Economic Evaluation of Cover Crops in Midwest Row Crop Farming

Economic Evaluation of Cover Crops in Midwest Row Crop Farming

Summary

The goal of this project is to assess the private and social returns to cover crop adoption in Midwest row crop farming, with the expectation that providing science-based information on their potential return on investment will result in increased adoption of cover crops.

In 2016, we developed a methodological framework and an accompanying survey questionnaire to create partial budgets for cover crops for different soil types, cover crop mixes, and farm management practices; as well as to implement socio-economic and agronomic impact analyses.

The development of the methodological framework and the survey questionnaire required extensive interaction between team members, farmers, and researchers. Three focus group with experienced cover crops farmers were conducted in Iowa, Minnesota, and Illinois to discuss reasons for adoption, required changes in practices, and resulting changes in costs and revenues. They served as the basis to identify relevant production practices and variables that influence cover crop use. Based on that information and a comprehensive literature review, a first draft of the survey questionnaire was developed, and first round of simulations on the APSIM agronomic model was completed. Focus group participants were asked to provide feedback on the survey questionnaire. Farmers were duly compensated for their time and effort. The survey instrument was ready for distribution in December 2016.

Objectives/Performance Targets

The proposed indicators to monitor performance during the first year of the project are:

(1) number of farmers interviewed at least once by December 31, 2015 (18 out of 20 will be considered a success).

(2) Complete economic model to evaluate private net benefits of cover crop adoption over the long run by December 31, 2015.

(3) number of farmers interviewed at least twice by June 1, 2016 (18 out of 20 will be considered a success).

(4) Complete short- and long-term partial budgets for farmers in focus groups by July 31, 2016 (18 out of 20 will be considered a success).

(5) Finish survey instrument by October 1, 2016.

(6) Finish distributing survey by November 1, 2016.

(7) Finish distributing second mailing among non-respondents by December 1, 2016.

The proposed indicator to evaluate performance during the first year of the project is:

(1) Anonymous surveys among farmers participating in focus groups to assess effectiveness and usefulness of interactions (one by December 31, 2015 and another one by June 1, 2016; at least ¾ of positive responses will be considered a success).

Accomplishments/Milestones

Indicators to monitor performance:

(1) Number of farmers interviewed at least once by December 31, 2015: 16. The target was 18 out of 20 invited farmers, but getting farmers to participate in focus groups proved harder than expected, even with the great support and leadership provided by Practical Farmers of Iowa.

(2) The economic model is a slightly adapted version of Gabriel, Garrido, and Quemada (2013).[1]

(3) Number of farmers interviewed at least twice by June 1, 2016: 16. The second round of interviews was conducted by phone and emails, to follow up on the summary of the analysis of focus group discussions, and to request feedback on the first draft of the survey questionnaire.

(4) All short-term partial budgets for farmers in focus groups were completed on time. The long-term partial budgets could not be completed because the variability of reported yield drags and bumps for cash crops among focus group participants was substantial and a wider pool of responses was needed to parametrize the distribution of yield effects.

(5) The final survey instrument was ready by December 2016. The delay was partly due to our attempt at securing a minimum response rate through a printed version of the survey implemented through the National Agricultural Statistics Service (NASS). It is well known that online surveys tend to be inexpensive but result in very low response rates. So we partnered with the Iowa State University Center for Agricultural and Rural Development (CARD) to implement a printed version of the survey instrument in the state of Iowa through (NASS), at a cost of $30,000 fully funded by CARD. The interaction with NASS experts improved the quality of the survey questionnaire at the cost of delaying its completion.

(6) The online survey was distributed by Practical Farmers of Iowa on January 25, 2017. The printed survey instrument was distributed by NASS in early February 2017.

(7) At least three electronic reminders were sent by Practical Farmers of Iowa in February and March 2017. NASS sent one follow up letter to non-respondents in late March 2017, and enumerators will conduct phone interviews with non-respondents in mid-April 2017.

Proposed indicator to evaluate performance:

(1) All farmers participating in focus groups provided positive anonymous evaluations of the focus group meetings and the follow up interactions.

[1] Gabriel, J.L., Garrido,A., and M. Quemada. 2013. “Cover crops effect on farm benefits and nitrate leaching: Linking economic and environmental analysis.” Agricultural Systems 121:23-32.

Impacts and Contributions/Outcomes

It is too early to evaluate the project learning and action outcomes:

• Learning outcomes: Project participants and Cornbelt farmers will learn how to systematically evaluate the net returns of cover crops in the short- and the long-run using partial budgets. They will learn how to measure the value they create to society at large by reducing nitrate pollution and soil erosion through cover crops.
• Action outcomes: Midwest farmers will use partial budget tools and increase cover crop acres. Policy makers and other stakeholders focused on degraded water quality will use the societal economic evaluation to promote adoption of cover crops, seeing it as a game changer to improve water quality.

The following outputs were generated (* indicates presenter):

Plastina, A. and F. Liu (*). 2016. “Comprehensive Partial Budgets for Cover crops in Midwest Row Crop Agriculture.” Selected Poster, Agricultural and Applied Economics Association and West & Western Agricultural Economics Association Joint Annual Meeting. Boston, MA. July 30 – Aug 2.

Plastina, A., Miguez (*), F., Carlson, S., and F. Liu. 2016. “Economic Evaluation of Cover Crops in Midwest Row Crop Farming.”  Invited Presentation, SARE Advisory Committee. Ames, IA. June 24.

Collaborators: