International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

General Information on Taiwanese Crop Insurance

With technology constantly evolving in agriculture and producers adapting these methods to conduct business, it is important for the Taiwanese academia and Taiwanese Crop Insurance Corporation (TCIC) to meet the growing demands of farmers and ranchers, we study and design agricultural profit insurance as risk management tool in this paper. We identify the key issues and concerns that arise in the design and rating of agricultural yield insurance plans, with a particular emphasis on yield risk modeling. We show how the availability of data shapes the insurance scheme and the ratemaking procedures. Relying on the Taiwan experience and recent developments in statistics and econometrics, we review some risk modeling concepts and provide technical guidelines in the development of agricultural insurance plans. Yield randomness varies regionally. Price randomness differs among commodities and changes over time. Yields and prices tend to move in opposite directions. Finally, we show how these risk modeling techniques can be extended to price risk in order to develop agricultural profit insurance schemes.

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