Incentives

What brings together the complexweb of concerned landowners,

federal and state conservation programs,nonprofit groups, native plants andwildlife and the restoration biologyneeded to restore natural communities?Usually it’s a key individual, and in theWillamette Valley of western Oregonthat person is Steve Smith.

Smith is a Private Lands Biologistwith the Willamette Valley NationalWildlife Refuge Complex. His job is towork with private landowners in theValley to promote native species and theirhabitats. Through U.S. Fish and WildlifeService’s Partners for Fish and WildlifeProgram, he and his colleagues developprojects that restore the Valley’s diversewetland, oak savannah, and wet and dryprairie habitats. The Partners programprovides cost-sharefunding for privatelandowners whovolunteer to restorenative plant andwildlife habitat ontheir land.

Landowner partnerships key“In a landscape likethe WillametteValley, which is96% privatelyowned and containsnumerous species indecline, landownersare the key to pre-venting a down-ward trajectory inhabitat and popula-tion sizes,” says

Creating a conservation communityin Oregon’s Willamette Valley

Smith. In just the first six months of2005, he brought 28 new landownersinto the Partners program. Smith is sowell-known in the Valley that he needsto do little outreach, and news aboutland management successes spreads byword of mouth. “Landowners contact usfor assistance in discovering what is valu-able on their lands,” he says.

Smith begins building a partner-ship by walking the property with alandowner and determining what livesthere. Many Valley residents are excitedto discover the diversity of plants, butter-flies and songbirds on the land, and asthey begin managing their land to aidnative species, some find that their agri-cultural business and quality of life bene-fit as well.

Continued on page 6

A quarterly newsletter published by the Environmental Defense Center for Conservation Incentives

Conservation

MeetingVirginia’sanimal farmchallenges

Improving conservationand profits ondairy farms

Designingincentivesthat meetgoals

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Fall 2005

To subscribe to ConservationIncentives or share comments/questions, please contact us at:

(202) 572-3358CCIeditor@environmentaldefense.org

The Center for Conservation IncentivesEnvironmental Defense1875 Connecticut Ave, NWWashington, DC 20009

Making newhomes forthreatenedprairie dogs

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Meeting with landowners on the land is essential for SteveSmith’s wildlife habitat conservation work. Here, the Partners forFish and Wildlife private lands biologist (right) is meeting withCorvallis landowner Richard Owens.

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The Shenandoah Valley of Virginia iswell-known for lovely mountains,

flowing rivers and beautiful farmland.Less well-known is that this area, whichdraws over a billion tourism dollarsannually, leads the state in animal agri-culture. Maintaining these two majoreconomic sectors is both a significantopportunity and a significant challenge.In addition to providing the region’s pas-toral landscape and identity, animal agri-culture also generates 600,000 tons ofexcess animal manure and poultry litterevery year, which, without proper man-agement, makes its way to creeks,groundwater and the Chesapeake Bay.

Much of this nutrient oversupplyfrom manure and litter is spread as fertil-izer on crop fields and pastureland. Whenapplied at appropriate rates, manure andlitter are a valuable source of nutrientsand organic matter for crop and forageproduction. However, land application ofexcess manure and litter is increasinglyrecognized as contributing to local andregional water quality problems.

Shared goals unite diverse interestsThe need to find better ways to dealwith these excess nutrients broughttogether a diverse group from academia,agricultural interests, environmentalgroups and state government agencies inSummer 2004. The group organized the

Waste SolutionsForum, and in April2005, more than 80invitees gathered inRoanoke, Virginia.

Guided by ashared belief thatboth clean water andthriving agricultureare not only possiblebut essential, Forumparticipants set asidedifferences andbegan developing astrategy and actionplan. They identifiedseveral practical andeconomically viable alternatives for man-aging and using manure and litter andoutlined an implementation strategy. TheForum is serving as the beginning pointfor long-term collaboration and partner-ships to change how manure and litter aremanaged throughout Virginia, starting inthe Shenandoah Valley.

Each Forum participant has animportant vested interest in good manureand litter solutions. Farmers and agri-business need economically viable man-agement to stay in business and to resistpressure to sell land for development.Environmental groups seek stewardshipthat ensures clean waterways and drink-ing water. State agencies look for compli-

ance with standards andregulations. Local gov-ernments want to protectrural agricultural her-itage. Academicianssearch for efficient, lesspolluting technologies.The energy industryseeks affordable, non-polluting alternatives toforeign oil.

Virginia Secretaryof Natural Resources W.Tayloe Murphy, Jr., iden-tified a key theme on theopening day: “Unanimity

In Virginia’s Shenandoah Valley, goals areclean water and thriving animal agriculture

is not required for success, but solidarityis.” Though not in total agreement onwhat to do or when to do it, all theForum participants affirmed the urgentneed to work together to find and imple-ment solutions.

Pilot projects, other activities initiate changeMurphy noted that the Forum was not“a series of presentations,” but a begin-ning for change. After the two-daymeeting, the group moved into theimplementation phase, which is expectedto continue for many years, with the ini-tial focus on activities in the next threeyears. Priority actions now under devel-opment include:�Piloting advanced feed management on

dairy farms to reduce nitrogen andphosphate nutrients in manure that inexcess can harm water quality;

�Implementing transportable projectsthat demonstrate alternative uses ofmanure and litter to produce energy,bio-oils, fertilizers and fuel;

�Conducting several training workshopson composting technologies; and

�Establishing a stable and significantsource of state funding for agriculturalbest management practices and forinnovation grants.Renowned for its scenic beauty, Virginia’s Shenandoah

Valley leads the state in animal agriculture.

The average cow produces 20 to 22 tons of manure a year, whichcan be a valuable resource when used properly.

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Traditionally, environmentalists anddairy farmers meet only in court or

at public hearings, and cooperationbetween the two camps is virtuallyunknown. That’s changing as dairies faceincreased pressure to address air andwater quality problems. In 2003,Environmental Defense and SustainableConservation brought together dairytrade groups, environmentalists, U.S.Department of Agriculture and U.S.Environmental Protection Agency staff,and academic and extension manuremanagement specialists to form theNational Dairy EnvironmentalStewardship Council. (See Summer 2005Conservation Incentives, www.environ-mentaldefense.org/article.cfm?ContentID=4665).

NDESC has identified severalcost-effective and environmentally soundmanure management practices and tech-nologies that are being used successfullyon dairies across the nation. The Councilalso recommends ways that federal andstate policymakers can help the dairyindustry protect air and water resourcesthrough incentive and grant programs.

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Reports targeted to dairy farmersand policymakersTwo reports available from SustainableConservation (see end of article) summa-rize these results. The first report, “Cost-effective and Environmentally BeneficialDairy Manure Management Practices,”offers dairy producers practical ways tomanage manure and save money. This fall,Sustainable Conservation sent copies tomore than 16,000 dairy farmers and asso-ciated industries. A second report for poli-cymakers outlines ways that governmentprograms can better assist producers inmanure management.

Many available alternatives for managing nutrientsRecognizing that every dairy farm is differ-ent, the dairy producers’ report focuses onseveral alternatives for matching nutrientneeds to crops and capturing the nutrientsin dairy manure. Some of them include:�Feed management. Producers can

decrease the concentration of nutrientsand salt in dairy manure by eliminatingunnecessary, often costly nutrients andsalt in the diet of cows.

�Anaerobic digestion. This technologyharnesses the power of microbes to pro-duce renewable energy from dairymanure. Dairies that install anaerobicdigesters can offset electricity costs byproducing their own energy, an increas-ingly appealing strategy as energy costsrise.

�Land swapping. Vegetable growers anddairy producers farm each others’ landfor a period of time. Rotating dairy for-age with vegetable crops benefits bothproducers economically and increases adairy’s options for manure application.

�Nutrient cycling through forage crops. Anumber of different strategies controlthe application rate of manure to crop-land. Applying just enough manure tosupply necessary crop nutrients andavoiding over-application allows produc-ers to make use of manure nutrients,reduce or eliminate commercial fertilizer

www.environmentaldefense.org/go/conservationincentives

costs and protect the environment.Producers in the Northeast and Midwestare using drag hose injection systemsthat immediately incorporate a pre-determined amount of manure into thesoil, reducing the risk for both air andwater emissions. In the West wheredairy forage crops are typically flood-irrigated, producers are using a practicecalled synchronized rate nutrient appli-cation, a technique that gives producerscontrol over the amount and timing oflagoon liquid application.

The dairy producers’ report alsodescribes three new technologies currentlyunder development: aquatic cropping sys-tems, waste-to-energy technologies andalternative herd management. Anothersection outlines the wide range of state,federal and other funding options forinnovative manure management.

Joining forces to influence policyNDESC member and EnvironmentalDefense scientist-policy analyst SuzyFriedman points out that collaborativeefforts like NDESC are important forinforming policymakers how they canhelp producers comply with environmen-tal regulations and manage manureresponsibly. Strong partnerships betweenagriculture and environmentalists can alsoinfluence national policy. According toFriedman, “Because the upcoming 2007Farm Bill will play a critical role in theimplementation of innovative approachesto manure management over the next fiveto ten years and beyond, it is crucial thatthe bill provide financial and technicalassistance to researchers to continuedeveloping, and to producers to demon-strate and implement, economically andenvironmentally effective technologies andapproaches to manure management.”

Both NDESC reports are availableat www.suscon.org or by calling Sustain-able Conservation, 415-977-0380 ext 301.

One for the money, two for the H20:Dairies boost profits and conservation

Conservation Incentives thanks KristenHughes, Project Manager at SustainableConservation, for this article.

The National Dairy Environmental Steward-ship Council has identified several waysdairy farmers can improve air and waterquality and profits at the same time.

In the landowner-wildlife conflictarena, prairie dogs have a front seat.

So it’s especially welcome news that tworanchers have volunteered to aid therarest of the four U.S. prairie dog species.Earlier this year, Allen Henrie andMitchel Pace signed Safe HarborAgreements, under which they volun-teered to manage part of their land tobenefit the Utah prairie dog (Cynomysparvidens). Yet more good news comesfrom a state agency: In September, theUtah School and Institutional TrustLands Administration launched a con-servation bank to benefit the federallythreatened mammal.

To many western ranchers andfarmers, prairie dogs are no more thandestructive pests that gobble up valuablelivestock forage and damage costly hayingequipment. On the contrary, say conserva-tionists, prairie dogs are essential to GreatPlains and western grasslands landscapes.As keystone species, they feed many birdsand mammals, shape the vegetation bycontinuously pruning it and provide shel-ter and housing for myriad animal speciesin the extensive burrows of prairie dog“towns.” Moreover, scientists considerprairie dogs an ecosystem process becausethey influence plant succession, waterinfiltration and mineral cycling.

Prairie dogs’ plum-met from their historicalnumbers is less contro-versial. After decades ofpoisoning, shooting,habitat loss and disease,only a fraction of oncevast prairie dog townsremains. The Utahprairie dog, known onlyfrom the southwesternquarter of the state, hasbeen on the federal endangered andthreatened species list since 1973.Conservation efforts to date have aimed atrelocating Utah prairie dogs from privatelands to public lands, and the outcome hasbeen mixed at best, with little progress

Conservation Incentives4

toward recovery.Numbers have fluctuated,but the populationremains below 10,000and may be as low as5,000.

Securing landownerhelp for prairie dogrecoveryWith the best remaininghabitat on private landsand the potential forimproving degradedranchland for cattle aswell as prairie dogs, in1998 EnvironmentalDefense began exploringways to involvelandowners in Utahprairie dog recovery.Recognizing that manyranchers lack the moneyto improve their land, theorganization helpedsecure funds for range-land restoration.

Allen Henrie will be restoringhabitat for prairie dogs on about a fifthof his 900-acre Garfield County ranch.He will restore rangeland by thinninginvading rabbit brush that discourages

prairie dogs, whichneed open habitat forpredator surveillance.Henrie will also plantnative grasses and otherherbaceous plants thatfeed both prairie dogsand cattle and con-struct additional fenc-ing to exclude cattlewhile the land is beingre-vegetated. He will

also implement a prescribed grazing planto maintain the restored vegetation andencourage a reintroduced prairie dogcolony. The Leopold Stewardship Fund,which is administered by the SandCounty Foundation and Environmental

Defense, and U.S. Fish and WildlifeService Private Stewardship GrantsProgram are funding this work.

After the land is restored, the UtahDepartment of Wildlife Resources willreintroduce Utah prairie dogs at noexpense to Henrie. “This is a win-winsituation,” he says. “I win by gettingrangeland improved and hopefully theprairie dog wins by gaining new habitat.”

On his Sevier County ranch,Mitchel Pace will thin overgrown brush,re-seed grasses and other native plants,and employ mechanical and herbicidaltreatments to improve forage and preda-tor surveillance habitat for prairie dogs.He will also manage his grazing opera-tions to reduce forage impacts and pro-mote vegetative recovery by better dis-tributing his cattle. USDA’sEnvironmental Quality IncentivesProgram and FWS’s Partners for Fishand Wildlife are providing funding forrestoration work on the Pace ranch.

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After 22 years of protection, the federally threatened Utahprairie dog has new opportunities for recovery. The bestremaining habitat is on private land.

Ranchers and new bank help prairie dogsfind a home on the range

–––––––––––––––“I’ve been called all

sorts of names—including stupid—butI’m convinced this is

the right thing to do.”-Rancher Allen Henrie

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third party that appraised the sites.The sale gives SITLA needed

income for schools and other publicinstitutions. As habitat enhancement

earns more bank cred-its, SITLA can sellthose credits or usethem to mitigate itsown development pro-jects. SITLA also hasthe option of expandingthe bank to generatestill more credits. IronCounty Commissioner

Dennis Stowell says, “This bank is goodnews for development in Iron County.”

Developing a “culture of recovery”Center for Conservation Incentives ecol-ogist Ted Toombs thinks it’s good newsfor prairie dogs as well: “With time,” hesays, “we hope to develop a ‘culture ofrecovery,’ where landowners, state andfederal agencies, and non-profit and agri-cultural organizations are all workingtoward the same goal: recovering anddelisting the Utah prairie dog. Theseprojects are the first step in showing thatthis can happen in a way that’s in every-one’s best interest.”

Toombs, who works inEnvironmental Defense’s Boulder office,brought the two Safe Harbors to the fin-ish line after the multi-year effort wasbegun by other Environmental Defensestaff. He believes it was worth the wait:“These projects and the conservationbank are models that demonstrate whatcan be done to help the species. If morepeople begin to do these things, we canmove the Utah prairie dog significantlycloser to recovery within five years.”

www.environmentaldefense.org/go/conservationincentives 5

These habitat enhancements willlikely be continued by the prairie dogsthemselves, as they move in from anactive five-acre colony that abuts Pace’sland. In his Safe Harbor Agreement,Pace consented to allow expansion ofthat colony even if the animals eventu-ally occupy his entire 22 acres. “Underthe right circumstances,” he says, “cattleand prairie dogs can coexist.”

As with all Safe HarborAgreements, the two new Safe Harborsprovide legal assurances to the landown-ers that they will not incur newEndangered Species Act restrictions as aresult of their habitat improvements andthe reintroduction of prairie dogs ontheir property.

Bank expected to benefit state,prairie dogs and citiesThe Utah prairie dog conservation bankwas finalized in September 2005, fiveyears after Environmental Defense beganwork on the project. This agreementbetween Utah’s School and InstitutionalTrust Lands Administration and theFWS aims to increase habitat for thefederally threatened prairie dog whileadding flexibility to Endangered Species

Act restrictions in rapidly growing Utahcommunities. SITLA is an independentagency which manages 3.4 million acresof trust land for the benefit of stateschools and other publicinstitutions.

Under the agree-ment, SITLA willenhance and restoreUtah prairie dog habitatat three sites totalingabout 800 acres on landit owns in the ParkerMountain area of south-central Utah. The bank put these sitesunder perpetual conservation easementsand established a perpetual endowmentfund to maintain them as Utah prairiedog habitat.

In return for its beneficial manage-ment, SITLA earns credits that it caneither use for its own projects or sell todevelopers in growing communities suchas Cedar City, where construction isaffected by Endangered Species Actrestrictions for Utah prairie dogs.Because of surrounding development,these sites usually offer only marginalhabitat where prairie dog populations areunlikely to persist over the long term

unlike SITLA’sParker Moun-tain property.

Based onUtah prairie dogcounts at theSITLA sites, thebank openedwith 77 credits.Rapidly expand-ing Iron Countyimmediatelypurchased all thecredits andintends to resellthem to devel-opers. The pricewas $1,636 each,plus $200 percredit for theperpetualendowmentfund, a pricedetermined by a

Rancher Allen Henrie (left) volunteered to help the Utah prairie dogby restoring habitat on a portion of his land. It’s the first SafeHarbor Agreement for the species and a model for other Utahprairie dog conservation projects. Environmental Defense ecologistTed Toombs (right) assisted Henrie with the process.

–––––––––––––––“By working together

instead of buttingheads, we’ll all come

out ahead.”-Rancher Mitchel Pace

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-Margaret McMillanendangered species specialist

Center for Conservation IncentivesEnvironmental Defense

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The Utah prairie dog is one of thespecies featured in EnvironmentalDefense’s Back from the Brinkcampaign. For more information,visit www.backfromthebrink.org

Conservation Incentives6

ducted cooperatively, withfederal, state and non-profitorganizations participatingwith the landowner. Thismanagement can preclude orremove the need to list aspecies under theEndangered Species Act.Landowners also have theoption of ensuring long-term protection of listedspecies and their habitats byestablishing conservationeasements through NRCSand Farm Bill programs.

Rare plant closer to recoveryPartners program participants Warrenand Laurie Halsey own 270 acres inBenton County. “We’ve had wonderfulassistance over a number of years,because we have different land types andSteve [Smith] knows the land,” saysLaurie. In 1996, the Halseys beganrestoring wetland ponds, which now har-bor two animals on the Oregon sensitivespecies list, western pond turtles(Clemmys marmorata) and northern red-legged frogs (Rana aurora aurora). Theirupland prairie habitat supports federallythreatened Kincaid’s lupine (Lupinus sul-phureus ssp. kincaidii) and federally

endangered Fender’sblue butterflies(Icaricia icariodes fend-eri). Nelson’s checker-mallow (Sidalcea nelso-niana), another feder-ally threatened plant,occupies their wetprairie habitat. Toenhance the plants’survival, the Halseysare gradually eliminat-ing non-native species.

The Halseys alsoparticipate in researchto determine optimalrestoration strategies.On several ten-acresites, native plants arebeing experimentally

Next, Smith discusses assistanceprograms with the landowner.Depending on the landowner’s interestlevel, various partner organizations canbe consulted. U.S. Fish and WildlifeService has a cooperative agreement withthe USDA’s Natural ResourcesConservation Service for funding andimplementing conservation programs,such as the Wetlands Reserve Program.

Restored land generates new revenueOne landowner benefiting from thisapproach is Polk County grass seedfarmer Mark Knaupp, who has workedwith several agencies on his WRP pro-ject. Since 1996, he has restored a 430-acre wetland and established a wetlandmitigation bank on his 2,000-acre farm.In addition to selling wetland mitigationcredits, Knaupp hosts duck club activitieson his land. Knaupp once derived hisentire income solely from grass seed, butnow says that WRP has been “a big plus. . . by diversifying our land base, we havethree income sources.”

Smith’s third step in working witha landowner is to develop a Partners pro-gram voluntary cooperative agreement torestore or sustainably manage habitat.Projects are usually funded and con-

planted, non-native plants removed andvarying management regimes conducted.

The checkermallow favorsWillamette Valley’s wet soils and is easyto propagate and reintroduce. Smith andother restoration participants, such asLinda Boyer of Heritage Seedlings, Inc.,which propagates the seeds, are opti-mistic that the plant can make a rela-tively quick recovery. However, restoringentire prairie plant communities associ-ated with the checkermallow is essential.

“Wet prairie ecosystems are morethan a garden plot of checkermallow,”says Smith. Restoration often requiresplanting an array of native species infields where many years of commercialgrass production have eradicated thesoil’s native seed bank. Reducing com-peting non-native plants takes time andcontinued intensive management.

Restoring natural communities ofnative species can also require a commu-nity of dedicated conservationists. WithSmith’s persistence in bringing togetherlandowners, the Partners program,NRCS and Farm Bill conservation pro-grams, Nelson’s checkermallow couldbecome the first listed species to achievefull recovery in the Willamette Valley.

Willamette ValleyContinued from page 1

Over half the known sites for federally threatened Nelson’scheckermallow are in the Willamette Valley of Oregon. Withhelp from private landowners, the species stands a goodchance of recovery.

Conservation Incentives thanksAnn Carlson, FWS EndangeredSpecies Recovery Biologist, for thisarticle. She works with a cross-pro-gram recovery group in the FWSPortland Regional Office.

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benefits that do not directly benefit theproducer (habitat for at-risk species).Many “practices” actually embodychanges in management or productionsystems rather than discrete “add-ons” toan existing production system. In thismodern context, traditional cost-sharingmakes sense for only a portion of theportfolio of conservation actions society isencouraging producers to adopt. A morecomprehensive classification of conserva-tion assistance would include four classesof assistance (see table).

In order to be cost-effective, conser-vation assistance should recognize thedifference between these forms of assis-tance, and adjust the type and level of

In the early days of U.S. agriculturalconservation policy, cost-sharing was a

straightforward partnership between thefarmer and society to encourage the useof simple practices such as terraces, con-tour plowing and windbreaks that wouldreduce soil erosion. Cost-sharing recog-nized that both the farmer and societyhad an interest to be served throughthese practices: the farmer to keep hisprimary productive asset—the soil—inplace, and society to keep the farmer onthe land and the soil out of ditches,rivers, reservoirs and the air.

Today, conservation’s value comesfrom off-site environmental benefits(clean water, clean air) or from on-site

payment to the circumstances. For tradi-tional cost-sharing, assistance should gen-erally be one time, with the rate in pro-portion to the benefits accruing for boththe farmer and society. Management orcontinuing cost-sharing would recognizethat the flow of payments must continueor practices will be abandoned (and previ-ous expenditures wasted). Again, the rateshould be proportional to the benefitsaccruing for each party, but could decreaseover time as the producer becomes moreaccustomed to the system or practice.

In contrast, an incentive paymentaims to overcome the producer’s reluc-tance to try the practice. These payments

Good conservation programs are specific to the landowner’s situation

Type of Assistance Economic Use and Justification Example

“Traditional” one-time cost-sharing

Should be used in situations where the practice has realcosts of installation but few costs for continuing use. Boththe producer and society realize gains, and each has an eco-nomic incentive to pay for the practice in proportion to thebenefits accruing. The government’s one-time cost-shareshould equal the proportion of the total cost not covered bythe farmer’s private benefit.

A good example is a terrace, which con-serves moisture and soil for increasedproduction and prevents off-site runoff,flooding and sedimentation. The cost-share encourages the producer toinstall the practice, but is a one-timepayment that does not require a contin-uing subsidy from society.

“Management” or“continuing” cost-sharing

Similar to traditional cost-sharing, but the practice incurs acontinuing cost to the producer that would, in the absence ofcost-sharing, cause abandonment of the practice becausethe ongoing benefits do not equal the ongoing costs.Government’s continuing cost-share should equal the portionof annual cost not covered by the farmer’s private benefit.

Examples might be contour plowing,where the contour needs to be re-established periodically, or delayed haying for nesting birds, which reducesforage value.

Incentive payment No “cost” to share. Benefits to the producer outweigh the fullcost of installation and there are social benefits, but farmersare reluctant to adopt the practice because of a steep learn-ing curve, greater management requirement or some otherimpediment. An incentive payment large enough to overcomefarmer reluctance should continue for two or three years,just long enough for the producer to experience the benefits.

Conservation tillage is a good exampleof this class because it usually producesnet gains in revenue, but is a challenging system to learn and apply.The practice of precision farming maybe another example.

Capital restriction Benefits to the producer outweigh the full cost of installation.There are social benefits, but farmers do not have and can-not obtain sufficient capital or financing to make the invest-ment. The appropriate assistance is the minimum needed tosecure the financing, which may be an interest rate subsidyor simply a loan guarantee.

A manure storage system is a goodexample of this kind of practice, since itrequires a large, up-front investmentthat pays dividends to the farmer (facili-tating more efficient nutrient manage-ment) and society (reducing nutrientlosses to the environment) over anextended useful life.

Continued on page 8

The Environmental Defense Center forConservation IncentivesThe Environmental Defense Center for Conservation Incentiveswas launched in 2003 with major support from the Doris DukeCharitable Foundation to further the conservation of biodiversityon U.S. private lands through the use of incentives. The Centerworks with landowners, conservation organizations and govern-ment agencies to develop place-based projects that demonstratethe utility of incentives in conserving habitats on private lands.The Center also works to influence the development and imple-mentation of national and state incentive programs and policies.Headquartered in the Washington, DC office of EnvironmentalDefense, the Center also has staff in all of the regional offices.We thank the Doris Duke Charitable Foundation and RobertWilson for their generosity in funding this work.

www.environmentaldefense.org/go/conservationincentives

Conservation IncentivesConservation Incentives is published quarterly and is distrib-uted electronically, with print copies available upon request.Articles may be reproduced if credit is given and a copy ismailed to the address below.

The Center for Conservation IncentivesEnvironmental Defense1875 Connecticut Avenue, NWWashington, DC 20009(202) 387-3500

Michael Bean & Tim Searchinger, co-directorsRobert Bonnie, managing directorMargaret McMillan, newsletter editorAnn Karpinski, newsletter designer and subscription manager

Shenandoah ValleyContinued from page 2

are only needed for a short period of time(one to three years)—just long enough topersuade the landowner of the practice’sutility by increasing yields, reducing costsor both. Unavailable or high-cost capitalcauses landowners to forego investmentsthey might otherwise like to make.Assistance to overcome such capitalrestrictions should be tailored to the costand availability of financing (not the costof the practice), and can take a variety offorms (interest rate subsidies, loan guar-antees, direct loans and others).

Under no condition does a one-size-fits-all approach to cost-share ratesdo justice to the differences betweenneeded assistance. Uniformly lowering (orraising) cost-share rates is not a substitutefor fitting the assistance to the need. A50% cost-share paid for conservationtillage every year for a decade is no bar-gain when a $2-$3 per acre incentivepayment for two years would suffice toovercome reluctance to adopt a practicethat has a “negative” cost (i.e., that makesmoney for the farmer). Paying half thecost of a $50,000 manure storage systemis not a conservation bargain if a loanguarantee with no eventual cost wouldpersuade the farmer to invest in it.Similarly, reducing cost-share to 50% for

a wildlife habitat improvement projectwhich produces no economic benefits forthe farmer is not cost-effective if it is toolow to encourage participation.Substituting an incentive payment forcost-sharing on a practice that imposes acontinuing annual cost on the farmer islikewise poor economy.

The ideal conservation programdesign for U.S. Department ofAgriculture programs is to match thetype of payment to the kind of practice,to use the least amount of incentive nec-essary to encourage participation and torecognize the differing benefits receivedby producers and society.

Testifying to the importance ofForum goals is the number and diversityof participants, Steering Committeemembers and financial supporters. Apartial list includes faculty from severalVirginia Tech departments; VirginiaCooperative Extension; Virginia PoultryFederation; Virginia State Dairymen’sAssociation; Virginia Farm Bureau; fivestate agencies concerned with health,environment and recreation;Environmental Defense’s Center forConservation Incentives; VirginiaAssociation of Counties; ShenandoahResource Conservation andDevelopment Council; Pure WaterForum; Altria Group; Chesapeake BayFoundation and the Institute forEnvironmental Negotiation.

-Suzy Friedmanagricultural policy specialist

Center for Conservation IncentivesEnvironmental Defense

Read more at www.mawaterquali-ty.org or contact co-chairs AnnJennings, Chesapeake Bay Foun-dation, ajennings@cbf.org or DaleGardner, Virginia State Dairymen’sAssociation, vamilk4u@gte.net

Conservation programsContinued from page 7

Conservation Incentives thanksRalph Heimlich, principal,Agricultural ConservationEconomics, for this article.

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