A Note on the Use of Conservation Practices in U.S. Agriculture

This article measures the effect of an increase in productivityattributable to an increase in soil organic carbon associated with theincrease in the use of conservation practices in agriculture in theUnited States. Both the direct and indirect effects are calibrated. Theanalytical approach used consists of a dynamic computable generalequilibrium model composed of 14 producing sectors, 10 consumingsectors, seven household categories classified by income, and agovernment. The results suggest that the impact of a change inproductivity is an increase in output over a six year period starting in1998 in field crops. The most significant impact is felt in thelivestock sector. This is because field crops are a major input in theproduction of livestock. The food processing sector also exhibits arelatively large increase because of the increase in inputs of both fieldcrops and livestock. Manufacturing output increases primarily becauseoverall investment rises and most investment utilizes manufacturinggoods. The other producing sectors are generally unaffected by theincrease in agricultural production due to an increase in soil organiccarbon. Coincident with the increase in the production of field cropsis a relatively large decrease in the price of field crops. Othernoticeable price reductions occur in the livestock sector and the foodprocessing sector. For the consuming sectors, the consumption offood and alcohol and tobacco increase but consumption in all of theother sectors remains basically unchanged. Prices in the food andalcohol and tobacco sectors decline by about 1% while theprices in the other sectors remain static. Household welfare increasesin the aggregate by only 0.1% with this increase occurringuniformly across all household categories. Revenue received by thegovernment increases a modest 2% in response to an increase inoutput and, hence, an increase in taxes paid. The results indicate thatthere are significant production benefits for several sectors that can berealized by an increase in the use of conservation practices inagricultural production which, in turn, enhances soil organic carbon.There are a number of policy options available to promote the use ofconservation practices. These include education and technicalassistance, financial assistance, research and development, landretirement, and regulation and taxes.