Source: AUBURN UNIVERSITY submitted to
YIELD, INSURANCE, AND ADAPTATION: A RESEARCH PROGRAM FOCUSING ON AGRICULTURAL PRODUCTION IN ALABAMA AND THE SOUTHEAST
Sponsoring Institution
National Institute of Food and Agriculture
Project Status
COMPLETE
Funding Source
Reporting Frequency
Annual
Accession No.
1012308
Grant No.
(N/A)
Cumulative Award Amt.
(N/A)
Proposal No.
(N/A)
Multistate No.
(N/A)
Project Start Date
May 1, 2017
Project End Date
Apr 30, 2022
Grant Year
(N/A)
Program Code
[(N/A)]- (N/A)
Recipient Organization
AUBURN UNIVERSITY
108 M. WHITE SMITH HALL
AUBURN,AL 36849
Performing Department
Agri Economics & Rural Sociol
Non Technical Summary
Climate's impact on crop yield and crop insurance's impact on agricultural production have attracted much attention. Several projects in the CRIS retrieval system aim to address issues related with climate change, crop yields, and crop insurance. However, the proposed project differs from the existing projects in the specific research questions, geographical regions considered, data to be analyzed, and methodology to be used. Therefore, the proposed project complements or extends the existing projects to deepen the understanding on climate's impact on agricultural production, the potential of farmers' adaptation, and crop insurance's impact as a major risk management tool. Specifically, we propose (1) to understand how climatic variability affects crop yields and quantify farmers' adaptation potential with a focus on Alabama and the Southeastern United States; (2) to investigate the determinants of farmers' insurance demand as a risk management tool and a tool to adapt to climate change; (3) to explore the effects of crop insurance on technology innovation and adoption; and (4) to examine crop insurance' impacts on agricultural productivity and farmers' welfare in Alabama and in the Southeast. Outcomes of this objective will be of important policy implications. They will contribute to the current body of literature about crop insurance's impacts on agricultural production and hence contribute to the optimal design of the crop insurance program. The research results should also inform farmers' and potential investors' decisions regarding the adaptation options and crop insurance contract choice.
Animal Health Component
100%
Research Effort Categories
Basic
(N/A)
Applied
100%
Developmental
(N/A)
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
6011830301050%
6011710301050%
Goals / Objectives
The objectives of this proposed project are (1) to understand how climatic variability affects crop yields and quantify farmers' adaptation potential with a focus on Alabama and the Southeastern United States; (2) to investigate the determinants of farmers' insurance demand as a risk management tool and a tool to adapt to climate change; (3) to explore the effects of crop insurance on technology innovation and adoption; and (4) to examine crop insurance' impacts on agricultural productivity and farmers' welfare in Alabama and in the Southeast.
Project Methods
Theoretical, empirical, and experimental methodologies and procedures will be employed to complete the proposed project. During the lifetime of the project, data from various sources will be acquired and assembled. Based on these datasets, statistical and econometric models will be developed to quantify climate's impact on crop yields in Alabama and in the Southeast. Specifically, by comparing the climate impacts on yield based on experimental trial data and those on observed yield data from farms, we can identify the short-term adaptation potential for farmers and the key options that can be used by farmers to better adapt to climate change.We will then analyze how crop insurance will affect the total factor productivity (TFP) of farming in Alabama and in the Southeast, which will shed lights on how crop insurance will affect the efficient use of resources (labor and capital) and the technology progress. The analysis will be based on the ARMS dataset and the farm-level Census of Agriculture data. Non-parametric econometric analyses will be employed for the data analysis.Moreover, the proposed project aims to develop a framework of welfare analysis that accounts for the interaction between crop insurance and agricultural innovation. The framework will be an expansion of the sufficient statistics approach developed by Chetty (2009) and thoroughly reviewed in Chetty and Finkelstain (2013). By combing the theoretical model and observed agricultural data, we will quantity the welfare impact of crop insurance conditional on coverage levels, subsidy levels, and its interaction between technology innovation and adoption.

Progress 10/01/20 to 09/30/21

Outputs
Target Audience:Ruiqing Miao presented "Impact of changes in Title II of the 2018 Farm Bill on the Acreage and Environmental Benefits of Conservation Reserve Program" at Program in Environmental and Resource Economics (pERE) Weekly Seminar, Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign. May 3, 2021. About 28 researchers and students from the University of Illinois at Urbana-Champaign attended the presentation. Ruiqing Miao presented a poster, "Maladaptation of U.S. Corn and Soybean Yields to a Changing Climate," at Auburn Research Fac- ulty Symposium, January 29, 2021, Auburn, AL. The audience was Auburn University faculty members and graduate students. Ruiqing Miao presented "Time-Varying Adaptation of U.S. Corn and Soybean Yields to a Changing Climate" in the Applied Mi- croeconomics Seminar, Department of Economics (Auburn University, November 4, 2020, Auburn) and in the Department of Agricultural Economics and Rural Sociology (Auburn University, October 26, 2020, Auburn). In total, about 50 Auburn University researchers and graduate students attended the presentations. Brian Cornish presented "Impact of changes in Title II of the 2018 Farm Bill on the Acreage and Envi- ronmental Benefits of Conservation Reserve Program" at Agricultural & Applied Economics Association (AAEA) Annual Meeting, August 1-3, 2021, Austin, Texas. The audience was researchers and graduate students in the field of agricultural economics. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?Ph.D. students Prasenjit Ghosh, Jingfang Zhang, and Brian Cornish, as well as undergraduate studentsLindsey Wesse, Roshell Rosales Aguilar, and Seth Ingram in the Department of Agricultural Economics and Rural Sociology at Auburn University, worked on constructing datasets, conducting economic analysis, and writing journal articles. How have the results been disseminated to communities of interest?We presented the results of research at the 2021 Agricultural & Applied Economics Association (AAEA), various seminar or workshop series at Auburn University and University of Illinois at Urbana-Champaign. What do you plan to do during the next reporting period to accomplish the goals?We will try to have the current working papers published during the next reporting period and will expand our research to examine how technology innovation and adoption will affect farmers' adaptation to climate change and the sustainability of US agriculture.

Impacts
What was accomplished under these goals? Obj. (1) to understand how climatic variability affects crop yields and quantify farmers' adaptation potential with a focus on Alabama and the Southeastern United States. During the reporting period, we published two papers studying the relationship between climate variability and crop yields. The first is entitled "Distributional and Temporal Heterogeneity in the Climate Change Effects on U.S. Agriculture". The second is entitled "Maladaptation of U.S. Corn and Soybean Yields to a Changing Climate." We also started a new working paper entitled "Agricultural Adaptation to Climate Change across Space: The Case of U.S. Agriculture over 1958-2019." In this paper, we account for space heterogeneity in examining the adaptation of U.S. agriculture to climate change. We allow the adaptation and responsiveness of crop yield to climate variables to vary across space, thereby taking into account potential neighborhood influences on farmers' adaptation strategy. Obj. (2) to investigate the determinants of farmers' insurance demand as a risk management tool and a tool to adapt to climate change. Nothing to report during this period. Obj. (3) to explore the effects of crop insurance on technology innovation and adoption. Nothing to report during this period. Obj. (4) to examine crop insurance' impacts on agricultural productivity and farmers' welfare in Alabama and in the Southeast. We started a new project to study the impact of the federal crop insurance program on agricultural production efficiency and welfare, which will shed light on how crop insurance may affect efficiency of the input use (land, labor, and capital) in the contiguous US.

Publications

  • Type: Journal Articles Status: Published Year Published: 2021 Citation: Cornish, Brian*, Ruiqing Miao, and Madhu Khanna. forthcoming. Impact of changes in Title II of the 2018 Farm Bill on the Acreage and Environmental Benefits of Conservation Reserve Program. Applied Economic Perspectives and Policy. doi: http://doi.org/10.1002/aepp.13185
  • Type: Journal Articles Status: Published Year Published: 2021 Citation: Ghosh, Prasenjit*, Ruiqing Miao, and Emir Malikov. forthcoming. Crop Insurance Premium Subsidy and Irrigation Water Withdrawals in the Western United States. The Geneva Papers on Risk and Insurance  Issues and Practice. doi: https://doi.org/10.1057/s41288-021-00252-4
  • Type: Journal Articles Status: Accepted Year Published: 2021 Citation: Khanna, Madhu and Ruiqing Miao. forthcoming. Inducing the Adoption of Emerging Technologies for Sustainable Intensification of Food and Renewable Energy Production: Insights from Applied Economics Australian Journal of Agricultural and Resource Economics. doi: https://doi.org/10.1111/1467-8489.12461
  • Type: Journal Articles Status: Published Year Published: 2021 Citation: Yu, Chengzheng*, Ruiqing Miao, and Madhu Khanna. 2021. Maladaptation of U.S. Corn and Soybeans to a Changing Climate. Scientific Reports. doi: https://doi.org/10.1038/s41598-021-91192-5
  • Type: Journal Articles Status: Published Year Published: 2020 Citation: Malikov, Emir, Ruiqing Miao, and Jingfang Zhang*. 2020. Distributional and Temporal Heterogeneity in the Climate Change Effects on U.S. Agriculture. Journal of Environmental Economics and Management 104:1-10. doi: https://doi.org/10.1016/j.jeem.2020.102386


Progress 10/01/19 to 09/30/20

Outputs
Target Audience:Ruiqing Miao presented "Grassland Easement Acquisition: Conversion Hazard Rate, Additionality, and Spatial Spillover" at the 2020 Annual Association of Environmental and Resource Economists (AERE) virtual Summer Conference. June 4-5. About 20 researchers and students from the nation attended the presentation. Ruiqing Miao presented "Climate Change Effects on U.S. Agriculture: Distributional Heterogeneity, Technological Adaptability, and Spatial Spillovers" at Ohio State University, Auburn University, Iowa State University in the fall of 2019. About 80 researchers and students in total attended the presentation. Two outreach-type articles were posted on Farmdoc Daily (https://farmdocdaily.illinois.edu/), a renowned extension website that reach a large audience of farmers and policymakers. These two articles are: "The Food-Energy-Water Nexus and Emerging Agricultural Technologies" and "Tradeoff between Short-Term and Long-Term Risk Management Tools: New Study Shows that Crop Insurance May Hinder Agricultural Innovations in Drought-Tolerant Technologies". Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?PhD students Prasenjit Ghosh, Jingfang Zhang, and Brian Cornish, as well as MS student Hayes Grogan in the Department of Agricultural Economics and Rural Sociology at Auburn University worked on constructing datasets, conducting economic analysis, and writing journal articles. How have the results been disseminated to communities of interest?We presented the results of research at the 2020 Annual Association of Environmental and Resource Economists (AERE) Summer Conference and at three universities. We also have two outreach-type articles posted on Farmdoc Daily (https://farmdocdaily.illinois.edu/), a renowned extension website hosted by University of Illinois. What do you plan to do during the next reporting period to accomplish the goals?We will try to have the current working papers published during the next reporting period and continue working on examining the impact of crop insurance and of climate on U.S. agriculture.

Impacts
What was accomplished under these goals? Obj. (1) to understand how climatic variability affects crop yields and quantify farmers' adaptation potential with a focus on Alabama and the Southeastern United States. During the reporting period, we completed two working papers studying the relationship between climate variability and crop yields. The first working paper is entitled "Distributional and Temporal Heterogeneity in the Climate Change Effects on U.S. Agriculture". In this paper, we apply a flexible panel-data quantile regression withtime-varying coefficients to examine distributional heterogeneity and temporal variation in this relationship and show that U.S. corn and soybeans have overall become less sensitive to temperature and precipitation over 1948-2010. The second working paper, entitled "Maladaptation of U.S. Corn and Soybean Yields to a Changing Climate", uncovers the inherent trade-offs and limitations of existing approaches to crop adaptation. Results show that although the two crops became more heat- and drought-tolerant, their productivity under normal temperature and precipitation conditions decreased. Over 1951-2017, heat- and drought-tolerance increased corn and soybean yields by 33% and 20%, whereas maladaptation to normal conditions reduced yields by 41% and 87%, respectively, with large spatial variations in effects. Obj. (2) to investigate the determinants of farmers' insurance demand as a risk management tool and a tool to adapt to climate change. Nothing to report during this period. Obj. (3) to explore the effects of crop insurance on technology innovation and adoption. The paper "Climate, Insurance, and Innovation: The Case of Drought and Innovations in Drought-Tolerant Traits in U.S. Agriculture" was accepted by European Review of Agricultural Economics. In this paper, I find that the US agricultural sector responds to climate variation by increasing innovation activities, but this response is weakened by subsidized crop insurance by about 23 per cent. This indicates that crop insurance may have an unintended crowding-out effect as an option of risk management and may inhibit societies' long-run capacity to adapt to climate change. Obj. (4) to examine crop insurance' impacts on agricultural productivity and farmers' welfare in Alabama and in the Southeast. We completed a working paper entitled "Crop Insurance Premium Subsidy and Irrigation Water Withdrawals in the United States." In this paper we find that a 1% increase in premium subsidy leads to 0.446% (about 475,901 acre-feet/year) and 0.673% (about 474,026 acre-feet/year) increase in total freshwater and surface freshwater withdrawals, respectively. The elasticity of total freshwater and surface freshwater withdrawals with respect to revenue insurance premium subsidy is more than twice as large as those with respect to yield insurance premium subsidy.

Publications

  • Type: Journal Articles Status: Under Review Year Published: 2020 Citation: Malikov, Emir, Ruiqing Miao, and Jingfang Zhang*. forthcoming. Distributional and Temporal Heterogeneity in the Climate Change Effects on U.S. Agriculture.
  • Type: Journal Articles Status: Accepted Year Published: 2020 Citation: Li, Yijia*, Ruiqing Miao, and Madhu Khanna. forthcoming. Neonicotinoids and Decline in Bird Biodiversity in the United States. Nature Sustainability
  • Type: Journal Articles Status: Accepted Year Published: 2020 Citation: Miao, Ruiqing. 2020. Climate, Insurance, and Innovation: The Case of Drought and Innovations in Drought-Tolerant Traits in U.S. Agriculture. European Review of Agricultural Economics
  • Type: Journal Articles Status: Accepted Year Published: 2020 Citation: Miao, Ruiqing and Madhu Khanna. 2020. Harnessing Advances in Agricultural Technologies to Optimize Resource Utilization in the Food-Energy-Water Nexus. Annual Review of Resource Economics
  • Type: Journal Articles Status: Under Review Year Published: 2020 Citation: Ghosh, Prasenjit*, Ruiqing Miao, and Emir Malikov. Crop Insurance Premium Subsidy and Irrigation Water Withdrawals in the United States.


Progress 10/01/18 to 09/30/19

Outputs
Target Audience:Ruiqing Miao presented "Economics of Switchgrass as Feedstock for Livestock and Bioenergy" at Alabama Grazing Academy, Perdido River Farms on September 20, 2019 in Atmore, Alabama. About 15 growers from Alabama attended the presentation. Prasenjit Ghosh, the PhD student who is working under the Hatch project, presented a poster titled "Effects of Crop Insurance on Irrigation Water Use in the United States" at the 2019 Agricultural and Applied Economics Association (AAEA) Annual Meeting (July 21-23, 2019) in Atlanta, GA. The poster session was open to all the attendees (more than 1,000) and was set in a time when no oral presentations were going. We believe that most of the audience were faculty members and graduate students from universitiesacross the US. Because the session was open to everyone who participated in AAEA, the audience might also include policymakers and staff members from NGOs. Hayes Grogan, the MS student who is working under the project, created materials that were presented by Dr. Brittney Goodrich at the 2019 AAEA annual meeting described above. The title of the presentation is "'Bee' Productive: A Study of Honey Production in the United States". About 20 people attended the presentation at the conference. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?PhD student Prasenjit Ghosh and MS student Hayes Grogan in the Department of Agricultural Economics and Rural Sociology worked on constructing datasets, conducting economic analysis, and writing journal articles. How have the results been disseminated to communities of interest?We presented the results at the 2019 Agricultural & Applied Economics Association (AAEA) Annual Meeting (July 21-23) in Atlanta, GA and at an extension meeting in Alabama (i.e., Alabama Grazing Academy, Perdido River Farms, September 20, 2019, Atmore, Alabama). What do you plan to do during the next reporting period to accomplish the goals?We will try to get the three working paper published during the next year and continue working on examining the impact of crop insurance on U.S. farm productivity.

Impacts
What was accomplished under these goals? Three working papers have been produced to fulfill objectives (1), (3), and (4). They are: Malikov, Emir and Ruiqing Miao. "Climate Change Effects on U.S. Agriculture: Distributional Heterogeneity, Technological Adaptability, and Spatial Spillovers." R&R at JEEM. Miao, Ruiqing. "Climate, Insurance, and Innovation: The Case of U.S. Agriculture." R&R at European Review of Agricultural Economics. Prasenjit Ghosh, Ruiqing Miao, and Emir Malikov. "The Effects of Federal Crop Insurance Program on Irrigation Water Use in the United States." One paper has been published to fulfill objective (1). The paper is: Schillerberg, Tayler A.*, Di Tian, and Ruiqing Miao. 2019. "Spatiotemporal patterns of maize and winter wheat yields in the United States: predictability and impact from climate oscillations." Agricultural and Forest Meteorology 275:208-222.

Publications

  • Type: Journal Articles Status: Published Year Published: 2019 Citation: Li, Yijia*, Ruiqing Miao, and Madhu Khanna. 2019. Effects of Ethanol Plant Proximity and Crop Prices on Land-Use Change in the United States. American Journal of Agricultural Economics 101(2):467-491.
  • Type: Journal Articles Status: Published Year Published: 2019 Citation: Miao, Ruiqing, Prasenjit N. Ghosh*, Madhu Khanna, Weiwei Wang, and Jian Rong. 2019. Effect of Wind Turbines on Bird Abundance: a National Scale Analysis based on Fixed Effects Models. Energy Policy 132:357-366.
  • Type: Journal Articles Status: Published Year Published: 2019 Citation: Schillerberg, Tayler A.*, Di Tian, and Ruiqing Miao. 2019. Spatiotemporal patterns of maize and winter wheat yields in the United States: predictability and impact from climate oscillations. Agricultural and Forest Meteorology 275:208-222.
  • Type: Journal Articles Status: Published Year Published: 2019 Citation: Anand, Mohit*, Ruiqing Miao, and Madhu Khanna. 2019. Adopting Bioenergy Crops: Does Farmers Attitude toward Loss Matter? Agricultural Economics 50(4):435-450.


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

Outputs
Target Audience:The graduate student working under the hatch project, Prasenjit Ghosh, presented a paper supported by the project at the Agricultural and Applied Economics Association (AAEA) Annual Meeting (August 5-7, 2018) in Washington, D.C. The title of the paper is "Agricultural Irrigation's Responses to Federal Crop Insurance in the United States." About 20 people attended the presentation. We believe that most of the audience were faculty members and graduate students from universities across the US. Because the session was open to everyone who participated in AAEA, the audience might also include policy makers and staff members from NGOs. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?Undergraduate student Nate Scarff and PhD student Prasenjit Ghosh in the Department of Agricultural Economics and Rural Sociology worked on constructing the datasets and economic analysis. How have the results been disseminated to communities of interest?We presented the results at the 2018 Agricultural & Applied Economics Association (AAEA) Annual Meeting (August 5-7) in Washington, D.C. What do you plan to do during the next reporting period to accomplish the goals?We will continue to examine the impact of crop insurance on farm productivity and agricultural innovations in the next reporting period.

Impacts
What was accomplished under these goals? During this reporting period the team analyzed the effects of crop insurance on water use in the United States. We have completed a draft manuscript for the research and presented it at a professional conference.

Publications

  • Type: Conference Papers and Presentations Status: Published Year Published: 2018 Citation: Ghosh, P. and R. Miao. "Agricultural Irrigationâ¿¿s Responses to Federal Crop Insurance in the United States." Conference Paper Submitted to Agricultural & Applied Economics Association (AAEA) Annual Meeting, August 5-7, 2018, Washington, D.C.


Progress 05/01/17 to 09/30/17

Outputs
Target Audience: Nothing Reported Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?Undergraduate student Nate Scarff and PhD student Prasenjit Ghosh in the Department of Agricultural Economics and Rural Sociology worked on constructing the datasets. How have the results been disseminated to communities of interest? Nothing Reported What do you plan to do during the next reporting period to accomplish the goals?We will conduct economics analyses based on the data we collected to achieve the goals of this project.

Impacts
What was accomplished under these goals? This project started on May 1, 2017. Between May 1, 2017 and Sep. 30, 2017, we aimed to complete crop yield databases and to obtain access to the USDA Economic Research Service (ERS) Agricultural Resource Management Survey (ARMS).

Publications