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A Conceptual Framework for Evaluating Agricultural Economic and Environmental Tradeoffs in the Central Nebraska Basins Using Field-Level Area Study Data AgEcon
Lakshminarayan, P.G.; Babcock, Bruce A.; Mitchell, Paul D..
Tipo: Working or Discussion Paper Palavras-chave: Environmental Economics and Policy.
Ano: 1996 URL: http://purl.umn.edu/18373
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A Real Options Framework for Analyzing Program Participation as Human Capital Investments: The Case of the Average Crop Revenue Election (ACRE) Program AgEcon
Mitchell, Paul D.; Rejesus, Roderick M.; Coble, Keith H.; Knight, Thomas O..
We develop a real options framework to model producer participation in a subsidy program as a human capital investment to learn how the stochastic subsidy affects returns and how to adapt production activities to new program incentives, formally linking the framework to a multinomial logit specification for empirical applications. Analysis of farmer intentions for participation in the ACRE program created by the 2008 Farm Bill finds that reluctance to participate was driven largely by risk aversion and perceptions about income risk from yield and price variability, consistent with the theory that uncertainty creates an option value discouraging human capital investments.
Tipo: Working or Discussion Paper Palavras-chave: Agricultural Policy; Commodity Programs; Farm Bill; Multinomial Logit; Real Options Theory; Subsidy; Agricultural and Food Policy; Q12; Q18.
Ano: 2010 URL: http://purl.umn.edu/92896
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ADDITIVE VERSUS PROPORTIONAL PEST DAMAGE FUNCTIONS: WHY ECOLOGY MATTERS AgEcon
Mitchell, Paul D..
Economic analyses of pests typically assume damage is either additively separable from pest free yield or proportional to it. This paper describes the ecological assumptions required for additive and proportional damage functions to demonstrate that both specifications are reasonable. Ecological research supports a proportional damage function for competitive pests such as weeds, while for insect pests the appropriate damage function depends on the level of pest free yield. Theoretical analysis identifies differences between additive and proportional damage functions in terms of the impact of pest control on output variance and the concavity of output in the pest control input.
Tipo: Conference Paper or Presentation Palavras-chave: Pest Economics; Damage Function; Damage Control; Risk Reducing Input; Increasing Returns; Functional Response; Crop Production/Industries; Environmental Economics and Policy.
Ano: 2001 URL: http://purl.umn.edu/20775
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Adoption of Best Management Practices to Control Weed Resistance By Cotton, Corn, and Soybean Growers AgEcon
Frisvold, George B.; Hurley, Terrance M.; Mitchell, Paul D..
This study examined adoption of ten best management practices (BMPs) to control weed resistance to herbicides. Using data from a survey of 1,205 U.S. cotton, corn, and soybean growers, count data models were estimated to explain the total number of practices frequently adopted. Ordered probit regressions were used to explain the frequency of individual BMP adoption. Growers practicing a greater number of BMPs frequently (a) had more education, but less farming experience; (b) grew cotton, (c) expected higher yields relative to the county average; and (d) farmed in counties with a lower coefficient of variation (CV) for yield of their primary crop. Yield expectations and variability were significant predictors of the frequency of adoption of individual...
Tipo: Conference Paper or Presentation Palavras-chave: Weeds; Herbicide; Resistance management; Corn; Cotton; Soybeans; Adoption; Crop Production/Industries; Farm Management; Production Economics; Research and Development/Tech Change/Emerging Technologies; Q12; Q16.
Ano: 2009 URL: http://purl.umn.edu/49432
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ADVERSE SELECTION, MORAL HAZARD, AND GROWER COMPLIANCE WITH BT CORN REFUGE AgEcon
Mitchell, Paul D.; Zhu, En (John); Hurley, Terrance M..
This paper develops a principal-agent model of farmer compliance with Bt corn refuge requirements intended to manage the evolution of resistance to the Bt toxin by insect pests. The model endogenizes the price of the technology, the audit rate, and the fine imposed on non-complying farmers when farmer willingness to pay for Bt corn and compliance effort is private information.
Tipo: Conference Paper or Presentation Palavras-chave: Crop Production/Industries.
Ano: 2004 URL: http://purl.umn.edu/20123
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An Ex Ante Analysis of the Benefits from the Adoption of Corn Rootworm Resistant, Transgenic Corn Technology AgEcon
Alston, Julian M.; Hyde, Jeffrey; Marra, Michele C.; Mitchell, Paul D..
This study examined the potential economic impacts in the United States of the commercial adoption of a corn rootworm (CRW) resistant transgenic corn. Using a counterfactual approach, we estimated that if the technology had been made available in the year 2000 at a price that would equate per acre costs to those for insecticide-based corn rootworm control, and adopted on all of the acres treated for corn rootworm in that year, the total benefits would have been $460 million. This benefit includes $171 million to the technology developer and seed companies, $231 million to farmers from yield gains, and a further $58 million to farmers from reduced risk, time savings, and other nonpecuniary benefits associated with reduced use of insecticides. This is a...
Tipo: Conference Paper or Presentation Palavras-chave: Crop Production/Industries.
Ano: 2003 URL: http://purl.umn.edu/57828
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An Unbalanced Nested Error Component Model for Estimating Pest Damage Functions and the Value of Rootworm Bt Corn AgEcon
Dun, Zhe; Mitchell, Paul D..
We apply Antweiler’s (2001) double-nested unbalanced panel data model to estimate a western corn rootworm damage function using data from field trials in Illinois and Nebraska. Results imply that expected yield losses for a one unit difference in the node injury scale are 16.4%. Estimated random year and state effects are statistically significant, as is the estimated random experimental effect. The experimental effect is relatively large indicating the tremendous variability in yield losses at the small scale for plots with the same node injury scale measure of root damage. Using the estimated pest damage function to assess the value of Bt corn for farmers in Nebraska and Illinois, we find that, with a mean yield of 200 bu/ac, a yield CV of 25%, a...
Tipo: Conference Paper or Presentation Palavras-chave: Crop Production/Industries.
Ano: 2010 URL: http://purl.umn.edu/90700
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Analyzing Farmer Participation Intentions and Enrollment Rates for the Average Crop Revenue Election (ACRE) Program AgEcon
Mitchell, Paul D.; Rejesus, Roderick M.; Coble, Keith H.; Knight, Thomas O..
The 2008 Farm Bill created the Average Crop Revenue Election (ACRE) program as a new commodity support program. We analyze actual county-level ACRE enrollment rates and a mail survey of farmers just before the ACRE sign-up deadline in Mississippi, North Carolina, Texas and Wisconsin. As discussions begin regarding the next Farm Bill, an understanding of the factors affecting ACRE participation can provide guidance as program changes are discussed. Our empirical analysis of the survey suggest that initial farmer plans to switch to ACRE in 2009 were driven by producer perceptions of whether or not ACRE would pay more than existing programs and whether or not it would provide more risk protection. On the other hand, planning to stay with existing programs in...
Tipo: Working or Discussion Paper Palavras-chave: Farm Management; Risk and Uncertainty.
Ano: 2011 URL: http://purl.umn.edu/116705
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Can Conventional Crop Producers Also Benefit From Bt Technology? AgEcon
Dun, Zhe; Mitchell, Paul D..
Transgenic plants producing insecticidal protein derived from Bacillus thuringiensis (Bt) have been widely adopted since their commercial introduction in 1996. In 2009, 25 countries planted 134 million ha of transgenic crops. The widespread adoption of such plants has reduced use of conventional insecticides while attaining yield gains, thus providing economic, environmental and human health benefits. Because of Bt crops’ high pest control efficacy, there is concern that pests will develop resistance to Bt toxins so that Bt crops are less or no longer effective. To delay the evolution of resistance, the U.S. Environmental Protection Agency (EPA) currently requires Bt crop growers to also plant non-Bt (conventional) crops on a minimum percentage of their...
Tipo: Conference Paper or Presentation Palavras-chave: Welfare; Bt; Pest suppression; Agricultural and Food Policy; Crop Production/Industries.
Ano: 2011 URL: http://purl.umn.edu/103584
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COMPOSED ERROR MODEL FOR INSECT DAMAGE FUCNTIONS: YIELD IMPACT OF ROTATION RESISTANT WESTERN CORN ROOTWORM IN ILLINOIS AgEcon
Mitchell, Paul D.; Gray, Michael E.; Steffey, Kevin L..
This paper describes a composed error model for estimating the conditional distribution of yield loss to serve as an insect damage function. The two-part error separates yield variability due to pest damage from other non-pest factors such as soil heterogeneity, non-uniform application of agronomic practices, and measurement errors. Various common functional forms (linear, quadratic, Cobb-Douglas, negative exponential, hyperbolic, sigmoid) for the pest damage function are presented and parameter estimation is described. As an empirical illustration, the model is used to estimate a damage function for corn rootworm, the most damaging insect pest of corn in the United States. The estimated damage function gives expected proportional yield loss as a...
Tipo: Conference Paper or Presentation Palavras-chave: Crop Production/Industries.
Ano: 2002 URL: http://purl.umn.edu/19602
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COMPOSED ERROR MODEL FOR INSECT DAMAGE FUNCTIONS: YIELD IMPCT OF ROTATION RESISTANT WESTERN CORN ROOTWORM IN ILLINOIS AgEcon
Mitchell, Paul D.; Gray, Michael E.; Steffey, Kevin L..
This paper describes a composed error model for estimating the conditional distribution of yield loss to serve as an insect damage function. The two-part error separates yield variability due to pest damage from other non-pest factors such as soil heterogeneity, non-uniform application of agronomic practices, and measurement errors. Various common functional forms (linear, quadratic, Cobb-Douglas, negative exponential, hyperbolic, sigmoid) for the pest damage function are presented and parameter estimation is described. As an empirical illustration, the model is used to estimate a damage function for corn rootworm, the most damaging insect pest of corn in the United States. The estimated damage function gives expected proportional yield loss as a function...
Tipo: Working or Discussion Paper Palavras-chave: Crop Production/Industries.
Ano: 2002 URL: http://purl.umn.edu/24020
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Cost of Production System Budgets AgEcon
Mitchell, Paul D..
Tipo: Working or Discussion Paper Palavras-chave: Agricultural Finance.
Ano: 1997 URL: http://purl.umn.edu/18649
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Count Data Models of Prescribed Fire Escapes AgEcon
Mitchell, Paul D.; Buman, Thomas; Buman, Stanley.
We specify several count data models, parameterizing the probability densities in terms of their means for easier comparison between models. In addition, we derived a correction of these probability densities for differences in sample sizes, which is a contribution to the count data literature as far as we are aware. We then empirically implement these models using data from a mail survey of firms using prescribed fire to estimate the expected number of escapes from prescribed burns. We find that the not correcting for sample size differences can lead to erroneous conclusions concerning the statistical significance of variables.
Tipo: Conference Paper or Presentation Palavras-chave: Research Methods/ Statistical Methods.
Ano: 2006 URL: http://purl.umn.edu/21055
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Economic Analysis of Supplemental Deductible Coverage as Recommended in the USDA’s 2007 Farm Bill Proposal AgEcon
Mitchell, Paul D.; Knight, Thomas O..
A primary change to crop insurance contained in the USDA's Farm Bill Proposal is Supplemental Deductible Coverage (SDC). SDC would allow farmers who purchase individual crop insurance coverage to purchase GRP in the amount of the individual policy deductible. GRP indemnities would be accelerated compared with the current GRP policy. Analysis indicates that SDC provides substantial benefits in terms of certainty equivalent gains. The largest benefits are realized by low risk farmers, compared to others in the county, and farmers whose yields are highly correlated with the county yield. Optimal individual policy coverage levels generally decrease when SDC is taken.
Tipo: Working or Discussion Paper Palavras-chave: Agricultural and Food Policy.
Ano: 2007 URL: http://purl.umn.edu/92125
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Economic Analysis of Supplemental Deductible Coverage as Recommended in the USDA's 2007 Farm Bill Proposal AgEcon
Mitchell, Paul D.; Knight, Thomas O..
A primary change to crop insurance contained in the USDA’s Farm Bill proposal is supplemental deductible coverage (SDC). SDC would allow farmers who purchase individual crop insurance coverage to purchase area-wide coverage in the amount of the individual policy deductible. This supplemental area-wide coverage would be similar to the existing Group Risk Plan policy, but with an accelerated indemnity schedule. Analysis indicates that SDC increases farmer certainty equivalents. The largest benefits are realized by farmers with high yield potential in counties with greater systemic risk. In general, optimal individual policy coverage levels modestly decrease when SDC is taken.
Tipo: Journal Article Palavras-chave: Crop insurance; Area-wide coverage; Actual production history (APH); Group risk plan (GRP); Yield distribution; Risk and Uncertainty.
Ano: 2008 URL: http://purl.umn.edu/44743
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Economic Evaluation of Bt Corn Refuge Insurance AgEcon
Mitchell, Paul D.; Hurley, Terrance M.; Hellmich, Richard L..
The EPA has imposed mandatory refuge requirements for Bt crops to prolong the efficacy of Bt. Growers have no economic incentive to plant the required refuge because refuge crops are on average less productive and more risky. This paper evaluates refuge insurance—insurance thatpays indemnities for yield losses on refuge due to insect damage—as a tool to increase grower compliance incentives. We determine actuarially fair insurance premiums, then evaluate the feasibility of private provision of refuge insurance and its impact on grower incentives to comply with refuge requirements. A private market for refuge insurance appears unlikely because our analysis suggests that even a 2 percent load on the actuarially fair premium makes growers unwilling to buy...
Tipo: Working or Discussion Paper Palavras-chave: Bt corn; Crop insurance; Refuge crops; Pest-resistant management; European corn borer; Yield loss; Crop Production/Industries; Risk and Uncertainty.
Ano: 2000 URL: http://purl.umn.edu/18565
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ECONOMIC EVALUATION OF BT CORN REFUGE INSURANCE AgEcon
Mitchell, Paul D.; Hurley, Terrance M.; Hellmich, Richard L..
The EPA has imposed mandatory refuge requirements for Bt crops to prolong the efficacy of Bt. Growers have no economic incentive to plant the required refuge because refuge crops are on average less productive and more risky. This paper evaluates refuge insurance--insurance that pays indemnities for yield losses on refuge due to insect damage--as a tool to increase grower compliance incentives. We determine actuarially fair insurance premiums, then evaluate the feasibility of private provision of refuge insurance and its impact on grower incentives to comply with refuge requirements. A private market for refuge insurance appears unlikely because our analysis suggests that even a 2% load on the actuarially fair premium makes growers unwilling to buy...
Tipo: Conference Paper or Presentation Palavras-chave: Research and Development/Tech Change/Emerging Technologies; Risk and Uncertainty.
Ano: 2000 URL: http://purl.umn.edu/21757
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Effect of Prices, Traits and Market Structure on Corn Seeding Density AgEcon
Mitchell, Paul D.; Shi, Guanming; Ma, Xingliang; Lauer, Joseph G..
Recent agronomic research finds that economically optimal seeding densities have likely increased for many Midwestern corn farmers as a result of genetic improvements including new GM traits such as Bt corn and herbicide tolerance. We derive a per acre demand model for hybrid seed corn to examine the determinants of corn seeding densities and estimate the model using a large data set of individual farmer seed corn purchases. Current results identify factors other than prices affecting farmer corn seeding densities. Among these factors are the GM trait of the seed corn, measures of the local seed corn market structure, seed purchase source and intended end use. We interpret these effects in terms of information effects—farmers with more/better access to...
Tipo: Conference Paper or Presentation Palavras-chave: Hybrid seed corn; Bt corn; Herbicide tolerance; Herfindahl index; Corn borer; Rootworm; Hyperbolic yield model; Agribusiness; Crop Production/Industries; Farm Management; Industrial Organization; Production Economics; D2; D21; Q1; Q12.
Ano: 2009 URL: http://purl.umn.edu/49520
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EFFECT OF REVENUE INSURANCE ON ENTRY AND EXIT DECISIONS IN TABLE GRAPE PRODUCTION: A REAL OPTION APPROACH AgEcon
Seo, Sangtaek; Salin, Victoria; Mitchell, Paul D.; Leatham, David J..
This study determines the entry and exit thresholds of table grape farming with irreversible investment under uncertainty. Real option approach is adopted to consider the investment and management flexibility. Also revenue insurance is introduced to consider the effect of the risk management programs on the entry and exit thresholds. Results show that revenue insurance increases the entry and exit thresholds by 1% and 4%, respectively, thus discouraging new investment and current farming, as long as the revenue guarantee is less than the exit threshold. Revenue insurance increases the entry threshold by 3% and decreases the exit threshold by 13% as long as the revenue guarantee is greater than the exit threshold. In this case, revenue insurance...
Tipo: Conference Paper or Presentation Palavras-chave: Risk and Uncertainty.
Ano: 2004 URL: http://purl.umn.edu/20229
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EFFECTS OF FEDERAL RISK MANAGEMENT PROGRAMS ON LAND ALLOCATION AND INPUT USE AgEcon
Seo, Sangtaek; Mitchell, Paul D.; Leatham, David J..
We analyze the effects of crop insurance and the Marketing Loan Program on optimal nitrogen use and acreage allocation for a case cotton-sorghum farm in Texas. A mathematical programming model is used to simulate the optimal nitrogen fertilizer rate, crop acreage allocation, coverage level, and price election factor, along with participation in the crop insurance (APH and CRC) and the Marketing Loan Program for both crops. Results show that current insurance programs increase the optimal fertilizer rate 1-3% and increase the optimal cotton acreage 16-129%. The Marketing Loan Program slightly changes optimal fertilizer rates and increases optimal cotton acreage an additional 1-9%.
Tipo: Conference Paper or Presentation Palavras-chave: Agricultural and Food Policy; Risk and Uncertainty.
Ano: 2004 URL: http://purl.umn.edu/20160
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