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The Impact of Federal Crop Insurance on the Conservation Reserve Program

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  • DeLay, Nathan

Abstract

I directly estimate the acre-for-acre impact of crop insurance participation on Conservation Reserve Program (CRP) enrollment at the county level. The government may be sponsoring competing interests if subsidized insurance expands production at the expense of CRP. I employ an instrumental variables technique to correct for endogeneity in insurance decisions. Results suggest that an additional 1,000 acres insured reduces CRP enrollment by about three acres, though effect sizes vary by region. Local policy initiatives such as conservation compliance incentives could help offset local environmental consequences of converting land from CRP to insured production.

Suggested Citation

  • DeLay, Nathan, 2019. "The Impact of Federal Crop Insurance on the Conservation Reserve Program," Agricultural and Resource Economics Review, Cambridge University Press, vol. 48(2), pages 297-327, August.
    • Handle: RePEc:cup:agrerw:v:48:y:2019:i:02:p:297-327_00
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    Cited by:

    1. Lu, Xun & Che, Yuyuan & Rejesus, Roderick M. & Goodwin, Barry K. & Ghosh, Sujit K. & Paudel, Jayash, 2023. "Unintended environmental benefits of crop insurance: Nitrogen and phosphorus in water bodies," Ecological Economics, Elsevier, vol. 204(PA).
    2. Biram, Hunter D. & Tack, Jesse & Nehring, Richard F., 2022. "Does Crop Insurance Participation Impact Quality-Adjusted Pesticide Usage?," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322136, Agricultural and Applied Economics Association.
    3. Zaman, Azaz & Miao, Ruiqing, 2024. "Stability and resilience in farm income: The role of federal farm programs," 2024 Annual Meeting, July 28-30, New Orleans, LA 344069, Agricultural and Applied Economics Association.
    4. Jennifer Ifft & Margaret Jodlowski, 2024. "Farm heterogeneity and leveraging federal crop insurance for conservation practice adoption," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 46(2), pages 572-594, June.
    5. Youngho Kim, 2024. "Payments for Ecosystem Services Programs and Climate Change Adaptation in Agriculture," Economics Series Working Papers 1054, University of Oxford, Department of Economics.
    6. repec:ags:aaea22:335971 is not listed on IDEAS
    7. Lawson Connor & Roderick M. Rejesus & Mahmut Yasar, 2022. "Crop insurance participation and cover crop use: Evidence from Indiana county‐level data," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(4), pages 2181-2208, December.
    8. Prasenjit N. Ghosh & Ruiqing Miao & Emir Malikov, 2023. "Crop insurance premium subsidy and irrigation water withdrawals in the western United States," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 48(4), pages 968-992, October.
    9. Aaron De Laporte & Daniel Schuurman & Tristan Skolrud & Peter Slade & Alfons Weersink, 2024. "Business risk management programs and the adoption of beneficial management practices in Canadian crop agriculture," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 72(3), pages 309-324, September.

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