Fertilizer use on agricultural land contributes to both nutrient pollution of surface and ground water as well as to global climate change. Voluntary conservation programs run by the USDA encourage farmers to reduce their use of fertilizers and to adopt practices and technologies that reduce nutrient run-off, but do the funds that go into these programs have the desired effect? OLS regression analysis was used to estimate the effect of federal conservation subsidies on both the number of farmland acres treated with fertilizer and the number of farms that reported using conservation practices. The analysis uses county level data for Michigan, Illinois and Iowa from the 2007 Census of Agriculture and subsidy data obtained by the Environmental Working Group from the USDA. Conservation subsidies are found to have a significant, negative effect on the acres of farmland treated with fertilizer and a significant, positive effect on the number of farms using conservation practices. Crop insurance subsidies are also found to have a large, significant and positive effect on acres fertilized. Variables such as average farmer age, number of female operators, average farm size, number of organic acres, number of irrigated acres and number of rented acres per county are not found to be significant. This analysis has substantial implications for achieving conservation outcomes though agricultural policies because it highlights ways that production policies can work at counter purposes to the goals of conservation programs.

1. EFFECTS OF FEDERAL
CONSERVATION PAYMENTS ON
FERTILIZER USE IN THE MIDWEST
Riva C. H. Denny, M.S.
Doctoral Student
Department of Sociology
Michigan State University
RSS 2014
New Orleans, LA

2. Outline
•Introduction
•Research Question
•Hypotheses
•Data and Methods
•Findings
•Conclusion
•Limitations
•Next steps

3. •Agriculture is a significant source of
water impairment due to soil and
nutrient run-off (EPA 2014)
• Agriculture’s contributions to threatened
or impaired water bodies:
• Leading cause for rivers and streams (13%)
• 2nd leading cause for wetlands (18%)
• 3rd leading cause for lakes, reservoirs and
ponds (5%)
Introduction

4. Effects of Conservation Programs
• Voluntary USDA conservation programs seek
to reduce these effects
• Have been found to be effective (NRCS 2011;
NRCS 2012)
• Does reduced run-off
lead to reduced
fertilizer application?

5. Research Question
Do federal conservation payments, by
encouraging farmers to adopt certain
practices, ultimately have the effect of
reducing fertilizer use?

6. METHODS
• Data and Sample
• Hypotheses
• Variables and Measures
• Statistical Methods

7. Hypothesis 1
• The greater the amount of Federal
conservation payments made to farmers in a
county the greater the number of farms using
conservation practices
Conservation $$$ Conservation Farms
+

8. Hypothesis 2
• The greater the amount of Federal
conservation payments made to farmers in a
county the lower the amount of land treated
with fertilizer in the county (a decrease in the
extensiveness of use)
Conservation $$$ Fertilized Acres
-

9. Hypothesis 3
• The greater the amount of Federal
conservation payments made to farmers in a
county the lower the amount of fertilizer used
per acre in the county (a decrease in the
intensiveness of use)
Conservation $$$ Fertilizer per Acre
-

10. Data and Sample
• 2007 Census of Agriculture
• USDA’s NRCS via the Environmental Working
Group
• Conservation payments variable
• County level data for Iowa, Illinois, and Michigan
• Initial N = 284
• States chosen due to interest for another project

11. Dependent Variables*
• Conservation Farms
• The number of farms that reported using “conservation
farming methods”
• Fertilized Acres
• The number of farmland acres in the county that were
treated with commercial fertilizer, lime, and soil conditioners
• Fertilizer per Acre
• The dollars spent on fertilizer per acre fertilized
• A measure of the average intensity of fertilizer use per acre
*Descriptive statistics available upon request

12. Independent Variables*
• Conservation Payments—in $1,000 of dollars
• Farmland Value—average estimated market value of
land and buildings per acre in $1,000 of dollars, a proxy
for land quality
• Average Farmer Age—of the principle operator
• Farmland Area—acres of farmland in the county
• Number of Farms
• Conservation Farms—The number of farms that reported
using “conservation farming methods”
*Descriptive statistics available upon request

13. Conservation Payments
•Conservation
payments
dominated by
CRP in this
sample CRP
79%
EQIP
8%
WRP
3% Other
10%

14. Conservation Payment Programs
• Conservation Reserve Program: annual rental payment
for farmers removing environmentally sensitive land from
agricultural production and planting species that will
improve environmental quality (FSA 2014)
• Wetland Reserve Program: technical and financial
support to landowners to protect, restore, and enhance
wetlands on their property (NRCS 2014b)

15. • Environmental Quality Improvement Program:
“financial assistance to help plan and implement
conservation practices that address natural resource
concerns and for opportunities to improve soil, water,
plant, animal, air and related resources on agricultural
land and non-industrial private forestland” (NRCS 2014a)
• Includes the National Water Quality Initiative: A national
EQIP initiative that “helps farmers and ranchers
implement conservation systems to reduce nitrogen,
phosphorous, sediment and pathogen contributions from
agricultural land in specific approved watershed” (NRCS
2014a)
Conservation Payment Programs

16. Statistical Methods
• Ordinary Least Squares (OLS) regression
• Stata12
• Assumptions met enough

17. FINDINGS

18. Conservation Farms, OLS Coefficients (N=275)
Conservation Payments 0.014**
Farmland Value 5.743
Average Farmer Age -6.944**
Farmland Area 0.001***
Number of Farms 0.232***
Intercept 332.536*
F-Test 449.090***
Adjusted R2
0.891
Two-tailed test *p < 0.05 **p < 0.01 ***p < 0.001

19. Fertilized Acres, OLS Coefficients (N=275)
Conservation Payments -15.653*** -16.348***
Farmland Value 5,315.659*** 5,020.172***
Average Farmer Age -1,944.738* -1,587.440*
Farmland Area 0.877*** 0.845***
Number of Farms -23.053*** -35.003***
Conservation Farms 51.455**
Intercept 75,310.530 58,199.770
F-Test 1,644.010*** 1,402.990***
Adjusted R2
0.968 0.969
Max VIF 2.580 9.350
Two-tailed test *p < 0.05 **p < 0.01 ***p < 0.001

20. Fertilizer per Acre, OLS Coefficients (N=275)
Conservation Payments -0.001 -0.001
Farmland Value 6.090*** 6.270***
Average Farmer Age -0.177 -0.394
Farmland Area 6.030x10-6
2.56x10-5
*
Number of Farms 0.005 0.012**
Conservation Farms -0.031**
Intercept 57.344* 67.759*
F-Test 21.680*** 19.920***
Adjusted R2
0.274 0.293
Max VIF 2.580 9.350
Two-tailed test *p < 0.05 **p < 0.01 ***p < 0.001

21. Conclusions
Hypothesis 1
Hypothesis 2
Hypothesis 3
Conservation $$$ Conservation Farms
+
Conservation $$$ Fertilized Acres
-
Conservation $$$ Fertilizer per Acre
-

22. Conclusions
• While conservation payments are associated
with increased use (extensiveness) of
conservation practices, which have been
found to reduce nutrient run-off, these do not
clearly translate into reduced fertilizer
application—at least not in this sample

23. Limitations
• Small sample size
• Variables of interest
had to be left out
• Model
appropriateness?
• Only 1 year
considered
• Imprecise variables

24. Next Steps
•Use 2012 Ag Census data
•More detailed data on conservation
payments—how much from which
programs?
•Include more states
•Structural equation modeling?

25. References
• FSA. 2014. "Conservation Programs." USDA Farm Service Agency. Retrieved July 29, 2014
(http://www.fsa.usda.gov/FSA/webapp?area=home&subject=copr&topic=landing).
• EPA. 2014. "Watershed Assessment, Tracking & Environmental Results, National Summary of State
Information." US Environmental Protection Agency. Retrieved July 30, 2014
(http://ofmpub.epa.gov/waters10/attains_nation_cy.control).
• Nickerson, Cynthia, Robert Ebel, Allison Borchers, and Fernando Carriazo. 2011. Major Uses of Land in the
United States, 2007. Economic Information Bulletin Number 89. Washington, DC: USDA, Economic
Research Service. Retrieved February 21, 2013
(http://www.ers.usda.gov/media/188404/eib89_2_.pdf).
• NRCS Conservation Effects Assessment Project (CEAP) Cropland Modeling Team. 2011. Assessment of the
Effects of Conservation Practices on Cultivated Cropland in the Great Lakes Region. Washington, DC:
USDA, Natural Resources Conservation Service. Retrieved July 30, 2014
(http://www.nrcs.usda.gov/Internet/FSE_DOCUMENTS/stelprdb1045480.pdf).
• NRCS Conservation Effects Assessment Project (CEAP) Cropland Modeling Team. 2012. Assessment of the
Effects of Conservation Practices on Cultivated Cropland in the Upper Mississippi River Basin.
Washington, DC: USDA Natural Resources Conservation Service. Retrieved July 30, 2014
(http://www.nrcs.usda.gov/Internet/FSE_DOCUMENTS/stelprdb1042093.pdf).
• NRCS. 2014a. "Environmental Quality Incentives Program." USDA Natural Resource Conservation Service.
Retrieved July 29, 2014
(http://www.nrcs.usda.gov/wps/portal/nrcs/detail/national/programs/financial/eqip/?&cid=stelprdb104
4009).
• NRCS. 2014b. "Wetlands Reserve Program." USDA Natural Resource Conservation Service. Retrieved July 29,
2014 (http://www.nrcs.usda.gov/wps/portal/nrcs/main/national/programs/easements/wetlands/).

26. THANK YOU!
QUESTION?
Riva C. H. Denny
Michigan State University
Department of Sociology
509 E. Circle Dr., Rm 316 Berkey
East Lansing, MI 48824-1111
rchdenny@msu.edu