Rate setting procedures for United States crop yield and revenue insurance contracts employ methods that presume correlations to be state invariant. Whether this is true matters. If yield-yield correlations strengthen when crops are subject to widespread stress, then diversification...

We develop a real option model of the irreversible native grassland conversion decision. Upon plowing, native grassland can be followed by either a permanent cropping system or a system in which land is put under cropping (respectively, grazing) whenever crop prices are high (respectively, low)....

Strong demand for agricultural commodities, high crop prices and pressure to reduce government budget deficits heighten the need for land retirement programs to be designed to maximize environmental benefits for any given budget outlay. The Conservation Reserve Program (CRP) is the largest land...

The U.S. crop insurance market has several features that set it apart from other insurance markets. These include:(a) explicit government subsidies with an average premium subsidy rate of about 60% in recent years; and (b) the legislative requirement that premium rates be set at actuarially fair...

Life cycle analysis (LCA) is the standard approach used to evaluate the greenhouse gas (GHG) benefits of biofuels. However, it is increasingly recognized that LCA results do not account for some impacts—including land use changes—that have important implications on GHGs. Thus, an...

This study investigates the implications of treating different environmental benefits as the primary target of policy design. We focus on two scenarios, estimating for both of them in-stream sediment, nutrient loadings, and carbon sequestration. In the first, we assess the impact of a program...

We use a mechanism design framework to analyze the optimal design of green payment policies with the dual goals of conservation and income support for small farms. Each farm is characterized by two dimensions of attributes: farm size and conservation efficiency. Policymakers may not be able to...

The United States has invested large sums of resources in multiple conservation programs for agriculture over the past century. In this paper we focus on the impacts of program interactions. Specifically, using an integrated economic and bio-physical modeling framework, we consider the impacts...

In this paper, we examine the design of permit trading programs when the objective is to minimize the cost of achieving an ex ante pollution target, that is, one that is defined in expectation rather than an ex post deterministic value. We consider two potential sources of uncertainty, the...

This study investigates the carbon sequestration potential and co-benefits from policies aimed at retiring agricultural land in the Upper Mississippi River Basin, a large, heavily agricultural area. We extend the empirical measurement of co-benefits from the previous focus on environmental...