Crop insurance: A barrier to conservation adoption?

Fleckenstein, Michelle; Lythgoe, Ashlyn; Lu, Jiaxin; Thompson, Nathan; Doering, Otto C.; Harden, Seth; Getson, Jackie M.; Prokopy, Linda Stalker

doi:10.1016/j.jenvman.2020.111223

Cited by 23 publications

(30 citation statements)

References 36 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…As alluded to in the introductory section, there are several possible economic mechanisms for why crop insurance coverage can disincentivize the use of cover crops as a conservation practice. One of the most common reason given for crop insurance being a barrier to cover crop adoption is the risk of losing crop insurance coverage if recommended cover crop planting and termination guidelines are not strictly followed (Coppess & Schnitkey, 2017; Fleckenstein et al, 2020). In the study period, for example, any divergence from the guidelines has to be pre‐approved by the insurance company, or the farmer risks losing coverage.…”

Section: Background and Datamentioning

confidence: 99%

“…Although there are a number of possible reasons for the relatively low cover crop adoption rate in the United States, several recent papers and popular press articles have consistently mentioned that crop insurance is one of the major “policy‐related” barriers to increasing cover crop use (Arbuckle & Roesch‐McNally, 2015; Barnett & Stockwell, 2016; Bryant & O'Connor, 2017; Carlisle, 2016; Coppess & Schnitkey, 2017; Friedman et al, 2018; Marzen & Ballard, 2016; O'Connor, 2013; Renton et al, 2020; Stockwell & Moseley, 2017). These papers have mainly argued that the presence of crop insurance coverage and the eligibility rules associated with this coverage serve to disincentivize cover crop adoption (Coppess & Schnitkey, 2017; Fleckenstein et al, 2020; O'Connor, 2013).…”

mentioning

confidence: 99%

“…A traditional “moral hazard” story is also often cited where crop insurance provides incentives to not adequately adopt productivity‐enhancing inputs or practices, like cover crops (i.e., insurance induces individuals to not sufficiently protect against losses) (O'Connor, 2013). Moreover, there is a perception that the cover crop planting and termination rules used in crop insurance are complex, such that insured farmers are afraid of the possibility of losing eligibility if they unintentionally break these rules (i.e., if not terminating cover crop according to detailed crop insurance guidelines) (Coppess & Schnitkey, 2017; Fleckenstein et al, 2020; Marzen & Ballard, 2016; Stockwell & Moseley, 2017). Hence, the potential loss of crop insurance eligibility (and losing a potential indemnity payment) has historically been perceived as a major deterrent to planting cover crops 2…”

mentioning

confidence: 99%

“…Using a one‐year cross‐sectional farm‐level data for soybeans, Lee and McCann (2019) did not find a statistically significant relationship between crop insurance use and cover crop adoption in a probit regression model. Using a mixed‐methods approach that utilized quantitative analysis of survey data and qualitative evaluation of selected farmer interviews, Fleckenstein et al (2020) did not find strong evidence that crop insurance requirements are a barrier to cover crop adoption.…”

mentioning

confidence: 99%

See 3 more Smart Citations

Crop insurance participation and cover crop use: Evidence from Indiana county‐level data

Connor

Rejesus

Yaşar

2021

Applied Eco Perspectives Pol

View full text Add to dashboard Cite

This study examines whether crop insurance participation reduces incentives to use cover crops in corn and soybean production. To achieve this objective, we utilize 2006–2015 county‐level longitudinal data with information on cover crop adoption and crop insurance participation for the State of Indiana. Cover crop adoption information is collected from a remote sensing (satellite‐based) data set of soil health practices. Linear fixed effect (FE) models and instrumental variable FE models are used in the empirical analysis to take advantage of the panel nature of the data and address potential endogeneity issues. Our results suggest that while crop insurance coverage may play a role in “disincentivizing” cover crop use, it is likely not a major driver in the cover crop adoption decision (i.e., the magnitude of the effect is small). Therefore, further research and policy attention toward other potential mechanisms that can likely have a larger impact on cover crop uptake may be a better approach (e.g., enhanced outreach programs and/or additional targeted conservation payments).

show abstract

Section: Background and Datamentioning

confidence: 99%

mentioning

confidence: 99%

mentioning

confidence: 99%

mentioning

confidence: 99%

See 2 more Smart Citations

Crop insurance participation and cover crop use: Evidence from Indiana county‐level data

Connor

Rejesus

Yaşar

2021

Applied Eco Perspectives Pol

View full text Add to dashboard Cite

show abstract

“…In the environmental context, it is taking actions aimed at achieving sustainable agricultural development, which is associated with the implementation of resilient agricultural practices that support synergy between increasing productivity and maintaining ecosystems capable of providing specific services [2]. As agricultural producers face the inherent threats of climate change, they employ various risk management strategies to reduce uncertainty, including crop insurance [3].…”

Section: Introductionmentioning

confidence: 99%

Crop Insurance, Land Productivity and the Environment: A Way forward to a Better Understanding

et al. 2021

View full text Add to dashboard Cite

Providing farmers with effective risk management tools and increasing the productivity of factors of production, while limiting negative effects on the environment, is an important challenge for the current EU agricultural policy. The aim of this research is to identify and evaluate the relationship between crop insurance and land productivity in the context of environmental effects. The study covered farms with crop insurance participating in the Polish FADN system. The article uses the TOPSIS method of organizing objects. We classify farms in terms of land productivity and examine the relationship between these results and the value of insurance coverage. In our conceptual and empirical framework, we recognize that there is a mutual relationship between crop insurance, land productivity and the environment. Our empirical results show that the level of insurance coverage may support the increase in land productivity, indirectly affecting the environment. Farms with the highest productivity level were characterized by an average value of insurance that was double that compared to farms with the lowest productivity level.

show abstract

Farm heterogeneity and leveraging federal crop insurance for conservation practice adoption

Ifft,

Jodlowski

2024

Applied Eco Perspectives Pol

View full text Add to dashboard Cite

Current and proposed policies aim to leverage the Federal Crop Insurance Program (FCIP) to promote conservation practices. This study uses corn farm‐level survey data to inform the effectiveness of targeting FCIP participants. We implement an unsupervised machine learning algorithm to assess what conservation practices are most common among participants. We find that farms that use crop insurance have higher adoption rates for practices that are generally profit‐maximizing. We also calculate nitrogen balance, a yield‐scaled measure of nitrogen fertilizer's potential environmental impact. We find a positive relationship between crop insurance and nitrogen balance closer to the optimum.

show abstract

Crop insurance: A barrier to conservation adoption?

Cited by 23 publications

References 36 publications

Crop insurance participation and cover crop use: Evidence from Indiana county‐level data

Crop insurance participation and cover crop use: Evidence from Indiana county‐level data

Crop Insurance, Land Productivity and the Environment: A Way forward to a Better Understanding

Farm heterogeneity and leveraging federal crop insurance for conservation practice adoption

Contact Info

Product

Resources

About