Jayson K. Harper

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Crop Insurance Performance in Pennsylvania
Jayson K. Harper Professor of agricultural
economics Department of Agricultural Economics
and Rural Sociology The Pennsylvania State
University Visit the PA Crop Insurance Education
Web Site http//cropins.aers.psu.edu Penn State
is committed to affirmative action, equal
opportunity, and the diversity of its workforce.
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Types of Agricultural Risks

• Production
• Marketing
• Financial
• Legal
• Human resource
• Environmental

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Crops covered by MPCI in Pennsylvania

• apples
• barley
• processing beans
• cabbage
• corn (grain and silage)
• forage production
• forage seedling
• grain sorghum
• grapes
• green peas
• nursery

• oats
• peaches
• potatoes
• soybeans
• fresh-market sweet corn
• processing sweet corn
• tobacco
• fresh-market tomatoes
• processing tomatoes
• wheat
• winter squash

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Other types of policies

• AGR-Lite--insures the revenue of the entire farm
  rather than individual crops by guaranteeing a
  percentage of average gross farm revenue. All
  farm raised crops, animals, and animal products
  are eligible for coverage. Uses information from
  a producer's Schedule F tax forms to calculate
  the policy revenue guarantee. Limited to a
  maximum liability of 250,000 per farm.

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PA Producers Benefit From Crop Insurance
Protection, 2002

1,609 Policies 24 Mil. Protection 163,892 Acres
Insured 1.7 Mil Gross Premium 833,484 Net
Premium 6.9 Mil. Paid Losses 8.28 Benefit Cost
Ratio

962 Policies 8.6 Mil. Protection 49,608 Acres
Insured 770,607 Gross Premium 237,403 Net
Premium 2.2 Mil. Paid Losses 9.32 Benefit Cost
Ratio
1,668 Policies 29 Mil. Protection 111,640 Acres
Insured 1.7 Mil Gross Premium 545,320 Net
Premium 3.3 Mil. Paid Losses 6.12 Benefit Cost
Ratio
2,369 Policies 43 Mil. Protection 191,575 Acres
Insured 3.1 Mil Gross Premium 1.2 Mil Net
Premium 12.5 Mil. Paid Losses 10.15 Benefit Cost
Ratio
1,247 Policies 17 Mil. Protection 89,220 Acres
Insured 1.4 Mil Gross Premium 498,679 Net
Premium 3.8 Mil. Paid Losses 7.54 Benefit Cost
Ratio
2,021 Policies 21 Mil. Protection 143,024 Acres
Insured 2.6 Mil Gross Premium 1.0 Mil Net
Premium 9.0 Mil. Paid Losses 8.97 Benefit Cost
Ratio
4,230 Policies 78 Mil. Protection 371,897 Acres
Insured 7.4 Mil Gross Premium 2.8 Mil Net
Premium 25.6 Mil. Paid Losses 9.15 Benefit Cost
Ratio
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Summary

• The number of CI policies has increased 223 from
  1999 to 2003
• The number of acres covered has increased 181
  from 1999 to 2003
• Acres covered by
• CAT policies are declining
• CRC policies are increasing (rapidly)
• APH BUP policies are stable to slightly
  decreasing
• Drought is the major source of risk in PA ( 2/3
  of losses since 1981)
• Loss ratios have varied from 0.52 (1996) to 5.19
  (1991) in past 15 years
• Farmer B/C ratios have varied from 0.90 (1994) to
  9.67 (1999) in past 15 years

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Sales closing dates

• JANUARY 31-- AGR insurance
• MARCH 15-- spring seeded crops
• MAY 31 nursery crops
• JULY 31-- forage seedings
• SEPTEMBER 30-- fall seeded crops
• NOVEMBER 20-- fruit crops
• NOVEMBER 30-- GRP insurance
• For more information, visit the
• Penn State Crop Insurance Education Web Site
• http//cropins.aers.psu.edu

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REGIONAL RISK MANAGEMENT EDUCATION
CONFERENCE Taking Risk Management Education to
the Next Level
For Agricultural Risk Management Educators and
Influencers May 4 and 5, 2004 Harrisburg East
Holiday Inn Harrisburg, Pennsylvania