BALANCING PRODUCTIVITY AND ENVIRONMENTAL BENEFITS
IN THE ENVIRONMENTAL QUALITY INCENTIVE PROGRAM (EQIP)
Otto Doering, Purdue University
Organized Symposium Presentation at the American Agricultural Economics Association
August 4th, 1998, Salt Lake City, Utah.
Summary of the Presentation:
A concern with productivity has to be tempered with our history of declining real prices for
agricultural commodities which signal to some degree a certain amount of excess capacity in
agriculture in the United States. Thus, environmental concerns today may logically outweigh
productivity concerns. Conservation programs that preceded the present EQIP program, such as
the ACP, often had a productivity component that also was designed to help redistribute income
to farmers. In terms of productivity, this may have been as direct as subsidizing the application of
lime or the installation of drainage. It may have been more indirect, such as improving damaged
lands that could then be returned to production. In any case, some portion of conservation
programs was seen as productivity enhancing. This was viewed as a worthwhile public
expenditure as was the income transfer that went along with it.
EQIP is not as directly productivity enhancing or income enhancing as former programs. It is
productivity enhancing in comparison to the Conservation Reserve Program (CRP) which is
viewed by some, such as agribusiness interests in commodity trade and processing, as anti-
production. The CRP is anti-production in the sense that it removes lands from production.
These begs the question whether these lands could be farmed sustainably or have the potential for
causing environmental damage beyond their value in agricultural production.
What EQIP does is encourage and subsidize activities or investments that allow productive use of
land for crops while reducing environmental damage that might otherwise occur. In this sense it
does enhance productivity, not necessarily through increasing yields (though that may occur) but
through holding land