Incentives For Conserving Resources In Agriculture
Why do some farmers adopt conservation tillage practices while others do not? In a recent study, resource and environmental economists at the Center for Agricultural and Rural Development (CARD) found that even though conservation practices can raise expected profits, some farmers are reluctant to adopt them, considering them riskier than conventional methods. The study estimates the financial incentives necessary to encourage the adoption of conservation tillage, finding that a premium can play a significant role in these decisions. The researchers used 1992 data and concluded that in that year, on average, a subsidy of $2.40 per acre for corn and $3.50 per acre per year for soybeans would have allowed Iowa farmers to overcome aversion to the risks they perceived in adopting conservation tillage practices. The research paper, "Green Subsidies in Agriculture: Estimating the Adoption Costs of Conservation Tillage from Observed Behavior," is available online, or for a print copy, call (515) 294-7519.