Farm program impacts on incentives for green manure rotations

Abstract

AbstractFarm programs influence the profitability of a crop rotation through five effects: (1) a deficiency payment (DP) effect, (2) an acreage reduction (ARP) effect, (3) a base effect, (4) a crop price effect, and (5) a risk reduction effect. This study initially examines ARP and DP effects of the 1985 Farm Bill on the relative profitability of a low-input rotation and a grain-intensive conventional rotation in Washington state over 1986–1990. In years of low deficiency payments or high foregone returns from ARP land, the low-input green manure rotation was competitive with the conventional rotation but lost its advantage in years of low ARP costs or high deficiency payments. Long-runincentives to maintain wheat base introduced a consistent bias against the low-input green manure rotation. Planting flexibility options proposed during the 1990 Farm Bill debate could reduce farm program barriers to green manure and other low-input rotations. The Bush Administration's Normal Crop Acreage (NCA) proposal, which was not accepted in the 1990 legislation, would have largely eliminated base erosion for the green manure rotation in this study. More importantly, non-ARP green manure acreage would have qualified for deficiency payments under the NCA, thereby sharply increasing the low-input rotation's relative profitability. Proposals like the NCA might receive further attention in the future due to environmental concerns, fiscal pressures, or possible trade agreements requiring multilateral phaseout of agricultural subsidies coupled to commodities.