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Thesis (M.S.)—University of Nebraska—Lincoln, 1963. Department of Agricultural Economics.


Copyright 1963, the author. Used by permission.


Farmers in Nebraska and other Great Plains states are constantly confronted with uncertainties with respect to yields, prices and technology. The individual farmer, unable to predict the effect of these factors upon his business, has tried several schemes to cope with this unfavorable situation. Among others such as diversification, forms of tenure, technological advances, and government programs, all risk crop insurance has been used. Crop insurance provides the farmer with a means whereby he may transform individual uncertainties into group risks. If the group is large enough and the events are random, the occurrence may be reduced to a risk and actuarial rates can be assigned to shift individual uncertainties to the group as insurable risks.

All-risk crop insurance as provided by the Federal Crop Insurance Corporation (F.C.I.C.), has been available in limited areas since 1938. Since 1949 the scope of the program has been gradually expanded until 995 counties were offered coverage in 1962. Despite the availability to farmers of all-risk crop insurance, only a small percentage of farmers have taken advantage of this opportunity.

The long range objectives of the project are rather general in nature and are outlined as follows:

(1) To determine the effects of present crop insurance programs on level and stability of farm income and financial structure.

(2) To ascertain the demand for crop insurance by farmers and organizational factors affecting demand.

(3) To analyze arrangements involving crop insurance with price and/or storage programs as variables.

The initial phase of this project primarily covers the descriptive aspects of the program and therefore has somewhat different, and more specific objectives. These short range objectives are:

(1) To establish the characteristics of the farm businesses and the farm operators that are presently under contract with the F.C.I.C.

(2) To evaluate farmers opinions of the present program and to suggested alternative programs.

(3) To suggest changes that would increase the effectiveness of the insurance program.

The attainment of these objectives is intended to be only the beginning phase of a project which is anticipated will last five years. Future work in this area will seek to further explore the possibilities and prospects of the crop insurance program.

Advisor: Robert M. Finley