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Title: Crop Insurance, Disaster Payments and Land Use Change: The Effect of Sodsaver on Incentives for Grassland Conversion
Authors: Claassen, Roger
Cooper, Joseph C.
Carriazo, Fernando
Authors (Email): Claassen, Roger (
Keywords: bootstrap
crop insurance
joint densities
Supplemental Revenue Assistance
JEL Codes: Q2
Issue Date: 2011-05
Abstract: Subsidized crop insurance may encourage conversion of native grassland to cropland. The Sodsaver provision of the 2008 farm bill could deny crop insurance on converted land in the Prairie Pothole states for 5 years. Supplemental Revenue Assistance payments, which are linked to crop insurance purchases, could also be withheld. Using representative farms, we estimate that Sodsaver would reduce expected crop revenue by up to 8% and expected net return by up to 20%, while increasing the standard deviation of revenue by as much as 6% of market revenue. Analysis based on elasticities from the literature suggests that Sodsaver would reduce grassland conversion by 9% or less.
Institution/Association: Journal of Agricultural and Applied Economics>Volume 43, Number 02, May 2011
Total Pages: 17
From Page: 195
To Page: 211
Collections:Volume 43, Number 02, May 2011

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