Some farming practices (excess fertilization and manure, for example) can degrade our Nation's natural resources while others (such as preserving land for wildlife) can enhance our natural heritage.  USDA conservation programs offer producers a range of options for assistance with conservation efforts:

• Working-land programs like the Environmental Quality Incentives Program provide technical and financial assistance to farmers who install or maintain conservation practices on land in production.

• Land retirement programs like the Conservation Reserve Program remove land from agricultural production for at least 10 years.

• Agricultural land preservation programs like the Farm and Ranch Lands Protection Program purchase rights to certain land uses, such as development.

• Conservation Technical Assistance (CTA) provides ongoing technical assistance for installing environmental practices like riparian buffers.

ERS tracks conservation program funding levels and analyzes trends in support for these four categories of conservation spending.  ERS research examines the cost-effectiveness and equity of agri-environmental policies and programs, with an emphasis on identifying conservation program design features that increase environmental gain per program dollar.  ERS also investigates the environmental impact of broader agricultural policies and programs on land use, input use, and conservation practice adoption.  Research findings highlight the many tradeoffs involved in program design:

• "Green payments"--payments that serve both farm income and conservation objectives-could require that policy makers trade one objective off against the other. Conservation programs can support farm income but at a potential cost in terms of environmental gains. Commodity programs can be made "greener" but likely will not fix every agri-environmental problem or do so cost-effectively.

• Incentives for environmental compliance, which explicitly link environmental and income objectives, could be sharply reduced on some farms if direct payments are eliminated to help reduce the Federal budget deficit.  The future of compliance may depend on linking compliance to other existing or new farm programs.

• "Targeting" conservation efforts through eligibility requirements, participation incentives, or enrollment screens can be used to focus payments on fields, practices, or specific resource concerns most likely to generate the greatest environmental benefits.

• Bidding--a process in which farmers compete in an auction for conservation payment contracts-integrates market-like features into conservation programs and can reveal the costs of participating and the benefits program applicants would likely supply. Feeding those bids into benefit-cost indices to enroll producers enhances the cost effectiveness of conservation programs.

• Paying farmers to adopt specific conservation practices and paying for the level of environmental performance are two different approaches with distinct benefits. Paying for performance is more cost effective than paying for practices because program incentives are directly linked to environmental outcomes. These outcomes, however, are not easy to observe, making performance-based payments difficult and costly to implement. Payments that focus on practices with high expected benefits may be a practical compromise.

Cost effectiveness, environmental performance--the level and types of environmental gains delivered by the program--and the distribution of program benefits can vary widely according to the package of decisions ultimately made about eligibility, participation incentives, and enrollment screening.

Last updated: Saturday, May 26, 2012

For more information contact: Roger Claassen