Designing and Rating an Area Yield Crop Insurance Contract

9 Pages Posted: 31 Mar 2020

See all articles by Jerry R. Skees

Jerry R. Skees

University of Kentucky - College of Agriculture - Department of Agricultural Economics

J. Roy Black

Michigan State University

Barry J. Barnett

University of Georgia - Department of Agricultural & Applied Economics

Date Written: May 1997

Abstract

This article documents the design and rate‐making procedures used in the development of the Group Risk Plan (GRP)—the new federal crop insurance product that insures based on area yield. The authors of this article worked closely with personnel in the Federal Crop Insurance Corporation and others in developing methodological and practical constraints needed in implementing a workable area yield contract. GRP indemnity payments are made based on percentage shortfalls in actual county yields relative to a forecasted yield. Historical county yield data are used to develop forecasted yields and premium rates.

Keywords: agricultural policy, area yield, crop insurance, G220, Q140, Q180

Suggested Citation

Skees, Jerry R. and Black, J. Roy and Barnett, Barry J., Designing and Rating an Area Yield Crop Insurance Contract (May 1997). American Journal of Agricultural Economics, Vol. 79, Issue 2, pp. 430-438, 1997, Available at SSRN: https://ssrn.com/abstract=3562586 or http://dx.doi.org/10.2307/1244141

Jerry R. Skees (Contact Author)

University of Kentucky - College of Agriculture - Department of Agricultural Economics ( email )

Rm 310, Agricultural Engineering Bldg.
Lexington, KY 40546
United States
606-257-7262 (Phone)
606-257-7290 (Fax)

J. Roy Black

Michigan State University

Agriculture Hall
East Lansing, MI 48824-1122
United States

Barry J. Barnett

University of Georgia - Department of Agricultural & Applied Economics ( email )

Athens, GA 30602-7509
United States

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