At 1982 season-average prices, almost all private 

 palustrine wetlands for which estimated yields are 

 available would have returned sufficient revenue to 

 cover variable costs of production. About 4.4 

 million acres of these wetlands were used as 

 cropland in 1982, while retaining their status as 

 palustrine wetlands. Thus, 38 million acres could 

 have been converted to cropland, depending on 

 clearing and drainage costs and the availability of 

 equally or more attractive potential cropland from 

 nonwetland sources. This estimate is far larger than 

 the 5.1 million acres of high- and medium-potential 

 cropland inventoried by SCS and reported in table 6. 

 However, the difference is not surprising since field 

 assessments of cropland potential included in- 

 formation on size, accessibility, and ownership fac- 

 tors affecting conversion as well as drainage 

 feasibility and expected yield. The effect of 

 regulatory programs administered by State and 

 Federal agencies can also reduce the economic 

 feasibility of some wetland conversions. Some 21.6 

 million acres of wetlands in unfavorable land 

 capability classes^ VII and VIII were not rated for 

 conversion potential, although more than 2.8 

 million acres of existing cropland are in these 

 classes, and drainage would undoubtedly improve 

 this land's agricultural capability. Also, lower 

 assessments of wetland crop potential may, con- 

 sciously or unconsciously, reflect USDA's policy 

 restricting financial and technical assistance for 

 drainage to palustrine wetlands in types 1 and 2. 



each of the eight crops shown in the second col- 

 umn of table 9. If all producers were to receive 

 deficiency payments, from 25 to 115 percent more 

 acreage would have returns exceeding variable 

 costs. The exception is soybeans, for which defi- 

 ciency payments are not available. Since the ex- 

 pected loan price of $4.65 per bushel is lower than 

 the expected season-average price, slightly fewer 

 acres of soybeans could earn shortrun returns 

 above variable costs at the loan price. Corn and 

 oats would have the largest increases in acreage 

 under price supports compared with season-average 

 prices. For corn, the 7.2 million-acre increase is 62 

 percent of corn acreage that would earn shortrun 

 returns above variable costs without price supports. 



Price supports provide an incentive to bring 

 wetlands into production. Feasible acreage without 

 price supports ranges from 46 to 80 percent of 

 acreage that could earn shortrun profits without 

 price supports. However, the costs of conversion 

 and the fixed costs which must be covered for 

 longrun profitability are ignored. The additional 

 revenue provided by deficiency payments is not 

 likely to be sufficient to offset these costs. For soy- 

 beans, probably the most important crop produced 

 on converted wetlands, price supports under CCC 

 loan operations are not likely to rise above market 

 prices, providing no incentive for wetland conver- 

 sion beyond their role in reducing producer risk. 



At expected season-average prices, returns would 

 cover variable costs of production for acreages of 



The land capability class system rates land's suitability for 

 agricultural production. 



Table 9 — Remaining private palustrine wetlands 

 feasible for production of program crops under expected 

 prices, 1986-91 



na = Not available since some acres have estimated yields for 

 more than one crop. 'Detail does not add to total because 

 some acres have estimated yields for more than one crop. 



Source: 1982 National Resources Inventory, USDA Soil Conser- 

 vation Service. 



Conversion Costs. The preceding analysis is both 

 short run and applies at the margin. That is, we 

 made no attempt to take account of the costs of 



Rgun 5 



Supply response curve on wetlands 

 for soybeans, 1982 



Dollars per bushel 



10 



4 



Source: {S^l 



8 12 16 



Million acres 



20 



24 



28 



11 



