Factors influencing participation in Federal Crop Insurance in the High Plains of Texas

Farmer attitudes regarding the use of crop insurance and the organizational and institutional characteristics of farms in the High Plains of Texas were investigated in an effort to determine the factors influencing participation in the Federal Crop Insurance program. Farms were stratified on the basis of soil -water resource combinations and sample participant, prior-participant and non-participant farmers were interviewed. Among the various strategies employed to reduce income variability due to unforeseen crop losses, participants rely primarily upon crop insurance, cash reserves, and field dispersion in the order listed. One-fourth of the non-participants and one-third of the prior-participants have no known precautionary measure of protection against crop losses and rely principally upon crop diversification for farm income stability. Although prior-participants are no longer insured with Federal Crop Insurance, as a group they still rank crop hail insurance as the principal strategy employed against crop losses, followed by field dispersion and cash reserves. The strategy ranked first by non-participants was cash reserves, with hail insurance in second place, and livestock in third position. Thus, a form of crop insurance (including hail insurance) holds a prominent position among all other strategies to reduce farm income variability associated with crop losses in this area. ..