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The Impact of Ad-hoc Disaster Programs on the Use of Conservation Practices

Author

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  • Schoengold, Karina
  • Ding, Ya
  • Headlee, Russell

Abstract

The paper estimates the impacts of risk reducing government programs on the use of conservation practices in agriculture. Specifically, conservation tillage or no-till agriculture can be used to reduce risk from weather shocks while subsidized crop insurance and disaster payments also reduce risk from weather shocks through financial assistance. The paper examines the extent to which conservation practices (i.e., private insurance) and government programs (i.e., public insur- ance) are substitutes for each other. The paper uses data on conservation practices from the Conservation Tillage Information Center. Results are estimated using instrumental variables and spatial panel data techniques. The economic model shows that government support programs and self management of risk through improved production practices are substitutes. The empirical analysis shows that producers with riskier climate conditions are more likely to use conservation tillage practices but that recent receipts of ad-hoc disaster payments and insurance indemnity payments reduce those probabilities.

Suggested Citation

  • Schoengold, Karina & Ding, Ya & Headlee, Russell, 2012. "The Impact of Ad-hoc Disaster Programs on the Use of Conservation Practices," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124957, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea12:124957
    DOI: 10.22004/ag.econ.124957
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    File URL: http://ageconsearch.umn.edu/record/124957/files/Schoengold_AAEA2012.pdf
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    References listed on IDEAS

    as
    1. JunJie Wu & Bruce A. Babcock, 1998. "The Choice of Tillage, Rotation, and Soil Testing Practices: Economic and Environmental Implications," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(3), pages 494-511.
    2. Ding, Ya & Schoengold, Karina & Tadesse, Tsegaye, 2009. "The Impact of Weather Extremes on Agricultural Production Methods: Does Drought Increase Adoption of Conservation Tillage Practices?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 34(3), pages 1-17, December.
    3. JunJie Wu, 1999. "Crop Insurance, Acreage Decisions, and Nonpoint-Source Pollution," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(2), pages 305-320.
    4. Goodwin, Barry K. & Rejesus, Roderick M., 2008. "Safety Nets or Trampolines? Federal Crop Insurance, Disaster Assistance, and the Farm Bill," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 40(02), pages 415-429, August.
    5. Bruce A. Babcock & David A. Hennessy, 1996. "Input Demand under Yield and Revenue Insurance," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(2), pages 416-427.
    6. Garrett, Thomas A. & Marsh, Thomas L. & Marshall, Maria I., 2006. "Political allocation of US agriculture disaster payments in the 1990s," International Review of Law and Economics, Elsevier, vol. 26(2), pages 143-161, June.
    7. 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, Agricultural and Applied Economics Association, vol. 86(4), pages 1058-1077.
    8. Vincent H. Smith & Barry K. Goodwin, 1996. "Crop Insurance, Moral Hazard, and Agricultural Chemical Use," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(2), pages 428-438.
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    Keywords

    Environmental Economics and Policy; Farm Management; Land Economics/Use;

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