Land Retirement and Working-Land Conservation Structures:
A Look at Farmers’ Choices
Farmers’ conservation
choices vary with farm, household, and
environmental characteristics.
Dayton
Lambert, Patrick
Sullivan
|
|
Roughly
37 percent of farm operators had retired
cropland from production or had working-land
conservation structures in place in
2001. Of these, 36 percent received
conservation payments. |
|
Operators
of smaller retirement and lifestyle
farms are more likely to retire farmland. |
|
Operators
of larger farms are more likely to adopt
conservation measures that are compatible
with farm production. |
|
This
article is drawn from . . . |
Conservation-Compatible
Practices and Programs: Who Participates?
by Dayton Lambert, Patrick Sullivan, Roger
Claassen, and Linda Foreman, ERR-14, USDA,
Economic Research Service, February 2006 |
You
may also be interested in . . . |
“Use
of Conservation-Compatible Farm Practices
Varies by Farm Type,” by Dayton
Lambert and Patrick Sullivan, Amber Waves,
Vol. 4, Issue 1, February 2006
Confined
Animal Production and Manure Nutrients,
by Noel Gollehon, Margriet Caswell, Marc Ribaudo,
Robert Kellogg, Charles Lander, and David
Letson, AIB-771, USDA, Economic Research Service,
June 2001
Contrasting
Working-Land and Land Retirement Programs,
by Marcel Aillery, EB-4, USDA, Economic Research
Service, March 2006 |
Operators of all types and sizes
of farms have adopted conservation-compatible farming
practices and installed conservation structures.
Many farmers do so for sound business reasons—to
protect the productive capacity of their farmland,
to reduce seed, fertilizer, and other input costs,
or to save time and labor. However, the costs of
conservation practices that primarily create off-site
benefits to society—in the form of cleaner
air, improved water quality, and a healthier ecosystem—often
pose significant barriers to their adoption by farm
operators. To encourage these efforts, USDA provides
technical and financial support to farm and ranch
operators through a diverse set of conservation
programs that either retire environmentally fragile
land from production or encourage the adoption of
conservation-friendly farming practices. Recent
ERS research suggests that farms and farm households
that install working-land conservation structures
(such as contour strips or grass waterways) often
differ from those that retire farmland. Therefore,
as working-land program budgets increase, the mix
of farms participating in USDA’s conservation
programs may change.
The effectiveness of a conservation
program depends on the choices farm operators make
because adoption of conservation practices is voluntary.
But, despite the importance of farmers in determining
environmental outcomes, relatively little is known
about those who adopt conservation practices and
participate in USDA’s conservation programs,
and why they do so. A recent study by ERS found
that household characteristics and operator attributes
such as age, gender, educational attainment, household
size, and dependence on off-farm income affect the
types of conservation efforts farm operators are
likely to engage in, as well as the types of conservation
programs they are likely to find appealing (see
box, “An Array of Conservation
Programs Is Available to Farmers”). For
example, older farm operators and those focused
on a nonfarm occupation are less likely to install
working-land conservation structures than younger
farm operators whose primary occupation is farming.
As a result, programs supporting a wide array of
alternative conservation practices are most likely
to match the interests of a wide range of farmers.
Different Conservation Structures
Are Used by Different Types of Farms
Farm practices that are potentially
compatible with USDA’s conservation goals
fall into three broad categories: (1) adopting farm
management practices, such as conservation tillage;
(2) installing working-land structures, such as
grass waterways; and (3) retiring land from agricultural
production. While a high percentage of farms have
adopted one or more conservation-compatible farm
management practices (see the February
2006 issue of Amber Waves), the focus here is on working-land
structures and land retirement. These two types
of practices account for most of the conservation
payments that farmers receive and their adoption
is likely to depend more on conservation program
subsidies than the adoption of new farm management
practices.
![Chart: Working-land conservation program budgets have been expanding recently, but land retirement programs still account for most conservation spending](https://webarchive.library.unt.edu/eot2008/20090117205249im_/http://www.ers.usda.gov/AmberWaves/June06/Features/charts/Feature-Lambert--fig01.gif) |
USDA’s 2001 Agricultural
Resource Management Survey (ARMS) provides data
on characteristics of farm businesses and households
that have installed a select group of conservation
practices, with or without the financial support
of conservation programs. About 37 percent of farm
operators had retired whole farmland fields from
production; dedicated farmland to wildlife habitat;
or installed grass waterways, filter strips, and
riparian buffers (trees planted along stream banks)
as of 2001. Each of these vegetative structures
can reduce unwanted environmental impacts of cultivation
and, when farm operators install them on environmentally
sensitive land, they can be eligible for support
from USDA’s Conservation Reserve Program.
The installation of grass waterways, contours, and
riparian buffers also qualifies farmers for Environmental
Quality Incentives Program support because these
structures offer larger environmental benefits when
integrated into the activities of farms producing
crops and/or livestock for sale.
Significant differences across
farm types are evident in both adoption of conservation
practices and participation in conservation programs.
Of the farms that had one or more conservation structures
in place in 2001, over half had planted whole fields
to conservation cover (grasses, legumes, etc.),
while another third had installed working-land structures,
such as riparian buffers. Operators of retirement
and lifestyle farms, which are generally smaller
and whose operators are less engaged in farming
as an occupation, are more likely to adopt land
retirement practices than operators who report farming
as a primary occupation. In contrast, larger farms
are more likely to install working-land structures
than smaller farms. Households operating farms with
higher sales rely more on income from farming, and
their operations are large enough that investments
in land improvements pay off. In addition, farms
retiring land from production are more likely to
participate in a conservation program than farms
installing working-land conservation structures.
What motivates decisions to retire
farmland or to install working-land conservation
structures? Certainly, environmental factors (such
as the erodibility of farmland) and financial considerations
(such as profitability, or costs associated with
changing a practice) play major roles. But other
factors are also likely to influence farm operator
decisions.
Using economic modeling techniques,
ERS measured the associations between individual
farm, operator, and household attributes and the
adoption of conservation practices, holding other
factors, such as environmental conditions, constant.
Farms that had retired whole fields from production
had a significantly higher share of retired farm
operators, a higher level of conservation program
payments, and a smaller share of production from
high-value crops (vegetables, fruits, and nursery
products) than farms that had not retired land
and had not installed conservation structures.
Differences abound between farms that retired
whole fields and those that installed grass waterways,
filter strips, and other structures compatible
with working land. Farms that installed working-land
conservation structures were generally larger
grain farms that received lower conservation payments.
These farms had operators who were more likely
to consider farming their primary occupation,
slightly younger, and less reliant on off-farm
income than farm operators who retired whole fields
from production.
![Chart: Retirement and residential farmers are mre likely to retire land, while high-sales farmers are more likely to install working-land conservation structures with or without program support](https://webarchive.library.unt.edu/eot2008/20090117205249im_/http://www.ers.usda.gov/AmberWaves/June06/Features/charts/Feature-Lambert--fig02.gif) |
While conservation program participants
are reimbursed for some of the costs of installing
one or more conservation practices on their farmland,
many farm operators not enrolled in a conservation
program and, thus, not receiving payments, have
retired land or installed conservation structures
for other reasons. On the other hand, while eligibility
rules determine whether a farm operator can participate
in a conservation program, the operator’s
business and personal goals determine whether or
not eligible land is enrolled
Who Participates in Conservation
Programs?
Among all farms that had retired
land from production or had working-land conservation
structures in place in 2001, roughly 36 percent
received conservation payments. In general, of the
farms that have adopted these conservation practices,
smaller operations participate in conservation programs
at a higher rate than larger operations. Program
choice, however, varies by farm size, with small
farms participating more heavily in land retirement
programs and larger farms participating more heavily
in working-land programs (see box, “Larger
Farms More Likely To Use Conservation Structures
Than Smaller Farms”).
A different pattern emerges, however,
for farms that continue producing a farm commodity
while receiving conservation payments versus those
that cease production. About half of farms participating
in conservation programs do not produce farm commodities—these
are overwhelmingly small farms that have chosen
to rent their farm assets to the government, through
conservation program enrollments, and to other farm
operators rather than continue producing commodities
themselves. Among farms producing crops and/or livestock
for sale, high-sales operations participate in both
land-retirement and working-land programs at higher
rates than other farms.
Not surprisingly, farms participating
in conservation programs but no longer growing crops
or raising livestock tend to own a large portion
of their land, their operators tend to be older,
and the farm households tend to have fewer children
and receive a higher percentage of income from nonfarm
sources than other farms.
Among farmers still producing
crops and/or livestock for sale, program participants
tend to rent more of the land they operate, farm
more cropland, have more children in the household,
and rely less on off-farm income than nonparticipating
farmers. In general, among participants who continue
to focus on farm production, few major differences
are apparent between those who retire land and those
who have installed structures. Working-land program
participants are more likely than land-retirement
program participants to depend on revenue from high-value
crops and to rent relatively more of the land they
operate, both of which make land retirement less
attractive. They also receive relatively more commodity
program payments than working farms that retire
land from production.
Participation Depends on a Variety
of Factors
While environmental considerations
are associated with the decision to participate
in conservation programs, farm size, farm operator
goals, and farm household characteristics also play
a role. But not all conservation programs appeal
to all farm operators who decide to participate.
Over half of the participants in land retirement
programs take land out of production while curtailing
their farming activity, perhaps to retire or to
take advantage of off-farm activities. These participants
have little incentive to participate in working-land
programs. But land retirement need not signal retrenchment
from agriculture. In many instances, farm operators
focused on agricultural production enroll farmland
in a land retirement program as a farm management
strategy, perhaps to diversify their income.
Working-land programs seem to
appeal especially to those who report farming
as their primary occupation and can invest time
and managerial oversight to incorporate new farming
practices and conservation structures into their
operations. And, as these farms grow in size,
they may equip more of their farmland with working-land
conservation structures. Thus, the importance
of conservation programs in influencing conservation
practice decisions varies by the type of program,
practice, farm cost structure, operator skill,
and household goals. This suggests that conservation
programs offering a wide array of practice alternatives
are most likely to match farmers’ interests
and enable USDA to meet program goals cost effectively.
An Array of Conservation
Programs Is Available to Farmers |
Efforts to
mitigate unwanted environmental side effects
of agricultural practices are not new. For
more than a century, the Federal Government
has managed programs to curtail soil erosion
caused by farming. Earlier conservation efforts
focused on the onsite benefits of reducing
soil erosion. But in recent decades, USDA
has broadened its emphasis to include water
and air quality improvement and wildlife habitat
protection. The following programs support
these goals by reimbursing farmers and farmland
owners for eligible conservation practices.
- The Conservation Reserve Program
(CRP) was authorized by the Food
Security Act of 1985 to retire environmentally
sensitive land from agricultural production
for 10-15 years. In return for an annual
rental payment and partial reimbursement
for the cost of establishing and maintaining
approved groundcover, program participants
agree to take enrolled land out of production
and plant grasses, trees, and other conservation-cover
crops. Since 1996, farmers have also been
allowed to enroll land through a continuous
signup program focused on developing riparian
buffers and other working-land conservation
structures. On roughly 35 million acres
of enrolled cropland in 2004, farmers and
landowners received $1.8 billion in cost-share
and rental payments from the CRP.
- The Wetlands Reserve Program
(WRP) was first implemented in
the early 1990s to retire and restore wetlands
that had been converted to cropland. The
Farm Security and Rural Investment Act of
2002 (the 2002 Act) authorized enrolling
slightly over 2 million acres in WRP.
- The Conservation Reserve Enhancement
Program (CREP) was initiated
in 1997. This Federal-State partnership
targets farmland for retirement in
specific geographic areas to achieve
local conservation goals. Nearly 600,000
acres have been enrolled in CREP, which
is administered through the Conservation
Reserve Program.
- The Environmental Quality Incentives
Program (EQIP) provides financial
and technical assistance to help participants
adopt conservation practices on eligible
agricultural land. EQIP is a working-land
program that shares with farmers the costs
of installing approved structural practices
(grassed waterways, riparian buffers, etc.)
or of implementing conservation management
practices (integrated pest management, fertilizer
management, etc.). Funding for EQIP increased
substantially under the 2002 Act, from roughly
$200 million annually in the early part
of the decade to $1.3 billion in 2007. By
statute, at least 60 percent of EQIP funds
go to livestock producers, including large
confined-livestock operations.
- The Conservation Security Program
(CSP) was authorized in the 2002
Act to support continuing conservation practices
on working lands. In 2004, the first year
of the program, 2,200 farmers received $35
million for conservation practices on roughly
2 million acres of working land.
Other conservation programs
administered by the Federal Government include
the Farm and Ranch Lands Protection Program,
the Conservation Technical Assistance Program,
the Grassland Reserve Program, the Wildlife
Habitat Incentives Program, and Agricultural
Management Assistance. |
Larger Farms More Likely
To Use Conservation
Structures Than Smaller Farms |
Larger farms
are often perceived to behave differently
than smaller farms, and agricultural pollution
is sometimes viewed as a “big-farm”
problem. While this study has not analyzed
either the level or the source of environmental
problems from the agricultural sector, the
observed patterns of participation in conservation
efforts raise doubts about the general validity
of this notion.
Conservation practices adopted
by farmers and ranchers often vary by size
of farm, but both large and small farms have
adopted conservation-compatible practices
and participate in USDA’s conservation
programs. Working-land conservation practices
appeal more to farms focused on agricultural
production. These tend to be larger operations
producing most of the Nation’s farm
commodities. Alternatively, farm households
with resources more focused on off-farm activities
find land retirement more appealing. These
operations tend to be smaller, lower production
farms that control roughly 25 percent of the
Nation’s farmland.
Simply examining the proportions
of large and small farms that have adopted
conservation practices ignores the fact that
large farms generally control more land and
thus are more likely to encompass environmentally
sensitive parcels of land in need of special
treatment. To adjust for this, ERS researchers
tied the rate of increase in conservation
program participation to farm size.
Looking only at farm operations
that produce crops or livestock, a 1-percent
increase in farm size (as measured by acres
of cropland operated) is associated with more
than a 1-percent increase in the probability
of participating in CRP to retire land. The
decision to install conservation structures
on CRP land is largely unaffected by farm
size. But, once a farm operator decides to
participate, a 1-percent increase in farm
size is associated with more than a 1-percent
increase in the amount of land enrolled.
The evidence suggests that as farms grow in
size, they are likely to install more conservation
structures or plant more native grasses, legumes,
or trees under the provision of the CRP, even
after adjusting for the amount of land they
control. |
|