production costs in Nebraska. Thus, fixed costs due 

 to conversion can be relatively unimportant, adding 

 only 6 percent to irrigated corn production costs in 

 Nebraska, or overwhelming, almost tripling produc- 

 tion costs for soybeans in North Carolina. Where ■ 

 conversion costs are high, the relatively small im- 

 pact of farm programs on revenues is probably less 

 important to the conversion decision than in situa- 

 tions where conversions costs are small. Therefore, 

 denying benefits may be more effective on wetlands 

 that are easy to convert to cropland. 



Economics of Conversion for Hypothetical Farms 



The impact of swampbuster sanctions does not 

 hinge on the economic feasibility of converting 



wetlands with or without price supports for crops 

 grown on the converted wetlands. An operator who 

 plants any annual crop on converted wetlands loses 

 eligibility for farm program benefits on all crops 

 grown in the entire operation. The cost to the 

 operator of the swampbuster sanction thus depends 

 on the amount of program benefits received on the 

 initial acreage operated, not the benefits that might 

 have been received for crops grown on the wetland 

 portion. 



An analysis of hypothetical farms from areas where 

 wetland has been converted can show the impor- 

 tance of loss of benefits as well as tax subsidies. 

 Tradeoffs between expanded production without 

 benefits and foregone expansion with continued 



N/A = Not applicable. 



'Based on 1982 baseline of 100. 



13 



