Whole Farm Income Insurance in a Canadian Context
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This paper employs mean-variance and mean-skewness optimization to investigate farmers’ crop
choices under Gross Revenue Insurance (GRIP), Whole Farm Income Insurance, the Canadian
Agricultural Income Stabilization program, and its modified 2008 program AgrInvest. To our
knowledge this paper is the first to fully consider the endogenous optimization of whole farm
insurance in a farm optimization model. The results indicate that farmers will alter farm plans
significantly in response to the type of insurance offered and the level of subsidy. Farmers will
take on production risks that they would not otherwise take and this risk taking behavior is
exacerbated by subsidy.