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Center Pivot Irrigation Systems as a Form of Drought Risk Mitigation in Humid Regions

Daniel J. Cooley and Steven Smith

No 30093, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Irrigation in the Eastern US receives little attention compared to the West, but farmers in humid states of the US, traditionally reliant on rainfall, have more than tripled irrigation since 1978. We examine this trend in Illinois where there has been a nearly threefold increase in center pivot irrigation systems (CPIS) installations since 1988. Specifically, we analyze where and when CPIS installations occur and their benefits in terms of annual crop yield, irrigated acreage, crop selection, and reduction in drought-related insurance payouts. To do so, we create a novel data set derived from a deep learning model capable of automatically identifying the location of CPIS during drought years along with annual county level crop, weather, and insurance data. The results indicate CPIS installations in Illinois are significantly more common over alluvial aquifers after droughts. Additionally, counties with a higher presence of CPIS do not have higher average crop yields, a shift to more water intensive crops, or an expansion of cropland. However, in drought years CPIS presence does have a significant positive effect on corn yield and a significant negative effect on indemnity payments for both soybeans and corn. The results provide insights into an emerging trend of irrigation in humid regions, raising potential policy considerations for crop insurance and signaling a potential need to address water rights as demand increases.

JEL-codes: Q15 Q18 Q25 Q54 (search for similar items in EconPapers)
Date: 2022-05
New Economics Papers: this item is included in nep-agr, nep-env and nep-ias
Note: EEE
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Published as Center Pivot Irrigation Systems as a Form of Drought Risk Mitigation in Humid Regions , Daniel Cooley, Steven M. Smith. in American Agriculture, Water Resources, and Climate Change , Libecap and Dinar. 2024

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