Agricultural Insurance as an Environmental Policy Tool

This paper examines the possibility that insurance for row crops, livestock, and aquaculture can be used effectively to encourage producers to adopt practices that will improve environmental behavior. Examples of agricultural environmental insurance are provided and considered in the context of alternative policy mechanisms. The current state of agricultural insurance and the nonagricultural environmental insurance market are explored. We also lay out the characteristics of an insurable risk along with the theoretical basis of insurance provision. An empirical example of an environmental insurance design is provided, and the behavioral implications of such a design are examined. Finally, we discuss important considerations that should be evaluated when considering an attempt to implement an agricultural insurance program directed at environmental behavior.


Issue Date:
2003-08
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/43214
Published in:
Journal of Agricultural and Applied Economics, Volume 35, Number 2
Page range:
391-405
Total Pages:
15
JEL Codes:
D81; G22; H23; K13; Q18




 Record created 2017-04-01, last modified 2017-08-25

Fulltext:
Download fulltext
PDF

Rate this document:

Rate this document:
1
2
3
 
(Not yet reviewed)