Green payment windfalls and pitfalls

Excerpt

During the past twenty years, the Conservation Reserve Program (CRP), Environmental Quality Incentive Program (EQIP), and Conservation Security Program (CSP) created location specific, results orientated approaches, which gained support from farmers and from policymakers. Certain past successes, including successes in protecting grasslands, make these likely candidates for “green payment” initiatives. Yet, recent legislative initiatives aimed at improving grasslands pursue, instead, a dual purpose, combining something vaguely environmental with creating windfalls for farmers.

The 2002 farm legislation changed the CRP to allow farmers already growing grass to receive a payment for growing grass. The Grassland Reserve Program may create similar windfalls for grasslands, as it may be unrealistic to create and monitor a “reserve” while grazing continues on the enrolled acres. Another popular and well-intentioned option for grassland could include subsidizing hay to increase soil productivity; yet even this may also lead to unintended spillovers, as new entrants into the hay business crowd out those already supplying very limited, local livestock needs.

Enrolling grass in the CRP. The pitfalls posed by new CRP options for enrolling land already in grass are easiest to recognize: 1) Farmers already growing grass will naturally wish to capture windfall …