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Exploring the Influence of NRCS Cost-Share Programs on Cover Crop Adoption in the Midwest

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  • Loduca, Natalie R.
  • Sears, James

Abstract

This paper investigates the role of Natural Resource Conservation Service (NRCS) cost-share programs in promoting cover crop adoption. Cover crops offer multiple public ecological benefits, including reducing greenhouse gas emissions and improving water quality, along with private benefits to farmers from improvements in soil health, weed suppression, and a reduction in soil erosion. However, adoption of cover crops remains below the socially-optimal level due to high adoption costs and incomplete internalization of broader ecosystem services. The cost-share payments from NRCS allow farmers to bridge this gap between the public and private benefits of conservation practices. First, our theoretical model demonstrates that failing to separate voluntary adoption program payments into their cost-share proportion and per-acre cost components will yield incorrect conclusions regarding the impact of cost-share generosity on enrolled cover crop acreage. Next, using disaggregated NRCS program participation data and a panel fixed effects regression approach, we isolate the effect of cost-share generosity from per-acre payments and provide novel evidence on the role cost-share generosity plays in driving voluntary conservation program participation and cover crop adoption in agriculture. Lastly, we utilize remote-sensing data on total county-level cover crop and conservation tillage acreage to estimate complementarity models. These findings contribute to a comprehensive understanding of the factors influencing the adoption of cover crops and offer insights into the role of government incentives in increasing sustainable agricultural practices.

Suggested Citation

  • Loduca, Natalie R. & Sears, James, 2025. "Exploring the Influence of NRCS Cost-Share Programs on Cover Crop Adoption in the Midwest," 2025 AAEA & WAEA Joint Annual Meeting, July 27-29, 2025, Denver, CO 361184, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea25:361184
    DOI: 10.22004/ag.econ.361184
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    References listed on IDEAS

    as
    1. Roger Claassen & Eric N. Duquette & David J. Smith, 2018. "Additionality in U.S. Agricultural Conservation Programs," Land Economics, University of Wisconsin Press, vol. 94(1), pages 19-35.
    2. Todd, Jessica E. & Whitt, Christine & Key, Nigel & Mandalay, Okkar, 2024. "An Overview of Farms Operated by Socially Disadvantaged, Women, and Limited Resource Farmers and Ranchers in the United States," Economic Information Bulletin 340512, United States Department of Agriculture, Economic Research Service.
    3. Fleming, Patrick & Lichtenberg, Erik & Newburn, David A., 2018. "Evaluating impacts of agricultural cost sharing on water quality: Additionality, crowding In, and slippage," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 1-19.
    4. Cain, Zachary & Lovejoy, Stephen B., 2004. "History and Outlook for Farm Bill Conservation Programs," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 19(4), pages 1-6.
    5. Lee, Seungyub & McCann, Laura, 2019. "Adoption of Cover Crops by U.S. Soybean Producers," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 51(4), pages 527-544, November.
    6. Thompson, Nathanael M. & Reeling, Carson J. & Fleckenstein, Michelle R. & Prokopy, Linda S. & Armstrong, Shalamar D., 2021. "Examining intensity of conservation practice adoption: Evidence from cover crop use on U.S. Midwest farms," Food Policy, Elsevier, vol. 101(C).
    7. Patrick Fleming, 2017. "Agricultural Cost Sharing and Water Quality in the Chesapeake Bay: Estimating Indirect Effects of Environmental Payments," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 99(5), pages 1208-1227.
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