Wednesday, October 31, 2018
M.S. student James Keeler earned first place honors in the 2017 Universities Council on Water Resources conference student oral presentation contest. His presentation was titled "Irrigation Under Crop Insurance." Congratulations James!
Abstract: Multi-Peril Crop Insurance is a well-established risk management tool for agricultural producers in the United States. Since insurance policies are purchased before planting, insurance choice can alter subsequent risk management decisions and behavior. This is consistent with the economic theory of moral hazard which suggests that producers have an incentive to take more risks when insured, as they are no longer responsible for possible losses. In particular, insured producers may use more of a risk-increasing input or less of a risk-decreasing input. Many of the previous empirical studies have shown that insured producers mete out fewer applications of fertilizer and pesticides, supporting unintended environmental benefits of crop insurance. In this study, we investigate the impact of crop insurance on groundwater use for irrigation. We develop an econometric model of the producer’s irrigation decision including weather, soil, crop, and insurance characteristics. A Fixed Effects model was applied to section-level irrigation and insurance. Groundwater irrigation data was collected from producer wells located in Nebraska’s portion of the Republican River Basin, where flow meters are required. Crop insurance (MCPI) data was obtained from the USDA Risk Management Agency.image:
