The Effects of Crop Insurance and Disaster Relief Programs on Soil Erosion: The Case of Soybeans and Corn

Abstract

The consequences of government agricultural subsidy policies for indicators of environmental quality, including soil loss, food safety, and groundwater and river contamination, have received considerable attention and have been lightening rods for high profile political debates since at least the 1960s. Federal crop insurance and other agricultural disaster assistance programs have not been immune from controversy in this policy context, perhaps especially in relation to the use of chemical inputs. Thus, previous research has examined the effects of federal crop insurance programs at the intensive margin on the use of potentially environmentally damaging inputs fertilizer and other chemical input use (Smith and Goodwin, 1996; Horowitz and Lichtenberg, 1993; Babcock and Hennessy, 1996). More recently, the interaction of government policy, especially risk management programs, and crop choice and other land use issues has also become the focus of considerable debate. Thus, some recent research has evaluated the extent to which risk management assistance, through the provision of ad-hoc disaster assistance and federally subsidized crop insurance, has affected land use patterns.