Job Market Paper
Efficiency and Coordination of Tile Drainage Investments in the US Corn Belt, Rwit Chakravorty, David A. Hennessy and Hongli Feng
Abstract: Subsurface tile drainage has played a crucial role in U.S. agriculture since the late 1800s, and it remains a subject of considerable interest and debate in the context of sustainable intensification of agriculture. This paper examines the impact of tile drainage on county average corn and soybean yields and yield resilience using 2017 U.S. Census of Agriculture data. Employing a control function approach with land slope as an instrumental variable to address endogeneity, we find a significant, positive effect of tile drainage on yield, especially in high precipitation areas. Additionally, tile drainage reduces long-term yield variability, enhancing yield resilience. Using the point estimates from the econometric analysis, we find that the marginal value of investment in additional tile drainage exceeds approximations of annualized costs in large parts of our study area. Potential agricultural surplus gains from tiling are found to be higher in areas with flatter topography, which require higher coordination among neighboring farmers. Climate change simulation results show up to 12% higher soybean yields and up to 10% higher corn yields for tiling-adapted counties than those that remain at 2017 levels of tiling.
Work in Progress
Barriers to Voluntary Tile Drainage Investments in the U.S. Corn Belt, Rwit Chakravorty, David A. Hennessy, Hongli Feng
Abstract: This study explores the barriers to tile drainage adoption by surveying farmers in the Midwestern U.S. Findings indicate that farmers receiving expert guidance are more likely to recognize yield benefits of drainage, while also recognizing rental contracts and environmental concerns as barriers to investment. This finding highlights the importance of extension services and other forms of expert outreach in helping farmers navigate complex decisions. Additionally, land tenure status significantly influences perceptions; renters often view contractual stipulations and payback period as more significant obstacles. This aligns with prior research indicating that the insecure or temporary nature of rental agreements can complicate investment in long-term infrastructure like drainage systems. Policies focusing on designing payment structures that offer incentives for both tenants and owners could potentially lower these barriers. Regional differences further highlight the necessity for tailored policy responses that consider local conditions and farm characteristics. As drainage technologies evolve to balance profitability with environmental sustainability, targeted outreach and policy adaptations can promote broader adoption, ultimately enhancing agricultural productivity and ecological outcomes.