August 16, 2013

Current and past farming practices have led to significant environmental degradation in the form of soil erosion (sediments), as well as fertilizer and chemical related water pollution. The United States Department of Agriculture (USDA) has long tried to implement policies to temper such negative effects on the environment. The 2008 Farm Bill which currently guides agricultural and related environmental/conservation policy is being revised on this front. The United States Senate and the House of Representatives are each currently proposing a version of the 2013 Farm Bill to change the existing system, making it more efficient in achieving environmental (and other food related) goals, while also seeking significant spending cuts. Both versions remove direct payments to farmers. A key difference between the two proposals is in the changes to
crop insurance subsidies as related to conservation compliance, which is the focus of this study. While both
proposals continue these subsidies, the version passed by the Senate makes this subsidy conditional on conservation
compliance, whereas the version passed by the House provides this subsidy without such compliance.

In this Cornhusker Economics article, four professors from the University of Michigan-Dearborn and the University of Nebraska-Lincoln explore why "empahty nudging, in combination with financial incentives, is very effective in enhancing environmental quality."

"This is a relatively cheap and effective way to increase the effectiveness of policy, and should therefore receive increased consideration in the policy debate."

Read more about their research and what it could mean for conservation policy development.

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