| The farmer's response to the Federal Crop Insurance Reform Act of 1994 is analyzed using SDRF (Stochastic Dominance with Respect to a Function) and EV (mean-variance) criteria. Risk management strategies for barley, durum wheat, spring wheat and sunflower in the northwest and north-central crop reporting districts of North Dakota are considered.;The results show that all SDRF efficient strategies under the new legislation are to register for government commodity programs (GCP) and the crop insurance program. Preferred coverage levels varied with farmer's risk attitudes. Farm managers with low levels of risk aversion prefer only participating in the GCP under the previous crop insurance program. The analysis implies that the 1994 Act will encourage more producers to purchase crop insurance policies. |
