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The Role of Cost-Share Rates and Prices on the Size of Conservation Investments in EQIP

  • Hand, Michael S.
  • Nickerson, Cynthia J.
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    Per-unit costs for conservation investments in the Environmental Quality Incentives Program (EQIP) are determined by market prices for conservation practices and payment cost-share rates. This study examines the relative importance of these factors in determining the size of the most common conservation investment in EQIP. Results suggest that per unit costs have a significant but inelastic impact on the size of conservation investment; as expected, higher per-unit costs are associated with smaller investments. This effect is largely due to variation in market prices of conservation practices for the majority of farmers. However, cost-share rates may play a role for some limited resource farmers.

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    File URL: http://purl.umn.edu/49257
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    Paper provided by Agricultural and Applied Economics Association in its series 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin with number 49257.

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    Date of creation: Apr 2009
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    Handle: RePEc:ags:aaea09:49257
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    1. Okwudili, Onianwa & Wheelock, Gerald & Gyawali, Buddhi Raj & Gan, Jianbang & Dubois, Mark & Schelhas, John, 2004. "An analysis of the factors affecting participation behavior of limited resource farmers in agricultural cost-share programs in Alabama," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 22(1).
    2. Meredith J. Soule & Abebayehu Tegene & Keith D. Wiebe, 2000. "Land Tenure and the Adoption of Conservation Practices," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(4), pages 993-1005.
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    5. Hoppe, Robert A. & Korb, Penelope J. & O'Donoghue, Erik J. & Banker, David E., 2007. "Structure and Finances of U.S. Farms: Family Farm Report, 2007 Edition," Economic Information Bulletin 59032, United States Department of Agriculture, Economic Research Service.
    6. Lambert, Dayton M. & Sullivan, Patrick & Claassen, Roger & Foreman, Linda F., 2006. "Conservation-Compatible Practices and Programs: Who Participates?," Economic Research Report 7255, United States Department of Agriculture, Economic Research Service.
    7. Namatié Traoré & Réjean Landry & Nabil Amara, 1998. "On-Farm Adoption of Conservation Practices: The Role of Farm and Farmer Characteristics, Perceptions, and Health Hazards," Land Economics, University of Wisconsin Press, vol. 74(1), pages 114-127.
    8. Lichtenberg, Erik, 2004. "Cost-Responsiveness of Conservation Practice Adoption: A Revealed Preference Approach," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 29(03), December.
    9. Hendrix, Shannon & Wheelock, Gerald & Onianwa, Okwudili O., 1999. "Factors Affecting Conservation Practice Behavior Of Crp Participants In Alabama," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 17(2).
    10. Luanne Lohr & Timothy A. Park, 1995. "Utility-Consistent Discrete-Continuous Choices in Soil Conservation," Land Economics, University of Wisconsin Press, vol. 71(4), pages 474-490.
    11. Jeffrey Gillespie & Seon-Ae Kim & Krishna Paudel, 2007. "Why don't producers adopt best management practices? An analysis of the beef cattle industry," Agricultural Economics, International Association of Agricultural Economists, vol. 36(1), pages 89-102, 01.
    12. JunJie Wu & Bruce A. Babcock, 1998. "The Choice of Tillage, Rotation, and Soil Testing Practices: Economic and Environmental Implications," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(3), pages 494-511.
    13. Lambert, Dayton M. & Sullivan, Patrick & Claassen, Roger, 2007. "Working Farm Participation and Acreage Enrollment in the Conservation Reserve Program," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 39(01), April.
    14. Lori Lynch & Sabrina J. Lovell, 2003. "Combining Spatial and Survey Data to Explain Participation in Agricultural Land reservation Programs," Land Economics, University of Wisconsin Press, vol. 79(2), pages 259-276.
    15. Obubuafo, Joyce & Gillespie, Jeffrey M. & Paudel, Krishna P. & Kim, Seon-Ae, 2008. "Awareness of and Application to the Environmental Quality Incentives Program By Cow–Calf Producers," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 40(01), April.
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