Upland Cotton Producers’ Willingness to participate in a BMP/STAX Pilot Program

Changes in the 2014 Farm Bill have reconnected federally-subsidized crop insurance to conservation compliance and eliminated direct payments that were tied to conservation compliance. The net effects of these changes on producers’ incentives to comply with conservation standards and on the environment are uncertain, especially in regions such as the Mississippi Delta. We propose pilot crop insurance programs to improve the link between federally-subsidized crop insurance and conservation compliance in the southern United States and for crops such as cotton. The objective of this study was to determine Tennessee and North Central Mississippi cotton producers’ willingness to participate in hypothetical pilot programs that would incentivize use of cover cropping and no-till practices coupled with crop insurance via an additional cost share payment above current Environmental Quality Incentive Program cost share payments. Data were collected using a mail survey of Tennessee and North Central Mississippi cotton producers conducted in early 2015. A bivariate probit model was estimated to ascertain the factors that impact cotton producers’ willingness to participate in two pilot programs that link cover cropping or no-till with Stacked Income Protection Plan crop insurance. Results found that 35% of the cotton producers would be willing to participate in the cover cropping and Stacked Income Protection Plan pilot program, while 28% indicated they would participate in the no-till and Stacked Income Protection Plan pilot program. Results from the bivariate probit model showed that producers already planning to use Stacked Income Protection Plan in 2015 were more willing to participate in the pilot programs. A producers’ age, income, and debt-to-asset ratio influenced their willingness to participate in the pilot programs. More producers stated they used no-till production than cover crops; therefore, we made pairwise comparisons between producers’ ratings of potential outcomes from using cover cropping and no-till as well as between users and non-users of each of those practices. The results provide unique insight into producers’ perceptions of these practices. Overall, the proposed hypothetical pilot programs could improve the linkage between federally-subsidized crop insurance and conservation compliance; however, future research should consider the potential for these pilot programs for other crops and regions of the United States