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Effects Of Federal Risk Management Programs On Land Allocation And Input Use

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  • Seo, Sangtaek
  • Mitchell, Paul D.
  • Leatham, David J.

Abstract

We analyze the effects of crop insurance and the Marketing Loan Program on optimal nitrogen use and acreage allocation for a case cotton-sorghum farm in Texas. A mathematical programming model is used to simulate the optimal nitrogen fertilizer rate, crop acreage allocation, coverage level, and price election factor, along with participation in the crop insurance (APH and CRC) and the Marketing Loan Program for both crops. Results show that current insurance programs increase the optimal fertilizer rate 1-3% and increase the optimal cotton acreage 16-129%. The Marketing Loan Program slightly changes optimal fertilizer rates and increases optimal cotton acreage an additional 1-9%.

Suggested Citation

  • Seo, Sangtaek & Mitchell, Paul D. & Leatham, David J., 2004. "Effects Of Federal Risk Management Programs On Land Allocation And Input Use," 2004 Annual meeting, August 1-4, Denver, CO 20160, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea04:20160
    DOI: 10.22004/ag.econ.20160
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    References listed on IDEAS

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