Crop Insurance Could Be Disincentive for Adapting to Climate Change, Says Study

A study by researchers at North Carolina State University found that crop insurance serves as a disincentive for farmers to adopt climate change mitigation measures. Crop yield variability is more acceptable to farmers who have crop insurance, this study found. “This could be an unintended consequence of providing subsidies for crop insurance,” explained Rod M. Rejesus, professor of agricultural and resource economics at NC State and the corresponding author of the research study. “The concept of moral hazard could be present here. If insurance will cover crop losses due to various effects like drought or severe weather, a farmer may not want to pay the extra expense for climate change adaptation efforts such as using cover crops to improve soil health, for example.”