Farmer Transaction Costs of Participating in Federal Conservation Programs: Magnitudes and Determinants

Laura McCann and Roger Claassen

Abstract

Transaction costs may be a barrier to participation in USDA conservation programs. Data on perceived barriers and transaction costs from the 2012 USDA Agricultural Resources Management Survey of soybean farmers were analyzed. Of farmers who had not applied for programs, almost a third agreed that applying for programs and documenting compliance (perceived transaction costs) were barriers to participation. The measured magnitudes of transaction costs of those who did apply varied by program but do not seem particularly onerous and are lower than in European studies. Regression analysis indicates that complexity of the program and the farming system may increase transaction costs. (JEL Q15, Q52)

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