A note on the use of conservation practices in US agriculture

This article measures the effect of an increase in productivity attributabl e to an increase in soil organic carbon associated with the increase in the use of conservation practices in agriculture in the United States. Both th e direct and indirect effects are calibrated. The analytical approach used consists of a dynamic computable general equilibrium model composed of 14 p roducing sectors, 10 consuming sectors, seven household categories classifi ed by income, and a government. The results suggest that the impact of a ch ange in productivity is an increase in output over a six year period starti ng in 1998 in field crops. The most significant impact is felt in the lives tock sector. This is because field crops are a major input in the productio n of livestock. The food processing sector also exhibits a relatively large increase because of the increase in inputs of both field crops and livesto ck. Manufacturing output increases primarily because overall investment ris es and most investment utilizes manufacturing goods. The other producing se ctors are generally unaffected by the increase in agricultural production d ue to an increase in soil organic carbon. Coincident with the increase in t he production of field crops is a relatively large decrease in the price of field crops. Other noticeable price reductions occur in the livestock sect or and the food processing sector. For the consuming sectors, the consumpti on of food and alcohol and tobacco increase but consumption in all of the o ther sectors remains basically unchanged. Prices in the food and alcohol an d tobacco sectors decline by about 1% while the prices in the other sectors remain static. Household welfare increases in the aggregate by only 0.1% w ith this increase occurring uniformly across all household categories. Reve nue received by the government increases a modest 2% in response to an incr ease in output and, hence, an increase in taxes paid. The results indicate that there are significant production benefits for several sectors that can be realized by an increase in the use of conservation practices in agricul tural production which, in turn, enhances soil organic carbon. There are a number of policy options available to promote the use of conservation pract ices. These include education and technical assistance, financial assistanc e, research and development, land retirement, and regulation and taxes.