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Converting Hydric Cropland to \Vetlands in Missouri: A Geoeconomic Analysis

Tony Prato, Chris Barnett and Chris Fulcher

Center for Agricultural, Resource and Environmental Systems

College of .Agriculture, Food and Natural Resources

University of Missouri-Columbia

Columbia, l\rlO 65211

Research Report No. 6

l\rlarch 1993

WAITE MEMORIAL BOOK COLLECTIO DEPT. OF AG. AND APPLIED ECONOl\111'""'

1994 BUFORD AVE. 2~ :!. cu~ UNIVERSITY OF MINNESOTA ST. PAUL, MN 55108 U.S.A.

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··<· ·. t-~' C~nvert;ng :iJ'.ydric Cropland· to Wetlands in Miisourl~ ·· .. ~· .··· ·

. · . · · A GeQec909rtifo An~l.ysis·i < · ·· · · ·· · · ·

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Dramatic losses i1tVl~tlands Jftom.215 milli~n. acreS irt the lower 48 states ill the 1600s tQ 99 million acres today) led fprmer President Georg~ Bush to adopt· a no.-.net~loss .·

.· p.olicy for wetland;s in 1990 as recommended by the National Wetlands Policy Forum . (Cons~tvation · Founda:tiQn 1988}. .. 'I'.he Food; Security·· Act of l9S$ contained: . a · · swampbuster" pfovisicm whicl,1. denie.s mo~t fann program hefrefits to farmers who convert wetlands tO cropland. · After t11e bill was approved, the Conservation Reserve Program (CRP) pro:visi-0n was modit1ed to allow· farmets to bid eligible cropland along·· ·. streams and lakes into the CRP, even if the land is. not· highly erodible. A Wetlands Reserve Program (WRP), established by the Food• Agricult\lre, Consezyation and 'Trade Act of 1990, .allows fa,rm~rs to bid eligible cropland into a wetlands reserve (U .s. Department of· Agriculture 1992). . Farmers whose bi<is are accepted ·receive annual .rerital .and cost sharing payments. These policies are of panicular importance in · Missouri. where more t!lan 90 percent of the original 4.$. million actes of wetlands have · been lost. .(u.s~. Soil conservatiori Service 1985)... ·

Agriculture is ·a major· contri.b:utor to .. wetland .losses ·and ·a· majot beneficiary of wetlands protection and development. · Drainage of wetl~ds for agri~ultural pr:oduc.tion accounts for 81 percent of national wetland tosses· and tWcHhirds of the. remainingwetlancis ate · in agricultural. areas. (!iii.er 1984). .·Adverse effects of. agriculturill nonpoinf source pollution can be reduced through headwater _wetlaqds that .are upstream of rivers, lakes, estuaries or fringe wetland.s adjacent to such water bodies~ In addition, vegetative filter strips along stream corridors and riparian areas can stabilize banks; trap sedimeI\tS and nutrients and reduce peak flows . (U.S. Army Corps of Engineers . 1986}. Other economic benefits of wetlands include t}o9d prote¢tioh, shoreline erosion control; fish .. · and wildlife <habitat; natural. products and recreation and aesth¢tics (Environmental

· Ptotec:tion Agency 1988)... · · ·

t The ~ti\li.ties -On which tllis repert is 1-1• were financed in p;1ft by the · Depl-].rtinent of the· Interior~ . U'.S; Geological SurVeyi th tough tnc:!: M-isso'1ri

·· : Water Resot;Jrces Research·. Center, and by the Missouri Agricultural Experirn~nt ••· Station, Qniyersity· ofMissouri-Coll.unhia .. ·. , ·... · ·

2:Torty Ptatois Profess~rof AgricµltµralEconomicsarid Ditedotof.the.Center · · . fOrAgrictiltu.ral, Resource and Environmental Systems (CARES);~ University. of Missouri·ColuIT1bia. · Chris Barnett and. Chris. Fulcher are. ResearctL Associates in CARES~.·· . . . . . .. . . . . .. · . . · .. ··· ....... ··... . . . ..

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· Tb.ere are two deficiencies with. respect to analyzing the potential for .enhancing wetland development in agricultural areas. · . first, systematic methods have not been developed for identifying cropland that.has high ·potential for conversion to wetland. Second; the benefits. and costs of convening cropland . to wetlands · has not been adequately evaluated.~· . lfhe major purpose of this paper is tQ ·evaluate the physical and economic feasibility of converting Missouri cropland to wetland.. Specific obJec.tives are to: 1) demonstrate how a Geographic Information System (OIS) can be used to identify hydric

· cropland that is suitable for conversion to wetlands, and 2) evaluate the net private and social benefits of converting hydric cropland to wetia.nc:J . .

Related Research·

A .study by Heimlich et al. (1989) and Carey et al. (1990) .indicates that the average easement and restoration costs for a least-cost wetland reserve from hydric cropland would be $845 million for a 2.5 million acre reserve ($338/acre) and $2.4 billion fora 10 million acre reserve ($480/acre) in. 1988 ·dollars. Their analysis indicates that. between 200,000 and 500,00 acres would be lpcated irt Missouri. Only Minnesota and Iowa have higher acreag.es. Several studies have estimated the present value of net returns from converting wetlands to agricultural uses, including land clearing and preparation· costs. These values can be viewed as the opportunity co.st (loss in net agricultural income) of converting agricultural land to wetl'1Jld. ·Per acre pre.sent values were estimated to be $151 in the Mjssissippi Delta region (Kramer and Shabman 1986), $637 in North Carolina (Danielson et aL 1988; 1989) and $257 in Central Minnesota (Danielson et al. 1986).

The.Des Plains River Wetland .Demonstration Project in Wadsworth, .Illinois studied the economic efficiency and political acceptability of building and managing wetlands for nonpoint pollution control in a 450~acre site (Hey 1988). Hey's results can .be applied to areas along the Mississippi River, where 61 million acres of wetlands have been lost over the past 150 years. Restoring 10 percent of the Lost wetlands along the Mississippi River (6.1 million acres) in a 15-year period would require that 407,000 acres be converted to wetlands each year. Construction and land costs would equal $24 billion or $400 per acre. Annual operating cost· would. be $160 million or $26 per acre~ Such a restoration effort would entail an annual investment of $247 million.

Wengrzynek and·. Terrell · (1990) studied five prototype nutrient/sediment control systems for controlling nonpoint · source . pollution from ·cropland. These systems

·included watershed land treatment practices, sediment basins, grass filter strips, wetlands, deep ponds, and polishing areas for reduction of soluble phosphorus, nitrogen, organic matter, bacteria and fine sediments reaching lakes and streams. Construction costs ranged from $14,000 to $22,500 for systems between 21 and 163 acres in size, or $667 to $138 per acre, respectively. Averag.e annual costs of construction and maintenance was $20 per acre. In addition to controlling nonpoint

source poUutiori from cropland, wetlands. can also protect forest, wildlife and recreational resources {Leventba,l 1990).,

Heimlich (1989) conducted a survey to evaluate the value of waterfowl production the Prairie Pothole region. Waterfowl habitat values were estimated to be between $175 and $292 per acre per year in 1988 dollars. Gupta and Foster (197'6) estimated the economic value of preserving freshwater wetlands in·. Massachusetts. Annual benefits . per acre of wetlands for wildlife production, visual .. cultural (open space, recreation, and aesthetics), water supply and flood control were $3,5, $135j $1400 and $40, respectively:

Raphael and Jaw0rski (1979) estimated the gross annual return from Michigan's 105 ,855 acres of coa,stal wetlands~ Benefits of · sport fishing; non.-consumptive recreation, waterfowl hunting, trapping of fur bearers and commercial fishing were $286, $138:24, $31.23, $30.44 and $3.78 per wetland acre per year, respectively. Smith (1992) estimated losses from converting wetland to cropland in terms of the percentage of the annual value of the crops produced after conversion. Losses ranged from 0.36% in coastal areas to l.54% in nontidal areas.

Analytical· Procedures

The analytical procedures consist of using ARC/INFO GIS to identify hydric cropland suitable for conversion to wetlands (site assessment) and economic ·procedures to estimate the net social and private benefits of converting hydric cropland to wetlarids (economic assessment). Details of each step are discussed below.

Site Assessment

The study area is Linn and Livingston cou,nties located in north central Missouri. Economic activity in both counties is dominated by crop and livestock production. Considerable agricultural acreage in the area has been converted from pasture to cropland which has increased the area's vulnerability to soil erosion and agrochemical contamination of surface and ground water. Since soil, land cover and land ownership data for the study area are not available in digital format and soil type is the major determinant of wetland . suitability, the GIS is based primarily ·on the soils. database. The latest soil survey for Livingston county was iss(led in December 1956 and the most recent soil survey for Linn county· in July 1990. Soils in the study area vary widely in.· texture, natural drainage and other characteristics. Broader ridge tops in the uplands are formed in loess. Upland side slops .and narrow ridges are -formed in loess over glacial till or entirely in glacial till. Nearly all of the upland soils. are wellsuited for cultivation. Soils on moderately and steeply sloped land have high erosion rates. Soils on the terraces. and floodplains are well suited for cultivation, although drainage is a problem .. ·

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. Development of the sQjl digi® ®¢ ass~iated tabulat databases for· the two counties: · · · require(:l digitization of44,743 arcs. whi¢h were then used to desc;;ribe 1$~062 s~paratce

soil• p.olygons, .. Tabular databases were created· for· eactt of the two soil sul"Veys~ · Linn•··. ·. . co·unty. has 25 soil types and Livingst<>n. county has 31 soil types. . For each soil type,

· extracts from their respeetive .s<;>il survey were tabulated an<,i>ertcoded to alfow .the . ·. creation of eight a~sociated: databases which were linked to the spatial 'file using a. soil

·· · ·· type code; Database· names .and ass9¢iat~ attributes areJisted below-: ·.· · · · · · . . . -. ·,, . -· .

· . Land, Cap~b1li1;y and C~op Yield .·· . . · - Land capability :class

... Com yield (bu/acte) - Soybean (bu/acre) · - Sorghum (b\l/acte)

· - Wheat (bu/acre) - Orchard grass - Alfalfa (tons/aereJ

Physical and Chemical Praperties ·• .. ·'."Depth - Percent clay · - Moist bulk density · .. Permeability .. · · - Available ·water capacity·· · -pH - Erosion factor I< - Erosion, factor T

Engineering Index Properties q

.. Fragment size · ... Percent passing sieve.4 . . - Percent passing sieve 10 ··

.. Percent passing sieve 40 -.t>ercent,passing sieve 200

· ' .. Liquid limit

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- Orchard grass ~ Clover (tons/acre) · ~ Orchard grass' (tons/acre) - Alfalfa. hay (tonsh1cre) . -Switch grass (animat·unit months) - Fescue .(animal unit months).

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Soil and Water· Features . - Hydrologic group

· - Flooding. frequenGy .. Flooding duration · . .. Flooding montns . - High water table· depth - High water table kind

. - High water table month~

Wildlife Habitat . - Grain. and seed crops .. Grasses and legumes· -·Wild herbaceou~ plants ~. Hardwood trees . ... Conifer6us plants

•· - Wetland plants · '" Shallow . water. areas . •Open Ianct/··wildlife

· .. Woodland. wildlife -Wetland· wildlife··

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Woodland Management, Building · Development, Sanitary Facilities, and Prime Farmland - Erosion hazwd - Equ1pment limitation

- Limitations to shallow excavations· -Limitations. to sewage lagoon·. areas - Prime farmland

\Vater l\tlanagement

- Limitations for pond reservoir areas - Limitations fot embankments; dikes; and levees - ·Features affecting··. draim1ge ·- Features affectl.ngirrigatiOn

Features affecting terraces and diversions - Features affecting. grass waterways

The· following screening process was used to identify hydric cropland sites in the study area with high potential for conversion to wetlands. Overall suitability of sites was based on three criteria: soil, size and shape. The soil criterion evaluates a site in terms.· of soil attributes that favor the construction, maintenance and productivity of a wetland. Six indices were used to ev<tluate and rank soil suitability. of a site: permeabilicy, moist bulk density, overall engineering properties, flooding properties, water table characteristics and wildlife habitat potential. The physical-chemical index accounted for moist bulk density and permeapility and the engineering ·index was based on the percent passing sieve 200 which was then ranked. Flooding was evaluated by an index that is the product of flooding frequency and flood duration. A water table index was calculated. by multiplying the depth to water table and the kinct of water table. A .

· wildlife habitat index was assessed through the evaluation and · summation of the wetland associated potential for each· type. of soil.

Each index had a possible range of-99 to 99. An overallsoils index was created by subtracting the sum of those indices in which a low value was desirable for wetland development from the sum of the indices in which. a high value favored wetland development. Simple summation and subtraction of indices implies that the indices have equal weight. The overall soils index has a range of -294 to 294. Those cropland parcels that had a soilsindex of 100 or greater were deemed favorable for wetland development.

Marty of the hydric cropland sites were considered too small. to make an effective · wetland and/or too difficult to secure.because of multiple ownership. Sites smaller than

12.3 acres (5 hectares) were elirninated because they are considered too small for. wetland development (Young 1992)~ .... Constructed wetlands on private. land range in size from.·LO. to30o·a.cres with anaverage size of 25 acres .. The likelihood that the landowners for all portiqns of a potential wetland site would agree to convert their portions is expected to decrease as the number of owners increases. Therefore, a shape factor. was used to eliminate long narrow sires along .creeks a.no· rivers which ate likely

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. 1\ppU~atiort <l(,the. soil's~ size and shape. criteria sho~ea that 152 site,s caverirtg 4,$37 acres w~re· suita;bl¢ for .wetland. development in . L.inn Cminty; •Th~ ·average ·size of thes.e •·•

· sites is 30 a(;res. ·. Lattd covet/bwne:rship coverag~s were assembled and digitiz~d intQ• . · the G!S. Coverages were complied from plat maps. and ~exial slides. Land cover indicates that 74.3% of th~ lartd area for the sites is. in. cropland, 10A% is )11 ..

grass/pasture, 8.2%' is;.in·fotest.artd.·7.2%isinoth;c:;t laridt:Js~s~ ta(td ownership shows that 20% of the sites have one owner, 38% have two owners; 20% had three owners, 14% had fourowners·and8% have five or more owners... . .· ...

Economie Assessment .

Net benefits {benefits minus costs). of converting hydric ctopland to . wetlapd . were . estimated on a pet acte basis for suitable sites in Linn and I..ivingstoo. counties~ Net

· private (landowner) benefits of converting cropland to wetland equal the net income generated by the we.tland, plus annual rental payments. received on the wetland, plus cost sharing payments on wetland construction costs, minus the loss in net agricultural income from conversioth minus c.onstruction and maintenance costS on the wetland; Net value of activities/functions of wetlands that cannot be captured by th.e landowner (e.g., downstream flood control benefits) are excluded from private wetland benefits. The· landowner would receive ren~ and cost sharing payment$ .if the wetland is enrollecUn the.WRP or .a similar program. · · ·

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Net social benefits of co{lverting ~topland to wetland equal the gross value of all · ·. activities/functions supported by the .wetland minus the loss ill net ·agricultural. inc-0me,

minus consttu1Ztion and; maintenance costs on the wetland~ . · Rental and <cost sharing payments are not included in net sociaj •benefits because they C0t1Stitute t:ransfer . payments. Wetland activities and functions whose values should be included in social benefits include·· reduction it1 erosicm, .nonpoint source pollution and flooding, and

· enhancement in fish and Wildlife babitat, natural ·products, recreation and aesttietics (EPA 1988).

. Losses in net agricultural income or n~t returns ·from conve:rsion of ¢ropland to wetland . equal gross renims from> crop production minus costs of producing . the crop; Since about 10 percent of hydric cropland in the U.S. meets the USDA d"¢fin:ition for prime farmland, hydric cropland usually. generate$ telatively high net returns to landowners (Heimlich 1989): · Gross returns per acre for a crop equa.l 'crop yield times market price

. ·for the crop~ ·crop yields fot the sous: 011 potential wed.and sites identified.with the GIS .. · · · · ... are~ similar for Linn and Livingston counties; · Five-year averag~ crop prices . for· the .. ·

· 1986~90 period wer~ used to. calculate gross crop returns; .namely:· $2.13, $2.95 and·· . · · $S~s1 per bushel for corn, wheat and,· soybea~s, respectively {Missouri Department of.·.·. ·•Agriculture 1991)". · .. Per acte: cdStS .. of. production are based: on 1990' Management Information :Records (l\.UR) for'Linn andLtvingston counties· (Ehlmanri, 1992): Crop . net'retums to land and managernentfe1 ~ke typi~aL ·. p rttatiettin the study area (corn .~

.·.'\1¥hest.mybsan3' were·$23.65,·.$J3,79:and $55~99 per. acre in ·Livingston county and· .. . . . ,. . t ' . . .. . . . ,., . .

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$15.99, $12.91 arid $60~06 per acre in Linn county for corn; wheat and soybfus, . · . respectively .. • in 1990 .. Prl. "·Tk.£.- -~f:cd_~-s~-·~~.- ~~>I~ . . ·~ ~·au.-e.~ ~:il.15.<M.u...._~~~~ 4'1.'1';£..S ... i.... lil/t~ ed~'· The lossin net agricultural income from conversion of cropland to wetland over a finite · time horizon of T years (L 1) ·and over an infinite time horizon (L2) are as follows: .

Lt== E[(l/n).t(PiYi-Ci)Jl(l+r)t t i

L2 = (1/m)I(PiYi-Ci) = (1/mZNRi 1 1

Per acre construction and maintenance costS for wetlands are:

CM = CC + EMC/(l +r)t t

where L = present value of loss in net agricultural income; Pi = price of the ith crop in the rotation; Yi = yield per acre for. the ith crop in the rotation; Ci == per acre cost of production of the ith crop in the rotation; NRi == net return from production of the ith crop; n = number of crops in crop rotation; CM = construction cost plus present value of maintenance cost; CC = construction cost· . . . . . ' MC == mainte-rtance cost; r = discount rate ( 10% ); i = crop index (i = 1, ... , n); t == time index (t= 1, .. .,T); and T = length of time horizon (years). .

Under the WRP, the government makes rental payments to landowners whose bids are accepted. Rental payments cannot exceed the maximum bid levels established by the government. From the landowners viewpoint, the rental payment offsets the loss in net crop retums from converting cropland to wetland.

Construction costs are the -costs for establishment or installation of the wetland which . .

include earth work for dikes and levees, water control structures and grass seeding for erosion control. Average construction costs vary from $50 per acre to $200 per acre for wetland construction on private land in .Missouri (Young 1992}; Most constructed wetlands .are at the high end of this cost range. In the WRP, landowners receive cost­share payments from the Agricultural Stabilization and Conservation Service equal to 75 % of construction costs. In addition, MDC pays the remaining 25 % of construction . costs. Wetland maintenance costs for mowing levees and keeping vegetation growing are assumed to be $5 per acre per year (Young 1992). . .

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Lack of data and information precluded estimation of many of the social benefits of converting cropland to wetland; The only benefits included here are those associated with waterfowl hunting. This simplification should not unduly distort the social benefits because waterfowl hunting is likely to be a major benefit of wetlands in the study area due to its proximity to Swan Lake National Wildlife Refuge and Fountain Grove Wildlife Area.

A landowner can lease the hunting rights to a private wetland in exchange for an annual fee. Byford (1990) e.stimated that the annual fee for duck hunting leases ranges from $30 to $300 per acre. Costs of managing wetlands for waterfowl hunting (installing nesting boxes, fences and dikes and planting feed patches) range between $28.91 and $40. 71 per acre in 1990 dollars. Therefore, net income to landowners from waterfowl leases is expected to be between $1.09 and $259.29 per acre in 1990 dollars.

In calculating the net private and social benefits of converting cropland to wetland, it is assumed that potential wetland sites are enrolled in the WRP, the rental payment received by the landowner equals the present value of the loss in net agricultural income from conversion, no cash crop is produced on the wetland, the entire area converted to wetlands is leased for hunting, and wetland construction costs are fully subsidized by the WRP and the MDC. In the pilot WRP, the rental payment is in the form of a periodic or lump•sum payment. Per acre net social and private net benefits of wetland development were determined for four time horizons: 25 years, 50 years, 75 years and infinite. An infinite time horizon corresponds to a permanent easement. Table 1 summarizes the range of annual benefits and costs of restoring hydric cropland sits to wetlands in Linn and Livingston counties.

Table 1. Annual Benefits and Costs of Wetland Construction in Missouri, 1990 dollars per acre.

Benefits Costs

Net loss in agricultural income Linn Livingston

Construction Maintenance

High Low

259.29

31.15 29.65

200.00 5.00

1.09

31.15 29.65 50.00 5.00

Benefits and costs of cropland conversion to wetland varies from parcel to parcel. It was not feasible to estimate benefits and costs for each suitable site identified with the

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GIS because of data limitations~ Therefore, net private and net social benefits of conversion were evaluated using the range of benefits and costs given in Table 1. Four cases were evaluated:

Case 1: High,benefits and high·costs Case 2: High benefits and low costs._ Case3: Low benefits and high costs: Case 4: Low benefits and low costs -

High benefits/costs refer to high waterfowl benefits and high conversion costs. benefits/costs correspond to low waterfowl benefits and low . conversion costs. social benefits are given in Table- 2 ~ ·

Table 2. Net Social Benefits of Cropland Conversion-to Wetlands, Linn and Livingston counties, Missouri, 1990 dollars per acre

County

Linn L.ivingston

Linn Livingston

Linn Livingston

Linn-Livingston

Annual 25-year - so~year · 75".'y~ar -Permanent -

23.14 24.09

Hi~h B~nefits-High Costs

1825.49 1834.07

2012.44 2021.84

2029.69 2039.17

High Benefits-Low_ Costs

173.14 1975 ..49 174.09 1984.10

2162.44 2179.69 2171.84 2189.17

Low_ Benefits-High Costs

-235.06 -518.20 -547.57 -550.28 -233.56 -504.63 -532.74 -535.34

Low Benefits:-Low Costs

-85.06 ··"368.20 -397.57 -400.28 -84.11 -359.59 -388.16 - -390.80

2031.45 2040.93

2181.45 2190.93

-550.55 -535.60

-400:55 :-391.07

Low Net

Positive (nega~ve) net social benefits imply that conversion of hydric cropland to wetlands is socially efficient (inefficient). Net social benefits per acre are positive in both counties- when benefits and costs are high, and-· when benefits are high and costs . are low. As expected, net social benefits are highest when benefits are high and costs· are low. Net social benefits are negative in both· counties when benefits are low and

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costs are high and when benefits and costs are both low~ Consideration of wetland benefits other than hunting could result in positive net social benefits even in these two cases. Linn county has smaller .net social benefits per acre than Livingston county because net returns per acre of cropland are higher in Linn county than in Livingston county.

Choice of time horizon influences the efficiency of wetland· conversion. Compared to annual net benefits, net social benefits for 25.:..year, · 50-year, 75-year and permanent wetland easements are 77. 88 % , 85. 95 % , 86. 70 % and 86. Tl% higher in Linn County and 73. 64 % , 81. 28 % , 81. 98 % and 82. 05 % higher in Livingston County, respectively. Hence, net benefits of conversion increase· with the time horizon but at a decreasing rate.

Because it is assumed that rental payments equal the loss in net agricultural income and that wetland construction costs equal cost sharing payments, the only distinction between net landowner benefits is whether hunting benefits are high or low. Because of these assumptions, there is no difference between net landowner benefits per acre in Linn and Livingston counties, Net landowner benefits for high and low hunting benefits are displayed m Table 3. Positive net landowner benefits

Table 3. Net Landowner Benefits of Cropland Conversion· to. Wetlands in Linn and Livingston counties, Missouri, 1990 dollars per acre

Annual 25-year SO-year 75-year Permanent

High Benefits

254.29 2308.20 2521.24 2540.90 2542.90

Low Benefits

-3.91 -35.49 -38. 76 -39.07 -39.10

indicate it is economically feasible for a landowner to convert hydric cropland to wetlands. Negative net landowner benefits indicate unfeasibility. Results show that if a landowner receives high waterfowl hunting benefits, enrolls the constructed wetland in the WRP, and receives full cost sharing on wetland construction, then conversion is economically feasible. However, if the landowner can only achieve low hunting benefits on the wetland, then conversion would not be economically feasible. In summary, under the assumptions of this analysis, it is economically feasible for a landowner to convert hydric cropland to. a wetland provided the revenue from waterfowl hunting leases on the wetland exceeds maintenance costs for the wetland.

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· · · . Conclusions . .

This study ·estimates the net social · a~d private(landowner} benefits of con.verting . ·· .. hydric cropland to wetlands in two Missouri counties. . 'fo. acco.unt for uncertainty in

the r¢v~nue which landowriets receive: front waterfOwt hunting on wetlands, and the costs of wetland construction and maintenance, economiC feasibilicy:was evaluated for a ·

· .·· range of benefits and. costs. Of tbe four benefit..;cost cases used ·to eva,luate social · feasibility of c;::onversion, two· cases shQwed positive net sodal benefits· and two cases indicate negative· net social benefits. Of the two benefiH:ost cases used to evaluate tbe· private feasibility of conversion, het ptiva:te benefits were positive in one case ap.d

.. negative in the· otnet.• Positlve (ttegative) net benefits· imply .that conversion· is economically feasible (ttnfeasible), TherefOre,. the sociai and private economic

. feasibility. of conversion. are sensitive to the range· of benet1ts artd costs evaluated here. . . ·.

If the rental payment receivec;l by the landowner is greater than or equal to the loss in net agricultural income from conversion and· the cost of wetland constrtictiort is fully subsidized, then the landowner would gain by converting hydtjc cropland to wetland

.. provided the income. earned from the wetland equals or exceeds the maintenance cost on the wetlanq.

The eeonornic assessment conducted here can be improved itr several ways~ First, an accounting snoulci. be made of tl'te other . economic artd ettvironmentai · benefits of · wetlands, such as flood control,· timber p1oduction, non,.e.ons1m1ptive recteaticm . ancl water q~ality protection. .Second, wetland construction and maintenance costs should. be determined based on- all locational factors including soil. type, slope, size:, ·shape and functi()n/purpose of the wetland. . Third. ·. site~tti-site vanability in crop yields, crop rotations and. production costs should be taken into account when estimatin,g the loss in netagricultural income from converting cropland towetland •. Fourth, the possibility of supporting both .wetl~d functions and commercial crop produ<;tion on wetland sites should be considered: · · ·

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References

Byford, Jam es· L. 1990. Assessing/Evaluating/Improving Your Potential from Wildlife. -In Conference Proce~ctings: Jncome Opportunities for the Private Landowner through Management of'. Natural Resources· and Recreational Access, William N. ·Grafton, Anthony Ferrise, Dale Colyer, Dennis K. Smith and James E~ Miller (ed .• ). West Virginia University Extension Service, Morgantown.

Carey, .Marc, Ralph Heimlich and Richard Brazee. 1990. A Permanent Wetland Reserve: Analysis of A New Approach to Wetland Protection. U.S. Department of Agriculture, Economic Research Service, Agriculture Information Bulletin No. 610.

Conservation Foundation. 1988. Protecting America's Wetlands: An Action Agenda. Final report of the. National Wetlands Policy Forum, Wash_ington, D.C.

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