ASSESSING CROP INSURANCE PROGRAM ELEMENTS AND AGRICULTURAL TECHNOLOGY IMPACTS

• Sponsoring Institution: National Institute of Food and Agriculture
• Project Status: COMPLETE
• Funding Source: HATCH
• Reporting Frequency: Annual
• Accession No.: 1001351
• Project Start Date: Oct 1, 2013
• Project End Date: Sep 30, 2018
• Program Code: [(N/A)]- (N/A)

Recipient Organization
NORTH CAROLINA STATE UNIV
(N/A)
RALEIGH,NC 27695

Performing Department
Agricultural and Resource Economics

Non Technical Summary
US agricultural producers currently face a number of risks that can severely impact their livelihoods. Two instruments that farmers typically use to manage production and income risks are crop insurance and adoption of advanced technologies. Given the wide use of these approaches to managing agricultural risks, further understanding of the economics of crop insurance and agricultural technology issues has the potential to benefit the U.S. agricultural industry, in general, and North Carolina agriculture, in particular. The main objectives of this project are: (1) to analyze actuarial and performance issues related to various crop insurance program elements and premium rating procedures, and (2) to assess adoption and economic impacts of agricultural technologies, like precision technology and genetically-modified crops, in both the US and developing countries. The project will collect pertinent primary and secondary data sources and analyze these data using state-of-the-art quantitative techniques. Results will primarily be disseminated through academic presentations and peer-reviewed publications. The ultimate goals are (1) to improve the efficiency and effectiveness of the US crop insurance program, and (2) to provide information about technology adoption behavior and impact that will benefit agricultural research institutions.

Animal Health Component

90%

Research Effort Categories

Basic

10%

Applied

90%

Developmental

0%

Classification

Knowledge Area (KA)	Subject of Investigation (SOI)	Field of Science (FOS)	Percent
601	6199	3010	100%

Knowledge Area
601 - Economics of Agricultural Production and Farm Management;

Subject Of Investigation
6199 - Economy, general/other;

Field Of Science
3010 - Economics;

Keywords

adoption

agricultural technology

crop insurance

impact assessment

premium rating

underwriting

Goals / Objectives
1) To analyze actuarial and performance issues related to various crop insurance program elements and rating procedures (e.g., weather weighting loss cost data, data credibility issues in area-based products, optional unit surcharge estimation). Other crop insurance issues related to moral hazard behavior, fraud, advantageous selection, and climate change may also be investigated as well. Major achievements that this project objective hopes to achieve are: (1) reports and procedures that are of use to the Risk Management Agency (RMA), and (2) peer-reviewed publications. 2) To assess adoption and economic impacts of agricultural technologies (e.g., precision technology, genetically-modified crops, new natural resource management practices, and other new/emerging technologies) in the US and developing countries. Particular focus will be on utilization of new generation impact evaluation techniques (e.g. propensity score matching, quantile fixed effects regression), rigorous analysis of specification issues, and/or use of longitudinal datasets. Major achievements that this project objective hopes to achieve are: (1) publication of the research outputs in peer-reviewed outlets, and (2) reports and outputs of benefit to national and international research organizations (i.e., International Rice Research Instittute (IRRI), Cotton Inc.).

Project Methods
1) This research will build upon some of the existing research undertaken by the project leader. The large crop insurance database of the RMA and other primary/secondary data sources will be used in the project. This will allow for analysis of different crop insurance contract elements and various premium rating issues. Other databases such as the one from the Agricultural Research Management Survey (ARMS) and the Census of Agriculture will be explored and used as needed. Various econometric methods will be used to evaluate actuarial methodologies and related crop insurance performance issues. 2) Primary and/or secondary data sources from the U.S. and (possibly) other countries will be used to assess the economic impacts and adoption of transgenic technology and precision farming technologies. Other databases such as the one from the Agricultural Research Management Survey (ARMS) and the Census of Agriculture will be explored and used as needed. Experimental data sets (from on-farm experiments) may also be used in some instances. Various econometric methodologies will be used in the analysis of adoption and impact agricultural technologies. Efforts: The project will aim to disseminate research results using peer-reviewed publications and other written outlets. Evaluation: Measurable indicators to evaluate the success of the project primarily include the number of peer-reviewed publications and written reports.

Progress 10/01/13 to 09/30/18

Outputs
Target Audience:Academics, researchers, policymakers Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?Mentoring graduate students with dissertations involving crop insurance and GM technologies. How have the results been disseminated to communities of interest?Journal articles, conference presentations, and outreach publications/presentations. What do you plan to do during the next reporting period to accomplish the goals?Continue with research related to the two main goals of the project.

Impacts
What was accomplished under these goals? The research output during this period (Oct 1, 2017to Sept 30, 2018) provided important inferences about advantageous selection in crop insurance, rating price risk in revenue crop insurance, risk effects of GM crops, producer preference for risk bioenergy crops, and adoption precision auto guidance system in agriculture.All these outputs contributed to the two main objectives of the project and provided a "change in knowledge" for these topic areas.

Publications

• Type: Journal Articles Status: Published Year Published: 2017 Citation: Sanglestsawai, S., D.G.P. Rodriguez, R.M. Rejesus, J.M. Yorobe, Jr. Production Risk, Farmer Welfare, and Bt Corn in the Philippines. Agricultural and Resource Economics Review. Vol. 46, No. 3 (December 2017): 507-528.
• Type: Journal Articles Status: Published Year Published: 2018 Citation: Goodwin, B.K., A. Harri, R.M. Rejesus, and K.H. Coble. Measuring Price Risk in Rating Revenue Coverage: BS or No BS? American Journal of Agricultural Economics. Vol. 100, No. 2 (March 2018): 456-478. (2019 AAEA Agricultural Finance & Management (AFM) Section Outstanding Research/Quality of Communication Award)
• Type: Journal Articles Status: Published Year Published: 2018 Citation: Krah, K., D.R. Petrolia, A. Williams, K.H. Coble, A. Harri, and R.M. Rejesus. Producer Preferences for Contracts on a Risky Bioenergy Crop. Applied Economic Perspectives and Policy. Vol. 40, No. 2 (June 2018): 215-239.
• Type: Journal Articles Status: Published Year Published: 2018 Citation: Velandia, M., B. Edge, C. Boyer, J. Larson, D. Lambert, B. Wilson, M. Buschermole, B. English, R.M. Rejesus, L. Falconer. Automatic Section Control Technologies and GPS Auto-Guidance Systems Adoption in Cotton Production. J. of Agricultural Science. Vol. 10, No. 7 (2018): 282-294.
• Type: Journal Articles Status: Published Year Published: 2019 Citation: He, J., R.M. Rejesus, X. Zheng, J.M. Yorobe Jr. Advantageous Selection in Crop Insurance: Theory and Evidence. Journal of Agricultural Economics. Vol 69, No. 3 (September 2018): 646-668.

Progress 10/01/17 to 09/30/18

Outputs
Target Audience:Agricultural economists, academics, government agency personnel, agricultural scientists, farmers, and policy-makers (in the executive and legislative branch). Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?Two graduate students were involved in the research published in this period. How have the results been disseminated to communities of interest?Academic journals and conferences. What do you plan to do during the next reporting period to accomplish the goals?Continue research in various research related to the major goals of this hatch project.

Impacts
What was accomplished under these goals? Several journal articles related to the major goals of this project has been published.

Publications

• Type: Journal Articles Status: Published Year Published: 2017 Citation: Sanglestsawai, S., D.G.P. Rodriguez, R.M. Rejesus, J.M. Yorobe, Jr. Production Risk, Farmer Welfare, and Bt Corn in the Philippines. Agricultural and Resource Economics Review. Vol. 46, No. 3 (December 2017): 507-528.
• Type: Journal Articles Status: Published Year Published: 2018 Citation: Goodwin, B.K., A. Harri, R.M. Rejesus, and K.H. Coble. Measuring Price Risk in Rating Revenue Coverage: BS or No BS? American Journal of Agricultural Economics. Vol. 100, No. 2 (March 2018): 456-478.
• Type: Journal Articles Status: Published Year Published: 2018 Citation: Krah, K., D.R. Petrolia, A. Williams, K.H. Coble, A. Harri, and R.M. Rejesus. Producer Preferences for Contracts on a Risky Bioenergy Crop. Applied Economic Perspectives and Policy. Vol. 40, No. 2 (June 2018): 215-239.
• Type: Journal Articles Status: Published Year Published: 2018 Citation: Velandia, M., B. Edge, C. Boyer, J. Larson, D. Lambert, B. Wilson, M. Buschermole, B. English, R.M. Rejesus, L. Falconer. Automatic Section Control Technologies and GPS Auto-Guidance Systems Adoption in Cotton Production. J. of Agricultural Science. Vol. 10, No. 7 (2018): 282-294.
• Type: Journal Articles Status: Published Year Published: 2018 Citation: He, J., R.M. Rejesus, X. Zheng, J.M. Yorobe Jr. Advantageous Selection in Crop Insurance: Theory and Evidence. Journal of Agricultural Economics. Vol 69, No. 3 (September 2018): 646-668.

Progress 10/01/16 to 09/30/17

Outputs
Target Audience:Academics, researchers, policymakers Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?Provided training on impact assessment to faculty and students at Beijing Institute of Technology. Mentored two PhD students with dissertations involving crop insurance and GM technologies. How have the results been disseminated to communities of interest?Journal articles, conference presentations, and outreach publications/presentations. What do you plan to do during the next reporting period to accomplish the goals?Continue with research related to the two main goals of the project.

Impacts
What was accomplished under these goals? Th research output during this period (Oct 1, 2016 to Sept 30, 2017) provided important inferences about the economic impacts of new rice varieties, use of information from precision ag. technologies, labor use effects of GM crop adoption, and effect of crop insurance use on cover cropping. All these outputs contributed to the two main objectives of the project and provided a "change in knowledge" for these topic areas.

Publications

• Type: Journal Articles Status: Published Year Published: 2016 Citation: Ninh, H.N., C.T. Aragon, F.G. Palis, R.M. Rejesus, and G.R. Singleton. Yield and Income Effects of Ecologically-Based Rodent Management in Mekong River Delta, Vietnam. Asian Journal of Agriculture and Development. Vol. 13, No. 2 (Dec 2016): 55-74.
• Type: Journal Articles Status: Published Year Published: 2017 Citation: Edge, B., M. Velandia, D.M. Lambert, R.K. Roberts, J.A. Larson, B.C. English, C. Boyer, R.M. Rejesus, and A. Mishra. Changes in the Use of Precision Farming Information Sources Among Cotton Farmers and Implications for Extension. Journal of Extension. Vol. 55, No. 2 (April 2017): 1-8.
• Type: Journal Articles Status: Published Year Published: 2017 Citation: Mottaleb, K.A., R.M. Rejesus, M.V.R. Murty, S. Mohanty, and T. Li. Benefits of the Development and Dissemination of Climate Smart Rice: Ex ante Impact Assessment of a Drought-tolerant Rice in South Asia. Mitigation and Adaptation Strategies for Global Change. Vol. 22, No. 6 (August 2017): 879-901.
• Type: Conference Papers and Presentations Status: Other Year Published: 2016 Citation: Rejesus, R.M. Have IPM Farmer Field Schools (FFS) worked in the Philippines? An Economists Perspective. Invited presentation for the symposium Economics of IPM in the 21st Century: Multiple Perspectives from Around the World at the XXV International Congress of Entomology, Orlando, FL (Sept. 25-30, 2016).
• Type: Conference Papers and Presentations Status: Other Year Published: 2017 Citation: Rejesus, R.M., X. Zheng, B.K. Goodwin, S. Park. How does a Fraud Mitigation Program Influence Insured Farmers Claims Behavior? The Spot Check List Approach in US Crop Insurance. Selected paper presentation, 5th International Agricultural Risk, Finance, and Insurance Conference (IARFIC), Paris, France (June 7-9, 2017).
• Type: Conference Papers and Presentations Status: Other Year Published: 2017 Citation: Rejesus, R.M. Addressing Selection Issues in Ex Post Impact Evaluations of Agricultural Technologies. Invited Seminar Presentation at Beijing Institute of Technology (BIT), China (June 21-22, 2017).
• Type: Conference Papers and Presentations Status: Other Year Published: 2017 Citation: Rejesus, R.M. Adoption and Impact of the Alternate Wetting and Drying (AWD) Water Management Technique for Irrigated Rice in the Philippines. Pre-conference presentation at the SPIA/PIM Conference on Impacts of International Agricultural Research: Rigorous Evidence for Policy. (July 5-8, 2017).
• Type: Conference Papers and Presentations Status: Other Year Published: 2017 Citation: Jones, M.S., Rejesus, R.M., Z.S. Brown, J.M. Yorobe, Jr. Drivers of Heterogeneity in Yield Gains from GM Maize in the Philippines: Evidence from Panel Data. Selected Poster Presentation, 2017 AAEA Meetings, Chicago, IL (July 30-Aug. 1, 2017).
• Type: Conference Papers and Presentations Status: Other Year Published: 2017 Citation: Rodriguez, D.G.P., A. Hegrenes, R.M. Rejesus. Planting Date and Climate Change in Cereal Production in Norway. Selected Paper Presentation, 2017 AAEA Meetings, Chicago, IL (July 30-Aug. 1, 2017).
• Type: Conference Papers and Presentations Status: Other Year Published: 2017 Citation: Connor, L. and R.M. Rejesus. Labor Savings and Time Allocation Shifts from the Adoption of Pesticidal GM Crops in the Philippines. Selected Paper Presentation, 2017 AAEA Meetings, Chicago, IL (July 30-Aug. 1, 2017).
• Type: Conference Papers and Presentations Status: Other Year Published: 2017 Citation: Connor, L., R.M. Rejesus, S. Marlow. Effect of Crop Insurance on Cover Crop Adoption. Selected Paper Presentation, 2017 AAEA Meetings, Chicago, IL (July 30-Aug. 1, 2017).
• Type: Theses/Dissertations Status: Published Year Published: 2017 Citation: Connor, L.Q. Post-Adoption Impacts of GM Corn on Farm Decisions in the Philippines.
• Type: Theses/Dissertations Status: Published Year Published: 2016 Citation: He, Juan. Three Essays on Crop Insurance
• Type: Websites Status: Published Year Published: 2017 Citation: R.M. Rejesus. Agricultural Policy, Risk Management, and Crop Insurance Resources. URL: https://ag-econ.ncsu.edu/agricultural-policy-risk-management-and-crop-insurance-resources/
• Type: Other Status: Published Year Published: 2017 Citation: Rejesus, R.M. What to do Before and After a Hurricane? Programs and Resources Available for North Carolina Agricultural Producers. NC State Agricultural Policy and Risk Management Brief (September 16, 2017).

Progress 10/01/15 to 09/30/16

Outputs
Target Audience:Academics, researchers, and policymakers Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided? Nothing Reported How have the results been disseminated to communities of interest?JOurnal articles, conference presentations, and outreach pulbications. What do you plan to do during the next reporting period to accomplish the goals?Continue with research related to the two main goals of the project.

Impacts
What was accomplished under these goals? A change in knowledge resulted in the outputs this period. All the outputs (e.g. articles and presentations) this period fall under the 2 major goarls of this project/

Publications

• Type: Journal Articles Status: Published Year Published: 2016 Citation: Yorobe, J.M., J. Ali, V. Pede, R.M. Rejesus, O.P. Velarde, and H.Wang. Yield and Income Effects of Rice Varieties with Tolerance to Multiple Abiotic Stresses: The Case of Green Super Rice (GSR) and Flooding in the Philippines. Agricultural Economics. Vol. 40, No. 3 (May 2016): 261-271 (Lead Article).
• Type: Other Status: Published Year Published: 2015 Citation: Rejesus, R.M. Sequestration and Your ARC/PLC Commodity Program Payments. NC State Agricultural Policy and Risk Management Brief (October 28, 2015).
• Type: Other Status: Published Year Published: 2015 Citation: Rejesus, R.M. Crop Insurance Cuts in the Bipartisan Budget Act of 2015. NC State Agricultural Policy and Risk Management Brief (November 2, 2015).
• Type: Other Status: Published Year Published: 2015 Citation: Rejesus, R.M. More Cuts to Crop Insurance? The Proposed AFFIRM Act. NC State Agricultural Policy and Risk Management Brief (December 8, 2015).
• Type: Other Status: Published Year Published: 2016 Citation: Rejesus, R.M. Tight Margins and Farm Program Payments in North Carolina. NC State Agricultural Policy and Risk Management Brief (April 26, 2016).
• Type: Conference Papers and Presentations Status: Published Year Published: 2016 Citation: He, J., X. Zheng, R.M. Rejesus, and J.M. Yorobe, Jr. Estimating the Effect of Crop Insurance on Input Use when Insured Farmers are Monitored. Selected Paper Presentation, 2016 AAEA Meetings, Boston, MA (July 31-Aug. 2, 2016).

Progress 10/01/14 to 09/30/15

Outputs
Target Audience:Academics, Researchers, and Policymakers Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?Professional development of project leader. How have the results been disseminated to communities of interest?Through peer reviewed journal articles. What do you plan to do during the next reporting period to accomplish the goals?Continue research on issues falling under the 2 broad goals of the project.

Impacts
What was accomplished under these goals? Research outputs this period resulted in change in knowledge and resulted in changes in actions. The Rejesus et al. (2015) crop insurance article resulted in major changes in the rating system of the Risk Management Agency of USDA. This is tangible action of a government agency based on results from the published paper. This issue falls under goal #1 above. The other peer reviewed articles reported this period falls under goal #2.

Publications

• Type: Journal Articles Status: Published Year Published: 2015 Citation: Lampayan, R.M., R.M. Rejesus, G.R. Singleton, and B.A.M. Bouman. Adoption and Economics of Alternate Wetting and Drying Water Management for Irrigated Lowland Rice Field Crops Research. Vol. 170 (January 2015): 95-108.
• Type: Journal Articles Status: Published Year Published: 2015 Citation: Sanglestsawai, S., R.M. Rejesus, J.M. Yorobe, Jr. Economic Impacts of Integrated Pest Management (IPM) Farmer Field Schools (FFS): Evidence from Onion Farmers in the Philippines. Agricultural Economics. Vol 46, No. 2 (March 2015): 149-162.
• Type: Journal Articles Status: Published Year Published: 2015 Citation: Rejesus R.M., K.H. Coble, M.F. Miller, R. Boyles, B.K. Goodwin, T.O. Knight. Accounting for Weather Probabilities in Crop Insurance. J. of Agricultural and Resource Economics. Vol. 40, No. 2 (May 2015): 306-324.

Progress 10/01/13 to 09/30/14

Outputs
Target Audience:Academics, researchers, and policy-makers Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?Professional development of project leader How have the results been disseminated to communities of interest?Through peer-reviewed journal articles and extension/outreacch presentations. What do you plan to do during the next reporting period to accomplish the goals?Continue research on issues falling under the 2 goals of the project.

Impacts
What was accomplished under these goals? The research output from this project resulted in a change in knowledge and, hopefully, can result in changes in actions/conditions. All of the published peer-reviewed articles in this report fall unders Goal #2 above. All these research provided imporatn insights on the different impacts of agricultural technologies, as well as other important agricultural issues (climate change), to stakeholders.

Publications

• Type: Journal Articles Status: Published Year Published: 2013 Citation: Mottaleb, K.A., S. Mohanty, H.T.K. Hoang, and R.M. Rejesus. The Effects of Natural Disasters on Farm Household Income and Expenditure: A Study on Rice Farmers in Bangladesh. Agricultural Systems. Vol. 121(October 2013): 43-52.
• Type: Journal Articles Status: Published Year Published: 2013 Citation: Rejesus, R.M., M. Mutuc-Hensley, P.D. Mitchell, K.H. Coble, and T.O.Knight,. U.S. Agricultural Producer Perceptions of Climate Change. Journal of Agricultural and Applied Economics. Vol. 45, No. 4 (November 2013): 701-718.
• Type: Journal Articles Status: Published Year Published: 2014 Citation: Sanglestsawai, S., R.M. Rejesus, J.M. Yorobe, Jr. Do Lower Yielding Farmers Benefit from Bt Corn: Evidence from Instrumental Variable Quantile Regressions. Food Policy. Vol. 44 (February 2014): 285-296.
• Type: Journal Articles Status: Published Year Published: 2014 Citation: Rejesus, R.M., A.M. Martin, and P. Gypmantasiri. Enhancing the Impact of Natural Resource Management Research: Lessons from a Meta-Impact Assessment of the Irrigated Rice Research Consortium. Global Food Security. Vol. 3, No. 1 (February 2014): 41-48.
• Type: Journal Articles Status: Published Year Published: 2104 Citation: Velandia, M., D.M. Lambert, C.D. Clark, R.M. Rejesus, Z. Li, W.H. Pepper, and K. Jensen. Product Liability Risk Perceptions in Tennessee Fruit and Vegetable Marketing. J. of Agribusiness. Vol. 32, No. 1. (Spring 2014): 67-84.
• Type: Journal Articles Status: Published Year Published: 2014 Citation: Kotsiri, S., R.M. Rejesus, S.L. Larkin, M.C. Marra. Adoption of Precision Technologies and Perceived Improvements in Cotton Quality. J. of Agribusiness. Vol. 32, No. 1. (Spring 2014): 1-18 (Lead Article).
• Type: Journal Articles Status: Published Year Published: 2014 Citation: Lobell, D.B., M.J. Roberts, W. Schlenker, N. Braun, B. Little, R.M. Rejesus, G. Hammer. Greater sensitivity to drought accompanies maize yield increase in the US Midwest. Science. Vol. 344, No. 6183 (May 2014): 516-519.
• Type: Journal Articles Status: Published Year Published: 2014 Citation: Watcharaanantapong, P. R.K. Roberts, D.M. Lambert, J.A. Larson, M. Velandia, B.C. English, R.M. Rejesus, C. Wang. Timing of Precision Agriculture Technology Adoption in US Cotton Production. Precision Agriculture. Vol. 15, No. 4 (June 2014): 427-446.
• Type: Other Status: Published Year Published: 2014 Citation: Marra, M.C. and Rejesus, R.M. The 2014 Agricultural Acts Impact on Farmers: Decisions, Decisions, Decisions. NC State Economist (May/June 2014).