converting the wetland, or the costs of starting a 

 farm by converting large tracts of wetland as the 

 principal cropland in the enterprise. These factors 

 are less important in an area such as the prairie 

 pothole region, where isolated wetlands surrounded 

 by existing cropland are relatively inexpensive to 

 convert. Where large tracts are converted or where 

 the costs of conversion are high, the short-term ' 

 economic feasibility of cropping the marginal 

 wetland acre matters less than the costs of 

 conversion. 



High costs of converting land to crop production 

 are probably the principal barrier to conversion of 

 most remaining wetlands. In a Minnesota survey of 

 potential cropland owners, high cost was the most 

 important obstacle to conversion listed by respond- 

 ents (34). Conversion costs affect the financial 

 feasibility of wetland conversion because they can 

 be relatively large and are incurred at the begin- 

 ning of land development, before offsetting 

 revenues begin. Such costs are large enough to 

 affect the economic feasibility of conversion if the 

 sum of after-tax annualized conversion cost and 

 acquisition cost exceeds the margin between 

 variable production costs and gross revenues from 

 crops (34). 



Despite the importance of conversion costs, 

 relatively little systematic information exists on a 

 nationwide basis. The 1983 farm production expend- 

 iture survey (FPES) gathered data on new con- 

 struction expenses for land clearing, surface and 

 subsurface drainage, leveling, and other land im- 

 provements from a national sample of farm 

 operators (10). Clearing expenses averaged $80 per 

 acre, ranging from $42 in the Southern Plains to 

 $267 in the Northeast. Drainage expenditures 

 averaged $101 per acre, ranging from $21 in the 

 Delta to $295 in the Southeast. However, since it is 

 not possible to separate wetland conversions from 

 clearing and drainage on nonwetland, these data 

 probably understate the costs of clearing and drain- 

 ing wetlands. Follow-on surveys to the 1978 USDA 

 landownership survey gathered data on clearing 

 and drainage investments undertaken between 1975 

 and 1977 (23, 24). Average clearing and drainage 

 costs were $175 and $95 per acre, respectively, but 

 these suffer from the same flaw as the FPES data. 



Economic studies of wetland conversion in several 

 farming areas where loss of wetlands has been a 

 concern are summarized in table 10. These studies 

 are useful chiefly for revealing the wide variation 

 in activities necessary to convert wetlands in dif- 

 ferent areas, resulting in widely varying conversion 

 costs. Conversion of pocosin wetlands in North 



Carolina requires constructing drainage canals and 

 pumping stations for outlets, as well as V-ditches to 

 drain the fields. Clearing the forest and scrub ^ 



vegetation requires heavy bulldozing, and removing 

 roots and fallen logs takes several passes with 

 custom-built root rakes. Newly cleared and drained 

 pocosin land is organic and acid, requiring heavy 

 liming and fertilizing to balance pH and restore 

 trace minerals, and must be worked to condition 

 the soil. Such conversions cost $1,000 to $1,500 per 

 acre, even for large operations that can fully realize 

 economies of scale. 



In contrast, converting prairie pothole wetlands 

 usually requires only drainage ditches. Costs are 

 estimated at only $150 to $800 per acre, and can be 

 as low as $14 per acre where operators do most of 

 the work with their own machinery (22). Conver- 

 sion of bottomland hardwood swamps in the Lower 

 Mississippi superficially resembles conversion in 

 the North Carolina pocosins. However, drainage 

 outlets usually have been provided by public invest- 

 ment in channelization and flood-control projects, 

 eliminating the largest part of drainage expense 

 (44). Clearing and root removal operations are 

 either not as extensive or not done to the degree 

 seen in North Carolina, resulting in lower land 

 development costs. Soil amendment, apart from 

 ordinary fertilization and liming included in crop , 



production costs, is apparently not required (18). v. 



Consequently, conversion costs in this area are only 

 $150 to $225 per acre, about 10 to 20 percent as 

 high as in North Carolina and less expensive than 

 some drainage in the prairie pothole area. 



Converting land for crop production in the Rain- 

 water basin and Sandhill areas of Nebraska is 

 primarily a byproduct of irrigation development, 

 which incidentally drains wetlands into reuse pits 

 or lowers groundwater levels through pumping (15). 

 Constructing reuse pits or dugouts and leveling for 

 center pivot irrigation systems costs between $120 

 and $600 per acre, but no clearing or other ex- 

 penses are incurred. 



Amortized over 20 years at 10-percent interest, 

 these conversion investments imply annual costs 

 ranging from less than $20 per acre for ditch 

 drainage of prairie pothole wetlands to $170 per 

 acre for complete conversion of North Carolina 

 pocosins (table 10). As a percentage of variable pro- 

 duction costs, these annualized costs range from 75 

 to 186 percent of corn and soybean costs in North 

 Carolina; from 15 to 150 percent of corn, soybean, 

 and wheat costs in Minnesota; from 25 to 35 per- # 



cent of soybean and wheat costs in Arkansas; and 

 from 6 to 69 percent of irrigated corn and soybean 



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