Nutrient Best Management Practice Insurance and Farmer Perceptions of Adoption Risk

Journal of Agricultural & Applied Economics, 2004, vol. 36, issue 3, pages 657-673

Abstract: This paper explores the effect farmer perceptions concerning how best management practice (BMP) adoption changes the profit distribution have on BMP adoption incentives and the potential for insurance to increase these incentives. Adoption indifference curves illustrate the effect of farmer perceptions on BMP adoption incentives and the potential for insurance to expand the set of perceptions consistent with adoption. Empirical analysis quantifies these conceptual results for nutrient BMP insurance, a new policy available to corn farmers as part of a USDA-Risk Management Agency pilot program in four states. Results indicate that nutrient BMP insurance can have economically relevant effects on farmer adoption incentives.

Keywords: adoption indifference curves; crop insurance; fertilizer; green insurance (search for similar items in EconPapers)
JEL-codes: D8 Q12 Q16 Q21 (search for similar items in EconPapers)
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Journal of Agricultural & Applied Economics is edited by Jeffrey M. Gillespie

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