Extent, Location, and Characteristics of Land Cropped Due to Insurance Subsidies

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Extent, Location, and Characteristics of Land Cropped Due to Insurance Subsidies

Author Info

Claassen, Roger
Lubowski, Ruben
Roberts, Michael

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Michael James Roberts

Abstract

We examine changes in land use caused by the large increase in crop insurance premium subsidies under the 1994 Federal Crop Insurance and Reform Act (FCIRA). We use a conditional logit model to estimate changes in six major land uses from 1992 and 1997 as a function of the change in expected return to crop insurance. Our data on individual land parcels across the entire coterminous United States enable identification of the extent, location, and physical characteristics of the land brought into and retained in production as a result of the crop insurance policies. Results indicate the additional crop insurance premium subsidies increased cultivated cropland area on the order of 1.9 million acres (0.6%), consistent with the lower range of previous estimates of crop insurance acreage effects. The estimated lands in production due to the subsidy increases are of lower quality than cropland overall in term of both Land Capability Classification and proneness to flooding, as well as more environmentally sensitive in terms of erodibility and proportion in wetlands.

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Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2005 Annual meeting, July 24-27, Providence, RI with number 19546.

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Date of creation: 2005
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Handle: RePEc:ags:aaea05:19546

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

Schatzki, Todd, 2003. "Options, uncertainty and sunk costs:: an empirical analysis of land use change," Journal of Environmental Economics and Management, Elsevier, vol. 46(1), pages 86-105, July. [Downloadable!] (restricted)
Smith, Vincent H. & Goodwin, Barry K., 2003. "An Ex Post Evaluation of the Conservation Reserve, Federal Crop Insurance, and Other Government Programs: Program Participation and Soil Erosion," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 28(02), August. [Downloadable!]
Serra, Teresa & Goodwin, Barry K. & Featherstone, Allen M., 2003. "Modeling Changes In The U.S. Demand For Crop Insurance During The 1990s," 2003 Annual meeting, July 27-30, Montreal, Canada 22019, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
Stavins, Robert & Plantinga, Andrew & Lubowski, Ruben, 2003. "Determinants of Land-Use Change In the United States 1982-1997," Discussion Papers dp-03-47, Resources For the Future. [Downloadable!]
Barry K. Goodwin & Monte L. Vandeveer & John L. Deal, 2004. "An Empirical Analysis of Acreage Effects of Participation in the Federal Crop Insurance Program," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 86(4), pages 1058-1077, November. [Downloadable!] (restricted)
Sullivan, Patrick & Hellerstein, Daniel & Hansen, Leroy & Johansson, Robert & Koenig, Steven & Lubowski, Ruben & McBride, William & McGranahan, David & Roberts, Michael & Vogel, Stephen & Bucholtz, Sh, 2004. "The Conservation Reserve Program: Economic Implications for Rural America," Agricultural Economics Reports 33987, United States Department of Agriculture, Economic Research Service. [Downloadable!]
Claassen, Roger & Tegene, Abebayehu, 1999. "Agricultural Land Use Choice: A Discrete Choice Approach," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 28(1), April. [Downloadable!]

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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Ginder, Matthew G. & Spaulding, Aslihan D., 2006. "Factors Affecting Crop Insurance Purchase Decisions in Northern Illinois," 2006 Annual meeting, July 23-26, Long Beach, CA 21073, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]

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This page was last updated on 2009-12-26.

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