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2014•Journal of Agricultural and Applied EconomicsRequires access

A Risk Analysis of Adjusted Gross Revenue-Lite on Beef Farms

Jeffery Williams, Andrew T. Saffert, G. Art Barnaby, Richard V. Llewelyn, Michael R. Langemeier

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Abstract

This study evaluates the Adjusted Gross Revenue-Lite (AGR-Lite) whole-farm adjusted gross revenue insurance program on net farm income risk using panel data from 49 southeast Kansas beef farms. On average for the group, but not each individual farm, AGR-Lite reduces the mean and standard deviation of net farm income, raises the average minimum, and lowers the average maximum observations of the net income distribution. Thirty-four farms (69%) received at least one indemnity payment. Stochastic efficiency with respect to a function reveals that AGR-Lite is preferred by 18 of the farm managers (37%) when an upper bound on the risk-aversion coefficient is used.

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What this paper is about

This study evaluates the Adjusted Gross Revenue-Lite (AGR-Lite) whole-farm adjusted gross revenue insurance program on net farm income risk using panel data from 49 southeast Kansas beef farms. On average for the group, but not each individual farm, AGR-Lite reduces the mean and standard deviation of net farm income, raises the average minimum, and lowers the average maximum observations of the net income distribution. Thirty-four farms (69%) received at least one indemnity payment. Stochastic efficiency with respect to a function reveals that AGR-Lite is preferred by 18 of the farm managers (37%) when an upper bound on the risk-aversion coefficient is used.

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OpenAlex reports 12 citations for this work. Citation counts describe recorded attention and do not establish research quality.

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Available abstract

This study evaluates the Adjusted Gross Revenue-Lite (AGR-Lite) whole-farm adjusted gross revenue insurance program on net farm income risk using panel data from 49 southeast Kansas beef farms. On average for the group, but not each individual farm, AGR-Lite reduces the mean and standard deviation of net farm income, raises the average minimum, and lowers the average maximum observations of the net income distribution. Thirty-four farms (69%) received at least one indemnity payment. Stochastic efficiency with respect to a function reveals that AGR-Lite is preferred by 18 of the farm managers (37%) when an upper bound on the risk-aversion coefficient is used.

Key concepts: Indemnity, Revenue, Net farm income, Net income, Agricultural economics, Farm income, Payment, Adjusted gross income

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