The Economics of Soil Health

When farmers make decisions about soil health practices, they consider whether a practice will improve crop yields or reduce input costs. However, improving the soil is a long-term process so it’s a challenge to put a dollar value on it.

Wally Tyner is a professor of ag economics at Purdue University. He says sometimes you can quantify how conservation measures will reduce operational costs.

"For example, if a farmer uses a cover crop that has a mixture of legumes in it, that’s going to add nitrogen to the soil so they can reduce their nitrogen input. If they do no-till, they’re going to have less passage through the field, that reduces their cultivation cost," says Tyner.

Sounds easy enough, but it’s not that cut-and-dried. Many farmers use no-till, however he says the adoption rate of cover crops is still pretty low. One reason is because we don’t have convincing scientifically-validated evidence that cover crops pay.

"Part of the issue also is, there’s two kinds of ‘they pay’. One is they pay on the farm, meaning that the farmer sees it in his or her bottom line. The other is that cover crops and no-till reduce soil erosion, they reduce nitrate leakage, and those are societal benefits," he says. "We need to come up with ways that farmers who produce those societal benefits get compensated for those and we haven’t done that yet."