Você está na página 1de 10

Iowa Ag Review

Fall 2009, Vol. 15 No. 4

Examining the Health of the U.S. Crop Insurance Industry

Bruce A. Babcock dollars without adverse impacts on
babcock@iastate.edu program effectiveness.
Revenue and Costs in the
Insurance Industry

n late September the Risk Man-
agement Agency (RMA) of USDA Insurance companies obtain rev-
released the results of commis- enue from premiums paid by their
sioned studies that calculated the customers and obtain additional
rate of return that U.S. crop insur- revenue from invested capital. This
ance companies have received from revenue must cover claims paid
selling multi-peril crop insurance out, the cost of adjusting claims,
(MPCI) (http://www.rma.usda.gov/ any cost of reinsurance, as well as
pubs/2009/millimanhistoricalrate. other overhead costs such as sala-
pdf). Since 2000, the average annual ries. Profits are positive when total
rate of return on equity has been 19 revenue exceeds total costs. The big
percent. The study also estimated difference between the crop insur-
that a reasonable rate of return over ing standards used by government ance industry and unsubsidized
the same time period for this line of analysts and then releases its own insurance industries is that about
business would be about 11 percent. report that allows it to argue that 80 percent of the premium revenue
One straightforward interpretation it cannot absorb any cuts in the that would be paid by customers is
of this difference is that since 2000, taxpayer subsidies that it receives actually paid by taxpayers. This 80
the crop insurance industry has because the industry is already percent number consists of the 60
received a rate of return that is 72 undercompensated. percent of premiums that are paid
percent higher than what would be What should Congress con- by taxpayers and the 20 percent ex-
needed to induce private companies clude? Should members and their pense reimbursement. In addition,
to participate in the crop insurance staff believe the industry reports taxpayers provide crop insurance
program. that further cuts will reduce indus- companies subsidized reinsurance
The insurance industry dis- try profits to the point at which in exchange for the requirement
agrees with this assessment of prof- companies will not be willing to par- that the companies must sell insur-
itability. In a report released in early ticipate in the program? Or should ance to all farmers in areas in which
October (http://www.ag-risk.org/ they believe the GAO and RMA they do business.
NCISPUBS/SpecRPTS/GrantThornton/ reports that conclude that substan- That such a large portion of pre-
Grant_Thornton_Report-2009_FINAL. tial cuts can be made because the mium is paid by taxpayers height-
pdf ) the industry argues that “the industry is overcompensated? ens the importance of determining
MPCI program is not as profitable Although economists are often whether the RMA report of a 72 per-
as the P&C (Property and Casualty) maligned for their lack of ability to cent excessive rate of return does,
industry and writing MPCI entails be precise in offering prescriptions in fact, accurately describe the cur-
greater risk.” Clearly there is a differ- for what ails the economy, their con- rent situation.
ence of opinion here. cepts and analytical tools can often
Arguments over the profitability give insights into competing argu- Competition in the Crop
of the crop insurance industry are ments. An examination of how the Insurance Industry
to be expected and have occurred crop insurance industry operates In most lines of insurance, as with
often. An arm of government, be and competes provides a simple most other industries, companies
it the Government Accountability and reasonably accurate measure of compete on the quality of their
Office (GAO) or the RMA, releases the amount of excess profits the in- product and on price. This compe-
a report that finds excess industry dustry receives. This measure esti- tition is what keeps industry profit
profits. The industry responds with mates that industry subsidies could levels from getting too far above or

arguments about the flawed account- be reduced by more than a billion

Iowa Ag Review

ISSN 1080-2193 below the levels needed to keep the the degree of excessive taxpayer
http://www.card.iastate.edu industry viable. But, as discussed in compensation to the industry is to
the accompanying article on page look at the only price in the indus-
4, RMA has the responsibility of set- try—the agent commission—that
IN THIS ISSUE ting premium rates. In addition, its is free to adjust. If compensation to
governing board, the Federal Crop the industry is excessive, then we
Examining the Health of the Insurance Corporation, determines should see the price paid to agents
U.S. Crop Insurance Industry ........ 1 which products companies can of- for their books of business increase
fer. Thus all crop insurance compa- as companies seek to expand. If
Drought Tolerance and Risk nies sell the same products at the compensation to the industry is too
in the U.S. Crop Insurance same price. low, then we should see the price
Program............................................ 4 Companies do compete, how- paid to agents drop as companies
ever. Those companies that are best attempt to cut their losses.
Recent CARD Publications............. 8 at using the government-provided
reinsurance make more money Agent Commissions
End of a Long Run ........................... 9 than others. In addition, companies Figure 1 shows one measure of
compete with each other for market agent commission. Although agent
share by competing for crop insur- commission rates have increased
ance agents’ books of business. All from just below 16 percent to about
crop insurance policies must be 17 percent of total premium, there is
sold by crop insurance agents. Most no obvious evidence in Figure 1 that
agents are independent so they can agent commissions have been bid
route their policies through any of up in response to excessive profits
Iowa Ag Review is a quarterly newsletter published by the the crop insurance companies that in the industry.
Center for Agricultural and Rural Development (CARD). This service policies in their regions. However, the cost of selling
publication presents summarized results that emphasize the Agents are more likely to offer their and servicing a crop insurance
implications of ongoing agricultural policy analysis, analysis
of the near-term agricultural situation, and discussion of agri-
books of business to the highest policy and running a crop insur-
cultural policies currently under consideration. bidder. Thus competition for market ance agency is not proportionate to
Editor share is conducted in terms of agent the amount of premium collected.
Bruce A. Babcock commissions. Those companies that In crop insurance, a farmer’s pre-
CARD Director
pay higher commissions will tend to mium will double if the price of
Editorial Staff
Sandra Clarke increase their market share. the insured crop doubles. But the
Managing Editor cost of servicing the policy will be
Becky Olson
Publication Design
Price as an Indicator of Profits constant. A better measure of agent
In a competitive market, profits will commissions is the dollar amount of
accrue to the factors of production commission paid per policy sold. As
CARD, Iowa State University, 578 Heady Hall, Ames, IA
50011-1070; Ph: 515-294-1183; Fax: 515-294-6336; E-mail: that are limited in supply. In profes- shown in Figure 2, commission re-
card-iaagrev@iastate.edu; sional baseball, increases in revenue ceived per policy sold has increased
Web site: www.card.iastate.edu.
typically show up in inflated salaries by a factor of almost four.
Articles may be reprinted with permission and with appro- to star players because they are in One measure of the extent to
priate attribution. Contact the managing editor at the above limited supply and owners compete which the industry is overcompen-
e-mail or call 515-294-6257.
for their services. In farming, an sated is the difference between the
increase in the price of crops tends minimum amount agents would ac-
to increase land rents because there cept to sell crop insurance policies
is only so much land to go around. and the amount that they currently
In economic terms, the factor that is receive. This measure assumes
Iowa State University most limited in supply is the residu- that all other factors in the crop
Iowa State University does not discriminate on the basis of race,
al claimant of any excess profits to insurance industry, such as staff or
color, age, religion, national origin, sexual orientation, gender
identity, sex, marital status, disability, or status as a U.S. vet- an industry. executive salaries, are paid a com-
eran. Inquiries can be directed to the Director of Equal Opportu- In the crop insurance industry, petitive amount. An overestimate of
nity and Diversity, 3680 Beardshear Hall, 515-294-7612.
though, as mentioned earlier, the the minimum amount of compensa-
Printed with soy ink only price that reflects competi- tion required to sell crop insurance
tion among companies is the price policies is the amount received
they pay agents for their books of in 2001. This is an over-estimate
business. Thus a good measure of because there was no shortage of


Iowa Ag Review

with the industry increased faster

than industry norms.
It is difficult to compare this
$1.165 billion estimate of over-
compensation with the 72 percent
excessive rate of return estimate
made in the RMA report because of
different methods used. But these
two estimates are clearly consis-
tent with an overall conclusion that
taxpayer support of the U.S. crop
insurance industry is excessive. To
better reconcile different estimates
of whether subsidies are too high or
Figure 1. Agent commissions as a percentage of total premium too low, government analysts could
make a simple adjustment: remove
Source: Table 5.1 of Grant Thornton report for National Crop Insurance Services, agent commissions as an unavoid-
October 2, 2009. able cost of business. As explained,
agent commissions are determined
by the level of subsidies provided to
the industry. Only the level of com-
mission that would induce agents to
quit the crop insurance business is
an unavoidable expense.

Ways to Cut (But Is There a Will?)

Industry revenue from underwriting
gains and expense reimbursement
totaled $3.2 billion in 2008. Thus, a
cut of $1.165 billion would have left
the industry with about $2 billion
in revenue. The two ways that this
amount of money could be reduced
is a combination of a reduction in av-
Figure 2. Commissions received per U.S. crop insurance policy sold erage underwriting gains along with
a change in the way that expense
reimbursements are calculated.
agents willing to sell crop insurance crop insurance companies in 2008 Underwriting gains, though,
in 2001, which implies that this was $1,015 per policy. give companies incentives to police
amount gave them a good return on There were 1.148 million poli- fraud in the program. But RMA
their labor. cies sold in 2008. So an estimate of could increase the amount of un-
Of course, we should increase the amount of excessive compensa- derwriting gains that companies
this 2001 amount by general wage tion that crop insurance companies give back to the agency in years in
inflation to reflect the prevailing receive from taxpayers is $1.165 which there are gains (the quota
increase in wage rates. If we make billion ($1,015 per policy multiplied share) in exchange for the agency
this adjustment, then the minimum by 1.148 million polices). More spe- taking on more of the losses in loss
amount of compensation needed cifically, if taxpayer subsidies to the years—which would cut average
in 2008 to induce crop insurance crop insurance industry had been taxpayer costs.
agents to provide the same level $1.165 billion lower in 2008, then To cut expense reimbursement,
of service that they provided in the level of service that existed in RMA could pay companies a flat
2001 is $426 per policy. The actual 2001 would have existed in 2008. amount per policy, say $426 per
compensation was $1,442. Thus, And, as stated earlier, this estimate policy. This would amount to about
the amount by which agents were of the amount of excess compensa- $500 million per year to pay agent
able to increase their compensation tion to the industry is too low if the
because of increased profits of the salaries of other personnel involved Continued on page 8


Iowa Ag Review

Drought Tolerance and Risk in the U.S. Crop Insurance Program

Bruce A. Babcock ratios are used to set rates instead
babcock@iastate.edu While most attention by the of just total payments made to ac-
515-294-6785 count for variations in the amount
interested public has of insurance that is purchased over
Tian Yu time and across regions. For ex-
yutian@iastate.edu focused on companies’ ample, an expensive home in 1970
515-294-2241 may have cost $200,000, whereas
large underwriting profits the comparable home today might

re farmers paying too much be valued at $2 million. A $10,000
for crop insurance? It sure and agents’ extraordinary claim paid in 1970 (5 percent of the
seems so, at least in the Corn value of the home) is comparable to
Belt. With the exception of 2008 commissions in recent a $100,000 claim today. If the risk of
when a large drop in price triggered insuring homes is no greater today,
payments, Corn Belt farmers have years, much less then the probability of making a 5
generally paid more into the pro- percent loss payment in 1970 equals
gram than they have gotten out, de- attention has been paid the probability of making a 5 percent
spite Congress’s intention that farm- loss payment today. By expressing
ers get at least two dollars for each to the premium-setting part claims paid as a percentage, insur-
dollar they pay into the program. ance companies can use past data to
But answering this question of the program. determine what they are likely to pay
is more difficult than just looking out in the future.
at the recent pattern of premiums The use of past loss-cost ratios
paid and claims received. How crop products plays a central role in deter- is the foundation for how RMA
insurance premiums are determined mining how much farmers pay for determines the extent to which
is quite complex. A few actuaries in their coverage and how much the there is yield risk. The loss-cost
USDA’s Risk Management Agency overall program costs taxpayers. procedure is valid if the risk of a 30
(RMA), a few actuaries outside of Congress has instructed RMA percent loss today is the same as
RMA, and a handful of university to set premiums to achieve a tar- the risk of a 30 percent loss in the
professors sort of know what is go- get loss ratio (indemnities paid out past. If it is, then RMA can simply
ing on. However, given the growing divided by total premium charged) calculate how often crop insurance
importance of premium setting in of 1.0. How RMA tries to achieve this companies have paid out different
the U.S. crop insurance program, target loss ratio is complicated by percentage losses to estimate the
it is important for more people to the fact that most farmers today buy current probability of paying out
know, at least in general, how these revenue insurance, which can pay losses of different magnitudes. The
premiums are determined. off when either market price or yield assumption of a constant percent-
In the public/private partnership drops. But RMA determines how age loss risk over time underlies the
that governs the U.S. crop insurance much companies can charge for the premium rates for all the popular
program, the private sector sells yield part of the coverage following crop insurance products, including
policies, adjusts claims, and submits fairly standard insurance guidelines Revenue Assurance, Crop Revenue
data to RMA. The government’s role for property and casualty insurance. Coverage, Actual Production His-
is to reimburse companies for their Insurance companies maintain tory, Group Risk Income Protection,
costs, provide reinsurance, and set large databases of historic loss data and the Group Risk Plan. Although
all premiums. While most attention to help them determine how much this assumption is convenient for
by the interested public has focused they should charge for insurance. setting premium rates, there is
on companies’ large underwriting By looking back in time and across mounting evidence that crop yields
profits and agents’ extraordinary customers, companies calculate how today are less susceptible to losses
commissions in recent years, much much they have paid out in insur- than in the past.
less attention has been paid to the ance claims relative to the total
premium-setting part of the pro- amount of insurance that their cus- Are Crop Risks Getting Lower?
gram. But how much the government tomers have purchased. The ratio of Figure 1 provides the first piece of
says crop insurance companies can losses paid to coverage purchased is evidence that crop risk has been
charge for the various insurance called the loss-cost ratio. Loss-cost decreasing over time. As shown,


Iowa Ag Review

by high temperatures. A good index

of drought would show severity in-
creasing as hot and dry conditions
increase (see the paper by Yu and
Babcock for further details).
The second step is to construct
a measure of yield loss. We accom-
plished this by estimating what yield
would be in any year absent hot and
dry conditions and then comparing
what yield actually was in the years
of hot and dry conditions. There are
two relevant measures of yield loss.
Under the lost-cost ratio method of
rate making, yield loss expressed as
Source: National Summary of Business Reports, USDA RMA. a percentage is assumed to stay con-
stant over time. So we are interested
Figure 1. Loss ratios for the U.S. crop insurance program from 1989 in calculating yield loss expressed
to 2008 as a percentage of what yield would
have been without drought. A sec-
the overall loss ratio for the U.S. Because biotech corn has been ond measure is the number of bush-
crop insurance program has indeed planted widely now for some time, els lost. If the percentage of yield
been declining. The average loss it seems reasonable to expect that loss is constant over time, and trend
ratio from 1989 to 1999 was 1.12. The evidence of lower corn yield risk yields are growing over time, then
average from 2000 to 2008 has been should be discernable in yield data. the absolute number of bushels lost
0.88. And there has not been a loss Findings from a new research report due to a drought of a given severity
ratio above 1.0 since 2003. However, (Yu and Babcock, 2009) support must be increasing.
a declining loss ratio, in and of itself, biotech company claims: corn yield The final step is to find yield
is not proof that crop risk has been losses from drought are much lower data that can be matched up with
reduced. For example, the decline today than in the past. The report the drought index data. The longest-
could be due to good growing-season also shows that not all of the reduc- running consistent data series on
weather. There have not been wide- tion in yield risk is due to increased yield is published by the National
spread losses in the Corn Belt due insect control because soybean Agricultural Statistics Service
to drought since 1988, and Corn Belt yield losses to drought have also (NASS). Measuring how the impact
states account for more than half declined. Next, we review what the of drought on yield has changed
of the total liability in the program. report found and the implications over time obviously requires obser-
Before we can conclude that risk has for premiums and taxpayer cost vations of drought throughout the
been reduced, we need to account from crop insurance. time period studied. Although the
for whether the decline in loss ratios incidence of drought has decreased
could have been caused by a string Measuring Changes in Drought over time, with no major drought
of better-than-average growing sea- Tolerance of Corn and Soybeans affecting Iowa yields since the 1980s,
sons that could change in the future. If corn and soybean yields are there have been enough droughts
Another piece of evidence that less susceptible to drought, then a in certain regions of Illinois and In-
yield risk for corn is lower now than drought of a given severity in 1980 diana in the 1980s and from 2000 to
in the past is that RMA has ap- would have resulted in larger yield 2008 to allow good measurements.
proved substantially lower premium losses than if the same drought had Figure 2 shows how yield losses
rates for farmers who plant biotech hit this year. Thus, a straightforward from droughts of different severi-
corn. The companies that produce method for making such a determi- ties in the years 1980–1989 compare
this biotech corn, which expresses nation is to compare yield losses with yield losses from comparable
toxins that kill corn borers and corn to drought in the 1980s with more droughts in 2000–2008 for corn and
rootworms, argue that their new recent yield losses. soybeans. Drought severity is indi-
hybrids are more vigorous and can The first step is to construct a cated by the value of the drought
better withstand adverse growing measure of drought severity. In the index on the horizontal axis, and
conditions. After seeing company Corn Belt, a lack of rainfall causes yield loss is the average loss either
data, the RMA agreed. the most damage if accompanied in bushels per acre or percentage


Iowa Ag Review

soybeans, the evidence seems strong

that the percentage of yield lost due
to drought has declined over time.
To estimate the magnitude of
these changes in drought-induced
losses, we use an equation that
shows how yield has changed over
time because of better management
and technology and how drought’s
impacts on yields have changed
over time. The estimated equation
can also be used to determine if the
increase in drought tolerance is sta-
tistically significant.
The estimated equation is
available in the working paper. The
hypothesis of increasing drought
tolerance for corn is strongly sup-
ported by the data. For soybeans,
the hypothesis of increasing drought
Figure 2. Estimated yield losses from drought in the years 1980–1989 and tolerance when yield loss is mea-
2000–2008 sured as a percentage of yield is also
strongly supported by the data. Soy-
bean yield loss measured in bushels
per acre is estimated to be practi-
cally unchanged over time. Figure 3
shows the estimated bushel-per-acre
loss for corn for droughts of differ-
ent severities. As shown, the esti-
mated number of corn bushels that
would be lost to drought is lower in
2008 than in 1988. The gap between
drought losses in those two years
widens considerably when losses
are expressed as a percentage of
drought-free expected yield, as
shown in Figure 4. For corn, a return
of a 1988 drought would reduce
yields by 31 percent in 2008, which
is far below the 45 percent losses
from the same drought in 1988. This
is a reduction in yield risk from
Figure 3. Estimated bushel-per-acre corn losses from drought in 1988 drought of 31 percent. For soybeans,
and 2008 there has been less of an increase in
drought tolerance than for corn. But
of yield in the counties that had els per acre. Thus, the data seem for a 1988-style drought, estimated
droughts of the given severity. As to support the idea that corn has losses have been reduced from 28
expected, the greater the drought become more drought tolerant over percent of drought-free expected
severity, the greater the yield losses. time. The evidence for soybeans is a yields to 23 percent—a reduction in
For corn, losses in the 1980s are bit mixed. Percentage yield loss due drought risk of about 18 percent.
greater than losses since 2000 for to drought is lower in 2000–2008 than
each category of drought severity in 1980–1989 for all droughts except Implications of Increased
when loss is measured in percentage for the most severe category, while Drought Tolerance
terms, and for most drought catego- there is no clear pattern for bushel- The maintained hypothesis that
ries when loss is measured in bush- per-acre loss. But for both corn and underpins all premium rates for


Iowa Ag Review

1980 to 2008 under the assumption

that percentage yield loss due to
drought has been constant over time
were calculated for four counties in
Illinois and Indiana for each crop
under the Group Risk Plan (GRP)—
a county-based yield insurance
program. The premiums needed to
cover these losses assuming declin-
ing percentage losses as shown in
Figure 4 were also calculated. The
differences were then subtracted
from the actual GRP rates. This re-
sults in adjusted GRP premium rates
that account for increasing drought
tolerance. Figure 5 shows the per-
centages by which current GRP rates
in those counties are too high. As
expected given the findings in Figure
Figure 4. Estimated percentage losses from drought for corn and soybeans 4, the percentage over-rating for corn
in 1988 and 2008 is generally much greater than for
soybeans. The anomalous result for
Spencer County corn is due to a low
percentage of the GRP corn rate that
is accounted for by drought. In Peo-
ria County, the unloaded GRP pre-
mium rate for 90 percent corn cover-
age is 3.41 percent. Given increased
drought tolerance, the premium
rate should be 1.06 percent. This
large difference shows the potential
impact of accounting for increased
drought tolerance of crops. For
soybeans the difference is smaller
but still significant. In Jasper County
the unloaded GRP rate is 2.22 per-
cent. Accounting for the increased
drought tolerance of soybeans would
drop the GRP rate to 1.52 percent.
The impact of lower premiums
on farmers is straightforward: if
premiums were to drop by 40 per-
cent, then the premium that farmers
would have to pay for the same level
Figure 5. Percentage by which premium rates for Group Risk Plan of coverage would fall by 40 per-
insurance are too high (1980–2009 premiums, assuming constant yield cent. Consequently, farmers would
losses due to drought) greatly benefit if increased drought
tolerance were accounted for in
the U.S. crop insurance data of a important source of yield risk, this crop insurance. The amount that
constant percentage yield risk over finding implies that Corn Belt crop crop insurance companies receive
time is not supported by the data. insurance premiums are too high. as an expense reimbursement would
Both corn and soybean yields in To determine the extent to also drop by the same percentage
the Corn Belt are more tolerant of which crop insurance rates may be because expense reimbursements
drought today than they were in the too high, the premiums needed to
past. Because drought is such an cover losses due to drought from Continued on page 8


Iowa Ag Review

Examining the Health of the U.S. Crop program that has generated 20 per- raise taxes or cut expenditures. But
Insurance Industry cent annual salary growth for crop there are economic costs associated
Continued from page 3 insurance agents who reside in rural with raising tax revenue, so federal
areas seems pretty remote. After programs should be scrutinized for
commissions. Then RMA could add all, Congress and the administration efficiency. In agriculture, the place
in so much per policy for claims ad- are currently borrowing money to to start is the crop insurance pro-
justment and so much per policy for create jobs to keep unemployment gram. There is no doubt the same
salaries and other overhead. down. But eventually, borrowed level of service can be provided to
The chances that Congress will money has to be paid back. And the farmers at much lower cost. ◆
soon embrace a cut in funding for a only way to pay back money is to

Drought Tolerance and Risk in the U.S. A Full Accounting become available, it is important that
Crop Insurance Program The efforts of biotechnology com- the crop insurance industry and Risk
Continued from page 7 panies seem to have paid off in an Management Agency alter the way
unanticipated manner by making they determine crop insurance rates
are calculated as a proportion of pre- corn hybrids better able to with- so the system can directly reflect the
miums. This drop in expense reim- stand drought conditions. Modern, lower risks.
bursement could be lower if farmers herbicide-resistant soybeans also
responded to a premium decrease by seem, for more enigmatic reasons, to Work Cited
buying more expensive coverage. have increasing drought resistance. Yu, Tian, and Bruce A. Babcock.
In addition, a drop in premium In addition, both crops are being “Are U.S. Corn and Soybeans Be-
rates would increase loss ratios, managed by larger and perhaps coming More Drought Tolerant?”
which would decrease underwrit- more able managers. And better CARD Working Paper 09-WP 500,
ing gains. Because taxpayers do not management leads to more timely October 2009, Center for Agricul-
benefit as much from underwriting field operations, which could result tural and Rural Development, Iowa
gains as they lose when there are in increasing drought tolerance. State University. Available at http://
underwriting losses, such a change The large impacts of this newly www.card.iastate.edu/. ◆
would likely benefit taxpayers. Thus, evident drought tolerance in corn and
taxpayers and farmers would likely soybeans may be dwarfed if seed com- Tian Yu is a graduate research assis-
be net winners from an adjustment to panies are in fact successful in their tant in the Center for Agricultural and
crop insurance premiums to account targeted efforts to reduce yield losses Rural Development and Department of
for increasing drought tolerance. due to drought. As new technologies Economics at Iowa State University.

Recent CARD Publications

Working Papers
Are U.S. Corn and Soybeans Becoming More Optimal Placement of Conservation Practices
Drought Tolerant? Tian Yu and Bruce A. Using Genetic Algorithm with SWAT. Manoj
Babcock. October 2009. 09-WP 500. Jha, Sergey Rabotyagov, and Philip W.
Dynamics of Biofuel Stock Prices: A Bayesian Gassman. July 2009. 09-WP 496.
Approach. Xiaodong Du, Dermot J. Hayes, A Paradox for Agro-Environmental Land
and Cindy Yu. September 2009. 09-WP 498. Policy. David A. Hennessy and Hongli Feng.
The Impact of Biofuels Policy on Agribusiness October 2009. 09-WP 499.
Stock Prices. Fatma Sine Tepe, Xiaodong Pass-Through in United States Beef Cattle
Du, and David A. Hennessy. September Prices. Huan Zhao, Xiaodong Du, and David
2009. 09-WP 497. A. Hennessy. 09-WP 494. July 2009.
Land Retirement Program Design in the
Presence of Crop Insurance Subsidies.
David A. Hennessy. July 2009. 09-WP 495.


Iowa Ag Review

End of a Long Run

his issue of the Iowa Ag Re- how most policies are funded by the We’ve enjoyed connecting with
view closes out the 15th vol- many to favor the few. you these many years through the
ume of this quarterly publica- CARD’s research on the impor- Iowa Ag Review. We invite you to
tion. Over the last 15 years we have tant issues affecting agriculture continue to follow our research
strived to present timely informa- will continue. But it will no longer and economic analysis of impor-
tion and insight into the important be reported in the Iowa Ag Review. tant issues in agriculture at our
issues that impact Iowa and U.S. The reality of shrinking budgets Web site: www.card.iastate.edu.
agriculture. Aided by the explosive combined with increased demands
growth of the Internet and Google, on ever-scarcer faculty time means
the Iowa Ag Review truly has a that we can no longer afford the
worldwide audience. We regularly time and money needed to keep the
receive comments on our articles publication going on a regular basis. Bruce A. Babcock
from as far away as Nepal and Aus- In its place, beginning in 2010, Director
tralia, as well as from more nearby CARD will begin a new publication Center for Agricultural and Rural
towns in Northwest Iowa. series titled CARD Policy Briefs. Development, Iowa State University
Many readers have found the This series will contain the same
Iowa Ag Review’s even-handed analy- type and length of articles that
sis of controversial topics a welcome have been published in the Iowa Ag
respite from the never-ending flow Review. Entries in the new series
of self-serving studies advocating will appear on our Web site when a
particular policy positions. If we do topic or issue seems ripe for analy-
break from our non-advocacy posi- sis or when CARD research needs
tion it is usually in favor of policy re- to reach a broader audience.
forms that cut wasteful government We will set up an electronic
spending or that provide valuable alert system for those of you who
public goods because taxpayers want to be notified when new
and the general public are the least- articles are posted. Please send
represented groups in legislative your e-mail address to card-pub@
bodies. Economists have a long and iastate.edu or fill out and mail the
esteemed history of pointing out postage-paid card below.

132-0025 NO POSTAGE
578 Heady Hall IF MAILED
Iowa State University IN THE
Ames, IA 50011-1070


Iowa Ag Review
Center for Agricultural and Rural Development
Iowa State University
578 Heady Hall
Ames, IA 50011-1070


Please enter my e-mail address into the alert system to notify me when new articles
are posted as CARD Policy Briefs.

My e-mail address: ______________________________________________

(Please print clearly)

E-mails will be sent in plain text. CARD will never share, sell, or rent personal informa-
tion with anyone. Information submitted to us is only available to employees managing
this information for purposes of contacting you or sending you e-mails based on your
request for information. Each e-mail sent contains an easy, automated way for you to
cease receiving e-mail from us.