Analysis of Crop Insurance Policy and Coverage Options for Cotton-Peanut Farms for 2011

Over 90% of cotton and peanut acreage planted in Georgia is insured with federal crop insurance.  Crop insurance is a vital risk management tool on Georgia farms.  Coverage options for cotton include both APH and CRC.  Peanuts are APH only- there is no CRC policy on peanuts.  Both crops can also be insured as "enterprise units".  This coverage option has not been widely accepted by Georgia farmers while it has been more accepted in neighboring states such as South Carolina and Alabama.  Beginning in 2011, the APH price election will be the same as the CRC Base Price.  This analysis compares APH and CRC and enterprise units type coverage to determine which coverage is best under various price and yield and farm scenarios.  A "case farm" approach is used.  The 2013 farm bill is expected to contain modifications to government payments structure and the farm bill "safety net".  Crop insurance is expected to become an even more vital component of the "safety net" and producers will need to evaluate policy and coverage options carefully.