Abstract Crop insurance is an important instrument to protect farmers against extreme weather events. Many countries provide subsidies for crop insurance products to make insurance more affordable for farmers. The Federal Crop Insurance Program in the United States and major European crop insurance programs such as in Spain, Italy, and France focus on subsidized multi‐peril crop insurance contracts that cover losses from various natural hazards (e.g., hail, wind, drought, frost). We study how making premium subsidies more flexible and allowing farmers to buy subsidized single‐peril contracts affects insurance demand. We theoretically show that single‐peril subsidies are more effective than multi‐peril subsidies at increasing insurance demand against specific perils. Single‐peril subsidies may, however, crowd out insurance demand against other risks, when risks are correlated. Using a series of premium subsidies introduced by different German states aimed at increasing frost insurance demand of winegrowers, we compare the effects of subsidies for single‐peril (frost only) insurance contracts to the effects of subsidies for multi‐peril (hail and frost) insurance contracts. We empirically show that both subsidies lead to a similarly strong increase in frost insurance demand. We also find that single‐peril frost insurance subsidies do not crowd out hail insurance demand which is in line with our theory as frost and hail are independent risks. Our results demonstrate that allowing for more flexibility in contract choices can make subsidy programs more effective without reducing coverage against other, uncorrelated risks.
Abstract This study is the first to evaluate the impacts of farm labor scarcity on producers in the United States across different crop production systems. Between 2002 and 2017, we disentangle the effects of labor scarcity from the impacts of rising commodity demand, technological change, and supply of other inputs on labor market outcomes. We leverage insights from a stylized theoretical framework, that shows labor market outcomes depend on these market forces and structural parameters like factor‐specific productivity changes, factor supply and substitutability. We implement a two‐step novel empirical strategy. First, we use constrained optimization approach to simultaneously estimate changes in input‐biased factor productivity, labor substitutability and price elasticity of labor supply for key Farm Resource Regions. Our estimates show that labor productivity in the Fruitful Rim region has stagnated relative to field crop dominant systems during our study period. This underscores the differences in capacity to adjust to labor shortages across production systems. Second, we use the first‐step estimates and a spatially explicit partial equilibrium model, to identify the responsiveness of wages and employment to reduced supply of farm workers. We find that a 1% annual decline in farm labor supply can increase hiring costs by 7.4% for specialty crop growers and 5.9% for field crop producers over the course of a decade. These can be further aggravated if trade policies increase demand from domestic producers and immigration policy further accentuate farm worker shortages. Addressing labor scarcity will be key to ensuring the long‐term sustainability and resilience of the agricultural sector.
Abstract Excessive water use for irrigation can accelerate the depletion of water resources, undermining agriculture's resilience to weather‐related shocks. Understanding how farmers make water use decisions is essential for developing effective water management policies. This study investigates the effect of crop insurance participation on water use in the High Plains Aquifer region, using crop‐specific irrigation data and unit pumping costs for groundwater extraction. We examine the question of moral hazard in input use, analyzing how water use responses to insurance participation vary with changes in groundwater pumping costs. To address endogeneity between water use and insurance participation, we employ an instrumental variable approach using base premium rates that are determined before farms make production and insurance decisions. We find that insurance participation increases per‐acre water use, but the magnitude of this effect declines as pumping costs rise. At the average pumping costs, a one percentage point increase in insurance participation leads to a 0.4% increase in per‐acre water use. At the 95th percentile of pumping costs, the marginal effect of insurance participation is negligible and close to zero. Our results suggest that water pricing policies should account for indirect effects through insurance participation to avoid the inefficient use of water resources.
Lifting smallholder farmers out of poverty depends largely on boosting their agricultural operating incomes, a persistent challenge despite numerous efforts. This study evaluates the impact of China's "E-Commerce into the Countryside" (ECC) program-the first and largest e-commerce initiative in the developing world-on both the level and distribution of smallholders' farm earnings. Employing a quasi-experimental design, we find that the ECC program significantly increases household per capita agricultural operating income. We show that this gain is driven by expanded market access through online sales, which facilitate income growth via three primary mechanisms: operational scale expansion, higher output prices, and a shift toward high-value-added crops. However, these benefits are unevenly distributed. The program also widens the income gap among smallholders, a disparity largely attributable to pre-existing differences in human, productive, and digital capital. Our findings highlight that e-commerce policies, while potent for income generation, require complementary measures to mitigate disparities that arise from heterogeneous initial endowments.
This paper examines the causal effects of a school feeding program on maternal empowerment and household consumption in rural China. Exploiting the staggered implementation of the Student Nutrition Improvement Program, we find that the program significantly reduces maternal time spent on housework, improves maternal labor market performance, and enhances maternal decision-making power within nuclear households. The augmented bargaining power translates into shifts in household consumption toward female-prioritized goods, including more nutritious foods, clothing, and housework-related appliances. However, these positive effects on maternal empowerment are diminished in multigenerational families, where grandparents can assist with childcare responsibilities.
To evaluate the role played by startup companies in the innovation ecosystem of US agriculture, we compile a unique dataset of 6024 new entrants founded 1987-2019 that details their financing lifecycles, annual economic performance, and patenting activities. One-third of the firms in the sample have observable signs of contributing to innovation, including patenting and external financing such as grants and venture capital, thus characterizing them as startups. Such startups and their financing have grown substantially over the period studied. We use discrete-time survival analysis to test factors related to firms receiving venture financing as well as to firms achieving successful financial exits. We find those firms that file for patents have higher likelihood of receiving financing than those that do not. Patent filings also increase the relative probability of a successful financial exit, which takes place primarily through mergers and acquisitions. In about a third of such exits, startups are acquired by corporate incumbents in agriculture well positioned to scale up and commercialize those startups' innovations for US agriculture. Importantly, a substantial portion of firms in the sample are still too young to have attained venture financing let alone a financial exit.
Voluntary agricultural land retirement programs are widely recognized for their environmental benefits, yet their economic effects, particularly on labor markets and land tenure, remain less understood. This paper examines the short- and long-term impacts of the first large-scale US land retirement initiative, the historical Conservation Reserve Program, introduced under the 1956 Set-Aside Act. Between 1957 and 1960, the program enrolled more than 30 million acres under 3-, 5-, or 10-year contracts, which then expired gradually through 1970. Using a newly digitized Conservation Reserve Program enrollment database linked to agricultural census data from the 1950s through the 1970s, we find that counties with medium and high enrollment intensity experienced statistically significant declines in tenant-cultivated land relative to low-enrollment counties during the program's active years. In medium-enrollment counties, tenant-operated land declined by roughly 0.6 percentage points, while high-enrollment counties experienced declines of approximately 1.6 percentage points nationally. The proportion of tenant farm operators also fell in both medium- and high-enrollment counties. These effects were larger and more persistent in the South, especially in counties with higher shares of nonwhite farm operators and sharecropping.
This paper examines how a natural disaster, the Dust Bowl, shapes occupational choices in farm households across generations. Using full-count US census data, I find that young adult sons shift away from self-employed farming toward wage farm work and nonagricultural sectors after the Dust Bowl. Younger children with affected farming parents are more likely to leave agriculture and earn higher income. Migration and schooling serve as mechanisms, and New Deal relief spending mitigates the Dust Bowl's effects. Overall, the Dust Bowl accelerated occupational reallocation among younger children of farmers and contributed to US mid-20th century structural change.
This paper derives a firm-level threshold, the Herfindahl Neutral Point, from the standard concentration index used in merger review. At this threshold, a marginal expansion leaves the index unchanged. Firms below the threshold reduce concentration when they expand; firms above it increase concentration. We derive exact formulas for discrete capacity additions and define bridging amounts that measure how far each firm sits from the threshold. Applying this framework to monthly federally inspected hog slaughter data from 2004 to 2024, we show that the sharp rise in concentration in 2016 is driven by acquisitions at firms that were near the threshold and then crossed it, while the subsequent partial decline reflects sustained growth among mid-tier packers operating below it. The 2015 acquisition of Cargill's pork business illustrates how bridging amounts organize merger analysis within a standard concentration screen. Reallocating the $34.7 million in federal capacity grants awarded to hog-sector processors under a targeting rule based on this threshold lowers the 2024 national hog packing Herfindahl-Hirschman Index by about 147 points relative to the pre-award baseline. The framework requires only market shares and the baseline concentration index.
Discrete choice experiments are increasingly being used to estimate land managers' willingness to accept participation in incentive-based environmental programs. This is a specific application of discrete choice experiments: the estimation of willingness to accept for a private good (program participation) where respondents have to make trade-offs between payments and the business costs required to improve the provision of the (environmental) public good targeted by the program. Previous reviews fail to provide methodological insights into the use of discrete choice experiments in this valuation context. In this study, we conduct a review of 80 studies (containing up to 93 sample-based observations) published in the Web of Science Core Collection, all of which apply discrete choice experiments to examine land managers' (farmers' and foresters') willingness to accept for participating in incentive-based environmental programs. Based on this systematic review, we report quantitative information on key features regarding policy settings, experiment design and implementation, and willingness to accept results. We conclude that many of the analyzed studies do not follow best practices for discrete choice experiments in particular and stated preference methods in general. We also use a construct validity indicator to assess whether willingness to accept estimates align with expectations about land managers' utility. The results from the meta-analysis show that special care should be taken in applications that focus on Africa, include contract design attributes, and use in-person surveys, among other features. Recommendations are provided to enable practitioners to obtain more accurate welfare estimates for better policy-making support.
Marshallian agglomeration is typically attributed to input-output linkages, labor market pooling, and knowledge spillovers; however, empirical evidence on how these mechanisms operate in agricultural settings remains limited. This paper examines whether and how China's agricultural geographical indications certification fosters agricultural agglomeration. Exploiting the staggered rollout of this certification system since 2008 as a quasi-natural experiment, we employ a staggered difference-in-differences design and find that certification significantly promotes county-level agricultural agglomeration, primarily through strengthened input-output linkages: it encourages the colocation of upstream producers and downstream processors and deepens local production networks. In contrast, we find no significant effects through labor market pooling or knowledge spillovers. The agglomeration effects are concentrated in plant-based certifications and are stronger in counties with better market access and transportation infrastructure. Overall, our findings extend Marshallian agglomeration theory to agriculture and provide new causal evidence on how agricultural geographical indications certification contributes to agricultural agglomeration as part of broader sectoral structural transformation.
Individual Fishing Quotas (IFQs) have the potential to lead to higher ex-vessel prices by reducing market gluts and improving product quality. While IFQs have been introduced in a number of fisheries in recent decades, few causal studies investigate their price effects. Using synthetic control methods on US reef-fish fisheries, we show that IFQs significantly increase prices for red snapper, red grouper, gag grouper, yellowedge grouper, scamp grouper, and tilefish. We also find significant positive price spillovers to adjacent, untreated fisheries. A primary challenge to unbiased estimation using synthetic control is treatment spillover, which can contaminate both never-treated units in the donor pool and to-be-treated units in a staggered implementation. When control (donor) units are subject to these spillovers, this can lead to either attenuation or divergence of the causal estimate, depending on the empirical setting. To address this estimation challenge, we propose a framework relying on economic theory (market arbitrage and product substitution) and empirical analysis (e.g., market integration or demand estimation) to inform both donor selection and the timing of the treatment start date. As a result, our proposed structure improves the accuracy of synthetic control estimates, as shown by a small Monte Carlo experiment. Furthermore, by pre-identifying contaminated units, our framework allows for the direct measurement of the spillover effects themselves.
Dark sky conservation is increasingly popular, requiring facility upgrades and community cooperation. This study assesses its economic benefits at Great Sand Dunes National Park and Preserve, a Gold Tier International Dark Sky Park. Through on-site surveys, we collected data on visitor behaviors, expenditures, and night sky perceptions. We introduced a continuum of contingent night sky brightness levels based on visitors' home locations and measured changes in visitation. Our Travel Cost-Contingent Behavior analysis shows that each unit increase in nightlight decreases visitation by 0.05 days over 5 years. Using a weighted Latent Class Negative Binomial (LCNB) model, we estimate consumer welfare losses under escalating nightlight pollution scenarios. If the park's night skies matched an average rural, suburban, or urban area, visitors' consumer surplus would fall by about 3%, 23-24%, and 42-44%, respectively. These results underscore the substantial economic value of preserving dark skies.
Common-pool resources-such as collectively-owned grasslands-are often overused and depleted until effective conservation strategies are put into place. We conducted a lab-in-the-field experiment to examine the performance of different management strategies on the sustainability of common-pool grassland management in China. We designed three experimental interventions-reward, punishment, and communication-to evaluate how to cost-effectively promote grassland conservation. Results reveal that the communication treatment is as effective as the reward and punishment treatments in promoting grassland conservation. However, unlike the reward treatment, communication does not require external funding or create income inequality among herders, and unlike the punishment treatment, it avoids undesirable impacts such as reducing herders' net payoffs. A mechanism analysis suggests that our communication treatment shifts herders' focus from exploitation to conservation. Our results indicate that incorporating communication interventions into grassland management strategies could improve their overall performance.
Irrigation is widely recognized as a key driver of agricultural productivity and rural economic development, yet credible evidence on its impacts, mechanisms, and long-term economic returns remains limited due to endogenous irrigation investments. Leveraging the timing of government irrigation investments and longitudinal household survey data spanning 15 years, we investigate how irrigation affects agricultural productivity. We find that irrigation investment increased the share of irrigated farmland by 11.0 percentage points, which in turn raised per-area output by 14.9%, net agricultural income by 15.6%, agricultural total factor productivity by 13.7%, and per-labor output by 36.2%. These effects are driven by four key mechanisms: increased use of high-productivity inputs, expanded cultivation area, labor reallocation from farm work to off-farm work, and mitigation of drought damage. The induced land expansion and labor reallocation explain the substantially larger increase in per-labor output. A cost-effectiveness analysis suggests a high return to irrigation investment, with approximately half of the return stemming from labor reallocation that increased off-farm income. These results provide strong evidence that irrigation investment plays an important role in improving agricultural productivity and accelerating rural transformation, with benefits extending beyond the farm by influencing labor markets.
Poor animal health is a central concern in modern livestock production. Despite the necessity to incorporate animal health in efficiency analysis, the theoretical and empirical developments are limited on this subject. This article appropriately characterizes the axiomatic properties of animal health within a production framework. We treat animal health as a weakly disposable output with characteristics of an input and an output, which permits computing animal health-adjusted efficiency measures and shadow prices of animal health. The application considers 980 observations of Swedish dairy farms over the years 2009-2016. We use a Benefit-of-the-Doubt approach for assessing animal health, which captures its multiple dimensions with weights being optimized for each farmer. Applying a random sample-split procedure within a Data Envelopment Analysis framework, we statistically verify the extent to which inclusion of animal health in the production framework changes the efficiency estimates. The results show that including animal health in production analysis increases the average efficiency estimates from 0.900 to 0.973, a finding that largely also holds in a statistical sense. The shadow prices of animal health are mostly positive, which indicates a general willingness to accept lower levels of production for higher levels of animal health. Our findings suggest the importance of incorporating animal health into efficiency analysis.
Perennial crops are economically important. They contribute to food security, providing essential nutrients that are often lacking in annual crops, and provide additional environmental benefits compared with annual crops. Despite their importance, empirical research on the impacts of climate change and adaptation on perennial crops remains limited. We model the phenological characteristics of major perennial crops in California and take adaptation into consideration to estimate the effects of temperature and precipitation on yields in both the short run and long run. Our findings indicate that weather impacts vary across the four phenological phases-dormancy, bloom, fruit development, and fruit maturity. Specifically, warming during the dormancy phase reduces walnut yields and warming during the bloom phase reduces almond yields in both the short-run and long-run. These long-run negative impacts suggest that adaptation has not offset the adverse effects of winter warming on these crops. On the other hand, warming in the fruit maturity phase positively affects almond yields, especially in the long run, suggesting that adaptation has taken advantage of rising temperatures to increase almond yields. Our findings provide valuable insights for targeted adaptation strategies to enhance the resilience of perennial crop production in the face of climate change.
Immigrants can be more vulnerable to economic downturns and, during periods of economic hardship, more likely to experience food insecurity compared to natives. This study examines the differential effect of the unemployment rate on the probability of being food insecure among diverse groups of immigrant households relative to natives in the United States. Since the unemployment rate is not randomly determined for households, we use an identification strategy based on shift-share Bartik instruments which exploit exogenous spatial variation in industry employment shares and national industry growth rates. We find that increases in the unemployment rate raise the probability of household food insecurity, with noncitizen immigrants disproportionately affected compared to both natives and naturalized citizens, likely reflecting their more limited access to safety-net programs. Noncitizen immigrant cohorts from countries with high proportions of less-skilled workers, or those arriving during economic downturns, are more likely to experience food insecurity than both native-born individuals and naturalized immigrant citizens. Higher education partially mitigates the impact of unemployment on household food insecurity, particularly for U.S. immigrant noncitizens. Our findings highlight the need for targeted measures to support at-risk immigrant groups disproportionately vulnerable to short-term economic shocks.
The online food delivery (OFD) industry has witnessed substantial global expansion. In this study, we examine how OFD platforms in China affect the food safety conditions of restaurants. Given the difficulty quantifying food safety, we first propose a machine learning approach to construct a restaurant-specific food safety risk indicator based on online customer reviews. The approach features high-frequency continuous measurements with complete geographic coverage. We also conducted an event study and found that the food safety risk in restaurants decreased significantly in response to OFD platforms, with the effects concentrated in the five quarters including the entry period. Our mechanism analysis suggests that this improvement might come from extended market information, strengthened market competition, and heightened supervision and regulation. The impact is also more pronounced for chain restaurants, restaurants that are relatively popular and expensive, and restaurants offering low-risk food items.
Germany's Renewable Energy Sources Act (REA), enacted in 2000 and subsequently amended, subsidized national renewable energy production with fixed feed-in tariffs for renewable energy sources (RE) from wind, solar, and biogas. Empirical studies suggest that the policy was creating windfall effects for landowners and attribute farmland use homogenization to the policy. Empirical evidence, however, lacks a comprehensive and systemic analysis of the REA impact on farmland values, farm structures, and farmland heterogeneity. To understand the policy's impact channels, we propose five hypotheses, build a spatial price theory-informed structural equation model (SEM) and test it on a rich dataset of land transactions and land uses for the Federal State of Brandenburg, 2005-2018. The SEM uncovers direct impact channels on farmland prices from an increased willingness to pay more in proximity to wind turbines and biogas plants, and on farmland heterogeneity by incentivizing maize-based homogenous crop rotations. Indirect impact channels for biogas promotion on land prices via altering the farm structure reveal additional and larger impacts than previous studies suggested. Approximately 9% of the price increase could be attributed to the RE expansion over the study period. Future policy amendments should take such a systemic perspective and counteract adverse effects.
