Agriculture Reference
In-Depth Information
What We Can Conclude about Incentives for Ecosystem Service?
Farmer adoption of conservation practices depends on awareness, attitudes, bar-
riers, and incentives. The low-input practices studied at KBS LTER offer docu-
mented environmental benefits, including greenhouse gas mitigation (the permanent
No-till, Reduced Input, and Biologically Based systems) and reduced nitrate leach-
ing (the Reduced Input and Biologically Based systems). Michigan farmers have
been adopting conservation tillage practices, as have farmers nationally. However,
management that includes permanent no-till, rotation with small grains, winter
cover crops, and reduced agrochemical input rates has not been widely adopted,
which is also consistent with national patterns. Evidently, where a management
option is win-win for both private profitability and the environment at large, farm-
ers will adopt the practice. But where there are trade-offs that affect profitability,
most farmers are reluctant to shoulder what they perceive as a private burden for the
benefit of the public at large.
In focus group interviews and a statewide survey, Michigan farmers expressed
familiarity with the conservation practices used at KBS LTER, but they were gen-
erally inclined to adopt only those practices that are profitable. Farmers gener-
ally believed they should be compensated to undertake practices that benefited a
wider public than the farm. In experimental auctions and a subsequent mail survey,
they expressed willingness to adopt low-input cropping practices in exchange for
payments that would increase with the complexity and cost of the practices to be
undertaken.
Similar findings internationally have led to an explosion of interest in pay-
ments for environmental services (Pagiola et al. 2002, Lipper et al. 2009). The
ideal for sustainable financing of such projects is that they emerge from markets
between willing buyers and sellers. However, designing such an exchange for
agricultural ecosystem services can be extremely demanding, even when exter-
nal start-up funding is involved (Bohlen et al. 2009). Alternatively, government
programs can offer payments, although in the past, budgetary and political limi-
tations have constrained U.S. programs such as the Conservation Stewardship
Program and EQIP. Moreover, EQIP is not a true payment for ecosystem services
program because its payments share input costs; they do not pay for ecosystem
service outcomes per se.
Although funding payment for ecosystem service programs in the United
States may be politically difficult to expand through existing farm bill mecha-
nisms (Batie 2009), there exist alternative avenues for inducing farmers to adopt
costly practices that generate wider environmental benefits. Tradable pollution
permits have been inspired by the cost-effectiveness of tradable emissions per-
mits within the Clean Air Act cap on sulfur dioxide from U.S. electrical power
plants. Similar cap and trade programs have been proposed for water-borne
nutrients (Hoag and Hughes-Popp 1997, Stephenson et al. 1999, Ribaudo et al.
2011, Millar and Robertson 2015, chapter 9 in this volume); greenhouse gas
emissions (Konyar 2001, Post et al. 2004); and nitrous oxide abatement (Millar
et al. 2010, Ribaudo et al. 2011). Such programs potentially offer farmers a
market-based incentive to offer ecosystem services. However, tradable permit
