Conservation Incentives in US Agricultural Policy:
the News from Lake Wobegon and Prospects for Green Gold in Hawaii

Patrick G. Welle
Bemidji State University

Tuesday, April 2, 2002
12:00 PM – 1:15 PM
Saunders 515

Abstract

Land use practices in farming and forestry can produce environmental benefits such as soil conservation, protection of
ground water and surface water, floodwater retention, provision of bird and wildlife habitat, and trapping of potential
greenhouse gases, in addition to food and fiber. This talk will consider potential results of a policy to reward farmers
for the production of these kinds of environmental benefits, in addition to commodity production. Ideas included in the
development of the U.S. 2002 Farm Bill, especially provisions of the Conservation Security Program, will be discussed.
Results will be presented from a multidisciplinary research project called “Multiple Benefits from Agriculture: An
Economic, Environmental and Social Analysis”, particularly estimates of the economic value for these benefits based on
a contingent valuation study on Minnesota households.

Provisions of the Conservation Security Program will be juxtaposed with economic incentives for commodity production
under traditional farm policy. Changing public perspectives on programs that encourage yield of specific commodities
provides the context for further emphasis on incentives for conservation in land use practices. The public release of
USDA data (in response to an appeal under the Freedom of Information Act) on who receives commodity subsidies and
the distribution of these subsidies by state and by commodity has caused quite a stir, especially in rural areas of the
Midwest. Related to the widespread dissemination of this information has been an increase in grass-roots support for
counterbalancing commodity payments with incentives for conservation practices and capping farm subsidies at a
maximum level per recipient.

Particular land-use practices that have been demonstrated to provide these environmental benefits will be highlighted.
But the policy idea is to be flexible in rewarding innovative practices based on the magnitude of environmental
benefits that are achieved. While traditional farm policy has predominately benefited large farm operations in the
Midwest, especially those producing corn and soybeans, provisions of the Conservation Security Program would reward
conservation practices more evenly across the country, regardless of commodity. The possible implications of this new
direction in policy for land use in Hawaii are significant. Not only is Hawaii likely to be eligible for more reward from
agricultural payments, but land use practices that could be very effective in addressing major environmental issues in
Hawaii may be rewarded. Economic rewards could be forthcoming for practices that achieve greenhouse gas
sequestration, soil conservation, protection of groundwater and surface water, revegetation, and habitat improvement
for native species in Hawaii.