Payments from agricultural conservation programs and cover crop adoption

Abstract

AbstractThis study explores how aggregate payments received from two different U.S. agricultural conservation programs—the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP)—influence county‐level cover crop adoption rates in the Corn Belt. We utilize 2006–2015 county‐level panel data with information on cover crop adoption rates and per acre conservation program payments to achieve the study objective. Cover crop adoption information is collected from a unique satellite‐based data set of soil health practices. Linear fixed effect models, fractional regression models, and a moment‐based instrumental variables model are used in the empirical analysis. Our estimation results suggest that EQIP payments have a statistically significant positive effect on cover crop adoption at the county level. In contrast, we find statistical evidence that CSP payments reduce the county‐level proportion of acres planted to cover crops. These opposing effects indicate that it is possible for conservation payment programs to have differing aggregate effects on adoption rates of specific conservation practices (e.g., cover crops in this case). Moreover, these results imply that not all conservation programs “are created equal” and differences in policy designs and focus areas may induce diverging effects in the uptake of particular conservation practices.