Incentives to Supply Enhanced Ecosystem Services from Cropland
The study examines farmers’ willingness to accept compensation to adapt environmental stewardship practices in Michigan based on the analysis of survey data and advances the literature on adoption of agro-environmental practices by developing a supply function for crop acreage managed for environmental stewardship. Results show that farmers’ acreage enrollment depends chiefly on farm size and the perception of environmental improvements from the practices. For farms over 500 acres, the payment offered was also a significant inducement to acreage enrollment in all systems examined. Like prior studies of environmental technology adoption in agriculture, we find that environmental attitudes and affiliations, age, education and current farming practices are influential. But we find that the low cost suppliers of environmental services are the largest farms. Agricultural policies based on payment for environmental services that aim for cost-effective environmental impact will likely achieve most of their impact from larger farms.
