农业保险的再思考外文翻译.docx

农业保险的再思考外文翻译.docx

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农业保险的再思考外文翻译

农业保险的再思考外文翻译

本科毕业论文外文翻译

外文题目:

CROPINSURANCERECONSIDERED

出处:

Amer.J.Agr.Econ

作者:

JOSEPHW.GLAUBERCROPINSURANCERECONSIDERED

JOSEPHW.GLAUBER

Duringthelate1980sandearly1990s,therewasmuchdebateoverhowtofixwhatwereperceivedasthe“failures”oftheFederalcropinsuranceprogram.TheFederalCropInsuranceImprovementActof1980madecropinsurancetheprimaryformofdisasterprotectionforagriculturalproducers,replacingastandingdisasterassistanceprogramwithsubsidizedcropinsurance.Toencouragesales,privatecompanieswereenlistedtodelivertheproductandsignificantlyshareintheunderwritingrisks.Almostovernight,thecropinsuranceprogramwasconvertedfromapilotprogramofferinglimitedcoveragetoalimitednumberofcropsnationwide,toanationwideprogramcoveringmostmajorfieldcropsinmostmajorgrowingregions.

Theperceivedfailuresofcropinsuranceweremany.Atthetimeofpassageofthe1980Act,Congressenvisionedaparticipationrateapproaching50%ofeligibleacresbytheendofthedecade.Despitepremiumsubsidiesandexpandedcoverage,cropinsuranceparticipationgrewveryslowly.WhenamajordroughtstrucktheMidwestin1988,only25%ofeligibleacreagewasenrolledintheprogramnationwideandparticipationwasevenlessinstatessuchasIllinoisandIndianaChite.WidespreadcroplossesandpoorparticipationintheinsuranceprogrampromptedCongresstopasssupplementaldisasterlegislationthroughoutthedecadeincludingalmost$5billionindisasterassistancetocovercroplossesin1988and1989aloneGlauberandCollinsInadditiontoitsfailuretoreplacedisasterassistance,theactuarialperformanceofthecropinsuranceprogramwasdismalthroughoutthe1980sandearly1990s.Theaggregatelossratio,thatis,totalindemnitiesdividedbytotalpremiumsincludingpremiumsubsidies,exceeded150%over1981?

93.PooractuarialperformancewasblamedonexpansionofcoverageintonewareaswithouthavingadequatedatatorateriskswhichcontributedtoadverseselectionproblemsandthedifficultyinmonitoringproducerbehaviorwhichcontributedtomoralhazardissuesU.S.GeneralAccountingOffice1993.

Finally,despitelargeactuariallosses,companiessharedlittleoftheunderwritingrisks.Over1981?

90,totalindemnitiesexceededtotalpremiumsincludingpremiumsubsidiesby$2.3billion.Overthesameperiod,companiesrecordednetunderwritings“gains”of$102millionGlauberandCollins.ThispromptedrepeatedcriticismfromtheU.S.GeneralAccountingOffice1981,1987,1992thatcompanieswerenotadequatelysharinginrisks.

Withintenyearsofthe1980Act,poorperformanceofthecropinsuranceprogrampromptedtheBushAdministrationtoproposeeliminatingthecropinsuranceprogramandreplacingitwithastandingdisasterprogramGardner1994.TheproposalreceivedlittleinterestinCongress,butthecriticismofthecropinsuranceprogramremainedunabatedWidespreadcroplossesduetothe1993floodsintheMidwestpromptedyetanotherdisasterbill.Thistime,however,CongressandtheClintonAdministrationagreedontheCropInsuranceReformActof1994,whichauthorizedadditionalpremiumsubsidiestoincreaseparticipation.Yet,despiteincreasesinparticipation,Congresspassedadhocdisasterlegislationcoveringlossesin1998,1999,and2000.In2000,CongresspassedtheAgriculturalRiskProtectionAct,whichprovidedfurthersubsidiestoencouragecropinsurancepurchases.

Now,fifteenyearsandtworeformbillslater,thecropinsuranceprogramboastsan80%participationratewithover215millionacresenrolledandatotalliabilityestimatedinexcessof$46billionfor2004Davidson.OverAmer.J.Agr.Econ.86Number5,2004:

1179?

1195Copyright2004AmericanAgriculturalEconomicsAssociation1180Number5,2004Amer.J.Agr.Econ.57%ofparticipatingacresareenrolledatcoveragelevelsinexcessof65%.Thelossperformanceofthecropinsuranceprogramhasimprovedaswell.Over1994?

2003,theaggregatelossratiofortheprogramwas98%,whichpromptedtheSecretaryofAgriculturetoconclude,“theprogramonanationalscaleisfinanciallysound,properlyrated,andeffectivelymanaged”Glickman.And,newreinsuranceagreementsnegotiatedbetweentheprivatecompaniesandthegovernmenthaveresultedincompaniesretainingmoreriskandfacinglargerpossibleunderwritinglossesineventofwidespreadcroplosses.

Yet,havetheprogramreformssince1994reallyaddressedthefundamentalfailuresraisedfifteenyearsago?

Despitelargegainsinparticipation,Congresscontinuestopassadhocdisasterlegislation;twoyearsafterpassageoftheAgriculturalRiskProtectionAct,Congresspassedsupplementaldisasterassistancetocover2002croplosses.Thecostsoftheprogramhaverisendramaticallyaswell.Expectedannualcostsoftheprogramareover$3billion?

comparedwithlessthanone-thirdofthatcostfifteenyearsago.Increasedsubsidieshave,inturn,raisedconcernsaboutthedistortingeffectsofcropinsuranceonproduction.Whiletheaggregateactuarialperformancehasimproved,largeregionaldisparitiesexist.Finally,asprivatecompanieshavetakenonmorerisks,theyhavecomeunderincreasingcriticismforthelargeunderwritinggainstheyearnfromtheprogram.

Inthefollowingsections,thepaperreconsidersthecropinsuranceprogramandtheproblemsofagriculturalinsurancemoregenerally.Itdrawsonthelargeliteraturethathasemergedoncropinsurance,particularlyoverthepasttenyears.EconomicresearchoncropinsurancecanbetracedatleastasfarbackasValgren’s1922studyofprivateinsurancemarkets.2However,theamountofresearchoncropinsurancehasincreaseddramaticallyoverthepasttenyears,parallelingthegrowthntheprogramitself.Forexample,over1981?

93,tenjournalarticleswerepublishedintheAmericanJournalofAgriculturalEconomics.Since1994,fifty-onearticleshavebeenpublished,includingovertwentyin2003and2004alone.

Thepaperisorganizedasfollows.Thenextsectionexaminesthedemandforcropinsuranceandwhyparticipationinthecropinsur-anceprogramhasdependedonlargesubsidies.Thefollowingsectionexaminestheproblemsofratingagriculturalproductionrisksandhowsubsidiesmaskactuarialperformance.Theunintendedeffectsofsubsidizedcropinsuranceonproductionareconsideredinsection“EffectsofCropInsuranceonProduction.”Thesection“AlternativeCropInsurancePlans”examinesalternativesmeanstomanageproductionrisks,includingareayieldoptionsandweatherderivatives.Summaryandconclusionsareofferedinthefinalsection.

TheDemandforCropInsurance

Table1showsthegrowthofthecropinsuranceprogramsince1981.Participationintheprogramgrewslowlyinthe1980s,reachingonly55.6millionacresin1988,about25%ofeligibleacreage.Participationreached40%in1989and1990,largelybecauseofdisasterlegislationthatrequiredrecipientsofdisasterpaymentin1988and1989tobuycropinsuranceinthesubsequentcropyear.By1993,participationhad

fallento32%ofeligibleareaGlauberandCollins.

Overtheperiod1981?

93,participatingproducersreceived,onaverage,about$2inindemnitypaymentsforevery$1ofpremiumpaid.Whythendidparticipationratesintheprogramremainsolowthroughoutthe1980sandearly1990s?

Themostoftencitedreasonisadverseselectionsee,e.g.,Miranda.AdverseselectionproblemsarisewhenrisksvaryacrossinsurancebuyersandbuyersknowmoreabouttheriskstheyfacethandoestheinsurerwhosetstheratesHirshleiferandRiley.Thus,producerswhoseexpectedindemnitiesexceedthepremiumscostsaremorelikelytopurchaseinsurance;thosewhosecostsexceedtheirexpectedindemnitiesarelesslikelytopurchase.Second,studiesshowthatfarmersandranchersuseavarietyofrisk-managementstrategiestomitigatetherisksthattheyfaceHarwoodetal.,U.S.GAO1999.EmpiricalstudiesofcropinsuranceparticipationduringthisperiodconfirmedthatmanyofthesepracticeshadnegativeeffectsonparticipationseeKnightandCoble1997.

Bytheendofthe1980s,itwascleartopolicymakersthatthesubsidylevelsprovidedunderthe1980Actwerenotsufficienttoachieve50%participationwithouteithermakinginsurancepurchasescompulsoryorincreasingthelevelofthesubsidy.IntheiranalysisoftheU.S.cropinsuranceprogram,GardnerandKramerconcluded

thatpremiumswouldhavetobesubsidizedasmuchas50%toachieve50%participation.SimilarconclusionswerereachedbyWrightandHewittandGoodwinandSmith1995.

Congressrespondedbybothmakinginsurancecompulsoryandincreasingremiumsubsidies.UndertheCropInsuranceReformActof1994,producersofinsurablecropswereeligibletoreceiveabasiclevelofcoverage,catastrophicriskprotectionCAT,whichinitiallycovered50%ofaproducer’sapprovedyieldat60%oftheexpectedmarketprice.3CATcoveragewasrequiredforproducerswhoparticipatedinthecommoditypricesupportandproductionadjustmentprograms,farmcredit,orotherfarmprograms.WhilethepremiumcostofCATcoveragewasfullysubsidizedbythegovernment,producerswererequiredtopayasign-upfeeequalto$50percroppercounty.Inaddition,the1994Actprovidedadditionalsubsidiesforcoveragelevelsgreaterthan50%buy-uplevels.Over220millionacreswereenrolledintheprogramin1995,over80%ofeligibleacresexcludinghay,withoverhalfoftheseattheCATlevel.Respondingtoproducercriticism,CongresseliminatedthecompulsoryprovisionsforCATcoveragein1996causingenrollmentinCATtodecline.However,enrollmentinbuy-upcoveragecontinuedtoincrease,reaching120milli