**Testimony of G.A. (Art) Barnaby, Jr.**[^1]

**Professor of Agricultural Economics**

**Research and Extension**

**Kansas State University**

**Manhattan, Kansas 66506**

**Before the Subcommittee on General Farm Commodities and Risk
Management**

**U.S. House of Representatives**

**June 7, 2007**

Mr. Chairman Etheridge, Ranking Member Moran and Members of the General
Farm Commodities and Risk Management Subcommittee of the House Committee
on Agriculture; I appreciate the opportunity to appear before this
hearing on an overview of the Federal Crop Insurance System. My name is
Art Barnaby, with Research and Extension, Kansas State University.

Crop insurance has become an integral part of many farmers risk
management plans. In the mid-1980's, Dr. Bill Tierney and myself
developed a series of workshops to teach farmers how to combine crop
insurance with marketing tools to manage revenue risk. In the process,
it became apparent the standard multi-peril crop insurance contract
offered through the Risk Management Agency (RMA) did not meet the real
need of farmers who were preharvest pricing grain because multi-peril
crop insurance replaced bushels not at current market value but at a
forecasted price. For example, the 1988 drought caused both crop losses
and an increase in market prices that far exceeded the price forecasted
by RMA. A similar result occurred with the 2006 corn and grain sorghum
harvest price increase above RMA's forecasted price. APH insured corn
farmers were paid \$2 while Revenue Assurance with the Harvest Price
Option (RA-HPO) insured farmers were paid \$3.56 per lost bushel. Any
farmer who forward contracted corn but was not able to make delivery
were required to purchase those lost bushels at current market value of
\$3.56 plus basis to meet the requirements of their forward contract.

After the large price increase combined with a short crop in 1988,
working with a private company we developed a multi-peril insurance
contract that increased coverage when grain prices increased and
replaced any loss production at current market value, not at a
forecasted price at planting time. This was a private endorsement on the
multi-peril crop insurance contact titled Market Value Protection (MVP).
The MVP endorsement converted the multi-peril crop insurance contract
from a bushel payment trigger contract to a replacement guarantee.
Initially, that was done to offset the loss of deficiency payments that
occurred when markets prices were higher and farmers had no yield to
sell due to drought or other weather perils but after the 1996 Farm
Bill, it was used primarily as a method to guarantee performance on
forward contracts or hedges.

The MVP replacement contract was the first crop insurance contract to
include price risk and was released in 1990. This concept of inventory
replacement at current market value is not a new one as many homeowners'
policies also contain provisions to replace their insured house at
current construction cost rather than a fixed dollar amount.

The MVP replacement coverage was included in the Crop Revenue Coverage
(CRC) contract introduced in 1996. Working with a private company I
helped to develop the CRC contract. CRC was submitted to RMA for
reinsurance and made available to all insurance companies. The CRC
contract combined both the revenue guarantee and the replacement
guarantee in a single contract.

Income Protection (IP) was released the following year as was Revenue
Assurance (RA). These contracts guaranteed revenue but did not include
replacement value protection. In 2000, Revenue Assurance added the
Harvest Price Option (RA-HPO), which is the bushel replacement portion
of the contract and it is nearly identical to the CRC contract.

Because of the availability of CRC and RA-HPO, it is possible for
farmers to forward contract bushels up to 3 years before harvest and
remain in a fully hedged position. Farmers will either have the bushels
at harvest time in those future years or they will receive enough
insurance dollars to replace the lost inventory that is necessary to
offset the marketing plan. Some academics will argue that it does not
pay to market and I will not enter into that debate. But one thing is
absolutely certain, farmers have no choice once they plant the crop,
they will have to sell the crop because farmers simply can't store the
crop forever. Because farmers must sell the crop at some point, then the
alternative becomes either create an organized plan for selling the
crop, recognizing that price forecasting is less than a perfect science,
or if one truly believes marketing is random then just get up in the
morning and flip coins on the decision to sell or not to sell

.

I personally believe that an organized marketing strategy will out
perform flipping coins. I also recognize that selling production ahead
of harvest does carry additional risk but with the advent of replacement
coverage crop insurance through CRC and RA-HPO this risk is greatly
reduced. The major benefit of the replacement crop insurance contracts
is not that farmers expect to collect claims exceeding their premiums
paid but the fact that CRC/RA-HPO increases the length of the marketing
window. In fact, under today's conditions farmers can price grain up to
3 years ahead of harvest to roughly 9 months after harvest, combined
with replacement coverage insurance and storage, and still remain in a
fully hedged position. At harvest time, replacement insured farmers will
either have the bushels to deliver or they will receive enough indemnity
dollars to replace those bushels at current market value.

Congress should be concerned about unintended consequences, because many
farmers are making marketing decisions now for the 2007 crop based on
some of the best corn and grain sorghum prices that have been offered in
years. Many farmers are even selling their 2008 crop. Most of these
forward marketing decisions are based on the assumption CRC/RA-HPO will
still be available. This is why it is so important that Congress
consider all of these unintended consequences if a major policy change
is made.

Even the critics of the crop insurance program have not argued the
program has not worked as planned by Congress. In Table 1, it is readily
apparent that the growth of the crop insurance program has continued
over the past 15 years. The combined farmer paid premium and premium
subsidy has increased from \$759 million to \$4.6 billion over this
period of time. During this period of time, there have been many reforms
of the crop insurance program that primarily focused on increasing
participation and encouraging farmers to purchase higher coverage
levels. Clearly, an increased number of farmers did purchase insurance
in 2006 versus farmers in 1992. Apparently, Congress has recognized this
too in the most recently passed disaster bill that does not provide
benefits on insurable crops to uninsured farmers on that particular
crop. In the past, farmers growing insurable crops were also allowed to
collect disaster payments but that will not be the case for the most
recently passed law.

There are two special cases where crop insurance may not provide the
level of protection farmers' desire. The first case is shallow losses.
As any insured farmers will tell you, crop insurance works extremely
well if one has a total loss but if a farmer raises half of a crop that
leaves one with all of the harvest expenses and greatly reduces
production to sell. Because of the "large" deductibles in the crop
insurance contracts a half of a crop leaves insured farmers with a much
greater financial loss than if they had a total crop failure. The other
issue is the case of multiple year losses where the APH declines and
premium rates increase exponentially. For some growers with a declining
APH the new Group Risk Income Protection (GRIP) or the Group Risk Plan
(GRP) contracts maybe the best alternative in selected counties under
conditions of a multi-year loss. However, those issues will be left for
future discussions.

If crop insurance has worked as intended by Congress; then why are we
having the current debate? One current argument being made is the crop
insurance program has worked but it is "extremely" expensive. As one can
see in table 1, as participation increases, the cost of premium
subsidies also increases proportionally, therefore the more farmers that
are insured, the higher the cost is for USDA. If we were still dealing
with 1992 participation the government cost would be lower but Congress
wanted higher participation and that is exactly what happened.
Therefore, if Congress wants to reduce the USDA cost of the program then
simply reduce participation, which may have unintended consequences.

The other fundamental question being raised; crop insurance is "too
expensive" but compared to what? In order to try to answer that
question, the USDA data in table 1 was converted to a format similar to
private property/casualty insurance. First step in the analysis was to
calculate the total premium costs that includes the A&O, the
underwriting gains/losses by the insurance companies, the premium
subsidy and the farmer paid premium to reach a total premium cost. One
point that is often overlooked is "underwriting gain" as defined by the
government is not underwriting gain as defined by property/casualty
insurance. Because RMA uses an incorrect term, many analysts have made
an error in their arguments by assuming underwriting gain has the same
definition as it does in the private sector. Under private
property/casualty insurance all of the company expenses and indemnity
payments are paid before there is an underwriting gain/loss. Clearly
some of those dollars USDA is reporting as "underwriting gains" to the
companies are being used to cover some of the companies' operating
expenses.

If multi-peril was a private insurance contract the companies source of
revenue is the unsubsidized premium paid by the consumer for their auto
policy, homeowner's policy, or crop hail policy. Out of each dollar of
premium collected insurance companies must pay their claims, loss
adjustment expenses, insurance agent commissions, operating expenses of
the company, etc. However, because of GAP accounting procedures for the
insurance industry it becomes quite complex to compare federally
subsidized crop insurance with other common lines of private
property/casualty insurance. In addition most private property/casualty
insurance companies, investment income is a significant source of
revenue simply because premiums are paid at the start of coverage unlike
crop insurance where companies are actually paying losses before they
collect premiums. Crop insurance premiums are collected at harvest time,
not at the start of the coverage period.

Once total premiums were calculated, which is all dollars paid in; the
analysis then lists the total dollars paid in indemnity payments. The
analysis then calculated the percent of the total premium that was paid
in indemnity payments.

Percent of premium paid is a hard number that is not subject to
accounting gimmicks or other manipulation and therefore, the one number
that is the most relevant for comparison. Over this 15 year period, the
weighted average percent of premium paid in claims was 66 percent. That
means out of every dollar received in total premiums, 66 cents was paid
out in claims and the remaining dollars would be used to cover agent
commissions, loss adjustment expenses, legal litigation and all of the
other operating costs of the insurance company.

The 66 percent of premium paid in indemnity payment is overly optimistic
and a simple average of the percentage paid, that weights the risk of
loss equal in each year, is probably closer to the long-run average,
which was 74.1 percent of each dollar paid in premiums to cover claims.
The reason is the most recent 5 years of experience has been
exceptionally good in the crop insurance industry and because the sales
volumes are significantly higher in the most recent 5 years that good
experience overrides some of the earlier years that generated sizeable
losses. Assuming RMA's premium rate is correct companies will have
future large scale losses that will make the average closer to the 74.1
percent figure.

If one somehow believes weather has significantly changed so that
companies will not have those severe future losses then RMA has set the
premium rates too high and they should be cut. Most observers are
willing to concede the past loss ratio experience is basically
actuarially sound at the national level and the recent run of good luck
is likely to be offset in future years bringing the loss experience back
in to line. In fact, over the last 4 years effectively RMA has also
generated about \$1 billion in "underwriting gain" that they retained.
However, I don't expect that to continue either.

The other thing that is really striking is the amount of variability in
the percent of premiums paid in claims ranging from a high of 181
percent to a low of 39 percent of premium paid in claims. While the
average is closer to 70 to 75 percent, there is a lot of extreme
variability annually. It is this annual variation in percent of premium
paid in claims that makes crop insurance a particularly difficult risk
to insure privately. Because these crop risks contain a significant
amount of systemic risk is the reason the crop insurance loss ratios are
either really high or really low. Unlike other lines of
property/casualty insurance where losses are largely independent of each
other, these losses are highly correlated. In other words, when a farmer
has a drought all farmers in the county/state have a drought and the
result is a catastrophic risk that is difficult to insure privately.

As demonstrated the expected premium paid in claims over the long-run is
likely to be in the 70 to 75 percent range, leaving 25 to 30 percent for
operating the insurance companies. The remaining question; is that a
reasonable margin? A comparison analysis was made of the performance of
reinsured crop insurance versus other lines of common private
property/casualty insurance. Table 2 contains historical losses for
personal automobiles. Notice the dollar amounts are much larger than the
\$5 to \$6 billion in reinsured crop insurance, approaching nearly \$160
billion dollars in premiums. A net premium was calculated that deducted
dividends paid back to policy holders from premium dollars paid in by
policy holders to allow for comparison with reinsured crop insurance.

The property/casualty industry statistics on claims unfortunately are
not as clean as one would hope. In their reported losses
property/casualty companies also include the Loss Adjustment Expense
(LAE). By utilizing data published in AM Best, an annual report from
State Farm automobile insurance company and the Insurance Information
Institute, it was documented the percent of these total losses
attributed to LAE range from a low of about 15 percent to a high of 18
percent of the combined LAE and auto claims. Therefore, the indemnity
only payments were estimated as a range based on the estimated amount of
dollars that would have been paid in LAE. Depending on how low or how
high the LAE is the percentage of each dollar premium paid in claims
ranges from about 62 percent to about 65 percent. The remaining amount
of the premium dollar is then used to pay for all of the expenses of the
insurance company and after the expenses are deducted the company
generates an underwriting loss or gain. The private property/casualty
companies then add their investment income to reach a bottom line.

A similar analysis was done for homeowner's policies where the expected
payout ranged from about 60 percent to about 63 percent of the total
premium paid in indemnity payments (table 3). Private crop hail
insurance had an expected payout that ranged from about 63 percent to
about 72 percent of the total premium paid in indemnity payments (table
4).

When comparing the percent of each premium dollar paid in claims between
reinsured crop insurance versus auto insurance, homeowners insurance,
etc, crop insurance is paying out anywhere from 5 to 10 percent more of
each premium dollar in claims then are other private lines of insurance.
That leaves crop insurance companies with a smaller margin to operate
than the typical private property/casualty company. Any reasonable
objective view would have to conclude the private crop insurance
companies selling reinsured crop insurance are as at least as efficient
as private sector property/ casualty insurance companies, which are
market driven. In fact, there are few barriers to entry to the insurance
industry other than the company must provide evidence they have the
financial means to pay claims on the insurance coverage that they write.
It is a very competitive market and one would have to conclude these
margins are necessary for a viable private property/casualty insurance
industry.

The data clearly suggests the crop insurance companies are operating
with a smaller margin than the typical private property/casualty
company. This would suggest there are limits on how large Congress can
cut the A&O or increase the retention of "underwriting gain" (quota
share) by RMA and still have a viable private crop insurance industry to
deliver reinsured crop insurance contracts. This data suggests crop
insurance providers are already more efficient then the typical private
property/casualty company so how much increased efficiency is possible
is really an unknown. If Congress further reduces these margins, then
these companies will have to find ways to be even more efficient or exit
the industry. This data also does not answer the question, could USDA
sell, service, and deliver crop insurance cheaper through government
employees then through the private sector. There have been USDA studies
completed several years ago that concluded sales through government
employees would be more expensive, but there is no current data, only
"common sense".

As demonstrated the percent of premium that remains, after all claims
are paid, to pay all of the operating expenses of the crop insurance
company are less than for the typical private property/casualty company.
Therefore, the other question is "are the costs lower for a crop
insurance company versus a private property/casualty insurance company?"
On the surface, one would certainly think the opposite would be true.
For example, insuring an automobile is a fairly simple process and there
are several major private property/casualty insurance companies who
operate with only a web site and 800 numbers and don't even employ
agents. By contrast, crop insurance agents have a much larger paper
volume than is required to write a crop insurance policy. This is
primarily due to the extensive recordkeeping for proven yield purposes
as those records must be maintained and updated by unit (often by crop
field) over a period of years. Many insurance agents provide some of the
recordkeeping help as a service to their clients.

Another source of cost to the insurance company beyond agent commissions
is the Lost Adjustment Expense (LAE). It is difficult to find statistics
that would allow for a direct comparison to give some indication of the
LAE for crop insurance companies versus private property/casualty
companies. As one thinks about the LAE for settling crop losses,
particularly in the Great Plains, farms cover very large geographic
areas that involve a significant amount of travel time as well as travel
expense operating a vehicle for the loss adjuster to inspect the various
fields for claim purposes.

As a proxy for the LAE cost, the percent of claims per policies (car or
house) sold was compared with the percent of reinsured crop insurance
polices with claims. The RMA web site reports the number of policies
with premium and also reports the policies with indemnity payments. The
percent of policies with paid claims' 15 year average was 23.4 percent
and was a little higher during the most recent 5 years at 29.34 percent.

In addition, there are a significant number of claims filed on crop
insurance policies because farmers think they might have a loss. This
requires the insurance company to pay loss adjusters to go through the
process of settling the claim and checking to see if in fact there is an
indemnity due. In a significant number of cases after working the claim
the loss adjuster simply discovers the amount of loss does not exceed
the deductible and therefore there is no indemnity payment due to the
farmer. The policy is then released but the fact that this claim was
processed and LAE incurred is never reported to RMA. Only claims that
result in indemnity payments are reported to RMA and using only RMA data
severely underreports the number of claims that are actually worked, all
of which generate LAE costs for the insurance company.

Within the industry the percent of claims filed resulting in no
indemnity payments has a very wide range, from 25 to 40 percent of the
total claims filed. In the KSU estimate it was assumed 30 percent of
claims filed resulted in no indemnity payment and therefore, was not
reported to RMA. A 15 year average estimate for total claims processed
is approximately 30 to 38 percent of the policies had claims worked that
included both policies that had indemnity payments due as well as those
that did not have losses exceeding deductible and were released without
indemnity payments. When comparing the amount of claims that are worked
under a crop insurance policy versus typical private property/casualty
insurance policies such as auto, private crop hail, and homeowners, it
is clearly significantly higher (table 5). With approximately 1/3 of the
crop insurance policies having claims paid compared to less than 6 to 7
percent of the policies having claims on homeowners and a smaller
percentage of auto policies with claims. The crop insurance claim rate
per policy was more than double that of private crop hail.

Looking at the big difference in frequency of claims for crop insurance
versus other lines of property/casualty would suggests the LAE would
certainly be as expensive as auto, homeowners and private crop hail
policies. However, the cost of loss adjusting expenses for homeowners
and private auto insurance, in many cases, will exceed 10 percent of the
gross premium. By this measure, one could only conclude the crop
insurance companies have become very efficient at managing and settling
their claims.

**[Summary.]{.underline}** Based on this data, it is reasonable to
conclude the operating margins in crop insurance are less than they are
for a typical property/casualty insurance company and would certainly
suggest the companies are at least as efficient at delivering crop
insurance as other lines of insurance. Given the very "high" frequency
of claim on a crop insurance policy, as well as the recordkeeping for
selling a crop insurance policy there is no reason to believe the
administrative burden is less for crop insurance then it is for other
lines of insurance, in fact, the administrative burden is probably
larger. Finally, the crop insurance program has performed basically at
the level that Congress intended as participation during the past 15
years has increased from less than \$800 million premium volume to over
\$4.5 billion. As more farmers continue to buy crop insurance and to buy
higher levels of crop insurance coverage, the result has been higher
aggregate premiums paid by both the government and farmers. If the
government wants to reduce its contributions that will likely reduce
participation in the crop insurance program.

Finally, one needs to remember many farmers have tied their marketing
risk management plans to crop insurance not only for this year but in
some cases they have already obligated themselves on 2008 and perhaps
even 2009 crop sales. If major changes are made in the crop insurance
program there may be some unintended consequences occur before farmers
are able to unwind their forward marketing hedge position that is only a
hedge as long as there are bushels or crop insurance dollars to offset
that hedge.

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G. A. (Art) Barnaby, Jr.

124 North Dartmouth

Manhattan, Kansas 66503

[PERSONAL DATA]{.underline}:

[Home Phone]{.underline}: (785) 776-9232

[Office Phone]{.underline}: (785) 532-1515

[Fax Number]{.underline}: (785) 532-6925

[Cell Phone Number]{.underline}: (785) 564-1947

[Citizenship]{.underline}: USA

[Military]{.underline}: Active duty with United States Navy \--
1967-1971

[PRESENT RANK]{.underline}: Professor (July 1, 1990)

[PRESENT POSITION]{.underline}: Agricultural Economist, Department of
Agricultural Economics, Research and Extension, Kansas State University,
Manhattan, Kansas 66506

[AREAS OF CONCENTRATION]{.underline}: Crop Insurance, Risk, Farm
Management, Production and Resource Economics

[EDUCATION]{.underline}:

Ph.D. Texas A&M University 1981; Major in Agricultural Economics

Major Professor - Dr. Robert Whitson

M.S. New Mexico State University 1976; Major in Animal Science; Minor in
Agricultural

Economics

Major Professor - Dr. G. S. Smith

B.S. Fort Hays Kansas State College 1973; Major in Animal Science

[ACADEMIC RANK]{.underline}:

> Professor, Extension Agricultural Economist, Department of
> Agricultural Economics, Kansas State University, July 1990 - Present
>
> Associate Professor, Extension Agricultural Economist, Department of
> Agricultural Economics, Kansas State University, 1984 - July 1, 1990
>
> Assistant Professor, Extension Agricultural Economist, Department of
> Agricultural Economics, Kansas State University, 1979 - 1984

[AWARDS]{.underline}:

Dr. Barnaby was the winner of the American Agricultural Economics
Association's 2001 Individual Distinguished Extension Program Award for
his grower education on combining revenue insurance with marketing tools
to manage risk. This is generally accepted as the top award for
extension and his risk management approach has been widely adopted by
growers, marketing consultants, insurance agents and other extensions
services.

Dr. Barnaby also cooperated with Professors Dean Baldwin, Ohio State
University and Robert Wisner, Iowa State University on a series of risk
management educational programs in the Corn Belt. This educational
program was awarded the American Agricultural Economics Association's
2000 Group Distinguished Extension Program Award.

National Association of Wheat Growers, Excellence in Extension Award,
1990.

American Agricultural Economics Association, Distinguished Individual
Extension Program Award, 1991.

MAST Team Award, 2003.

Western Agricultural Economics Association Outstanding Extension Project
Award, 2004

[PUBLISHED BOOKS:]{.underline}

Edwards, William and G. A. Barnaby, Jr., [Managing Risk Through Crop
Insurance]{.underline}, John Deere Publishing, East Moline, IL, 2000.

Barnaby, G. A., ACrop Revenue Coverage Insurance Provides Additional
Risk Management Grain Sorghum Alternatives,@ [Sorghum: Origin, History,
Technology, and Production]{.underline}, Chapter, National Grain Sorghum
Producers, Abernathy, TX, October 1997.

[SELECTED PUBLICATIONS AND PAPERS]{.underline}:

Barnaby, G. A., and Jeffery R. Williams, [Testimony Before the
Nationwide Hearings on Crop Insurance Scheduled by the Commission for
the Improvement of the Federal Crop Insurance Program]{.underline},
Testimony presented to the Commission for the Improvement of the Federal
Crop Insurance Program, Salina, Kansas, March 14, 1989.

Harper, Jayson, Jeffery R. Williams, and G. Art Barnaby, [Selecting Risk
Efficient Crop Insurance Alternatives for Northeast Kansas Corn/Soybean
Farms]{.underline}, Selected paper WAEA meetings, Coeur d\'Alene, Idaho,
July 9-12, 1989.

Williams, Jeffery R., Richard V. Llewelyn, and G. A. Barnaby, \"Risk
Analysis Tillage Alternatives with Government Programs,@ [American
Journal of Agricultural Economics]{.underline}, 72(1990):172-181.

Williams, Jeffery R., Jason K. Harper, and G. Art Barnaby, \"Government
Program Impacts on the Selection of Crop Insurance in Northeastern
Kansas,\" [North Central Journal of Agricultural Economics]{.underline},
12(1990):207-221.

Barnaby, G. A. and Jerry Skees, \"Public Policy for Catastrophic Yield
Risk: An Alternative Crop Insurance Program,@ [Choices]{.underline},
Second Quarter 1990: 7-9.

Carriker, G.L., J.R. Williams, G.A. Barnaby, Jr., and J.R. Black.
\"Reduction of Yield and Income Risk Under Alternative Crop Insurance
and Disaster Assistance Plans.@ Selected paper presented at the 1991
SAEA meetings, Fort Worth, TX, February 1991. Abstract in [Southern
Journal of Agricultural Economics]{.underline}, 23(1991):258.

Williams, J.R., G.L. Carriker, G.A. Barnaby, Jr., J.K. Harper, and J.R.
Black. \"Area Measured Crop Insurance and Disaster Aid for Wheat and
Grain Sorghum.\" Selected paper presented at the 1991 AAEA meetings,
Manhattan, Kansas, August 1991. Abstract in [American Journal of
Agricultural Economics]{.underline}, 73(1991).

Carriker, G.L., J.R. Williams, and G.A. Barnaby, Jr., and J.R. Black.
\"Comparative Performance of Individual and Area Measured Crop Insurance
Programs.\" Selected paper presented at the 1991 WAEA meetings,
Portland, OR, July 1991. Abstract in [Western Journal of Agricultural
Economics]{.underline}, 16(1991).

Carriker, G.L., J.R. Williams, G.A. Barnaby, and J.R. Black, \"Yield and
Income Risk Reduction Under Alternative Crop Insurance and Disaster
Assistance Plans,@ [Western Journal of Agricultural
Economics]{.underline}, 16(1991):238-50.

Williams, Jeffery R., Gordon L. Carriker, G. Art Barnaby, and Jayson K.
Harper, \"Crop Insurance and Disaster Assistance Designs for Wheat and
Grain Sorghum,@ [American Journal of Agricultural
Economics]{.underline}, 75(1993): 435-447.

Barnaby, G. A., [Risk Assessed Marketing Applied to Wheat]{.underline},
Department of Agricultural Economics, Cooperative Extension Service,
Kansas State University, Manhattan, Kansas 66506. Selected paper
presented to the [National Wheat Growers]{.underline}, Winter Meeting
1994, New Orleans, Louisiana, January 19, 1994.

Barnaby, G. A., [Using Private Markets to Achieve Revenue
Insurance]{.underline}, Department of Agricultural Economics,
Cooperative Extension Service, Kansas State University, Manhattan,
Kansas 66506. Selected paper presented to the [AAEA Risk Management
Preconference]{.underline}, San Diego, CA, August 6, 1994.

Edwards, William and G. A. Barnaby, [DTN - Lesson VIII. Crop Insurance
Alternatives]{.underline}, Iowa State University, Ames, IA and Kansas
State University, Manhattan, KS, August 15, 1997.

Barnaby, G. A., [Crop Revenue Coverage Insurance Provides Additional
Risk Management Alternatives for Corn Growers]{.underline}, Department
of Agricultural Economics, Cooperative Extension Service, Kansas State
University, Manhattan, KS 66506. Presented to the First Farm Journal
Forum, Washington, D.C., November 13-14, 1997.

Flaskerud, George, Bruce Babcock and G. A. Barnaby, [DTN Lesson XII.
Alternative Yield and Price Risk Management Tools for
Wheat]{.underline}, North Dakota State University, Fargo, ND, Iowa State
University, Ames, IA and Kansas State University, Manhattan, KS,
November 1997, 1998.

Edwards, William and G. A. Barnaby, [DTN - Lesson IX. Crop Insurance
Alternatives]{.underline}, Iowa State University, Ames, IA and Kansas
State University, Manhattan, KS, September 1998.

Barnaby, G.A., [Risk Assessed Marketing (RAM), An Extension Education
Program on Managing Price and Yield Risk]{.underline}, Department of
Agricultural Economics, K-State Research & Extension, Kansas State
University, Manhattan, KS 66506. Presented to the American Agricultural
Economics Association Pre-Conference Workshop, Salt Lake City, UT,
August 1, 1998.

Barnaby, G.A., [Current New Crop Prices and Crop Insurance
Participation]{.underline}, Department of Agricultural Economics,
K-State Research & Extension, Kansas State University, Manhattan, KS
66506. Presented to Secretary Dan Glickman=s Working Group, Washington,
DC, August 24, 1998.

Barnaby, G.A., Risk Assessed Marketing (RAM), An Extension Education
Program on Managing Price and Yield Risk, Department of Agricultural
Economics, K-State Research & Extension, Kansas State University,
Manhattan, KS 66506. Presented to the American Agricultural Economics
Association Pre-Conference Workshop, Salt Lake City, UT, August 1, 1998.

Barnaby, G.A., [Risk Management Includes More Than MPCI Crop
Insurance]{.underline}, Department of Agricultural Economics, K-State
Research & Extension, Kansas State University, Manhattan, KS 66506.
Presented to National Governors= Association Agriculture Summit, Ames,
IA, August 26, 1999.

Barnaby, G.A., [Managing Financial Risk With Crop Insurance Marketing
Tools]{.underline}, Department of Agricultural Economics, K-State
Research & Extension, Kansas State University, Manhattan, KS 66506.
Presented to American Bankers Association 1999 National Ag. Bankers
Conference, Colorado Springs, CO, November 2, 1999.

Pendell, Dustin L., William R. Perry, Jeffery R. Williams, G. Art
Barnaby, and Bradley Lubben, [Mathematical Formulas for Calculating Net
Returns From Participation in Government Programs, CRP, and Crop
Insurance Alternatives]{.underline}, Staff Paper, Kansas Agricultural
Experiment Station, Contribution No. 04-036-D, Kansas State University,
Manhattan, Kansas, No. 04-02, August 2003.

Barnaby, G.A., [Compare Livestock Risk Protection (LRP) Contract with
Chicago Mercantile Exchange (CME) Put Option Premiums for Similar
Coverage]{.underline}, Department of Agricultural Economics, K-State
Research & Extension, Kansas State University, Manhattan, KS 66506,
October 31, 2003.

Barnaby, G.A., [Farm Journal Grain Marketing Guide]{.underline} ,
Department of Agricultural Economics, K-State Research & Extension,
Kansas State University, Manhattan, KS 66506, March 1, 2004.

Barnaby, G.A., [Testimony on Disaster Aid Alternatives]{.underline},
Testimony presented to the Subcommittee on General Farm Commodities and
Risk Management, U.S. House of Representatives, Committee on
Agriculture, Washington, DC, April 26, 2006.

![](media/image6.jpeg){width="6.536111111111111in"
height="8.997222222222222in"}

**Federal Grants or Contracts (including subgrants and subcontracts)
[the organization]{.underline} has received since October 1, 2004:**

Improving Farm Competitiveness: Explaining and Forecasting Farm
Profitability

USDA (Through: USDA) - 11/15/2002 - 11/14/2005 \$82,000.00

Kansas Urban Water Quality Restoration and Protection Initiative; & Part
2 (Year 2) (proposal = Planning Process Technical Assistance, Education
and Outreach)

EPA (Through: KS Dept. Of Health & Environment) - 01/01/2000 -
06/30/2007 \$250,214.00

USDA Agricultural Marketing Resource Center

USDA (Through: Iowa State University) - 09/27/2001 - 09/30/2006
\$245,275.00

Information Technology and E-Commerce: Implications for Small Business
Development in Rural Areas

USDA - 09/15/2003 - 09/14/2006 \$90,730.00

Market Risk Analysis for Organic Grain Farmers in the Great Plains

USDA (Through: USDA) - 09/30/2003 - 09/29/2006 \$158,726.00

The Potential Impact of Bovine Spongiform Encephalopathy (BSE) on Demand
for Beef in the United

States - USDA (Through: USDA) - 09/25/2003 - 12/31/2004 \$15,000.00

Integrating Economic and Biophysical Models to Assess the Impacts of
Water Quality Trading

EPA (Through: EPA) - 01/01/2005 - 12/31/2006 \$376,165.00

Improving Agriculture Students= Understanding of Global Production
Systems through Distance Learning

USDA (Through: USDA) - 09/01/2004 - 08/31/2006 \$273,457.00

Cost Production Studies for Corn and Wheat Grown in Kansas

USDA (Through: University of California) - 01/01/2004 - 01/31/2005
\$17,638.00

Value Added Producer - Rainbow Organic Farms (Through: Rainbow Organic
Farms)

03/19/2004 - 03/18/2005 \$50,000.00

Provision of Services to the Kansas Ag Innovation Center

USDA (Through: Kansas Department of Commerce and Housing)

\- 01/01/2004 - 12/31/2004 \$729,000.00

Development of a Research-Based Risk Assessment and Management Tool for
Cattle Feeders

USDA (Through: North Carolina State University) - 09/01/2004 -
08/31/2006 \$206,376.00

Combining Livestock Risk Protection Insurance with Private Market Tools
for Effective Cow-Calf Risk Management Plan

USDA (Through: USDA) - 10/01/2004 - 09/30/2005 \$149,962.00

The Value of the AU.S.A.@ Label on Retail Agricultural Products in Japan

USDA (Through: USDA) - 09/01/2005 - 08/31/2007 \$334,473.00

Meeting National Needs for Scholars Trained in Economics of Food
Marketing and Biosecurity

USDA (Through: USDA) - 09/01/2005 - 08/31/2008 \$276,000.00

Minority Fellows in the Economics of Food Safety and Biosecurity

USDA (Through: USDA) - 09/01/2005 - 08/31/2007 \$128,000.00

Pollution Trading

EPA (Through: Kansas Department of Health & Environment)

10/11/2005 - 06/30/2010 \$142,850.00

Value of Animal Traceability Systems in Managing Contagious Animal
Diseases

USDA (Through: USDA) - 09/20/2005 - 09/30/2007 \$151,791.00

Big Hill Creek/Big Hill Lake WRAPS Development

EPA (Through: Kansas Department of Health & Environment) \$31,041.00

Elk City Lake WRAPS Development - Amend 102

EPA (Through: Kansas Department of Health & Environment) \$31,041.00

Upper Verdigris/Toronto Lake WRAPS Development - Amend 103

EPA (Through: Kansas Department of Health & Environment) \$31,041.00

Tuttle Creek Lake Watershed WRAPS Development

EPA (Through: Kansas Department of Health & Environment) \$42,600.00

Milford Lake Watershed WRAPS Development

EPA (Through: Kansas Department of Health & Environment) \$42,600.00

Meeting National Needs for Scholars in the Economics and Management of
Water

Resources and the Environment

USDA (Through: USDA) -- 11/15/2006 -- 11/14/2011 \$252,000.00

Upper Arkansas Basin WRAPS Development

EPA (Through: Kansas Department of Health & Environment) --

12/1/2006 -- 06/30/2011 \$48,000.00

Verdigris River WRAPS Support - Amend 108

EPA (Through: Kansas Department of Health & Environment) --

11/01/2006 -- 8/31/2011 \$49,850.00

Agricultural Marketing Center

USDA (Through: USDA) -- 04/01/2007 -- 09/25/2008 \$361,350.00

Economic Analysis of Supply Chains

USDA (Through: Rainbow Organic Farms) -- 05/01/2006 -- 09/30/2006
\$9,516.00

Water Allocation Risk Analysis Tool

USDA (Through: USDA) -- 10/01/2006 -- 09/30/2008 \$698,952.00

Cattle Risk Management in Kansas for Today's and Tomorrow's Producers

USDA (Through: USDA) -- 08/30/2006 -- 09/30/2007 \$147,349.00

Advanced Risk Management WEB Based Education on Livestock and Other
Under-

Served Commodities via AgManager.Info

USDA (Through: USDA) -- 08/30/2006 -- 09/30/2007 \$10,000.00

Agricultural Marketing Resource Center (#412-30-39)

USDA (Through: USDA) -- 10/01/2006 -- 09/21/2007 \$315,725.00

Agricultural Marketing Resource Center (#412-30-54)

USDA (Through: USDA) -- 10/20/2006 -- 10/19/2007 \$119,960.00

Global Awareness of the International Dimensions of Agriculture

USDA (Through: USDA) -- 04/01/2006 -- 08/31/2008 \$99,917.00

Evaluation of Policy Options Aimed at Achieving a Reduction in
Groundwater

Consumption in Western Kansas

USDA (Through: USDA) -- 09/01/2006 -- 08/31/2009 \$83,500.00

[^1]: Prepared by G.A. (Art) Barnaby, Jr., Ph.D., Professor, Department
    of Agricultural Economics, K-State Research and Extension, Kansas
    State University, Manhattan, KS 66506, June 4, 2007, Phone
    785-532-1515, e-mail -- barnaby@ksu.edu.