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Economics of Soil Health

A Soil Renaissance workshop Sept. 21-22, 2015, brought more than 100 economists, researchers and practitioners together to discuss the economics of soil health. The multidisciplinary workshop was a collaboration of Farm Foundation, NFP and USDA’s Economic Research Service.

While much attention is being directed to soil health, little work has been done on the economics of soil and soil health.  This workshop laid the foundation for an ongoing program of research on the economics of soil health. The participants—from government, foundations, non-profits, academia and the private sector—gathered to learn about and discuss the science and economics of soil health. Through 14 presentations, 5 posters, and 3 group discussion sessions, the workshop explored the economics of soil health.

Highlights of the workshop:

  • Opening remarks by Ann Bartuska. USDA Deputy Under Secretary for Research, Education and Economics, underscored the need for setting an interdisciplinary and collaborative research agenda.
  • Presentations, posters, and a demonstration of a Cover Crop Decision Tool developed by economists at USDA’s Natural Resources Conservation Service provided participants with details on cutting-edge research and data related to soil health.
  • The small and large group discussions, along with an evening reception, fostered lively conversations about the public and private benefits of soil health, challenges for research on the economics of soil health, barriers to adoption of soil health practices, and the relationship between soil health and public policy.

Key takeaways from the workshop:
The economics perspective on soil health focuses on:

  • The need for soil health indicators and proxies which are relevant to farmers and easy to measure.
  • The distinction between public and private benefits of soil health.
  • The view of soil health as an intermediate good or a determinant of other primary goods.
  • Farmer decisions and adoption of practices that relate to soil health.
  • Profit as the primary (but not only) driver of farmer decision making.
  • Policy variables that can influence farmer decisions.

The soil science perspective on soil health focuses on:

  • The multiple dimensions of soil health, including the physical, biological and chemical properties of soils, and soil ecology.
  • Developing more refined indices that combine multiple soil health metrics.
  • Regional as well as within-field variation in the characteristics of healthy soils across soil types and climate.
  • Relationships between soil health indicators and yield or yield variability.

The policy perspective on soil health focuses on:

  • What the farmer needs to know to make decisions and the costs of information (e.g. soil testing)
  • Whether a “soil health” lens motivates the farmer to improve management.
  • The distinction between practices and management systems.
  • The need for an estimated value of the public and private benefits of producing and maintaining healthy soils (do they increase yields, lower input costs, and/or decrease risk), while recognizing non-monetary benefits like pride in farming.
  •  Estimating impacts of government and non-governmental programs and policies (such as research, outreach and extension, and financial assistance) on soil health.

Going forward, economists and soil scientists can employ diverse research methods to tackle soil health research questions by:

  • Combining survey data with soil sampling data to research how practices change soils over time, and the economics of practice adoption on the farm.
  • Using “big data” from satellite imagery or the private sector to investigate spatial variability in practice adoption, and to examine land use, crop choice, and soil health decisions at small scales.
  • Combining program-level data with spatial and soils data to quantify impacts of changes in soil health on yield, yield variability, and other agronomic or economic outcomes.
  • Employing behavioral and experimental economics methods to research the impact of information and incentives on adoption of soil health practices.
  • Developing detailed case studies that emphasize the net benefits to the farmer and to the public of adopting particular soil health practices or systems.

As authors gave permission, presentations from the workshop are shared here:

Session 1: Economics of Soil Health
Economics of Soil Health: A Conceptual Framework
Erik Lichtenberg, University of Maryland

Economics of Soil Health: Existing Research
Rick Farnsworth, USDA Natural Resources Conservation Service
Conservation Practice Adoption in U.S. Agriculture: What can we learn from ARMS?
Roger Claassen, USDA Economic Research Service

Session 2: Science of Soil Health, Part 1
Jerry Hatfield, USDA Agricultural Research Service

Bianca Moebius-Clune, USDA Natural Resources Conservation Service

Session 3: Science of Soil Health, Part 2
Data Needs for Economic Analysis/Empirical Challenges Wally Tyner, Purdue University
Integrated Agricultural Landscapes through Precision Business Planning
David Muth, AgSolver

Conservation Effects Assessment Project Cropland Survey & Modeling System
Jay Atwood, USDA Natural Resources Conservation Service

Session 4: Soil Health and Public Policy
Crop Insurance and Soil Health
Barry Barnett, Mississippi State University

U.S. Farm Programs, Conservation & Soil Health
Katina Hanson, U.S. Farm Service Agency

Applications of High Resolution Soil Data in Crop Insurance Rating and Yield Distribution Estimation
Josh Woodard, Cornell University

Session 5: Valuing Soil–Almost Three
Jim Moseley, AGree

Session 6: What do we want to do with the data? What are the priority research topics?
Steven Wallendar, USDA Economic Research Service

The Food and Agriculture Organization of the United Nations designated 2015 the “International Year of Soils.” Farm Foundation, in collaboration with the Samuel Roberts Noble Foundation, is leading the Soil Renaissance, a multi-year endeavor to focus attention on the role of healthy soils in feeding a growing world while maintaining and protecting natural resources.  The economics of soil health is one pillar of the Soil Renaissance, along with measurement, research and education. For updates on the work, visit the Soil Renaissance website.

USDA showcased the importance of soils to food security and maintaining of critical ecosystems as part of its IYS kickoff events in January. Soil health is also a major focus of USDA’s Natural Resources Conservation Service through its program, Unlocking the Secrets in the Soil. This focus on soil health emphasizes how soil as a complex, living ecosystem supports agricultural production and provides public and private ecosystem services. Yet little work has been done on the economics of soil and soil health.

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