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Impacts of Federal Crop Insurance on Land Use and Environmental Quality
Author(s) -
Claassen Roger,
Langpap Christian,
Wu JunJie
Publication year - 2017
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1093/ajae/aaw075
Subject(s) - crop insurance , environmental science , crop rotation , cropping , revenue , agriculture , environmental quality , agricultural economics , land use , agricultural land , business , natural resource economics , economics , geography , civil engineering , accounting , archaeology , engineering , political science , law
This article integrates economic and biophysical models to assess how federal crop revenue insurance programs affect land use, cropping systems, and environmental quality in the U.S. Corn Belt region. The empirical framework includes econometric models that predict land conversion and crop choices at the parcel level based on expectation and variance of crop revenues, land quality, climate conditions, and physical characteristics at each site. The predictions are then combined with site‐specific environmental production functions to determine the effect of revenue insurance on nitrate runoff and leaching, soil water and wind erosion, and carbon sequestration. Results suggest that federal crop insurance has, on average, a small effect on conversions of non‐cropland to cropland, and somewhat more significant impacts on crop choice and crop rotation. These changes in cropping systems have, on average, small impacts on agricultural pollution.