Should Basic Underwriting Rules be Applied to Average Crop Revenue Election and Supplemental Revenue?

This paper considers methods to adversely select on Average Crop Revenue Election (ACRE) and Supplemental Revenue (SURE). In the case of winter wheat, farmers had a large amount of a priori yield and price information before electing 2009 ACRE. Prior to the August 14 sign-up for ACRE, wheat was 3 months into the marketing year. In most years nearly half of the national average price is determined in the first 3 months of the marketing year. With this available information it was clear that Oklahoma, Texas, and Washington wheat would collect the maximum or near the maximum ACRE payment, while there was little chance that ACRE would pay on Colorado wheat.


Issue Date:
2010-08
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/92590
Published in:
Journal of Agricultural and Applied Economics, Volume 42, Number 3
Page range:
517-535
Total Pages:
19
JEL Codes:
Q18




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

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