Crop Insurance, Government Agricultural Policies, and Soil Erosion∗

This paper investigates the relationship between government agricultural programs and soil erosion. Using county-level data from the years 1992 and 1997, we estimate a model of water-induced (i.e., sheet and rill) soil erosion and crop insurance participation for counties where corn, soybean, and winter wheat account for at least 90 % of total planted acreage. This includes most of the areas that have exhibited the highest historical levels of sheet and rill erosion. We find that crop insurance participation and conservation payments are significantly associated with county average soil erosion levels. In particular, corn insurance participation exhibits a positive impact on soil erosion, while wheat insurance participation exhibits a negative impact. After controlling for differences in soil erodibility, counties that receive higher conservation payments exhibit lower levels of soil erosion. We also find that government price and income support program payments (e.g., target price-based/loan deficiency payments and AMTA payments) exhibit no statistically significant association with our soil erosion measure.