Academic journal article Journal of Agricultural and Applied Economics

Awareness of and Application to the Environmental Quality Incentives Program by Cow-Calf Producers

Academic journal article Journal of Agricultural and Applied Economics

Awareness of and Application to the Environmental Quality Incentives Program by Cow-Calf Producers

Article excerpt

This study uses a bivariate probit model with partial observability to examine Louisiana beef producers' awareness of the Environmental Quality Incentives Program (EQIP) and how awareness translates to application to the program. Results indicate that awareness of and application to the EQIP depend on portion of income derived from off-farm sources, extent of previous best management practice adoption at one's own expense, household income, farmed land that is highly erodible, contact with Natural Resource Conservation Service and extension service personnel, and producer age.

Key Words: BMPs, bivariate probit, EQIP, probit

JEL Classifications: Q12, Q16, Q18

With the introduction of the 1985 Farm Bill, a new era of increased emphasis on government conservation initiatives for agricultural land was begun. Among the more recent initiatives introduced in the 1996 Farm Bill and expanded in the 2002 Farm Bill was the Environmental Quality Incentives Program (EQIP). The EQIP involves the payment of subsidies, mainly in the form of cost-shares, to landowners willing to implement specific costintensive conservation practices, or best management practices (BMPs). Adoption of these BMPs is intended to reduce runoff of sediment and nutrients into water bodies and seepage of pollutants into groundwater.

The EQIP works together with other federal programs and is the only program that explicitly targets funds to livestock production environmental concerns. Nationally, at least 60% of EQIP funds must be used for natural resource concerns related to livestock (Vigil et al.). Producers may receive up to a 75% cost share on the adoption of qualified BMPs; the limit is 90% for limitedresource or beginning farmers. Despite information provided by federal agencies such as the U.S. Department of Agriculture (USDA) Natural Resource Conservation Service (NRCS) and more recently by extension services through programs such as the Master Farmer Program, many producers are not extensively informed about BMPs (Gillespie, Kim, and Paudel). Given the role of EQIP in encouraging BMP adoption, it is likely that they are also unaware of EQIP, which may help to explain why many are not applying for EQIP funds. Therefore, the objectives of this paper are to determine the extent of cow-calf producers' awareness of and application to the EQIP, factors affecting their awareness of and application to the EQIP, and secondarily, to determine factors affecting cow-calf producers' BMP adoption at their own expense.

Understanding the portions of farmers aware of the EQIP and the types is of interest for several reasons. First and clearest is that if a farmer is unaware of a program, he cannot participate. In some cases, without EQIP, a high cost of adoption may prevent adoption of BMPs that have the societal benefits of higher air and water quality. Knowing who is unaware of the program can thus help in targeting educational programs that inform producers of the opportunity. Awareness, however, does not necessarily lead to application. Knowledge of who applies provides insight into the types of producers who believe EQIP will benefit them the most. If, for example, larger farmers on more highly erodible land were the greater applicants, then this would provide evidence that the program is most attractive to producers whose use of BMPs may have the greatest impact on environmental quality.

A number of studies have focused on factors affecting BMP adoption among producers (e.g., Gould, Saupe, and Klemme; Lambert et al.; Rahelizatovo and Gillespie; Soule, Tegene, and Wiebe; Wu and Babcock; Wu et al.) and participation in conservation incentive programs (e.g., Lambert et al.). Few, if any, however, have linked awareness with whether benefits were applied for, especially regarding the EQIP. Though this paper does not link the EQIP to the adoption of specific BMPs, its contribution is that it provides insight into the types of producers who are most likely to be proactive in seeking assistance to adopt BMPs. …

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