Effects of Federal Risk Management Programs on Optimal Acreage Allocation and Nitrogen Use in a Texas Cotton-Sorghum System

We analyze the effects of crop insurance and the Marketing Loan Program on optimal nitrogen use and acreage allocation for a case cotton-sorghum farm in Texas. A mathematical programming model is used to solve for the optimal nitrogen fertilizer rate, crop acreage allocation, coverage level, and price election factor, along with participation in the crop insurance and the Marketing Loan Program for both crops. Results show that depending on the crop and farmer risk aversion, these federal risk management programs increase or decrease optimal fertilizer rates-6% to 3%, increase optimal cotton acreage 94% to 144%, and decrease sorghum acres up to 50%.


Issue Date:
2005-12
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/43503
Published in:
Journal of Agricultural and Applied Economics, Volume 37, Number 3
Page range:
685-699
Total Pages:
15
JEL Codes:
Q12; Q18




 Record created 2017-04-01, last modified 2017-08-25

Fulltext:
Download fulltext
PDF

Rate this document:

Rate this document:
1
2
3
 
(Not yet reviewed)