Economic Impacts of Adoption of Best Management Practices by Crawfi Sh Producers: The Role of the Environmental Quality Incentives Program
Nyaupane, Narayan P., Gillespie, Jeffrey M., Paudel, Krishna P., Agricultural and Resource Economics Review
This study investigates reasons for adoption of best management practices (BMP), crawfish farmers' participation in the Environmental Quality Incentives Program (EQIP), and economic impacts of BMP adoption using data from a 2008 survey of crawfish producers. Most-cited reasons for BMP adoption are farmers' perceptions of increases in profit and long-run productivity. Land tenancy, education, double-cropping or crop rotation, and proximity to a stream influence EQIP participation. Perceptions of economic profits depend on the practices used. Participation in EQIP negatively impacts farmers' perceptions of profitability from adopting BMPs. The results underscore the importance of economic incentives in promoting BMP adoption.
Key Words: conservation practices, conservation programs, crop rotation, double-cropping
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Like most agricultural operations, crawfish farms can generate non-point source water pollution via erosion and discharges of effluent that contain contaminants. To combat non-point source pollution and provide benefits to wildlife, the U.S. Department of Agriculture (USDA) encourages farmers to adopt best management practices (BMPs) through its Environmental Quality Incentives Program (EQIP). A number of studies have addressed BMP adoption in agriculture and factors that influence it (Gould, Saupe, and Klemme 1989, Cooper and Keim 1996, Rahelizatovo and Gillespie 2004). Nyaupane and Gillespie (2011) found that the main reasons cited by crawfish producers for failing to adopt BMPs were lack of familiarity with them or perceptions that BMPs were not applicable to their operations. We are not aware of any studies that have closely examined (i) the specific reasons for farmers' BMP adoption, (ii) factors that influence the use of EQIP cost-share funds to implement such practices for crawfish production, or (iii) the impact of specific BMPs on farmers' perceptions of their farms' profitability. This study addresses these issues and enhances our understanding of the importance of economic incentives in encouraging BMP adoption.
A number of U.S. federal programs have been implemented since the 1930s to encourage adoption of conservation practices, including the Federal Food, Drug, and Cosmetic Act of 1938 (21 U.S.C. § 301 et seq.), the Federal Water Pollution Act of 1948 (33 U.S.C. 1251-1376), and programs in various farm bills over the years. Perhaps the most significant increase in conservation effort appeared in the 1985 Farm Bill (P.L. 99-198). Five years later, the Water Quality Incentives Program in the 1990 Farm Bill (P.L. 101-624) provided economic incentives to adopt BMPs, but the most significant program to encourage adoption of BMPs to date has been the EQIP, which was introduced in the 1996 Farm Bill (P.L. 104-127). The EQIP, under which the government shares the initial cost to farmers of implementing BMPs, was subsequently expanded in the 2002 and 2008 Farm Bills (Stubbs 2010). Few studies have addressed the economic impacts of BMPs (see Valentin, Bernardo, and Kastens 2004) or EQIP participation (see Obubuafo et al. 2008).
The Environmental Quality Incentives Program
Agricultural producers can apply to the EQIP, a voluntary program, and receive financial and technical support for BMP adoption for up to ten years, the goal of which is attainment of federal, state, and local environmental quality standards (Natural Resources Conservation Service 2011). The EQIP is administered through USDA's Natural Resources Conservation Service (NRCS) and is the nation's largest agricultural conservation program with total funding of $130 million in 1996, a figure that was slated to rise to $1.75 billion in 2012 (Stubbs 2010). Texas, California, Colorado, and Minnesota were the four largest recipients of EQIP funds per state for 2005 through 2008 (Stubbs 2010). Of the program's total annual expenditures, 60 percent of the funds are allocated to conservation practices related to livestock production. …