Targeted Conservation Contracts To Enhance Agricultural Best Management Practices: Incorporating Heterogeneity and Predicting Additionality

This project is a coordinated effort involving researchers from Clark University and the University of Delaware, and funded by Agriculture and Food Research Initiative Competitive Grant no. 2016-67023-21757 from the USDA National Institute of Food and Agriculture. The U.S. spends billions on state and federal policies encouraging farmers to implement best management practices (BMPs) through conservation contracts. BMP programs seek agricultural objectives, such as increasing crop prices by reducing production, and environmental objectives, such as providing wildlife habitat. A vibrant area of social science research explains BMP adoption, largely as a function of monetary payments and farmer characteristics. Yet existing research provides little insight on the design of more flexible BMP contracts that capitalize on farmer differences and desires to enhance cost-efficiency and agri-environmental outcomes. The goal of this project is to improve the cost-effectiveness of policies used to promote best management practices on farms in the United States. The research will inform the development of targeted, more cost effective conservation contracts that can be used by governmental agencies to incentivize agricultural best management practices. It will produce information to enable the design of flexible conservation contracts that can be used to optimize environmental benefits, farmer adoption, or acres enrolled. These innovative contracts will help U.S. agriculture remain competitive while balancing production and sustainable agri-environmental benefits.

The targeted conservation contracts will be derived from a specially designed survey of farmer preferences with respect to one best management practice-cover crops-as a case study. A series of surveys and actual planting decisions will be combined to derive a model of farmer participation and preferences. There are six research objectives. First, the researchers will develop revealed/stated preference models of cover crop program flexibility/adoption to provide insight into relationships between program design and farmers’ decision-making. Second, the researchers will design and implement innovative preference models to estimate tradeoffs among conservation contract attributes for different types of farmers across multiple regions in two states. Third, the researchers will characterize current cover crop patterns by coordinating cover crop adoption data from government programs, observational data (transect survey), and an adoption survey. Fourth, the researchers will validate (using collected transect survey and linked cover crop adoption data) and apply the revealed/stated preference model to forecast cover crop adoption and land cover change under innovative contract designs. Fifth, the researchers will compare contract fiscal efficiency under various conditions and developing an additionality analysis to control for enrolled land planted in cover crop regardless of contracts. “Additionality” occurs when policy incentivizes adoption that farmers would not otherwise provide. Sixth, the researchers will design targeted cover crop contracts that account for farmers’ tradeoffs, nonadditionality, and fiscal inefficiency to inform more optimal and cost-effective conservation contract designs. This project directly responds to USDA goals by focusing research at the nexus of agricultural land use, management, and conservation, and providing methodological advances to inform incentive-based polices and improve agricultural profitability.