Federal Crop Insurance Act, Farm Safety Net Improvement Act, and various RCCP Proposals
an abbreviated analysis prepared for Emily Alpert of OxfamAmerica
prepared in August 2007
With regard to pricing, the Federal Crop Insurance Corporation “shall establish or approve the price level…of each agricultural commodity for which insurance is offered.” As set forth under the FCIA, the expected market price is not to be less than the projected market price of the commodity. Authorized pricing approaches under the law include but are not limited to the following: expected market price may be the actual market price at the time of harvest; or expected market price, specifically for revenue and similar plans, may be the actual price of the commodity.
The Farm Safety Net Improvement Act of 2007 (S 1872 IS) proposes to incorporate processes established under the FCIA in the creation of a new revenue counter-cyclical program (RCCP). Under the proposed legislation, RCCPs would be triggered if “the State revenue from the crop year for the covered commodity in the State…is less than the revenue counter-cyclical program guarantee for the crop year for the covered commodity in the State…” Furthermore, the Farm Safety Net Improvement Act calls for State revenue to be determined by taking the actual State yield for each planted acre for the crop year, and multiplying that number against the RCCP harvest price for the crop year. Each state’s yield would be determined by taking the amount of the covered commodity produced in the State, and dividing that number of acres in the State planted to the covered commodity. Based on those underlying parameters, the RCCP guarantee will be 90% of the expected State yield multiplied against the RCCP pre-planting price. The legislation specifically calls for the pre-planting price to be the harvest prices established under the Federal Crop Insurance Act. According to Senator Durbin’s proposed legislation, “the revenue counter-cyclical program pre-planting price for a crop year for a covered commodity shall equal the average price that is used to determine crop insurance guarantees for the crop for the covered commodity under the Federal Crop Insurance Act…” RCCP pre-planting prices would be prevented by law from decreasing or increasing more than 15% from the previous year.
According to the American Farmland Trust, the “RCCP replaces existing counter-cyclical payments (CCPs) and loan-deficiency payments (LDPs) with a state-level revenue protection program. Congressional Budget Office (CBO) estimates indicate the cost saving from integrating crop insurance and replacing LDP’s, and CCP’s fully offset the cost of the RCCP making it effectively cost neutral.”[1] A search of the CBO cost estimates search engine, however, did not reveal any publicly-available assessments of taxpayer cost for Sen. Durbin’s amendment (S. 1872). RCCP payments, if they are required to be made for crop years 2008 through 2012 under the Farm Safety Act, would be calculated as the product derived from multiplying the following 4 elements:
The difference between the RCCP guarantee for the commodity in the State and the actual State revenue for the crop year
The acreage planted to the covered crop for harvest
The quotient derived by taking the farm’s production history and dividing that number by the anticipated State yield
90%
As far as how the WTO might view RCCPs, there is still question, largely depending on how Congress acts, as to whether they will be rated Green or Blue Box. The green box, of course, allows disaster payments and income safety nets – but the WTO might still find them more Blue Box appropriate. The Institute for Agriculture and Trade Policy, when reviewing RCCP as national yield-based program, stated that “[w]here the RCCP Green Box notification could be challenged as WTO illegal is at the juncture of payments claimed as relief from officially declared natural disasters…and income support payments to mitigate an income collapse resulting from policy decisions…WTO members are allowed to subsidize crop risk insurance premiums for producers “for relief from natural disasters”…and to make payments for “income safety nets” …But it would be difficult to verify, and hence to notify, to the WTO what part of RCCPs corresponded to natural disaster relief payment and what corresponded to an income loss that could result from a policy or neglect to administer a policy.”[2] Of course, the WTO is naturally concerned about US subsidies and the extent to which USDA programs distort trade and/or encourage export dumping. Interestingly enough, the CBO, in its most recent budget outlook, stated, “the sharp rise in some commodity prices (especially for corn) is expected to reduce spending for agricultural subsidies by $8 billion in 2007.”[3] Also notable is a CBO report that estimates, “the static welfare effect on the United States of a global 33 percent reduction in all tariffs and subsidies in the agricultural sector would be a loss of $11.1 billion, or 0.122 percent.” The study concluded, however, the negative welfare effect involved zero harm to the US agricultural industry, but implied shrinkage in the manufacturing sector caused by agricultural expansion drawing away capital, labor, and resources.[4]
Originally, the National Corn Growers’ Association proposed an RCCP plan that was based on county, not state yields. Their intent, of course was to propose the creation of a program that more adequately reflected local agricultural climates. Under their plan, the RCCP target revenue would have been the product obtained by multiplying a county’s trend yield by the pre-planting harvest price by 95%. Interestingly, the county trend yield would have been based on a regression formula, represented by the following (utilizing USDA county per acre yield data from 1980 through 2005):
yield/planted acre = Ac + Bc X year + error (Ac and Bc represent estimated parameters)
In the instance of corn, the NCGA proposal bounded the RCCP price between $2.40 and $3.20/bushel. “The RCCP cup (or floor) price of $2.40 per bushel is based on setting marketing loans rates equal to 95% of the 2000-04 Olympic average of season average price ($2.01 per bushel for corn) and a price basis of $0.39 per bushel to account for historical differences between seasonal-average and pre-planting revenue insurance prices.” The RCCP cap price was achieved by performing simulations to estimate RCCP program costs when the cap is set as a ratio of the cup prices. “The simulations showed that when the RCCP cap prices are set as 1.333 times the RCCP cup prices, the projected aggregate costs for RCCP are approximately $500 million per year above the Congressional Budget Office’s March 2007 farm bill spending baseline.”[5] Basically, the NCGA has argued revenue based countercyclical payments – based on county-level triggers – would be more cost effective than the Farm Bill’s current commodity support programs because the government makes, or can make, subsidy payment to farmers even in a crop year when their revenue is stable. Additionally, their argument is that revenue is a better target than yield because farmers still need financial protection when prices are high and yields are low. Still yet, there are some concerns about the NCGA proposal that have been expressed by others. To some, it’s not abundantly clear whether the Individual Revenue Insurance (IRI) component, which represents 1 tier of the NCGA’s 2 tier plan, would be required and whether producers would be able to choose crop insurance policies available other than crop revenue insurance-like IRI. Some researchers have argued that “[w]hile the concept provides a greater safety net, insuring revenue would likely create higher federal budget expenditures and increase the uncertainty associated with budget exposure for commodity program costs compared to existing CCPs. It is possible that some of this increase could be offset as the design of the two-tier program could relieve some of the usage and, therefore, cost of federally subsidized crop insurance.”[6]
Of course, the National Corn Growers Association wasn’t the only source of a type of revenue-protecting safety net in advance of this year’s Farm Bill debate. The US Agriculture Secretary proposed a Counter-cyclical Revenue Program (CCR), which also would have served as a replacement for the current counter-cyclical payment program. The Secretary’s proposal, unlike that of the NCGA’s and that of Sens. Brown and Durbin, envisioned CCR payments that would be triggered when national actual revenue falls below national target revenue. Also unlike the Brown/Durbin amendment, the Secretary’s program would be based on 85% of CCP payment yields multiplied against a base acres calculation, as opposed to the Farm Safety Net Improvement Act’s revenue guarantee, which would be 90% of the expected State yield for the covered commodity multiplied against the RCCP-defined pre-planting harvest price. The national target revenue would be given by the following formula:
NTR = {2007 target price – 2007 direct payment rate} X 2002-2006 Olympic National Average (note: the 02 through 06 average used in the NTR formula would be fixed for the entire life of the new Farm Bill)
The national actual revenue would be given by the following formula:
NAR = National Average Yield X Maximum of Season Average Market Price of Loan Rate
Furthermore, a CCR payment (triggered when national actual revenue falls below national target revenue), would be calculated by completing the following formula:
CCR Payment = NPR (national payment rate) X CCP Payment Yield X Base Acres x 0.85
(note: the NPR would be national target revenue minus national actual revenue, then divided by CCP payment yield)
According to some researchers on the subject, “[i]n their comparison of the CCR to the CCP, Richardson and Outlaw (200) showed that the CCR would pay about $1.5 billion less than the CCP over 2008-2016, with all of the savings by CCR coming in 2013-2016.” The same researchers found that crops with higher projected prices (wheat, corn, sorghum, barley, oats, and soybeans) were less protected by CCRs than by CCPs. They also noted that CCPs have built-in maximum payment rates, whereas such is not the case with CCRs.[7]
Risk Reduction, Crop Insurance Policies, Yield/Market Trending, and Production Impact
As is known, the USDA’s Risk Management Agency (RMA) provides management services and actuarial data for crop policies that fall under the following categories: Multiple Peril Crop Insurance (MPCI), Crop Revenue Coverage (CRC), Group Risk Plan (GRP), Income Protection (IP), Group Risk Income Protection (GRIP), or any other Federal Crop Insurance Corporation reinsured product providing indemnity for farmers against revenue and income risk factors. It should also be known that Revenue Assurance (RA) policies do serve as an alternative to MPCI, CRC, GRP, IP, and GRIP policies. “RA offers coverage levels of 65% through 85% for basic and optional units…80-85% coverage levels are available only in counties and on crops where MPCI allows 80-85% coverage levels and are not available on basic or optional units for cotton. The crop per-acre revenue guarantee may vary; however, the coverage level percent will be the same for each crop unit. For an enterprise unit, the crop per-acre revenue guarantee will be the same for all acres in the enterprise unit. The coverage level will be 65% through 85%...For the whole farm unit, the per-acre revenue guarantee will be the same for all insured acres. The level of coverage will be from 65% through 85%...”[8] As the proposed safety net introduced for Senate deliberation by Senators Durbin and Brown bears striking similarities to the current revenue assurance framework, it should be noted that current RA policies protect farmers from low price and low yield market circumstances, or perhaps, a combination of both factors. Major factors in RA policies as they are currently structured are yield history/average production history, revenue percentage coverage levels elected by individual farmers, projected harvest prices, and fall harvest prices.
One interesting note regarding revenue assurance policies under their current structure is that according to underwriting guidelines indemnities may not be paid to producers as a result of high price/low yield and/or low price/high yield environments. Now there is some logic in this rule – farmers, in many cases, can survive a crop year marked by low prices and high yields with their revenues intact. However, high price/low yield is a problem for farmers – national and regional market circumstances can be drifting in their favor, but with low yield, revenue drops markedly. As an example, current revenue assurance underwriting guidelines state, “[w]hole-farm units may not receive a payment if your corn revenue is low and your soybean or spring wheat revenue is high or vice versa.”
Senator Durbin, for his part, has made an attempt to address gaps where the current crop insurance environment performs incongruently with America’s subsidy framework for covered commodities. The American Farmland Trust, for example, is behind the crop insurance/RCCP integration strongly. Their position is that as a result of RCCP promulgation, “[p]rivate revenue insurance would operate much like it does currently. However, it would only cover a farmer’s individual revenue loss – for example from localized flooding or drought – if it were greater than the national loss. Because crop insurance only takes on individual risk, higher levels of protection would be available to farmers at a lower premium. Integration means a more efficient system, allowing the government to capture savings from crop insurance and use taxpayer money more wisely.”[9]
To read the proposed Farm Net Safety Improvement Act, one will find that there is reliance on the pre-planting or projected harvest price method. The Act calls for the RCCP guarantee for a crop year to be the expected State Yield for each planted acre of the covered commodity multiplied against the RCCP pre-planting price for the crop year for the covered commodity. One study on integrated production and price risk management, with specific regard to corn and soybean futures contracts, found that over the course of the 22-year period ending in the 1996-1997 crop year, pre-planting prices exceeded harvest prices in about 67% of the years for corn and 75% of the years for soybeans. Although that pattern suggests the pre-harvest pricing methods might ultimately prove beneficial to farmers, there are some interesting caveats. According to the study just mentioned, “where a high price/yield correlation exists, producers who price before harvest with fixed-price commitments may have greater exposure to production risk than with harvest sales. Increased risk occurs because short hedges work effectively as a risk-management tool only when value changes in the short futures position are offset by approximately equal and opposite value changes in the long cash position, i.e., the grain being produced.” To that end, the study suggests, “[t]he crop insurance needed for maximum effectiveness in managing production risk with pre-harvest pricing would be a type valuing lost production as its replacement cost.”[10] Keep in mind, short hedge positions are financial instruments that protect farmers from potential decreases in their cash positions at the time of harvest – if the cash price for a commodity for which a farmer has short hedge position is significantly higher than the agreed-upon hedge price, the farmer has then incurred potentially significant opportunity costs. For that reason, short hedges for farmers work if long hedge positions for commodities purchasers decline in the same marketing season, meaning that prices decline below the long position and decrease or eliminate any potential savings the holder of the long hedge might have.
The integrated production and price risk study previously mentioned also produced some interesting results when it came to mean net return over total economic cost and mean net cash flow regarding corn and soybean farms in Ohio between 1985 and 1997. The study evaluated farmers under three categories: cash renter, buyer/renter, and owner. If one were to take this study as one small snapshot of the virtues of pre-harvest risk management strategies, coupled with crop insurance instruments, the conclusion would be that pre-harvest pricing holds sound economic benefits for farmers. Multiple peril crop insurance (insures yield per acre) and crop revenue coverage (similar to revenue assurance policies in that protection is provided against low price or low yield, or a combination of both factors) added some benefit either as independent strategies, or coupled with pre-harvest pricing.
Clearly, the intent of the Farm Safety Net Improvement Act is to provide a better-functioning system for farmers to protect their revenue, while not, at the same time, drastically increasing cost to the American taxpayer. As already discussed, even without Sen. Durbin’s proposed legislation, farmers have options to reduce a variety of risk types. One study done by the USDA’s Economic Research Service concluded, “the degree to which strategies, such as forward contracting or hedging, reduce income risk depends on yield variability, the correlation between price and yield, and whether or not the crop is insured.” The study looked at four hypothetical corn farms in the following counties in the United States, and estimated risk: Iroquois County, Illinois – low yield variability and strongly negative yield-price correlation (low yields, high prices, or vice versa); Anderson County, Kansas – high yield variability and high yield-price correlation (high yields, high prices or low yields, low prices); Lincoln County, Nebraska – low yield variability and weak yield-price correlation; and Pitt County, North Carolina – high yield variability and low yield-price correlation. The findings for these counties were interesting. For example, farmers in the Corn Belt (ie – Iroquois County) seemed to benefit from the inverse price/yield relationship in a year of low output because of increased prices. Also, bumper crops tended to be additional protection in low price years. As far as hedging expected output, that strategy seemed to work best in Lincoln County, “where the probability of income below 70 percent of expected return is reduced from 8 to 2 percent.” Hedging seemed to be optimal in Lincoln County because of more consistent outputs and relatively uncorrelated prices and yields. As for Anderson and Pitt Counties, the study found there was greater revenue risk present than the other counties when no strategy was in place (ie – cash sales at time of harvest). For one, those two counties have a higher yield variability, so farmers can suffer without protections against weather problems or the benefit of field irrigation. Because Anderson and Pitt Counties are yield variable and have some degree of yield-price correlation, hedging may not offer the best protection. “Crop insurance is generally more effective than hedging in reducing the risks of vey low revenues across the four counties. When crop insurance alone is used by a producer, the probabilities of very low revenue is reduced greatly in all counties except Lincoln County, Nebraska.” In Lincoln County, the widespread use of irrigation actually tends to take the place of insurance policies. Nonetheless, the study, in part, concluded, “[c]rop insurance reduced risk more than forward pricing in most areas, but the greatest risk reductions are obtained by combining insurance and forward pricing.”[12]
Regarding revenue insurance, the same ERS study mentioned above found that revenue insurance (as it was assumed for purposes of the study) provided an intra-seasonal guarantee on the basis of farm yields and futures prices. Another conclusion was the “risks in farming would be substantially less if outputs could be insured and priced forward over periods more nearly matching the expected life of the specialized machines and equipment required for production.” At the same time, crop insurance was determined to be potentially useful because yields change gradually on a farm’s yield history, and it this easier for a producer to anticipate his/her coming season’s output. One final compelling finding of the study was that if one is looking at risk reduction from year to year, not just within the year, forward pricing (forward contracts are similar to short hedges, but reduce basis risk, which occurs when the cash price is less than the commodities futures market price over a series of years[13]) before planting tends to be more stable than harvest prices for crops that can’t be stored between years.[14]
As far as the growth or prevalence of crop insurance in the United States, the number of net acres insured in 2005 was 245.84 million. Total premiums in that year were $3.95 billion. Premium subsidies were $2.3 billion in 2005, and are expected to trend upward to $2.9 billion in 2015. To note, there were no major crop disasters in 2004 or 2005, and one study of loss ratios (which predict or assess the actuarial fairness of insurance premiums) found that “federal crop insurance will meet the loss ratio targets set by Congress.” Total obligations (indemnities paid, delivery expenses, administrative and operating expenses, commissions, etc.) were projected at $3.5 billion for 2006, and expected to reach more than $5 billion by 2008. Other predictions and assessments relating to insurable crops were also made. For cotton, the actual yield is expected to go from around 824 lbs/acre in 2005/2006 to 836 lbs/acre in 2015/2016 (with some up and down variation between the years), with gross market revenue (USD/acre) expected to increase to 544.86 by the 2015/2016 season. For soybeans, the actual yield is expected to go from 43.3 bu/acre in 2005/2006 to 44.0 bu/acre in 2015/2016 (with some up and down variation between the years), with gross market revenue (USD/acre) expected to increase to 243.46 by the 2015/2016 season. For wheat, the actual yield is expected to go from 42.0 bu/acre in 2005/2006 to 44.5 in 2015/2016 (with no up and down variation predicted for the interim years), with gross market revenue (USD/acre) expected to increase to 167.79 by the 2015/2016 growing season. For rice, actual yield is expected to go from around 6636 lbs/acre in 2005/2006 to 7427 lbs/acre in 2015/2016 (with no up and down variation predicted for the interim years), with gross market revenue (USD/acre) expected to increase to 659.64 by the 2015/2016 growing season. And for corn, the actual yield is expected to go from around 147.9 bu/acre in 2005/2006 to 164.3 bu/acre (with little to no variation in the interim), with gross market revenue (USD/acre) expected to grow to 409.39 by the 2015/2016 season.[15]
Another study evaluating the potential impact of crop insurance on US production trends revealed some insight that might be useful in evaluating how an integrated RCCP/crop insurance approach might influence the agricultural industry. The market impacts of crop insurance were analyzed using a POLYSYS-ERS simulation model for an average representative year. With regard to wheat production, “[t]otal…acreage expands about 300,000 to 350,000 on average, roughly a 0.5 percent increase in acreage compared with a scenario of no crop insurance subsidies. Total acreage for all eight crops expands about 900,000 acres, so that wheat accounts for about one the total increase.” The study, however, did not find an increase in wheat acreage in all US regions. “Wheat acreage does not increase in all regions in response to the premium subsidies…While premium subsidies have the direct effect of increasing net returns from wheat production, the resulting higher production reduces market prices, partially offsetting the incentive to expand production in subsequent years. In addition, subsidized insurance products are also available for competing crops, creating incentives to increase their production, with subsequent reductions in prices.”[16] Thus, if subsidized crop insurance premiums add to farming net returns and encourage increased production in some cases but not all, it might be argued that the integrated RCCP/crop insurance approach might have some impact on production incentive for farmers, but with multiple crops considered covered commodities, the market overall will probably ebb and flow, encouraging farmers not so much to overproduce, but to follow educated predictions in making planting decisions.
HARVEST PRICES
Pre-planting and/or projected harvest prices are calculated and used by FCIC/RMA-approved insurance carriers according to certain government guidelines. The following table details accepted methods for calculating projected harvest prices, which are used in determining per-acre revenue:
Ø CORN – cancellation date prior to March 15 – projected harvest is the simple average of the final daily settlement prices for the first ten trading days in February for the Chicago Board of Trade (CBOT) December futures contract
Ø CORN – covered states with a March 15th cancellation date - projected harvest price is the simple average of final daily settlement prices in February for the (CBOT) December corn futures contract
Ø SOYBEANS – cancellation date prior to March 15 – projected harvest price is the simple average of the final daily settlement prices for the first ten trading days in February for the CBOT November futures contract
Ø SOYBEANS – covered states with a March15th cancellation date – projected harvest price is the simple average of the final daily settlement prices in February for the CBOT November futures contract
Ø SPRING WHEAT – projected harvest price is the simple average of the final daily settlement prices in February for the Minneapolis Grain Exchange (MGE) September hard red spring wheat futures contract (durum wheat can be insured as hard red spring wheat under current underwriting guidelines)(spring wheat price may be used both for durum and Khorasan wheat)
Ø WINTER WHEAT - projected harvest price for Idaho, Indiana, Kentucky, Michigan, Ohio, and Tennessee is the simple average of the final daily settlement prices from August 15 to September 14 for the coming year’s CBOT July soft red winter wheat futures contract
Ø WINTER WHEAT – projected harvest price for Arkansas, Colorado, Iowa, Kansas, Missouri, Montana, Nebraska, Oklahoma, and South Dakota is the simple average of the final daily settlement prices from August 15 to September 14 for the coming year Kansas City Board of Trade July hard red winter wheat futures contract
Ø COTTON - projected harvest price is the January 15 through February 14 harvest year’s average daily settlement price per pound for the New York Cotton Exchange December cotton futures contract rounded to the nearest whole cent (RMA, as of 2005, pledged to release the cotton projected harvest price by February 20 of each harvest year)
Ø RICE - projected harvest price for rice in all covered states is the January harvest year’s average daily settlement price per pound for the harvest year’s CBOT November rough rice futures contract, rounded to the nearest 1/10th of 1 US cent
SOURCE: USDA Risk Management Agency
Revenue Assurance
Underwriting Rules: Feed Barley, Malting Barley, Canola/Rapeseed, Corn, Cotton,
Rice, Soybeans, Sunflowers, Spring Wheat, and Winter Wheat
(04-RA-UR (Ed. Rev. 07/25/03) – last revised: 05/16/2007)
Of course, the other end of the harvest pricing schedule is the release of fall harvest prices. According to the RMA, the FCIC releases fall harvest prices for revenue assurance policies based on the following schedule: August 5 for winter wheat, September 5 for feed barley and spring wheat, October 5 for canola and sunflowers, November 5 for soybeans, November 10 for rice, December 5 for corn, and December 10 for cotton. The chart below details government-accepted methods for calculating these fall harvest prices:
Ø CORN – fall harvest price is the simple average of the final daily settlement prices in November for the CBOT December futures contract
Ø SOYBEANS – fall harvest is the simple average of the final daily settlement prices in September for the CBOT October soybean oil futures contract – divided by 2, then minimized by 1
Ø SPRING WHEAT – fall harvest is the simple average of the final daily settlement prices in August for the MGE September hard red spring wheat futures contract
Ø WINTER WHEAT – for Idaho, Kentucky, Michigan, Ohio, and Tennessee fall harvest price is the simple average of the final daily settlement prices from July 1 to July 14 for the CBOT July soft red winter wheat futures contract; for Arkansas, Colorado, Iowa, Kansas, Missouri, Montana, Nebraska, Oklahoma, and South Dakota fall harvest price is the simple average of the final daily settlement prices from July 1 to July 14 for the KCBT July hard red winter wheat futures contract
Ø COTTON – fall harvest price is the simple average of the final daily settlement prices in November for the harvest year’s NYCE December futures contract, rounded to the nearest whole US cent
Ø RICE – fall harvest price is the October harvest year’s average daily settlement price per pound for the harvest year’s CBOT November rough rice futures contract, rounded to the nearest 1/10th of 1 US cent
SOURCE: USDA Risk Management Agency
Revenue Assurance
Underwriting Rules: Feed Barley, Malting Barley, Canola/Rapeseed, Corn, Cotton,
Rice, Soybeans, Sunflowers, Spring Wheat, and Winter Wheat
(04-RA-UR (Ed. Rev. 07/25/03) – last revised: 05/16/2007)
So how does harvest pricing for revenue assurance policies compare to the target prices established under the 2002 Farm Act? First, it’s important to note that harvest pricing is also used for income protection, multiple peril crop insurance, group risk income protection, and crop revenue coverage plans – and that it is possible for some variance to exist in harvest pricing, depending on the type of coverage chosen. Target prices as outlined in the 2002 Farm Bill, of course, are currently used in the calculation of CCPs in the legislation set to expire at the end of this year.
Top 5 States in 2006 in terms of production…
1. Kansas - $1,339,520,000 in wheat production
2. North Dakota - $1,129,014 in wheat production
3. Montana - $703,474,000 in wheat production
4. Washington - $615,593,000 in wheat production
5. Oklahoma - $395,760,000 in wheat production
Top 5 States in 2006 in terms of production…
1. Iowa - $3,187,813,000 in soybean production
2. Illinois - $3,087,360,000 in soybean production
3. Minnesota - $1,898,050,000 in soybean production
4. Indiana - $1,789,200,000 in soybean production
5. Nebraska - $1,477,950,000 in soybean production
Top 5 States in 2006 in terms of production…
1. Texas - $1,554,060,000 in cotton production
2. California - $989,141,000 in cotton production
3. Georgia - $646,626,000 in cotton production
4. Mississippi - $569,900,000 in cotton production
5. Arkansas - $533,982,000 in cotton production
Top 5 States in 206 in terms of production…
1. Arkansas - $892,028,000 in rice production
2. California - $464,464,000 in rice production
3. Louisiana - $200,930,000 in rice production
4. Missouri - $121,894,000 in rice production
5. Mississippi - $121,055,000 in rice production
[1] American Farmland Trust (Farm Safety Net Improvement Act of 2007)
http://www.farmland.org/
[2] Institute for Agriculture and Trade Policy – Revenue-Based Countercyclical Payments: US Disaster Relief? (by Steve Suppan, IATP Trade and Global Governance Program) (April 2007) (p.3)
[3] Congressional Budget Office – The Budget and Economic Outlook (August 2007) (p.7)
[4]Congressional Budget Office – The Effects of Liberalizing World Agricultural Trade: A Review of Modeling Studies (June 2006) (p.18)
[5] RCCP: Explaining the New Approach to Farm Programs
http://www.coloradocorn.com/legislative/2007%20Farm%20Bill/RCCP%20Explaining%20the%20New%20Approach%20to%20Farm%20Programs%200705031.rev.docp
[6] The 2007 Farm Bill: Policy Options and Consequences (Counter-Cyclical Programs and Safety Nets) – by James W. Richardson and Steven L. Klose, Texas A&M University (February 2007) (p.5)
[7] The 2007 Farm Bill: Policy Options and Consequences (Counter-Cyclical Programs and Safety Nets) – by James W. Richardson and Steven L. Klose, Texas A&M University (February 2007) (p.5)
[8] Revenue Assurance – Underwriting Rules: Feed Barley, Malting Barley, Canola/Rapeseed, Corn, Cotton, Rice, Soybeans, Sunflowers, Spring Wheat, and Winter Wheat
(04-RA-UR (Ed. Rev. 07/25/03) – last modified, 05/16/2007 / p.2)
[9] American Farmland Trust: Integrated Farm Revenue Program (Enhancing the long-term viability and competitiveness of American Agriculture)
http://www.farmland.org/
[10] Integrated Production and Price Risk Management: Impacts on Level and Variability of Corn and Soybean Producers’ Net Returns – by Robert N. Wisner, E. Neal Blue, and E. Dean Baldwin (p.2)
http://www.econ.iastate.edu/faculty/wisner/articles/aaee985final.doc
[11] Integrated Production and Price Risk Management: Impacts on Level and Variability of Corn and Soybean Producers’ Net Returns – by Robert N. Wisner, E. Neal Blue, and E. Dean Baldwin (p.9)
(Mean net return over total economic costs, mean net cash flow, and CVs of net cash flow for alternative risk management strategies for different financially structured corn and soybean farms, Ohio 1985-1997)
[12] How Farmers Can Reduce Risk: Examples Using Hedging, Forward Contracting, Crop Insurance, and Revenue Insurance (p.65, 66, 67)
Economic Research Service, USDA
[13] AgManager.info (Mykel Taylor, et.al. – Department of Agricultural Economics at Kansas State University)
http://www.agmanager.info/marketing/publications/marketing/forwardcontracting.asp
[14] How Farmers Can Reduce Risk: Examples Using Hedging, Forward Contracting, Crop Insurance, and Revenue Insurance (p.68)
Economic Research Service, USDA
[15] Food and Agricultural Policy Institute (FAPRI) (Crop Insurance Outlook Tables)
http://www.fapri.org.models/cropinsurance.aspx
[16] The Effect of the Federal Crop Insurance Program on Wheat Acreage (by Monte L. Vandeveer and C. Edwin Young) (p.27, 29) (Wheat Yearbook/WHS-2001/March 2001)
Economic Research Service/United States Department of Agriculture
[17] The 2002 Farm Act: Provisions and Implications for Commodity Markets/AIB-778 (p.5)
Economic Research Service/USDA
[18]Rain and Hail Agricultural Insurance
http://www.rainhail.com/prices/Price_harvest.htm
[19] United States Department of Agriculture National Agriculture Statistics Service
http://www.nass.usda.gov/QuickStats/index2.jsp
No comments:
Post a Comment