Risk Management Strategies in Humid Production Regions: A Comparison of Supplemental Irrigation and Crop Insurance

Recent federal agricultural programs have accelerated the devolution of enterprise risk management responsibility from the state to individual producers. Using a biophysical simulation model, the risk management benefits of federal crop insurance and supplemental irrigation are derived and compared to uninsured rainfed crop production in an expected utility framework. Federal crop insurance programs are inefficient at reducing producer exposure to weather-related production risk in humid regions, and the risk management benefits from supplemental irrigation are found to be scale and technology dependent. Environmental policies that regulate resource development will increase the investment cost of irrigation alternatives and reduce economic feasibility.


Issue Date:
2004-10
Publication Type:
Journal Article
DOI and Other Identifiers:
Record Identifier:
https://ageconsearch.umn.edu/record/31269
PURL Identifier:
http://purl.umn.edu/31269
Published in:
Agricultural and Resource Economics Review, 33, 2
Page range:
220-232
Total Pages:
13




 Record created 2017-04-01, last modified 2020-10-28

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