Research Conducted at Auburn University Has Provided New Information about Crop Insurance (Crop Insurance Premium Subsidy and Irrigation Water Withdrawals In the Western United States): Agriculture – Crop Insurance

2021 NOV 23 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Investigators publish new report on Agriculture - Crop Insurance. According to news reporting from Auburn, Alabama, by NewsRx journalists, research stated, “We estimate the effects of the federal crop insurance premium subsidy on freshwater withdrawals for irrigation among U.S. counties to the west of the 100th meridian. Our results indicate that a 1% increase in premium subsidy leads to a 0.446% (about 475,901 acre-feet/year) and 0.673% (about 474,026 acre-feet/year) increase in total freshwater withdrawals for irrigation and fresh surface water withdrawals for irrigation, respectively.”

Financial supporters for this research include Alabama Agricultural Experiment Station, Hatch program of the National Institute of Food and Agriculture, U.S. Department of Agriculture.

The news correspondents obtained a quote from the research from Auburn University, “The elasticity of total freshwater withdrawals for irrigation and fresh surface water withdrawals for irrigation with respect to revenue insurance premium subsidy is more than twice as large as those with respect to yield insurance premium subsidy. Groundwater withdrawals for irrigation are not found to be responsive to crop insurance premium subsidy. Because the elasticities are all non-negative, moral hazard should not be a dominant factor in the relationship between crop insurance subsidies and freshwater withdrawals for irrigation.”

According to the news reporters, the research concluded: “Thus, exploring the causal relationship between crop insurance premium subsidy and agricultural input uses, this study underscores the unintended effect of the federal crop insurance programme on water resource sustainability in the U.S.”

This research has been peer-reviewed.

For more information on this research see: Crop Insurance Premium Subsidy and Irrigation Water Withdrawals In the Western United States. The Geneva Papers on Risk and Insurance Issues and Practice, 2021. The Geneva Papers on Risk and Insurance Issues and Practice can be contacted at: Palgrave Macmillan Ltd, Brunel Rd Bldg, Houndmills, Basingstoke RG21 6XS, Hants, England.

Our news journalists report that additional information may be obtained by contacting Ruiqing Miao, Auburn University, Dept. of Agricultural Economics and Rural Sociology, 208B Comer Hall, Auburn, AL 36849, United States. Additional authors for this research include Prasenjit N. Ghosh and Emir Malikov.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1057/s41288-021-00252-4. 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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