Crop insurance and farm management of weather-related risks

Agricultural crop-based operations inevitably experience risk related to weather variability. How farmers cope with these weather-related risks, both throughout the growing season and from year to year, is not well understood due to the complexity of the decision making process. Farmers may choose from a range of production, financial and marketing strategies that function to alleviate the risk associated with weather.;One option currently available to farmers to manage the risk associated with weather is crop insurance. This research addresses the question of how farmers employ crop insurance in the management of weather-related risks. Soybean production, in particular, is examined as it is sensitive to weather and because it is a major cash crop in Ontario.;Provincial level data are employed to provide an understanding of the types of relationships which may be expected to occur between weather variability and crop insurance use. However, this level of examination relies on assumptions about behaviour and decision making. A farm level survey of soybean producers in Middlesex County provides an improved understanding of how crop insurance is used to manage weather-related risks by farmers.;This research concludes that soybean producers in Middlesex County employ crop insurance to manage the weather risks which predominantly interfere with the planting schedule. While some soybean producers in Middlesex County tend to employ crop insurance as part of a suite of risk management strategies, others are substituting alternative income protection strategies to alleviate the risk associated with weather.