Non-Compliance, Non-Additionality, and Disadoption: Insights into Challenges in Agricultural Conservation Programs

Agricultural conservation programs are a principal vehicle of the US federal government to combat environmental externalities arising from resource-intensive agricultural production. However, non-compliance, non-additionality, and disadoption issues often impede the sustainability goals envisioned by such programs. This dissertation consists of three essays that shed light on key challenges facing working lands programs, such as the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP). In the second chapter, I study the non-compliance rate in cost-share contracts between farmers and the Natural Resources Conservation Service (NRCS). Using a suite of panel data methods and an instrumental variable approach, I find that the non-compliance rate is negatively affected by payment obligations and contract acreage. Non-compliance is attributed mainly to contract cancellations than terminations due to the flexibility offered by the cancellation option. Besides, farmers act strategically after signing on contracts to maximize returns, which implies the presence of moral hazard in the cost-share contractual relationship. In the third chapter, I investigate the additionality of conservation programs and extension services for soil management practices using the propensity score matching method. I find that farm-specific conservation plans, conservation tillage, and zero-grade fields reveal positive additionality, while payment to avoid burning crop residue has subtractual additionality. The results show that cost-share programs and extension services encourage the adoption of only some conservation practices that many farmers would not undertake in the absence of such programs. In the fourth chapter, I model the adoption dynamics of conservation practices and estimate the probabilities of persistence and disadoption after the end of the cost-share contract period. Using the Markov chain framework, I find that acreage under nutrient and irrigation management practices show a high level of persistence, while cover crops acreage tend to move out to alternative practices at the contract expiration. There is a considerable likelihood of persistence with farmers bouncing between alternative conservation practices rather than returning to the state of no conservation at the end of contractual terms. The persistence and disadoption trends show that prioritizing conservation practices initiation over enhancements could lead to more conservation acres