Are crop insurance discount programs for cover crops effective? Evidence from Iowa

Abstract

AbstractCover crops are promoted by agronomists and governments due to their on‐farm and off‐farm benefits. Incentive programs were created because high planting costs have hindered cover crop adoption in the United States. Crop insurance discount programs are novel incentives that subsidize farmers’ crop insurance premiums by $5 per acre ($12.36 ha−1) on cover cropped land. While this payment is smaller than those typically offered through the Natural Resources Conservation Service and state‐level cost‐share programs, crop insurance discount programs have the potential to reach a significant proportion of farmers who purchase crop insurance. This paper uses data from a survey of Iowa farmers to quantify whether participation in the Iowa Crop Insurance Discount Program (ICIDP) affects the area planted to cover crops. I find that 11% of the ICIDP area would not have been planted to cover crops in the absence of the program, which is similar to other programs after considering the lower payment rate.