pecuniary income will not be sufficient to induce the farmer to give up 

 conversion if nonpecuniary returns are large and positive. 



Another interesting omission in the article is adequate discussion of the 

 anomalous empirical finding that there are significant nonpecuniary returns to 

 participation in the U.S. Fish and Wildlife easement and fee title wetland 

 preservation programs. Daniel son and Leitch report the results of a survey of 

 Minnesota farmers that elicited their responses toward participation in various 

 wetland preservation programs. The average price at which they would sell land 

 to the Service in a fee title purchase was only $583 per acre in a region in 

 which the average market price of cropland was $736. Discussion of this point 

 would resolve a discrepancy between the theory and the data presented in this 

 paper. 



75. Heimlich, R.E. 1986. Economics of wetland conversion: farm programs and 

 income tax. National Wetlands Newsletter 8(4):7-10. 



The swampbuster provisions of the Food Security Act of 1985 attempt to slow 

 wetland conversion and drainage by farmers by denying Federal farm program 

 benefits to any farmers who drain and convert wetlands. Benefits are denied on 

 all cropland owned by the farmer, but the sanction is applicable only for years 

 when annual crops (or certain agricultural commodities such as hay) are actually 

 planted on the former wetland acres. The programs involved include commodity 

 price support and disaster payments, crop disaster insurance, and subsidized 

 loans. Heimlich considers the potential impact of the swampbuster legislation 

 and makes a brief assessment of the potential impact of pending Federal 

 legislation that would restrict tax code provisions that reduce the after tax 

 cost of wetland conversion by farmers. 



The author believes that the impact of swampbuster on wetlands loss will 

 be negligible despite the fact that the U.S. Fish and Wildlife Service estimates 

 that 85% of the wetlands loss in the postwar era is due to agricultural 

 conversion. There were 78.4 million remaining non-Federal wetlands in 1982; half 

 had no estimated yields for crops covered by swampbuster. Less than half of the 

 remaining 38.9 million acres would yield positive profits if converted to 

 cropland, and 15.9 million acres of wetlands would yield a positive short run 

 profit net of conversion costs if they were allowed to participate in Federal 

 programs. However, 13.9 million of these acres would not yield a positive short 

 run return to drainage investment if they were not allowed to participate in 

 the price support program. 



The sluggish farm economy of the mid-1980's retarded all farm investment 

 activity, including wetland drainage, by farmers. It was more profitable to 

 purchase or lease existing farmland than to drain wetlands for agricultural use. 

 Heimlich asserts that the income foregone from loss of Federal benefits is much 

 greater for the average farmer than the income gained from drainage. But this 

 is more than counterbalanced by the fact that crops that are likely to be grown 

 on converted wetlands (such as soybeans) are not heavily supported. Moreover, 

 the regions that have high conversion potential wetlands and areas where 

 remaining wetland conversion to farmland might be profitable have low Federal 

 farm program participation rates. 



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