Mega Trends Driving Change within CES and Implications for Extension Economists

Many current trends affecting extension economist's education programs are found to be issues that go back 1/2 a century or more. Others involve issues that have been generally considered as part of economic theory, such as technology change. The emerging recasting of the social environment presents perhaps the most serious challenge to Extension economists program development.Teaching/Communication/Extension/Profession,

Commodity Programs and Beyond in the 2008 Farm Bill

Agricultural and Food Policy,

Climate Effects on Rainfall Index Insurance Purchase Decisions

Rainfall Index insurance is a pilot insurance product offered to producers of hay and pasture in 9 states. This analysis examines the expected payoff of the RI insurance for bi-monthly periods based on rainfall shortage probabilities in alternative climate phases. Differences in expected returns indicate that selection of ENSO-specific optimal intervals may result in higher returns than those based on pooled rainfall series.rainfall insurance, ENSO, expected indemnity, Production Economics, Risk and Uncertainty,

Determinants of Agricultural Disaster Payments in the Southeastern U.S.: County Level Analysis

Using county level data we study if weather and climate variables or variables used as proxies for rent-seeking behavior determine disaster payment in the Southeast. We do not find evidence of rent-seeking but find that, in addition to weather, long term climate variables affect disaster payments.Farm Management, Risk and Uncertainty,

Climate Effects on Rainfall Index Insurance Purchase Decisions

Rainfall Index (RI) insurance provides forage and hay producers with group risk protection against drought related losses. However, insurance premiums and risk protection are currently based on pooled weather data series and do not account for the impacts of specific climate phases, specifically the El Niño Southern Oscillation (ENSO), on local rainfall distribution. This analysis examines differences in the expected payoffs on the RI insurance under varying coverage levels based on probabilities of rainfall shortage during specific climate events at four Agricultural Experiment Stations in Alabama. Policy makers and producers are expected to benefit from the results that show the varying effects of climate on expected payouts from this insurance.Risk and Uncertainty,

Discussion: What Have We Learned from the New Suite of Risk Management Programs of the Food, Conservation, and Energy Act of 2008?

New revenue-based support programs in the 2008 Farm Bill represent a fundamental shift in farm programs and risk management decision-making. However, complexity, uncertainty, economics, and, arguably, an incomplete analysis of the new Average Crop Revenue Election (ACRE) program all contributed to low enrollment in the new program in 2009. An effective analysis of ACRE should consider farm programs as part of an integrated risk management portfolio, including crop insurance, marketing, and other risk management tools as opposed to a separate lottery program. Improving this integration could be one of the most significant consequences of the 2008 Farm Bill.farm bill, commodity programs, risk management, Agribusiness, Agricultural and Food Policy, Agricultural Finance, Farm Management, Land Economics/Use, Political Economy, Public Economics, Risk and Uncertainty, Q18,

Analysis of Irrigated Corn Production Adoption Decisions in Alabama

Expanding ethanol markets, abundance of water resources, and predominance of rainfed corn production in Alabama suggest possibility of irrigating cornfields. Numerical analysis shows that irrigated production becomes more preferable with higher corn prices and risk aversion. Adoption threshold is estimated at the price below its current level.Agribusiness, Crop Production/Industries, Land Economics/Use,

OPTIMAL CROP INSURANCE OPTIONS FOR ALABAMA COTTON-PEANUT PRODUCERS: A TARGET-MOTAD ANALYSIS

Target-MOTAD was used to determine the optimal crop insurance options for two representative cotton and peanut farms in southern Alabama. Results showed that, for one of the farms, no crop insurance option was risk reducing given the yield history. For the other farm, risk reduction involved shifting to higher levels of insurance coverage.Risk and Uncertainty,

Identifying ENSO Phase Impacts on Area Yield Insurance Rates: An Application of Non-Parametric Analysis

The paper reports results of non-parametric analysis of peanut, corn, and cotton yield distributions by the ElNino Southern Oscillation (ENSO) phases in the Southeastern U.S. For validation purposes, the historical yield data is complemented by a set of simulated peanut yields generated using daily weather data. The hypothesis, justified by the observed South-Eastern climate differences and research on ENSO cycles and planting dates, is that different climate conditions during ENSO cycles translate into different yield distributions and, therefore, insurance premiums (loss to coverage ratios). Kernel density estimates of historical county yield data show consistent patterns in the actuarially fair rate schedules grouped by ENSO phases and geographical areas. In particular, corn and cotton yield insurance premiums appear to be the most dependent on the ENSO phases and are the highest, regardless of coverage, during ElNino and the lowest during LaNina. Peanut premiums are higher during Neutral years and lowest during LaNina. The results appear to be robust to the transformations used to make the yield series stationary. While these dependencies do not necessarily correspond to the precipitation and solar radiation characteristics of the corresponding ENSO cycles in the Southeastern US, drawing direct analogies with yield variability is premature as many less documented factors, like the spacing of sunny and rainy days, may be just as important. The comparisons of the empirical and simulated peanut yield distributions show that they are similar in many ways and that the dissimilarities can be explained by known factors. These findings should be more relevant for the area yield insurance as opposed to the APH arrangements as the yield data used in designing contracts for the former reflects the systemic risk more influenced by climate than by the farm-level, basis risk factors accommodated in the APH plans.Risk and Uncertainty, Q140, C220, G220,

RISK AND SUSTAINABLE AGRICULTURE: A TARGET-MOTAD ANALYSIS OF THE 92-YEAR "OLD ROTATION"

Target-MOTAD was used to assess the risks and returns of sustainable cotton crop rotations from Auburn University's 92-year "Old Rotation." Study results analyze rotations of continuous cotton, with and without winter legumes; two years of cotton-winter legumes-corn, with and without nitrogen fertilization; and three years of cotton-winter legumes-corn and rye-soybeans double-cropped. Ten years of observations on deviations from target income were used to identify optimal sustainable rotation(s). Study results suggest that diversification in rotations, as well as in crops, results in the least risk for a given level of target income.Risk and Uncertainty,