Farm Progress

Incentives spur adoption of conservation practices

Economic incentives and peer pressure can encourage farmers to “do the right thing” for their farms and the environment.

Lee Schulz

November 14, 2022

6 Min Read
Hands holding dirt
CONSERVATION: Farmers all have different reasons to use conservation practices, but no matter what the reason, they should be able to see the benefits to the land.Jennifer Carrico

The Conservation Practice Adoption Motivations Survey is a joint project between two USDA agencies ― the National Agricultural Statistics Service and the Natural Resources Conservation Service. The project aims to assess adoption rates of different conservation practices and the role of technical and financial assistance programs.

USDA defines technical assistance as direct consultation with a farmer, rancher or landowner that may include developing a conservation plan for the operation of, or the planning, design and layout for structures (such as fences and water apparatuses in pastures) and management practices (such as grazing and pasture management). Technical assistance does not include workshops, internet resources, farm shows and conventions, and information not specific to a producer’s operation. Financial assistance is a payment or grant that helps defray the cost of installing or implementing conservation practices.

CPAMS focuses on four different conservation categories: crop practices, grazing practices, confined livestock practices and forestry practices. USDA designed questionnaires for each category to gather information specific to the practices involved in each category. Surveys for grazing practices and forestry practices are scheduled to be distributed in 2024.

The data collection period for the crop practices and confined livestock practices surveys was from May 2022 through September this year. Approximately 34,000 producers nationwide received a survey. State and regional survey data will be used to help promote, educate and guide the implementation of NRCS programs in the future. It is important to remember that conservation is voluntary. Financial assistance programs usually only cover a part of the actual costs.

Summary results now available

In October 2022, a NASS Highlights publication, “Conservation Practice Adoption Motivations, 2021 Cropland and Confined Livestock Practices” was released. NASS Highlights are topical, timely and easy-to-read summaries of key findings from one or more surveys conducted by NASS. Look for possible additional summaries of the CPAMS data from NRCS.

For the confined livestock practices version of the survey, the screening question was: Did you, regardless of ownership, raise any swine, poultry, milk cows, veal calves or feeder cattle (including backgrounders) on your operation during 2021? If the answer was “No,” the operation did not qualify for the survey.

Of the respondents who reported using specific conservation practices on confined livestock operations, the most widely used confined livestock conservation practice was runoff control and diversion of runoff structures, with 36.4% of respondents using them. Other practices used include waste (manure) storage facilities (27.6% of respondents using), stabilization or protection of heavily used areas (25.1%), comprehensive nutrient management (23.3%), waste use (20.2%), animal mortality facilities (15.5%) and waste (manure) separation facilities (8.1%).

An Iowa Beef Center 2014 survey of Iowa feedlot operators indicated that 43.0% of respondents had a manure (or nutrient) management plan.

Comprehensive nutrient management plans are unique to individual animal feeding operations. According to USDA, each plan includes a set of conservation practices and management activities that address natural resource concerns dealing with manure and organic byproducts, and their potential impacts on water quality. The plan addresses manure and wastewater handling and storage, nutrient management (for land application), record keeping (e.g., recording soil and manure tests), feed management (improving feed delivery, reducing feed waste, or increasing nutrient uptake by livestock to reduce the nutrient content of manure); and alternatives to direct land application of manure (e.g., composting).

On-farm costs, off-farm benefits matter

The two highest ranking motivational factors survey respondents listed for their decision to use runoff control and diversion of runoff structures on confined livestock operations were anticipated benefits greater than cost and anticipated off-farm environmental benefits, with 63.2% and 57.1% of respondents, respectively, indicating.

Facilitating better use of manure nutrients and livestock waste (68.9%) and receiving technical assistance (48.1%) were the top two motivational factors for having a comprehensive nutrient management plan.

Iowa law requires certain confinement feeding operations to develop and obtain Department of Natural Resources approval of a manure management plan.

Evaluating whether incentives work

NRCS has keen interest in several questions regarding conservation practice adoption. Are incentives too low for some practices, thereby depressing adoption? Is NRCS paying too much for some practices that producers would adopt anyway? Is technical assistance sufficient in some cases for adoption to occur? Are some practices prone to dis-adoption when financial assistance stops? How important are incentives in achieving operation-wide adoption of conservation practices? Are taxpayer dollars being invested most wisely?

Economics is, at root, the study of how people use resources and respond to incentives. Most simply, an incentive is a means to urge individuals to do more of a good thing and less of a bad thing. Metaphors of carrots and sticks are often used. A “carrot” is a reward for good behavior, and a “stick” is a negative consequence for bad behavior. Very often, a single incentive strategy will include both.

Economic and peer pressure incentives

Going further, incentives can be economic, which some call extrinsic incentives. Extrinsic incentives involve providing a material reward (like money) for accomplishing a task, or threatening some punishment for failure to do so. Think tax incentives or benefits, financial incentives (e.g., a discount or a payment), subsidies, tax rebates or negative incentives (e.g., a fine or a tax).

Intrinsic incentives, on the other hand, come from within and can be social, where there is a gain or loss in reputation (being seen doing the “right” or “wrong” thing); or moral, where there may be a clear or guilty conscience for doing, or not doing, something.

Incentives, particularly economic, do not necessarily come about naturally. Someone has to invent and enact them. They may require tinkering to get them right.

Incentives can backfire

Incentives that appeal to economic underpinnings may “crowd out” motivation for intrinsic incentives. Consider a farmer who embraces adopting conservation practices and does so voluntarily. Now suppose the farmer is offered payment in return for this effort. How will the farmer respond to this economic incentive?

Motivational crowding out refers to the possibility that the farmer may simply stop doing the conservation practices that they had once more or less happily done without payment, and only continue existing practices or adopt new practices that have incentive payments.

Of the CPAMS respondents who reported using specific cropland conservation practices on their farm or ranch, on average cover crops were used on 40.0% of cropland with 59.2% of respondents using. Cover crops are grasses, legumes and other forbs that are planted for seasonal cover and other conservation purposes. They are used for managing soil fertility and soil quality, and controlling weeds, pests and diseases.

Suppose NRCS wants to see increased use of cover crops, and farmers won’t do it for the current incentive and assistance structure. NRCS can increase the incentives. All they need is a certain number of producers to be incentive- and assistance-sensitive enough to take them up on it. An incentive that entices larger operations to adopt a practice will apply the practice on more acres faster. Once incentives get the ball rolling, other producers may jump on the bandwagon. 

Economic incentives help spur innovation

A salary cap in the National Football League and a lack of one in Major League Baseball doesn’t decrease football players’ athletic performance relative to baseball players. Most athletes are driven by the desire to win and be the best. Intrinsic incentives matter.

But if you remove economic incentives, you can inhibit innovation. There are cutting-edge conservation practices haven’t even been invented yet, and some existing practices need further refinement. Economic incentives will play a critical role in bringing these practices to light and into use, because the research and development activities, and first-mover implementation by farmers, will be costly. But the resulting knowledge will benefit all.

Schulz is an Extension ag economist with Iowa State University.

About the Author(s)

Lee Schulz

Lee Schulz is the Iowa State University Extension livestock economist.

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