Optimal crop insurance under climate variability: Contrasting insurer and farmer interests

V. E. Cabrera, D. Solís, David Letson

Research output: Contribution to journalArticle

3 Citations (Scopus)

Abstract

This study illustrates the potential synergies and conflicts of interest between farmers and insurers in the selection of an optimal crop insurance contract. Special attention is given to how climate information influences this decision-making process. To do so, we consider a representative 40 ha, rainfed, cotton-peanut farm located in Jackson County, Florida. Our results show that year-to-year El Nino Southern Oscillation (ENSO) based climate variability affects farmers' and insurers' net returns according to crop insurance contracts. Introduction of ENSO-based climate forecasts presents a significant impact on the selection of a particular contract to both the farmer and the insurer. We conclude that insurers and farmers can bridge their divergent interests by improving their understanding of the effect of climate conditions on the development of sustainable business plans.

Original languageEnglish (US)
Pages (from-to)623-631
Number of pages9
JournalTransactions of the ASABE
Volume52
Issue number2
StatePublished - Mar 2009
Externally publishedYes

Fingerprint

crop insurance
Insurance Carriers
Insurance
Climate
Crops
El Nino-Southern Oscillation
Contracts
farmers
climate
crop
El Nino
business planning
climate conditions
Conflict of Interest
Farms
Cotton
cotton
Conservation of Natural Resources
Decision making
sustainable development

Keywords

  • Crop insurance
  • ENSO
  • Optimization analysis
  • Risk management

ASJC Scopus subject areas

  • Agronomy and Crop Science
  • Biomedical Engineering
  • Food Science
  • Forestry
  • Soil Science

Cite this

Optimal crop insurance under climate variability : Contrasting insurer and farmer interests. / Cabrera, V. E.; Solís, D.; Letson, David.

In: Transactions of the ASABE, Vol. 52, No. 2, 03.2009, p. 623-631.

Research output: Contribution to journalArticle

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