Essay in Environmental Spillover of US Crop Insurance on Surface Water, Agricultural and Geographical Effects on Surface Water Impairment, and A Hypothetical Irrigation Game in Madison Co., TN

Abstract

Essay in \u27Environmental Spillover of US Crop Insurance on Surface Water\u27 investigates the spillover effect of the premium subsidy change in crop insurance to the surface water impairment. A two-step IV-GMM with SHAC optimal weighting matrix is used in the estimation. Data for the empirical evidence are from EPA, Risk Management Agency, National Agricultural Statistics Service, and US Census Bureau are used. The estimation results suggest an increase in premium subsidy and/or indemnified losses could lead to an increase in insured acres. However, the increase in insured acres may not significantly worsen the condition of impaired waters.Essay in \u27Agriculture and Geographical Effects on Water Impairment Condition\u27 investigates the impact of agriculture and geographical effects on water impairment condition by assembling county-aggregated huc-12s water impairment data and county agricultural data. Number of farms, number of animal units, farm-size, and agricultural-designated waters are used as agricultural indicators. County elevation and geographical position from equator are used as geographical indicator. Using IV approach, this study finds that higher number of farms and animal units could worsen water impairment condition. However, larger farm-size is associated with less change in water impairment. County located on predominantly higher elevation tends to have larger agricultural-designated waters which subsequently worsen the water impairment. There is also evidence that county\u27s geographical position is significant in explaining county\u27s progression in water impairment.Essay in \u27A Hypothetical Irrigation Game in Madison Co., TN,\u27 examines the condition that could lead to groundwater overdraft due to competition among farmers where weather condition dictates optimal water allocation. Using a dated response function and Madison County, TN., weather data from Jackson Weather Station, the simulation results indicate that when pumping cost is relatively low, the risk averse farmer would allocate more water than risk neutral farmers including during wet months. The result implies that the overdraft problem in southeastern region might exist if most farmers in the region are risk averse and pumping cost are very low. Thus, the sense of competition of water extraction might lead to groundwater overdraft even though the region has high precipitation