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 (EQIP) and Conservation Stewardship Program (CSP) provide financial assistance to farmers who adopt, install, or maintain conservation practices on land in production.
  • Land retirement programs like the Conservation Reserve Program (CRP) remove land from agricultural production for at least 10 years and support high-priority, partial-field practices such as field-edge filter strips and grass waterways.
  • Easement programs like the Agricultural Conservation Easement Program (ACEP) provide long-term or permanent protection for wetlands and other agricultural lands by purchasing certain rights, such as development rights.
  • 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 types of conservation assistance. ERS research examines the cost-effectiveness and equity of conservation 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:

  • 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 encourage farmers to adopt specific practices with high expected benefits may be a practical compromise.  Eligibility requirements, participation incentives, and enrollment ranking can be used to focus payments on fields, practices, or specific resource concerns that are likely to generate large environmental benefits. See, for example, Rewarding Farm Practices versus Environmental Performance (EB-5, March 2006).
  • Bidding—a process in which farmers compete in an auction for conservation payment contracts—integrates market-like features into conservation programs. When there is competition among farmers for program enrollment, bidding can reduce the size of conservation payments.  When used in conjunction with targeting (e.g. enrollment ranking), bidding can reduce conservation program costs and stretch conservation program budgets. See, for example, Participant Bidding Enhances Cost Effectiveness (EB-3, March 2006).
  • Incentives for environmental compliance, which explicitly link environmental and farm income objectives, can leverage farm program payments for environmental gain, but may not reach every producer (not all farmers receive income support or other payments). As farm programs evolve over time, the nature and size of the compliance incentive may also change, possibly affecting compliance incentives. See, for example, The Future of Environmental Compliance Incentives in U.S. Agriculture (EIB-94, March 2012).

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 (payment levels), and enrollment ranking.

Last updated: Monday, October 17, 2016

For more information contact: Roger Claassen