US environmentalists are up in arms on farms across the nation because of a recent downward trend in the Conservation Resource Program. The program, established about 25 years ago, pay farmers not to grow on some of their fields. The result has been impressive: 400,000 participating farmers and an area totaling over 36.8 million acres. Duck populations rose to about two million as a result. But now wheat and other crop prices are soaring, and farmers want their land back to…what else…farm. Last year farmers took back an area the size of Rhode Island and Delaware combined.
Surprised? You shouldn’t be. And those concerned environmentalists should maybe take a business course. The Conservation Resource Program is a subsidy. And guess what? Subsidies are designed to go away.
The United States is a rich nation with strong property rights and secure, standardized transactions. Especially in such environments, indirect methods of biodiversity conservation, such as subsidies, don’t make sense. And in this case – they can go away. The US Government would be better off taking a slightly more direct approach: the cheapest way to get something you want is to pay for you want rather than pay for something indirectly related to it.
As they say…you get what you pay for.
For the story, see the business section of the NY Times.