Assistant Agricultural Economics Professor Simanti Banerjee says coordination with other producers along with higher conservation payments should prompt environmentally friendly practices. Banerjee says financial incentives should convince producers conservation is worth their while.
“So, the government is essentially not coming in telling you that you have to participate,” Banerjee tells Nebraska Radio Network. “They are providing you with this policy and this incentive and you can choose to partake in it or not.”
The United States Department of Agriculture encourages conservation through the Payment for Ecosystem Services, but it wants to improve participation among farmers, both individually and in coordination with each other. Certain conservation efforts can only be effective if they cross property lines.
Banerjee’s research considered the so-called Agglomeration Bonus. It pays producers more if the join with their neighbors to adopt environmentally friendly land use practices, such as riparian buffers, wind breaks, or foraging patches for pollinators.
Incentives considered in the study focused on money alone, varying financial incentives based on the amount of coordination. The other sought to persuade farmers and ranchers to adopt conservation practices through information. A combination of the two seemed to work best.
The study tested incentives on 144 university students in a lab-controlled environment. Up next: taking the research to the field and talking with actual farmers and livestock producers.
Banerjee says the study highlights the importance role behavioral economics and economic experimentation plays in answering questions important to agriculture, the environment, and society.
Study results were published in the American Journal of Agricultural Economics.
AUDIO: Brent Martin reports [:45]