Subsidized crop insurance may encourage conversion of native grassland tocropland. The Sodsaver provision of the 2008 farm bill could deny cropinsurance on converted land in the Prairie Pothole states for 5 years.Supplemental Revenue Assistance payments, which are linked to crop insurancepurchases, could also be withheld. Using representative farms, we estimatethat Sodsaver would reduce expected crop revenue by up to 8% and expectednet return by up to 20%, while increasing the standard deviation of revenueby as much as 6% of market revenue. Analysis based on elasticities from theliterature suggests that Sodsaver would reduce grassland conversion by 9% orless.
