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The Role of Cost-Share Rates and Prices on the Size of Conservation Investments in EQIP

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  • Hand, Michael S.
  • Nickerson, Cynthia J.

Abstract

Per-unit costs for conservation investments in the Environmental Quality Incentives Program (EQIP) are determined by market prices for conservation practices and payment cost-share rates. This study examines the relative importance of these factors in determining the size of the most common conservation investment in EQIP. Results suggest that per unit costs have a significant but inelastic impact on the size of conservation investment; as expected, higher per-unit costs are associated with smaller investments. This effect is largely due to variation in market prices of conservation practices for the majority of farmers. However, cost-share rates may play a role for some limited resource farmers.

Suggested Citation

  • Hand, Michael S. & Nickerson, Cynthia J., 2009. "The Role of Cost-Share Rates and Prices on the Size of Conservation Investments in EQIP," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49257, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea09:49257
    DOI: 10.22004/ag.econ.49257
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    Keywords

    Agricultural and Food Policy; Environmental Economics and Policy;

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