Structural Conservation Practices in US Wheat Production: A Cost-Function Technology Adoption Approach

Abstract

Based on 2004 CEAP-ARMS Phase II data, higher-sales farms not participating in a conservation programme adopted farmland conservation structures much more intensively on wheat fields than did any other farm-size type among conservation programme participants or non-participants. Survey results suggest that wheat farms not participating in a conservation programme more frequently adopted infield conservation structures, while conservation programme participants more often installed field perimeter conservation structures. Wheat producers, particularly those not participating in a conservation programme, recognize productivity and profitability benefits of infield structures as sufficient to promote their adoption without programme incentives. However, for field perimeter structures, programme incentives may be needed to encourage their adoption because benefits are more commonly off-site. To supplement univariate comparisons between conservation programme participants and non-participants, we used a cost-function based acreage allocation model to examine adoption of structural conservation practices, including such practices as strip cropping, terraces, grassed waterways, field borders, and stream-side herbaceous buffers. To accurately assess the potential environmental impacts of conservation programmes, it is important to account for the variability in on-site field, farm, and environmental conditions influencing producer adoption decisions. Econometric models suggest that not accounting for factors such as field, farm, operator, and environmental attributes will likely under- or overestimate adoption of conservation structures with respect to input and commodity prices, regardless of programme participation status.

Factors influencing environmental stewardship in U.S. agriculture: Conservation program participants vs. non-participants

“…The present application differs from Schaible et al's (2009) study which used 2004 CEAP-ARMS data to evaluate producer decisions to allocate field acres to infield or field perimeter conservation structures for wheat acres. At the time, as a component of USDA EQIP funding, producer adoption of conservation structures was a key USDA conservation policy concern.…”

“…Both the theoretical model developed in Schaible et al (2009), as well as the 2004 (for wheat) and 2005 (for corn) CEAP-ARMS data are unique in providing us the opportunity to address this broader agricultural conservation policy issue. This paper examines the factors influencing farm stewardship intensity in both corn and wheat production, i.e., the intensity corn and wheat producers adopt a host of farmland and pest management practices as resource-conserving and more ecologically friendly crop production systems.…”

“…The modeling approach used is based on an extension of the theoretical work by Kim et al (2005), a modification of the work by Schaible et al (2006Schaible et al ( , 2007, and an application of the cost-function technology adoption model specified in Schaible et al (2008Schaible et al ( , 2009). The present application differs from Schaible et al's (2009) study which used 2004 CEAP-ARMS data to evaluate producer decisions to allocate field acres to infield or field perimeter conservation structures for wheat acres.…”

“…Therefore, for agriculture, models based on the log odds of choosing an advanced technology over a conventional technology assume that available cropland is fully utilized or cropland is predetermined. However, given that the 2004 and 2005 CEAP-ARMS data is based on continuous revealed preference data for producer acreage allocations, and given that a probabilistic model is not suitable to examine crop-specific technology adoption decisions where crop acreage is not predetermined, this study used a dual approach following Lichtenberg (2004), Kim et al (2005), and Schaible et al (2009) to examine the intensity of producer land and pest-management conservation decisions in U.S. wheat and corn production. We use a generalized, cost-function based acreage allocation approach to examine producer crop-specific production practice decisions across four broad land and pest-management technology (intensity) groups (production systems).…”

“…From a broad theoretical perspective, the modeling approach (derived from Schaible et al, 2009) defined c(y i,p ) and c(y j,p ) as per acre crop production cost functions using the ith and jth alternative land and pest-management intensive production technologies by the pth program participation class (p = 1 or 2, for conservation program participants or non-participants, respectively), where (y i,p ) is per acre yield. Also, y i,p is a function of output price, P y , and inputs, x, where x is a function of input prices w. The model assumes cost minimization and linearly homogeneous production functions.…”