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Environmental Effects Of Agricultural Land-Use Change: The Role Of Economics And Policy

  • Lubowski, Ruben N.
  • Bucholtz, Shawn
  • Claassen, Roger
  • Roberts, Michael J.
  • Cooper, Joseph C.
  • Gueorguieva, Anna
  • Johansson, Robert C.

This report examines evidence on the relationship between agricultural land-use changes, soil productivity, and indicators of environmental sensitivity. If cropland that shifts in and out of production is less productive and more environmentally sensitive than other cropland, policy-induced changes in land use could have production effects that are smaller-and environmental impacts that are greater-than anticipated. To illustrate this possibility, this report examines environmental outcomes stemming from landuse conversion caused by two agricultural programs that others have identified as potentially having important influences on land use and environmental quality: Federal crop insurance subsidies and the Conservation Reserve Program (CRP), the Nation's largest cropland retirement program. The report finds that lands moving between cultivated cropland and less intensive agricultural uses are, on average, less productive and more vulnerable to erosion than other cultivated lands, both nationally and locally. These lands are also associated with greater potential nutrient runoff and leaching compared with cultivated cropland nationally. Crop insurance subsidies and CRP have estimated effects on erosion and other environmental factors that are disproportionate to the acreage and production effects, but specific environmental impacts vary with the features of each program.

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File URL: http://purl.umn.edu/33591
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Paper provided by United States Department of Agriculture, Economic Research Service in its series Economic Research Report with number 33591.

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Date of creation: 2006
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Handle: RePEc:ags:uersrr:33591
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  1. Wu, JunJie & Adams, Richard M. & Plantinga, Andrew J., 2003. "Amenities In An Urban Equilibrium Model: Residential Development In Portland, Oregon," 2003 Annual meeting, July 27-30, Montreal, Canada 21961, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  2. Quiggin, John C. & Karagiannis, Giannis & Stanton, J., 1993. "Crop Insurance And Crop Production: An Empirical Study Of Moral Hazard And Adverse Selection," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 37(02), August.
  3. 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.
  4. 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.
  5. Nancy E. Bockstael, 1996. "Modeling Economics and Ecology: The Importance of a Spatial Perspective," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(5), pages 1168-1180.
  6. Just, Richard E. & Calvin, Linda & Quiggin, John, 1993. "Adverse Selection in Crop Insurance: Actuarial and Asymmetric Information Incentives," Working Papers 197809, University of Maryland, Department of Agricultural and Resource Economics.
  7. Babcock, Bruce A. & Hennessy, David A., 1996. "Input Demand Under Yield and Revenue Insurance," Staff General Research Papers 794, Iowa State University, Department of Economics.
  8. Andrew J. Plantinga, 1996. "The Effect of Agricultural Policies on Land Use and Environmental Quality," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(4), pages 1082-1091.
  9. Miranowski, John & Hammes, B., 1984. "Implicit Prices of Soil Characteristics for Farmland in Iowa," Staff General Research Papers 10706, Iowa State University, Department of Economics.
  10. Joseph W. Glauber, 2004. "Crop Insurance Reconsidered," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(5), pages 1179-1195.
  11. Junjie Wu & B. Wade Brorsen, 1995. "The Impact of Government Programs and Land Characteristics on Cropping Patterns," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 43(1), pages 87-104, 03.
  12. JunJie Wu, 2000. "Slippage Effects of the Conservation Reserve Program," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(4), pages 979-992.
  13. Keith H. Coble & Thomas O. Knight & Rulon D. Pope & Jeffery R. Williams, 1996. "Modeling Farm-Level Crop Insurance Demand with Panel Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(2), pages 439-447.
  14. 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.
  15. 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.
  16. Ian W. Hardie & Peter J. Parks, 1997. "Land Use with Heterogeneous Land Quality: An Application of an Area Base Model," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 299-310.
  17. 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.
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