Farm-Level Analysis of Risk Management Proposals, March 2000

This paper presents a detailed report of the representative farm analysis (summarized in FAPRI Policy Working Paper #01-00). At the request of several members of the Committee on Agriculture, Nutrition, and Forestry of the U.S. Senate, we have continued to analyze the impacts of the Farmers’ Risk Management Act of 1999 (S. 1666) and the Risk Management for the 21st Century Act (S. 1580). Earlier analysis reported in FAPRI Policy Working Paper #04-99 concentrated on the aggregate net farm income and government outlay impacts. The representative farm analysis is conducted for several types of farms, including both irrigated and non-irrigated cotton farms in Tom Green County, Texas; dryland wheat farms in Morton County, North Dakota and Sumner County, Kansas; and a corn farm in Webster County, Iowa. We consider additional factors that may shed light on the differential impacts of the two plans. 1. Farm-level income impacts under alternative weather scenarios. 2. Additional indirect impacts, such as a change in ability to obtain financing. 3. Implications of within-year price shocks. Our results indicate that farmers who buy crop insurance will increase their coverage levels under S. 1580. Farmers with high yield risk find that the 65 percent coverage level maximizes expected returns, but some who feel that they obtain other benefits from higher coverage will find that the S. 1580 subsidy schedule significantly lowers the cost of obtaining the additional coverage. Farmers with lower yield risk find that the increased indemnities from additional coverage will more than offset the increase in producer premium. In addition, because S. 1580 extends its increased premium subsidy percentages to revenue insurance products, farmers will have an increased incentive to buy revenue insurance. Differences in the ancillary benefits from crop insurance under the baseline and S. 1580 would be driven by the increase in insurance participation and buy-up. Given the same levels of insurance participation and buy-up, the ancillary benefits under the two scenarios would be the same.

Development of Concepts for Pavement Management, MLR-79-04, 1979

Sufficient evidence was not discovered in this brief search to alter the general opinion that the Serviceability (Present Serviceability Index-PSI) - Performance Concepts developed by the AASHO Road Test provides the optimum engineering basis for pavement management. Use of these concepts in Iowa has the additional advantage in that we have a reasonable quantity of historical data over a period of time on the change in pavement condition as measured by PSI's. Some additional benefits would be the ability to better assess our needs with respect to those being recommended to Congress by AASHTO Committees. These concepts have been the basis used for developing policies on dimensions and weight of vehicles and highway needs which the AASHTO Transport Committees have recommended to the United States House Committee on Ways and Means. The first recommendation based on these concepts was made in the mid 1960's. Iowa's participation in the evaluation for this recommendation was under the direction of our present Director of Transportation, Mr. Raymond Kassel. PSI Indexes had to be derived from subjective surface ratings at that time. The most recent recommendation to Congress was made in November of 1977. Based on the rationale expressed above, a pilot study of the major part of the rural interstate system was conducted. The Objective of the study was to measure pavement performance through the use of the Present Serviceability Index (PSI) - Pavement Performance concepts as developed by the AASHO Road Test and to explore the usefulness of this type of data as a pavement management tool. Projects in the vicinity of the major urban centers were not included in this study due to the extra time that would be required to isolate accurate traffic data in these areas. Projects consisting of asphalt surface courses on crushed stone base sections were not included.