The Effect of Technical Progress on Erosion Damage and Economic Incentives for Soil Conservation

Abstract

tion Service (SCS) was established by Congress in response to the alarm generated by the high erosion rates observed during the Dust Bowl days. Through technical assistance provided by SCS and through cost-share payments made by the Agricultural Conservation and Stabilization Service, farmers have been encouraged to adopt conservation practices designed to reduce soil loss from agricultural lands. But after more than 40 years of effort, soil loss rates remain excessive on 97 million acres (USDA 1980, 6). The long-term productive potential of these lands is being impaired by excessive erosion. In this paper, a damage function which incorporates the long-run cost of erosion to a farmer is presented and applied to evaluate conservation tillage in the Palouse wheatland of the Pacific Northwest. The role of technology in the conservation adoption decision is explored to see if policy implications for the control of erosion in the region can be drawn from the analysis. As erosion proceeds, its cumulative effect is evident in reduced crop yield. Of the numerous factors that affect crop yields, many are related to erosion damage. Soil moisture, organic matter content, fertility, and soil structure are examples. The depth of topsoil remaining is used as a proxy in this analysis for various variables related to erosion which impact crop yields. Although cumulative soil erosion may diminish the future productivity of soil, apparently some operators continue to mine soil by using erosive farming practices which offer higher yields currently. Some practices for reducing soil erosion may impose a double penalty on farmers in the form of lower yields and higher costs currently. These detriments to short-run profits may discourage farmers from adopting methods of soil conservation. However, farm operators who ignore the long-term effects of erosion may be mortgaging the future in their pursuit of current profits.