COMMODITY AND CONSERVATION POLICY IMPACTS ON RISK AND RETURNS

Crop yields, farm income risk and returns, and soil losses were simulated from 1974 to 1984 for southeastern Washington Palouse-region farms in three climatic subregions under alternative conservation and commodity policy scenarios. Historical commodity programs reinforced preexisting disincentives to retire highly erodible land to perennial grasses, but cropland base protection (CBP) legislation would eliminate such disincentives and increase profitability and decrease risk of land retirement. Nevertheless, additional incentives would be needed. Government rental payments can provide necessary incentives, but they are more costly without CBP. CBP was not included in the 1985 farm bill