Year of Publication

2002

Document Type

Thesis

College

Agriculture

Department

Agricultural Economics

First Advisor

Ronald A. Fleming

Second Advisor

Jerry R. Skees

Abstract

The U.S. crop insurance program provides subsidies and risk reduction benefits to producers. In response to enhanced income and decreased risk, farmers increase planted acres, often in more risky areas of production. The primary objective of this thesis is to determine the relationship between the environment and acreage brought into production as a result of crop insurance. This thesis does so indirectly, by examining the relationship between yield risk and a set of agri-environmental indicators. An ordinary least squares (OLS) model is used to examine this relationship. It is hypothesized that as acreage becomes more risky in terms of yield, environmental damages resulting from production will increase. Results suggest that while thisis not always the case, there is a strong correlation between yield risk and increased soil erosion for the majority of the acreage in the study area.

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