gis in relation to crop insurance
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GIS In Relation to Crop Insurance. Mark Coffman Spring 2011. Definition of Crop Insurance. - PowerPoint PPT PresentationTRANSCRIPT
GIS In Relation to Crop Insurance
Mark CoffmanSpring 2011
A contract of indemnity by which one party promises to compensate another for the financial loss incurred by the destruction of agricultural products from the forces of nature, such as rain, hail, frost, or insect infestation.
Definition of Crop Insurance
In 1938, Congress passed the Federal Crop Insurance Act establishing the first Federal crop insurance program
Before this, private insurers had difficulty providing affordable insurance products to producers
The costs of the Federal Crop Insurance Act were high and participation was low
History of Crop Insurance
In 1980, Congress passed legislation that would lower costs and raise participation rates by forming partnerships between private insurers and the government
In May 2000, Congress passed legislation forming the Agricultural Risk Protection Act (ARPA)
This made it easier for producers to access different insurance policies
History of Crop Insurance
2010 Oklahoma Indemnity Map
2010 Oklahoma Crop Profile
Excellent risk management for producers Provides loan security for lenders Provides a concrete source for bottom line
protection
Why Producers Use Crop Insurance
Crop Revenue Coverage (CRC) Revenue Assistance (RA)
◦ Revenue insurance protecting against low yields, low prices, or combinations of these.
◦ Indemnities are paid when actual gross revenue falls below a revenue guarantee
CRC and RA Insurance
Actual Production History (APH) insurance is the longest running crop insurance
Cheapest form of crop insurance Only covers producers from loss of bushels Price fluctuations are not accounted for with
APH insurance The yield average is based on the history of
that particular farm
APH Crop Insurance
Insurance◦ Farm Average: 40 bu◦ 75% coverage level◦ 40 * 75% = 30 bu/ac yield guarantee
Actual Yield◦ 15 bu/ac◦ 100 acres◦ $5.00 price election◦ 30 – 15 = 15 bu/ac◦ Indemnity payment
15 bu/ac * 100 acres * $5/bu = $7,500
APH Plans
Fire Insects (only if control practices were used) Plant diseases Wildlife Earthquake Volcanic eruption Failure of irrigation Revenue loss due to price Prevented planting (due to insurable cause of
loss)
Losses
GIS systems can create geospatial snapshots of cropland
Land cover data layers provided by enhanced GIS systems help many people such as:◦ Crop insurance companies◦ Crop growers associations◦ Seed/fertilizer companies
GIS
The USDA and the RMA administer the Federal crop insurance program
GIS helps this program by providing maps and products which are then incorporated with crop insurance policy data
GIS
The original GIS tool was created by ArcGIS 8
There are 4 main data layers that were used for analysis:◦ Soil Rating for Plant Growth◦ Slope◦ Elevation ◦ Flooding Zones
The soil rating for plant growth is created by using nearly 25 parameters of soil quality in the Soil Survey Geographic Database. Some of these parameters include soil climate, depth of root zone, and fertility
Prototype GIS
GIS can help RMA with maps of participation rates, causes of loss, loss ratios, etc.
Map areas that are more likely to experience loss based on physical factors
Analyze crop conditions based on satellite sensing and predict crop failure/loss in advance
GIS