ADAPTING TO VARIABLE WEATHER: THE ROLE AND IMPACTS OF CROP INSURANCE AND CONSERVATION DECISIONS IN RURAL COMMUNITIES

Our overall goal of the project is to explore how farmers use the Federal Crop Insurance Program (FCIP) and the Conservation Reserve Program (CRP) as risk management tools in response to extreme and variable weather, and to explore the consequences of increased enrollment in these two programs for the sector's sensitivity to extreme weather, local economies, and the environment. ?We will make progress towards this goal through the following four objectives: 1. Empirically quantify the effects of weather variability on participation in the FCIP and the CRP.2. Evaluate the impact of participation in the FCIP and CRP on agricultural adaptation, as measured by the sensitivity of agricultural yields and incomes to extreme weather.3. Estimate the effects of the FCIP and CRP on local economic activity, as measured by the number and types of farm and non-farm establishments, employment, and wages.4. Identify the effect of the FCIP and the CRP on two important environmental externalities from agriculture: water use and water quality.