Journal of Agricultural and Resource Economics
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Using data envelopment analysis with principal components, we calculate an adoption-intensity index for herbicide-resistance best management practices (BMPs). Empirical results for over 1,100 farmers in twenty-two U.S. states suggest that many farmers could improve their herbicideresistance BMP adoption. Two-limit truncated regression results show that higher yields and a greater proportion of acres planted with Roundup Ready R seeds motivate weed BMP adoption. While soybean and corn farmers have lower adoption intensity than cotton farmers, farmer educational attainment and greater concern for herbicide effectiveness and for human and environmental safety are found to help increase the adoption of weed BMPs.
Subsidies and fines are compared to voluntary and mandatory refuge insurance (insurance for pest damage on Bt corn refuge) as mechanisms for securing grower compliance with EPA refuge mandates. A conceptual model partially ranks mechanisms. Tradeoffs between mechanisms using grower welfare, payments to growers, and monitoring frequency are quantified empirically. Grower welfare is lowest with mandatory insurance because growers pay all costs, and is highest with direct refuge subsidies because public funds or companies subsidize all costs. Assuming typical premium loads and ignoring distribution considerations, we develop monitoring budgets for fines and subsidies, above which voluntary or mandatory insurance is better.
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