Economic and stochastic efficiency analysis of alternative cover crop systems in Louisiana

Hua Wang,Donna Gentry,Naveen Adusumilli,Lisa Fultz

doi:10.1017/s0014479720000216

Hua Wang, Donna Gentry + Show 2 more

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https://doi.org/10.1017/s0014479720000216

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Abstract

SummaryLandowners can engage in voluntary conservation with the help of incentive programs. Recommended conservation practices are selected based on management intentions as well as the contribution of those practices to the overall net returns. However, conservation motives are heterogeneous and based on individual risk behavior. Existing cost-share programs might either under-fund or over-fund conservation, which could lead to inefficient management of natural resources. The current analysis evaluates the economic feasibility of variable cover crop strategies, multiple seeding rates, within a soybean production system in silt loam and clay soils. The study utilizes stochastic efficiency with respect to a function, referred to as SERF, for determining the preferred strategies under various risk preferences. The SERF method accounts for the heterogeneity of individual decision-making with regards to conservation adoption. Results indicate that most risk-averse farmers chose tillage radish with medium seeding rate as their preferred strategy. However, as the risk-bearing capacity of an individual increases, the current level of incentives does not motivate to implement conservation. The most preferred plan for risk-neutral farmers is the fallow system in both silt loam and clay soils. The economic and risk assessment framework can improve understanding of the temporal dynamics of different practices and inform policy on conservation structure that promotes agricultural systems that are economically, environmentally, and socially sustainable.

Highlights

Among agricultural conservation practices, integration of cover crops into annual crop rotations systems is a useful management option for maintaining and enhancing soil and water quality (Cavigelli et al, 2013; Lin, 2011)
The decision to implement conservation practices, including cover crops, is significantly tied to economic factors related to on-farm production costs and barriers that interfere with cash crop demand (Adusumilli et al, 2019; Ashford and Reeves, 2003; Wortman et al, 2012)
The results identify the risk premiums (RPs) – the minimum amount of incentives necessary to adopt cover crops

Summary

Introduction

Integration of cover crops into annual crop rotations systems is a useful management option for maintaining and enhancing soil and water quality (Cavigelli et al, 2013; Lin, 2011). Cover crops offer a variety of benefits, including soil erosion control, increased biodiversity, nutrient recycling, increased soil organic matter, weed control, and increased crop yield (Adusumilli et al, 2016; Pimentel et al, 1995; Reddy et al, 2003; Sainju et al, 2002; Teasdale et al, 2007; Williams et al, 2009). The specific benefits of a cover crop depend on the species and growing environment. Field research has shown evidence of yield variation in cash crops following both single species and the mixture of cover crops (Burket et al, 1997), as well as when implemented in combination The decision to implement conservation practices, including cover crops, is significantly tied to economic factors related to on-farm production costs and barriers that interfere with cash crop demand (Adusumilli et al, 2019; Ashford and Reeves, 2003; Wortman et al, 2012)

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