Land Retirement and Working-land Conservation Structures: A Look at Farmers' Choices

Amber Waves, Jul 2006 by Lambert, Dayton, Sullivan, Patrick

* Roughly 37 percent of farm operators had retired cropland from production or had working-land conservation structures in place in 2001. Of these, 36 percent received conservation payments.

* Operators of smaller retirement and lifestyle farms are more likely to retire farmland.

* Operators of larger farms are more likely to adopt conservation measures that are compatible with farm production.

Operators of all types and sizes of farms have adopted conservation- compatible farming practices and installed conservation structures. Many farmers do so for sound business reasons- to protect the productive capacity of their farmland, to reduce seed, fertilizer, and other input costs, or to save time and labor. However, the costs of conservation practices that primarily create off-site benefits to society-in the form of cleaner air, improved water quality, and a healthier ecosystem-often pose significant barriers to their adoption by farm operators. To encourage these efforts, USDA provides technical and financial support to farm and ranch operators through a diverse set of conservation programs that either retire environmentally fragile land from production or encourage the adoption of conservation- friendly farming practices. Recent ERS research suggests that farms and farm households that install working-land conservation structures (such as contour strips or grass waterways) often differ from those that retire farmland. Therefore, as working-land program budgets increase, the mix of farms participating in USDA's conservation programs may change.

The effectiveness of a conservation program depends on the choices farm operators make because adoption of conservation practices is voluntary. But, despite the importance of farmers in determining environmental outcomes, relatively little is known about those who adopt conservation practices and participate in USDA's conservation programs, and why they do so. A recent study by ERS found that household characteristics and operator attributes such as age, gender, educational attainment, household size, and dependence on off-farm income affect the types of conservation efforts farm operators are likely to engage in, as well as the types of conservation programs they are likely to find appealing (see box, "An Array of Conservation Programs Is Available to Farmers"). For example, older farm operators and those focused on a nonfarm occupation are less likely to install working-land conservation structures than younger farm operators whose primary occupation is farming. As a result, programs supporting a wide array of alternative conservation practices are most likely to match the interests of a wide range of farmers.

Different Conservation Structures Are Used by Different Types of Farms

Farm practices that are potentially compatible with USDA's conservation goals fall into three broad categories: (1) adopting farm management practices, such as conservation tillage; (2) installing working-land structures, such as grass waterways; and (3) retiring land from agricultural production. While a high percentage of farms have adopted one or more conservation-compatible farm management practices (see the February 2006 issue of Amber Waves), the focus here is on working-land structures and land retirement. These two types of practices account for most of the conservation payments that farmers receive and their adoption is likely to depend more on conservation program subsidies than the adoption of new farm management practices.

USDA's 2001 Agricultural Resource Management Survey (ARMS) provides data on characteristics of farm businesses and households that have installed a select group of conservation practices, with or without the financial support of conservation programs. About 37 percent of farm operators had retired whole farmland fields from production; dedicated farmland to wildlife habitat; or installed grass waterways, filter strips, and riparian buffers (trees planted along stream banks) as of 2001. Each of these vegetative structures can reduce unwanted environmental impacts of cultivation and, when farm operators install them on environmentally sensitive land, they can be eligible for support from USDA's Conservation Reserve Program. The installation of grass waterways, contours, and riparian buffers also qualifies farmers for Environmental Quality Incentives Program support because these structures offer larger environmental benefits when integrated into the activities of farms producing crops and/or livestock for sale.

Significant differences across farm types are evident in both adoption of conservation practices and participation in conservation programs. Of the farms that had one or more conservation structures in place in 2001, over half had planted whole fields to conservation cover (grasses, legumes, etc.), while another third had installed working-land structures, such as riparian buffers. Operators of retirement and lifestyle farms, which are generally smaller and whose operators are less engaged in farming as an occupation, are more likely to adopt land retirement practices than operators who report farming as a primary occupation. In contrast, larger farms are more likely to install working-land structures than smaller farms. Households operating farms with higher sales rely more on income from farming, and their operations are large enough that investments in land improvements pay off. In addition, farms retiring land from production are more likely to participate in a conservation program than farms installing working-land conservation structures.