Risk Reduction and the 2014 Farm Bill

The 2014 Agricultural Act introduced several risk management programs for commodities. Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC) provide price and revenue protection, respectively, to eligible producers of covered commodities. Also in addition to existing federally-backed crop insurance policies, the Supplemental Coverage Option (SCO), a new program, provides subsidized add-on insurance coverage to producers of rice, cotton, corn, soybeans, sorghum, wheat, and spring barley. Through simulations of prices and yields, we examine the relationship between the support payments generated by these new programs and the magnitude of the risk reduction they produce, both under their current parameters as well as alternatives. The simulations also reveal the distribution of risk reduction among counties across the United States.


Issue Date:
2015
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/204845
Total Pages:
26
JEL Codes:
G32; Q18; Q14
Series Statement:
Paper 6486




 Record created 2017-04-01, last modified 2017-08-28

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