Livestock Disease Indemnity Design When Moral Hazard is Followed by Adverse Selection

Averting or limiting the outbreak of infectious disease in domestic livestock herds is an economic and potential human health issue that involves both the government and individual livestock producers. Producers have private information about preventive biosecurity measures they adopt on their farms prior to outbreak (ex ante moral hazard), and following outbreak they possess private information about whether or not their herd is infected (ex post adverse selection). We investigate how indemnity payments can be designed to provide incentives to producers to invest in biosecurity and report infection to the government, while simultaneously addressing the information asymmetry between producers and the government. We show how addressing the adverse selection problem leads to a risk-sharing tradeoff in the moral hazard problem. We compare the relative magnitude of the first- and second-best levels of biosecurity investment and indemnity payments to further demonstrate the tradeoff between risk-sharing and efficiency, and we discuss the implications for status quo U.S. policy.Food Consumption/Nutrition/Food Safety, Livestock Production/Industries, Risk and Uncertainty,

A Model of Incentive Compatibility under Moral Hazard in Livestock Disease Outbreak Response

This paper uses a principal-agent model to examine incentive compatibility in the presence of information asymmetry between the government and individual producers. Prior models of livestock disease have not incorporated information asymmetry between livestock managers and social planners. By incorporating the asymmetry, we investigate the role of incentives in producer behavior that influences the duration and magnitude of a disease epidemic.livestock disease, moral hazard, principal-agent model, Institutional and Behavioral Economics,

The Innovation Process: Practices in Food and Agribusiness Companies

Agribusiness,

Nitrogen Application Decision-Making Under Climate Risk in The U.S. Corn Belt

Nitrogen fertilizer is one of the most important inputs to corn production and farmers manage their crop by deciding how much to apply, when to apply it and how to apply it to maximize their yields and resulting profit. There is risk inherent in crop fertility manage- ment because once nitrogen is applied to the soil it is no longer immobile and cropland is subject to loss of this costly input under different weather conditions. Days suitable for field work, a farm’s machinery set, and weather conditions determine when field prepara- tion and planting activities are completed each year. This paper documents the methods and data used to evaluate the economic costs and benefits of the agronomic practice of ‘‘splitting” nitrogen fertilizer—applying some at or just before planting and a second appli- cation after the plant has already emerged and is in greatest need of nutrients. An example of how to use the free online decision support tool Corn Split NDST (splitn.agclimate4u.org) to evaluate the climate risk and economics of post-planting N applications is developed to illustrate the application of methods described

Conversations with non-choir farmers: Implications for conservation adoption. Report for the Walton Family Foundation

The following report documents the results and implications for the study, “Conversations with non-choir farmers: Implications for conservation adoption”. We conducted 10 in-person focus groups with farmers (IN=5; IA=3; IL=2) and three online focus groups with non-operating landowners (NOLs) who own land in Indiana, Illinois, and Iowa. This research sought to answer the following research questions: 1) What are viable strategies beyond what WFF is currently investing in to promote agricultural practices that that reduce nutrient runoff? 2) How and under what conditions can policies help to change farmer and landowner behavior? What are potential barriers, particularly resistance from the agricultural sector? 3) What do Corn Belt farmers think about the limits to voluntary conservation? Do they see a need to think beyond voluntary conservation? 4) What suggestions do Corn Belt farmers have for how to motivate wide-spread adoption of conservation practices to improve water quality? 5) How could new policies and incentives be tied to existing funding streams (e.g., Farm Bill) or other financial incentives? The focus group questions were designed to foster participants’ discussions of their perceptions on seven topics related to the research questions: 1) regulation; 2) conservation barriers; 3) market-based policies; 4) conservation targeting; 5) motivations for widespread conservation adoption; 6) communication networks; and 7) certification programs and private sector funding for conservation. The following pages include data from the 13 focus groups – 10 with farmers and 3 with NOLs. We conclude with implications of our findings

Crop Species Diversity Changes in the United States: 1978-2012

Citation: Aguilar, J., Gramig, G. G., Hendrickson, J. R., Archer, D. W., Forcella, F., & Liebig, M. A. (2015). Crop Species Diversity Changes in the United States: 1978-2012. Plos One, 10(8), 14. doi:10.1371/journal.pone.0136580Anecdotal accounts regarding reduced US cropping system diversity have raised concerns about negative impacts of increasingly homogeneous cropping systems. However, formal analyses to document such changes are lacking. Using US Agriculture Census data, which are collected every five years, we quantified crop species diversity from 1978 to 2012, for the contiguous US on a county level basis. We used Shannon diversity indices expressed as effective number of crop species (ENCS) to quantify crop diversity. We then evaluated changes in county-level crop diversity both nationally and for each of the eight Farm Resource Regions developed by the National Agriculture Statistics Service. During the 34 years we considered in our analyses, both national and regional ENCS changed. Nationally, crop diversity was lower in 2012 than in 1978. However, our analyses also revealed interesting trends between and within different Resource Regions. Overall, the Heartland Resource Region had the lowest crop diversity whereas the Fruitful Rim and Northern Crescent had the highest. In contrast to the other Resource Regions, the Mississippi Portal had significantly higher crop diversity in 2012 than in 1978. Also, within regions there were differences between counties in crop diversity. Spatial autocorrelation revealed clustering of low and high ENCS and this trend became stronger over time. These results show that, nationally counties have been clustering into areas of either low diversity or high diversity. Moreover, a significant trend of more counties shifting to lower rather than to higher crop diversity was detected. The clustering and shifting demonstrates a trend toward crop diversity loss and attendant homogenization of agricultural production systems, which could have far-reaching consequences for provision of ecosystem system services associated with agricultural systems as well as food system sustainability

Adoption of agricultural conservation practices in the United States: Evidence from 35 years of quantitative literature

Copyright © 2019 Soil and Water Conservation Society. All rights reserved. This is a comprehensive review of all published, quantitative studies focused on adoption of agricultural conservation practices in the United States between 1982 and 2017. This review finds that, taken as a whole, few independent variables have a consistent statistically significant relationship with adoption. Analyses showed that variables positively associated with adoption include the farmer self-identifying primarily as stewardship motivated or otherwise nonfinancially motivated, environmental attitudes, a positive attitude toward the particular program or practice, previous adoption of other conservation practices, seeking and using information, awareness of programs or practices, vulnerable land, greater farm size, higher levels of income and formal education, engaging in marketing arrangements, and positive yield impact expected. Some variables often thought to be important, such as land tenure, did not emerge as consistently important in this cross-study review. Other variables, such as farmers’ sense of place, training, presence of institutional conditions supporting adoption, and the role of collective decision making are not measured in enough studies to draw conclusions but potentially have a relationship with adoption decisions. Implications for how to promote conservation adoption and directions for future research are discussed. Because positive attitudes and awareness of conservation programs or practices are positive predictors of adoption, practitioners should share benefits of specific practices and programs and leverage existing practice adoption. Further work to explore relationships between conservation adoption and the role of farmer identity, nuances of land tenure, and the influence of structural factors is needed. Moreover, we suggest that future research should focus on the impact of different messages and avenues of reaching farmers in order to continue to inform conservation practices. Future research should consider both individual and institutional factors that facilitate and constrain adoption