Transitioning farm bill programs to a payment for ecosystem services approach
Heimlich, Ralph E.
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Farm bill programs currently provide a “pseudo-market” for conservation where a contract between the public and the government (the farm bill) is intermediated by the USDA. In this pseudo market, the USDA provides payments for management practices, which can lead to ecosystem service benefits. But, it does not currently pay directly for the ecosystem service benefits themselves. The goal of this presentation is to highlight considerations for USDA and private landowners (ranchers in particular) if USDA were to transition to a PES approach. I contrast the current system with a PES, and illustrate that significant differences might emerge in the size and character of the “markets” under each scenario. Many difficult questions would need to be addressed to determine how the profitability of a ranch would potentially be affected by a switch to a PES approach.