Abstract
An optimal control model is used to investigate the effect of government agricultural support programs on wetlands conversion in Canada's pothole region. Under existing grain programs, about 19 percent of land is left in an unimproved state conducive for waterfowl habitat; in the absence of government subsidies, 43 percent of agricultural land is left unimproved. The shadow values of marginal land are estimated to be $50-$60/acre. Given that habitat preservation programs pay farmers no more than $30/acre to maintain waterfowl habitat, and since Canadian programs have no conservation compliance provisions, it appears that current policy is misguided.
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