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Do Cover Crops Reduce Production Risk?

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  • Aglasan, Serkan
  • Rejesus, Roderick M.

Abstract

This study examines whether cover crop adoption reduces production risk. A crop insurance loss measure is used as the main measure of downside production risk. To achieve this objective, we utilize a county-level panel data set with information on cover crop adoption rate, crop insurance production losses, and weather variables. The data covers the main corn and soybean production regions in the Midwestern United States (US) for the period 2005 to 2018. We employ linear fixed effects econometric models and a number of robustness checks in the empirical analysis (i.e., including a fractional regression approach, recently developed instrumental variable procedures, and alternative empirical specifications). The estimation methods used take advantage of the panel nature of the data to address various specification and endogeneity issues. Our estimation results suggest that counties with higher cover crop adoption tend to have lower crop insurance losses (and thus have lower downside production risk).

Suggested Citation

  • Aglasan, Serkan & Rejesus, Roderick M., 2022. "Do Cover Crops Reduce Production Risk?," 2024 Annual Meeting, July 28-30, New Orleans, LA 324776, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea22:324776
    DOI: 10.22004/ag.econ.324776
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    References listed on IDEAS

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