Additionality in agricultural conservation payment programs

Abstract

A large number of both state and federal agricultural policies are designed to pay farmers and ranchers to undertake conservation practices that have off-farm environmental benefits or long-run farm-productivity payoffs. These supported actions can include implementing a nutrient management plan, installing stream-side or field-edge buffers, adopting no-till, or retiring cropland to grass or tree cover. Payments can take the form of cost-sharing for explicit costs incurred by the farmer, specified payment amounts meant to capture the cost of transitioning to the new practices, or lost income, particularly when land is taken out of production. In fiscal year 2012, USDA spent nearly US$5.5 billion through voluntary payment programs to support the adoption of conservation practices. What are taxpayers getting for their money? The answer entails, in part, knowing whether practices that receive conservation payments would have been pursued without those payments. Additionality is a measure of the extent to which conservation payments are necessary for practice adoption for those farmers who receive payments. Practices supported by payments are additional if they would not have been adopted without the payment, or, from an environmental standpoint, if the environmental benefits would not have been realized without the payment. Practices that would have been…