» 



mid-1970*s had relatively little remaining wetlands 

 with high or medium cropland potential in 1982 

 (fig. 4). Louisiana and Arkansas had only 144,000 

 and 121,000 acres of potentially convertible bot- 

 tomlands, a fraction of the 1.7 million acres each 

 lost earlier. There are similar but less dramatic dif- 

 ferences between wetlands lost to agriculture and 

 remaining wetlands with cropland potential in 

 Mississippi and North Carolina. Both Florida and 

 Minnesota had relatively high wetland losses 

 through the 1970's and still have more than 500,000 

 wetland acres with high and medium cropland 



Table 7— Conversion potential and effort required to 

 convert non-Federal palustrine wetlands, 1982 



• = Fewer than 100,000 acres. 



'Conversion requires action by several farms or a special 

 district. 



'Detail may not add to totals due to rounding. 



Source: 1982 National Resources Inventory, USDA Soil Conser- 

 vation Service. 



Figure 4 



Remaining wetiands with higli or medium 

 cropiand potentiai, 1982 



I 



Wetlands with high or 

 medium cropland potential 

 1.000 acres 



0-100 



100-200 



200-300 



300-500 



^^^B More than 500 

 Source (iv) 



^^ 



potential. Both Alabama and North Dakota had 

 small or no net losses of wetlands in the earlier 

 period and had 401,000 and 298,000 acres of high 

 and medium potential wetlands remaining in 1982. 



Economics of Wetland Conversion for 

 Agriculture 



Agricultural conversion of wetlands is analyzed in 

 two ways in this report. First, estimated crop yields 

 on remaining private palustrine wetlands are linked 

 with variable costs of crop production to estimate 

 commodity prices at which the farm operator 

 would just break even. Any wetland acre for which 

 the break-even price is smaller than the current 

 commodity price is a candidate for conversion, 

 since it is potentially profitable to bring into crop 

 production. In the long run, revenue from crop pro- 

 duction must be high enough to cover the cost of 

 converting the wetland, as well as other usual fixed 

 costs. Even if current prices are low, conversion 

 may take place if higher prices are expected. Con- 

 versely, high prices in a single year may not induce 

 conversion if prices are expected to drop. 



Second, hypothetical farm operations engaged in 

 wetland conversion are analyzed to show the im- 

 pact of swampbuster sanctions. The effects of both 

 price-support and income-tax subsidies are ex- 

 amined. A description of the role that price-support 

 programs and income tax provisions play in 

 wetland conversion for agriculture precedes the 

 analyses. 



Farm Programs, Income Taxes, and Wetland 

 Conversion 



Farm programs influence farmers' decisions to 

 plant by supporting prices and raising revenues, or 

 by subsidizing costs of production. Crop insurance 

 and disaster payments influence farmers' decisions 

 by reducing risk, which may raise expected 

 revenues if the premium subsidy is sufficiently 

 large. Farm price supports can make the difference 

 between profitable or unprofitable operation to the 

 extent that wetland areas developed for crop pro- 

 duction are economically marginal. If converted 

 wetlands are riskier to farm than other land that 

 could be converted to cropland, crop insurance and 

 disaster payments can reduce differences in the ex- 

 pected returns of these alternatives. The higher cost 

 of developing wetlands can be subsidized through 

 reduced-rate loans. Program effects analyzed here 

 are limited to deficiency payments, except for soy- 

 beans, which have only a loan rate; operating loan 

 subsidies, crop insurance, and disaster payments 

 were not analyzed (but see box). 



