Suchergebnisse

AbstractThe new Supplemental Agricultural Disaster Assistance (SURE) program, established by the 2008 Farm Bill, mandates disaster payments for individual farms that experience crop losses in excess of 50% of their average production, whether or not those farms are located in regions affected by catastrophic events. This study shows that, because of this provision, the SURE program creates substantial incentives for moral hazard behaviors in many market‐related situations. These incentives are especially severe when market prices equal or fall below prices at which farmers value commodity losses for federal crop insurance purposes.

AbstractAgricultural insurance in developed countries originates in named peril products that were originally offered by private companies approximately two hundred years ago, first in Europe and then in the United States. Today, many agricultural insurance products are offered, most of them heavily subsidized by governments. In the context of developed economies, this article examines the evolution of agricultural insurance products, the economics of the demand and supply sides of agricultural insurance markets, and the economic welfare, political economy, and trade relation implications of private and public agricultural insurance in developed countries.

The 1996 Federal Agricultural Improvement and Reform (FAIR) Act of 1996 has been portrayed as a radical departure from the farm policies of the past 60 years. FAIR brought sweeping institutional changes to the basic price and income support programs, many of which had been in place since the 1930s. Close analysis reveals that many of the reforms of the FAIR Act are less revolutionary innovations and more continuations of reforms that began with the 1985 farm legislation and were extended by the 1990 farm bill. Nor should one believe that the changes will result, as some suggest, in large changes in crop acreages or have large effects on the year‐to‐year variability offarm revenues for these crops. In both cases, the changes in policies may be substantive, but their effective consequences are modest.

A central, but inadequately explored issue with respect to subsidized crop insurance programs concerns the costs of delivering insurance coverage to farmers. This study examines that issue in the context of the heavily subsidized US crop insurance program which has often been put forward as a model for agricultural insurance programs in other countries. US Government programs often rely on private firms to deliver income transfers or services, which then establish their own rent-seeking lobbies, which are shared with input suppliers. This rent dispersion process is examined in the context of the U.S. agricultural insurance industry, which receives as much as one third of the annual subsidies that support the federal crop insurance program. We find that as total payments to insurance companies increased between 2001 and 2009, an increasingly large share of the agricultural insurance industry's rents accrued to insurance agents, although in markets where insurance companies possessed some oligopsony power, agent payments are smaller. The findings also suggest that the insurance industry (companies and independent agents) would almost surely provide the same service for substantially less than the gross revenues from the subsidies and underwriting gains they received. ; Non-PR ; IFPRI1; C Improving markets and trade; PIM 3.1 Advisory services; PIM 3 Adoption of Technology and Sustainable Intensification ; MTID

Agricultural policy issues play an outsized role in the race for the presidency if only because the primary season begins in Iowa, where corn is king, and other rural states such as New Hampshire and South Carolina. On a bipartisan basis, almost every candi­date, including President Donald Trump, supports current price and income-support policies, the federal crop insurance program, and soil and other conserva­tion initiatives that direct substantial taxpayer-funded payments to farm businesses. The major difference is that most of the Democratic candidates seek to shift such payments toward small and medium-sized farms and away from large-scale agribusiness farms. The candidates for the Democratic Party's nom­ination do differ on agricultural trade policy. Mayor Mike Bloomberg is the only candidate whose sup­port for free trade is unequivocal. Some candidates, including former Vice President Joe Biden, Sen. Amy Klobuchar, and Sen. Elizabeth Warren, have sup­ported some trade agreements with other countries (e.g., the recent US-Mexico-Canada Agreement) but would only support further trade agreements if they imposed implausibly stringent conditions regarding environmental, worker-safety, and other regula­tions in the countries with which the agreements are signed. Sen. Bernie Sanders seems generally opposed to any trade agreements and in this area seems to have more in common with President Trump, who has been willing to arbitrarily disrupt US access to over­seas markets for agricultural products in his trade and foreign policy initiatives. Finally, initiatives to address climate change through reducing carbon emissions are a common theme among all the Democratic candidates. Several, including Biden, Sanders, and Warren, have essentially adopted the Green New Deal as their cli­mate change initiative while, somewhat inconsis­tently given ethanol's impacts on carbon emissions, supporting the renewable fuels standards for ethanol and other biofuels. Bloomberg is a notable exception, viewing biofuels as problematic but supporting substantial reductions in the use of carbon fuel. In stark contrast, President Trump has aggressively termi­nated many of the Obama administration's climate change initiatives and, at least ostensibly, viewed cli­mate change as of no concern for his administration. ; IFPRI5; 4 Transforming Agricultural and Rural Economies ; MTID ; Non-PR

AbstractThis study uses farm‐level information from the ARMS database to evaluate the distribution of payments from major 2014 Farm Bill safety net programs—federal crop insurance, Agricultural Risk Coverage, and Price Loss Coverage—across farm size. Results indicate that farms within the top decile for crop sales receive over two‐thirds of the total payments from these programs. Recent legislative proposals to implement payment caps on each farm are shown to impact a relatively small percentage of farms that are almost entirely within the top decile of crop sales. However, implementing these caps is likely to result in as much as $2.51 billion in taxpayer savings. These help provide direction for continued efforts to design cost‐effective, equitable agricultural safety net policies.

IFPRI4; C Improving markets and trade; CRP2; MTID; PIM ; PR ; CGIAR Research Programs on Policies, Institutions, and Markets (PIM)

From any coherent policy perspective, agricultural policy in the United States is in total disarray. Not surprisingly, persistent and pervasive rent-seeking by well-funded lobbies explains many of the complex and often internally inconsistent federal programs that fall under the umbrella of US agricultural policy. This two-volume examination of US agricultural policies includes analyses on the federal crop insurance program, the sugar program, constraints on domestic production, and policy-mandated price discrimination. Those subsidy programs and other forms of support are deliberately structured to funnel the vast majority of their benefits to large farm businesses and, in the case of agricultural insurance, an entire segment of the insurance industry that would not otherwise exist. They do nothing to alleviate rural poverty and in most cases encourage farm and other agricultural businesses to waste some of society's scarce resources. Some federal programs do provide benefits for society as a whole. However, collusion among lobbies with competing interests has caused many of those programs to be inefficient. Agricultural Policy in Disarray provides fascinating, detailed, and contemporary evidence of how rent-seeking by small, well-organized interest groups results in government policies that do little good and much harm

Governments around the globe are trimming their support for agricultural R&D, giving greater scrutiny to the support that they do provide, and reforming the public agencies that fund, oversee, and carry out the research. These contemporary developments represent a break from previous patterns, which, since WWII, had seen a significant and steady expansion in the public funds provided for agricultural R&D. The growth rate of private-sector spending on agricultural research has slowed along with the growth of public spending in recent years, but the balance continues to shift toward the private sector. This paper presents a quantitative review of these funding trends and the considerable institutional changes that have accompanied them. We present and discuss new data for 22 OECD countries, provide additional data and institutional details for five of these countries, namely Australia, Netherlands, New Zealand, United Kingdom, and the United States, and conclude the paper with an assessment of these policy developments. ; Non-PR ; IFPRI1 ; EPTD