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Revenue insurance purchase decisions of farmers

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The objective of this study is to evaluate farm, household, and financial characteristics of cash grain farmers' decisions of whether to purchase revenue insurance. Using farm-level data these characteristics were identified by estimating a logit model of revenue insurance purchase decisions by farm operators. Results indicate that farm operators with the ability to self-insure through accumulation of sufficient wealth reserves measured in terms of the ratio of debts-to-assets, operators with off-farm income, and participation in production and marketing contracts, are more likely to pursue these strategies as a substitute for federal revenue insurance programmes. Further, study finds that older and wealthy cash grain farmers are less likely to buy revenue insurance.

Document Type: Research Article


Affiliations: 1: Resource Economics Division, Economic Research Service, US Department of Agriculture, Washington, DC, USA 2: Department of Agricultural and Resources Economics, North Carolina State University, Raleigh, NC, USA

Publication date: 2006-02-10

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