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Nutrient Best Management Practice Insurance and Farmer Perceptions of Adoption Risk

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  • Mitchell, Paul D.

Abstract

This paper explores the effect farmer perceptions concerning how best management practice (BMP) adoption changes the profit distribution have on BMP adoption incentives and the potential for insurance to increase these incentives. Adoption indifference curves illustrate the effect of farmer perceptions on BMP adoption incentives and the potential for insurance to expand the set of perceptions consistent with adoption. Empirical analysis quantifies these conceptual results for nutrient BMP insurance, a new policy available to corn farmers as part of a USDA-Risk Management Agency pilot program in four states. Results indicate that nutrient BMP insurance can have economically relevant effects on farmer adoption incentives.

Suggested Citation

  • Mitchell, Paul D., 2004. "Nutrient Best Management Practice Insurance and Farmer Perceptions of Adoption Risk," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 36(3), pages 1-17, December.
    • Handle: RePEc:ags:joaaec:43460
    DOI: 10.22004/ag.econ.43460
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    Cited by:

    1. Xiaodong Du & David A. Hennessy & Cindy L. Yu, 2012. "Testing Day's Conjecture that More Nitrogen Decreases Crop Yield Skewness," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(1), pages 225-237.
    2. Chai, Yuan & J. Pannell, David & G. Pardey, Philip, 2023. "Nudging farmers to reduce water pollution from nitrogen fertilizer," Food Policy, Elsevier, vol. 120(C).
    3. Tipparat Pongthanapanich & Eva Roth, 2006. "Toward Environmental Responsibility of Thai Shrimp Farming through a Voluntary Management Scheme," Working Papers 70/06, University of Southern Denmark, Department of Sociology, Environmental and Business Economics.
    4. Harris, Leah M. & Swinton, Scott M. & Shupp, Robert S., 2014. "Experimental auctions to evaluate incentives for cost-effective agricultural phosphorus abatement in the Great Lakes," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170287, Agricultural and Applied Economics Association.
    5. Traxler, Emilia & Li, Tongzhe, 2020. "Agricultural Best Management Practices, A summary of adoption behaviour," Working Papers 305271, University of Guelph, Institute for the Advanced Study of Food and Agricultural Policy.
    6. Meilin Ma & Carson Reeling & Megan N Hughes & Shalamar Armstrong & Richard Roth, 2023. "Comparison of conservation instruments under long-run yield uncertainty and farmer risk aversion," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 50(5), pages 1685-1714.

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    More about this item

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services
    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices

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