Financial incentive programs and farm diversification with cover crops: assessing opportunities and challenges

Abstract

Farmers in the Great Lakes region of the U.S. face tremendous pressure to reduce nutrient losses from agriculture. Increasing crop rotation diversity with overwintering cover crops can support ecological processes that maintain productivity while improving multiple ecosystem functions, including nutrient retention. We conducted a mixed-methods study to understand how financial incentive programs impact transitions to cover cropping in Michigan. Michigan farms span a wide range of soil types, climate conditions, and cropping systems that create opportunities for cover crop adoption in the state. We tested the relationship between Environmental Quality Incentives Program (EQIP) payments for cover crops and cover crop adoption between 2008-2019, as measured by remote sensing. We coupled this quantitative analysis with interviews with 21 farmers in the Lake Erie watershed to understand farmers’ perspectives on how incentive programs could support greater cover crop adoption. Panel fixed effects regressions showed that EQIP increased winter cover crop presence. Every EQIP dollar for cover crops was associated with a 0.01 hectare increase in winter cover, while each hectare enrolled in an EQIP contract for cover crops was associated with a 0.86-0.93 hectare increase in winter cover. In semi-structured interviews, farmers reported that financial incentives were instrumental to cover crop adoption, but that program outcomes fall short of intended goals due to policy design problems that may limit widespread participation and effectiveness. Thus, strengthening EQIP and related conservation programs could support broader transitions to diversified farming systems that are more sustainable and resilient.