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Abstract

Concerns have frequently been raised regarding the impact of federally-subsidized crop insurance and agricultural subsidy payments on land allocation and crop mix choices. If the reduction in production risk encourages farmers to plant on economically marginal land, it has often been asserted that this will lead to increases in environmental damage, including increases in soil erosion rates. This paper investigates the "conventional" wisdom that economically marginal land is also environmentally fragile, as defined by higher levels of inherent soil erodibility. We address this issue by looking at the distribution of crop yields for 4 major crops across National Resource Inventory (NRI) erodibility classes and by performing regression analysis. Our results indicate that land with higher levels of soil erodibility exhibit lower mean crop yields, a proxy for economic marginality, which lends support to the conventional wisdom.

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