The study develops a conceptual framework for analyzing the allocation of conservation funds via selectively offering incentive payments to farmers for enrolling in one of two mutually exclusive agricultural conservation programs: retiring land from production or changing farming practices on land that remains in production. We investigate how the existence of a pre-fixed budget allocation between the programs affects the amounts of environmental benefits obtainable under alternative policy implementation schemes. The framework is applied to a major agricultural production region using field-scale data in conjunction with empirical models of land retirement and conservation tillage adoption, and a biophysical process simulation model for the environmental benefits of carbon sequestration and reduction in soil erosion.
This working paper was published as Feng, Hongli, Lyubov A. Kurkalova, Catherine L. Kling and Philip W. Gassman, "Environmental conservation in agriculture: Land retirement vs. changing practices on working land," Journal of Environmental Economics and Management 52 (2006): 600–614, doi:10.1016/j.jeem.2006.03.004.
Feng, Hongli; Kurkalova, Lyubov A.; Kling, Catherine L.; and Gassman, Philip W., "Environmental Conservation in Agriculture: Land Retirement versus Changing Practices on Working Land" (2004). CARD Working Papers. 404.