Location: Agroclimate and Hydraulics Research UnitTitle: On-farm flood damages and willingness to pay for flood risk reduction: The case of the 2019 Missouri River floods
|SKEVAS, THEORDOROS - University Of Missouri|
|MASSEY, RAY - University Of Missouri|
Submitted to: Meeting Abstract
Publication Type: Abstract Only
Publication Acceptance Date: 3/31/2023
Publication Date: N/A
Technical Abstract: In 2019, the Missouri (MO) River severely flooded causing billions of dollars in damage to residential and commercial property and public infrastructure. Yet, at present, remarkably little is known about the operational and financial damages farmers suffered because of flooding. The goal of this study is to assess the operational and financial setbacks farmers sustained because of the 2019 floods, as well as their beliefs on the causes of these floods. It further investigates farmers’ willingness to pay (WTP) for flood risk reduction and the factors that condition it. The empirical application uses data from approximately 700 MO farmers operating near the homonymous river. Our results show that yield loss, loss of growing crops, and inability to plant crops were the three most important consequences of flooding. Financial losses of $100,000 or more were reported by nearly 40% of the flood-affected farmers. Government water management decisions were viewed by most sample farmers as the main cause behind the 2019 floods. Many respondents called for the need for the government to prioritize flood control over recreation and environmental concerns. The results of the WTP analysis show that less than half of the surveyed farmers were willing to pay to avoid flood risks, with an average WTP estimated at $3 per $10,000 value of agricultural land. Important determinants of WTP include risk aversion, disutility from flood risk, age, income, education, and subjective risk exposure.