Farmer Profitability and Willingness to Accept Payment to Adopt Cover Crops in Alabama

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Commodities

Practices

• Crop Production: cover crops
• Farm Business Management: business planning

The adverse impacts of agriculture on the environment – including waterways and climate – have received increasing attention in recent years. The use of cover crops has been lauded for its ecosystem services. Cover crops can reduce nonpoint-source nutrient pollution to waterways, and they play a key role in novel carbon markets due to their ability to sequester carbon in the soil. In addition to these off-farm benefits, cover crops have been shown to be effective at reducing soil erosion, improving soil-water dynamics, and improving soil health, which can translate to higher yields. Despite these benefits, adoption of cover crops remains limited with just 4% of cropland using the practice, nationwide. The additional cost and uncertain effects on net farm income is one of the reasons cited for the low adoption rate of cover crops.

Our proposed study will examine the profitability of using cover crops in Alabama. We will develop a survey to evaluate farmers’ costs of implementing cover crops. We will also study farmers’ willingness to accept payment to adopt cover crops, to better understand the potential for cost-share or carbon markets to increase use of the practice in the region. Lastly, we will evaluate current barriers to adopting cover crops. The proposed project will contribute to SARE program areas objectives of informing decision making, policy design, and interactions between agriculture and the environment.

1) Evaluate the profitability of using cover crops in Alabama.

Opportunities for farmers to be paid for planting cover crops have arisen due to the emergence of novel carbon markets. These programs have led to a lot of interest among producers, but knowledge on how cover crops affect net returns of the operation are not well known in Alabama. This objective will look to better understand the magnitude of the costs of planting and terminating cover crops, the two largest additional costs from the use of the practice. On the benefit side, we will analyze whether producers observe a yield bump to their following cash crop that could increase their revenue and offset some of these additional costs, or if they observe a yield drag from using cover crops. In all, we will estimate the effect of cover crops on farm profitability to better inform producers of the short-term costs of adopting the practice.

2) Measure farmers’ willingness to adopt cover crops through the use of payment-for-environmental-service programs.

Novel carbon markets and other cost-share programs for cover crops have the goal of increasing cover crop acreage. However, for these programs to be cost-effective, it is important to understand whether such programs lead to additionality, or acreage in cover crops that would not have been planted to cover crops without the payment. We will use a choice experiment to better understand whether payment-for-environmental-service programs have the desired effect of increasing farmers’ cover crop acreage and the payment rate per acre that farmers would require to participate.

3) Examine barriers to cover crop adoption.

While many of the existing barriers to cover crop use are cost related and could be potentially be addressed via incentive payments to farmers, there may be other non-cost related challenges that farmers face. These could include limited access to cover crop seed, weather conditions that make it difficult to plant or terminate the cover crop, the belief that cover crops take soil moisture at the expense of cash crops, lack of labor available to plant cover crops, or other limitations. These perceived limitations may differ between farmers who use cover crops and farmers who do not currently use cover crops. Understanding the main perceived barriers that non-adopters have for not using cover crops could be important in informing whether the reasons producers do not currently use cover crops are similar to the challenges observed by current adopters. This knowledge could inform educators from cooperative Extension or other organizations on potential challenges to increasing cover crop use.