Cotton Management Economic Notes, Volume 8, No. 1

Abstract

USDA's Risk Management Agency (RMA) announced last fall that cotton insurance rates would be recalculated for the 2000 crop year, resulting in a general lowering of rates for the West and MidSouth. RMA stated that, "rate changes have been adjusted to account for historically low producer participation in these regions." This adjustment has resulted in a fairly significant lowering of insurance premiums for most, but not all of Arizona's counties. The accompanying table illustrates the percentage change in rates for a "midlevel" policy by county from 1999 to 2000 for Upland and ELS. That is, rate changes assume a rate class of R07 (e.g., insured yield of 1,223-1,339 lbs. for Maricopa Upland) and 65 percent basic yield coverage level. Rate changes are before any government discounts.