Implications of Crop Insurance for Farmers and Lenders Academic Article uri icon

abstract

  • AbstractThe effect of the farmer's choice of crop insurance was evaluated on both the farmer's and lender's performance. This was done using whole-farm, Monte Carlo simulation for Texas wheat/sorghum operations. Results indicate crop insurance would be preferred by moderately risk-averse farmers when farm firm failure became an issue or the insurance loss ratio approached one. A lender always preferred the use of crop insurance, especially when the probability of firm bankruptcy was an issue.

author list (cited authors)

  • Leatham, D. J., McCarl, B. A., & Richardson, J. W.

citation count

  • 5

publication date

  • December 1987