New Data from Auburn University Illuminate Findings in Crop Insurance (Are Crop Insurance Discount Programs for Cover Crops Effective? Evidence From Iowa): Agriculture – Crop Insurance

2024 MAY 31 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Research findings on Agriculture - Crop Insurance are discussed in a new report. According to news reporting originating from Auburn, Alabama, by NewsRx editors, the research stated, “Cover crops are promoted by agronomists and governments due to their on-farm and off-farm benefits. Incentive programs were created because high planting costs have hindered cover crop adoption in the United States.”

Funders for this research include Alabama Agricultural Experiment Station, Hatch program of the National Institute of Food and Agriculture, US Department of Agriculture.

Our news editors obtained a quote from the research from Auburn University, “Crop insurance discount programs are novel incentives that subsidize farmers’ crop insurance premiums by $5 per acre ($12.36 ha-1) on cover cropped land. While this payment is smaller than those typically offered through the Natural Resources Conservation Service and state-level cost-share programs, crop insurance discount programs have the potential to reach a significant proportion of farmers who purchase crop insurance. This paper uses data from a survey of Iowa farmers to quantify whether participation in the Iowa Crop Insurance Discount Program (ICIDP) affects the area planted to cover crops. I find that 11% of the ICIDP area would not have been planted to cover crops in the absence of the program, which is similar to other programs after considering the lower payment rate. Crop insurance discount programs decrease farmers’ crop insurance premium by $5 per acre for planting cover crops. Uncertainty exists whether the payment offered through these programs is enough to increase cover crop area. This paper evaluates the effectiveness of the first 3 years of the Iowa Crop Insurance Discount Program.”

According to the news editors, the research concluded: “Farmers planted an additional 16 acres to cover crops due to the program, corresponding to 11% of program land.”

For more information on this research see: Are Crop Insurance Discount Programs for Cover Crops Effective? Evidence From Iowa. Agricultural & Environmental Letters, 2024;9(1). Agricultural & Environmental Letters can be contacted at: Wiley, 111 River St, Hoboken 07030-5774, NJ, USA.

The news editors report that additional information may be obtained by contacting Wendiam P. M. Sawadgo, Auburn University, Dept. of Agricultural Economics and Rural Sociology, Auburn, AL 36849, United States.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1002/ael2.20125. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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