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Impacts of Changes in Federal Crop Insurance Programs on Land Use and Environmental Quality

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  • Langpap, Christian
  • Wu, JunJie

Abstract

This paper integrates economic and physical models to assess how federal crop revenue insurance programs might 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, crop choices, and crop rotations 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 crop insurance will have small impacts on conversions of non-cropland to cropland, but more significant impacts on crop choice. These changes in crop mix have moderate impacts on agricultural pollution.

Suggested Citation

  • Langpap, Christian & Wu, JunJie, 2014. "Impacts of Changes in Federal Crop Insurance Programs on Land Use and Environmental Quality," 2014 AAEA: Crop Insurance and the 2014 Farm Bill Symposium: Implementing Change in U.S. Agricultural Policy, October 8-9, 2014, Louisville, KY 186643, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaeacj:186643
    DOI: 10.22004/ag.econ.186643
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    Keywords

    Agricultural and Food Policy; Land Economics/Use; Risk and Uncertainty;
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