Is crop insurance a vehicle to boost conservation?
Crop insurance premiums are determined each year based largely on several factors including the indemnity price of the insured commodity, on the user’s yield and risk characteristics, and on a large number of actuarial factors established by the Risk Management Agency (RMA) based on prior loss experiences.
The premiums are determined in a manner intended to be “actuarially fair”, or to result in a loss ratio that equates premiums paid in and premiums paid out over time (Gary Schnitkey and Bruce Sherrick, Department of Agricultural and Consumer Economics University of Illinois).
Similar to other types of...
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