In recent years, the U.S. Federal Crop Insurance
Corporation (FCIC) has significantly expanded
crop insurance choices available to
farmers. In addition to traditional yield insurance,
the FCIC has added alternative revenue
insurance products, developed group insurance
products, expanded the range of crops
covered by insurance, increased available coverage
levels on many products, developed new
approaches for using crop yield histories in
determining insurance premiums, and implemented
significant premium subsidies in attempts
to increase farmer participation. These
improvements, together with requirements in
the 1994Federal Crop Insurance Act that mandated
crop insurance protection for farmers
who received farm program benefits, motivated
a sharp increase in farmers’ participation
rates. Although the 1996 Farm Bill removed
the linkage between insurance participation
and farm program benefits, the Bill paved the
way for the new insurance products that also
contributed to higher participation.
Numerous prior studies have examined factors
associated with farmers’ purchase of crop
insurance. Comprehensive surveys are found