Degree

Doctor of Philosophy (PhD)

Department

Department of Agricultural Economics and Agribusiness

Document Type

Dissertation

Abstract

To reduce the rising negative environmental impacts of crop production (e.g., chemical runoff, soil erosion) using conservation practices in farming has become a very important policy and research focus. However, the interest of farmers in adopting conservation practices is highly dependent on the potential private benefits that these practices create. With the chances for increased weather variability and frequent extreme weather conditions, cover crops have been gaining more attention, as their on-farm benefits can provide an effective buffer against unfavorable weather events such as excess dry and wet conditions. Despite providing several benefits, cover crop adoption in the US remain very low (~4%). From a profit maximizing farmer’s perspective, net benefits provided by cover crops in the form of increased crop yield and reduced farm risks are likely a key driver in the decision to adopt them. In this dissertation, we attempt to investigate the economics of cover crops, impacts of adoption on crop yields and resiliency, and on overall farm risks which is reflected in crop insurance premium rates.

My dissertation is written in a three-essay format. In the first essay, I present a review of cover crop adoption, potential private and public benefits and costs associated with growing cover crops, impact on farm economy, and policy considerations. Various dimensions of cover crop economics are discussed through a review of cover crop literature and the potential future prospect for cover crop use as well as future research needs are also discussed. By increasing the knowledge about the economic framework within which cover crop adoption works, this study intends to inform producers contemplating adoption and policy makers aiming to increase adoption rate.

In the second essay, I investigate the effect of cover crops on crop yields and inspect whether the practice can help reduce the crop yield losses during excess dryness or moisture events and contribute to the overall resiliency. For this study, we utilize county level cover crop acreage data for corn and soybeans in the state of Indiana from 2006-2015 obtained from the Operational Tillage Information System (OPTIS) dataset. Taking advantage of the panel nature of our data, we utilize county/crop linear fixed effects specifications, and several robustness tests in our primary analysis to identify the impact of cover crop adoption on crop yield and crop yield resiliency. Findings from this study show that planting cover crops do not have any significantly beneficial effect on the mean yield of corn. However, our results suggest that there is a significant reduction in yield loss for both corn and soybeans planted to a cover during extreme weather conditions.

In the third essay, I examine the impact of cover crops on overall production risks in farm by looking at the effect on federal crop insurance premium rates. A continuous use of cover crops may increase yield stability and reduce risk over time, which can potentially influence the level of crop insurance coverage bought by farmers. The change in potential production risks after using cover crops is reflected in the premium rates. Given the findings of several studies claiming that cover crops can reduce yield risks, this paper aims to provide clear insights into the risk reducing benefits provided by cover crops by assessing the change in crop insurance premium rates, which is an effective economic measurement for farm risks. Findings form this study can provide insights on the actuarial efficiency of crop insurance premium rates given the recently increased interest from policymakers to design conservation practice friendly crop insurance programs.

Date

8-18-2023

Committee Chair

P Lynn Kennedy

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Available for download on Saturday, July 11, 2026

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