SOIL HEALTH : BENEFITS AND CURRENT POLICY CHALLENGES AND OPPORTUNITIES

Soil health plays an important role in agricultural productivity, environmental resiliency, and ecosystem sustainability. Soil health is simultaneously remarkably easy and remarkably difficult to define. In the abstract, soil health is a straightforward concept: it is a measure of a soil’s ability to support life, withstand transient environmental stresses, and endure as a core component of a resilient ecosystem. John W. Doran, Soil Scientist and Timothy Parkin, Soil Microbiologist of United States Department Of Agriculture(in 1994) suggest defining soil quality as “the capacity of a soil to function within ecosystem boundaries to sustain biological productivity, maintain environmental quality, and promote plant and animal health.” However, the question of how to measure and quantify this inherently holistic concept has proven exceedingly difficult.

One approach to quantifying soil health has been to develop soil quality indices. These indices collapse multidimensional data about a soil’s physical, chemical, and biological characteristics into a single-dimensional measure of soil quality. The benefits of such indices are clear: they provide a single measure of soil health, thus allowing for direct comparison across different soils. However, there are several challenges to this approach. First, there are many ways to construct a single-dimensional index for soil health. As a result, different indices may rank a soil’s health differently relative to other soils, leading to conflicting conclusions. Second, single-dimensional indices do not provide helpful information about the most effective ways to improve a particular soil’s health. For instance, two separate soils may share the same score on a soil health index, but differ drastically in their characteristic.

Another approach to quantifying soil health has been to use a collection of soil health “indicators” that each measure particular component of soil health. This approach provides more specific information about a soil’s characteristics, but also makes it more difficult to use this information in other contexts. Furthermore, many soil indicators may be difficult to easily observe.

When thinking about how to define soil health, a useful parallel is that of human health. The concept of a “healthy” person is easy to grasp, but difficult to quantify in a single number. Similarly, medical professionals are able to observe myriad components of human health ranging from blood pressure all the way to gastrointestinal bacteria levels. A truly complete list of all health measures is not only overwhelming, but also infeasible.

To balance the inherent complexities of soil health with the pragmatic goal of incorporating soil health measures into an economic or policy context, the most promising strategy is to identify a finite number of soil health indicators that capture the most prominent characteristics of soil health. These indicators can then be analyzed in a manageable multidimensional framework to provide meaningful information to farmers, ranchers, and policymakers.

Healthy soils increase plant growth, reduce erosion, prevent against pest and disease out-break, and can serve as a carbon sink. Physically, healthy soils have high aggregate stability, low bulk density, and high available water capacity. Chemically, healthy soils have neutral to slightly acidic pH, abundant and stable levels of phosphorus and potassium, adequate levels of micronutrients, and low salinity. Biologically, healthy soils have large amounts of organic matter, high levels of active carbon, adequate and stable levels of mineralizable nitrogen (having too-high levels of nitrates can decrease soil health), and a thriving microbial ecosystem.

One of the most challenging aspects of studying soil health is that the benefits of any one soil characteristic are highly dependent on the status of the other characteristics. For instance, micronutrient levels are meaningless in a soil with extremely low aggregate stability. Similarly, compaction may not be a very important issue when a soil is extremely saline. On top of that, any agronomic benefits of soil health will also be highly crop-dependent. A nitrogen-fixing crop like soybeans requires much less mineralizable nitrogen than does a nitrogen-leaching crop like corn.

One can, however, categorize the various benefits of soil health into several distinct groups: in one dimension, ecological/environmental benefits vs. agronomic benefits, and in another dimension, private benefits vs. external benefits. Ecological/environmental benefits are those that contribute to the resiliency of the area without directly increasing agricultural yield, while agronomic benefits are those that manifest specifically in increased yield. Private benefits are those that are realized by a farmer, while external benefits are realized by others. 

Many agricultural and land use practices are inherently dynamic in particular, crop rotation, tillage, and irrigation are all highly dependent on previous behaviour. Agricultural dynamics can be directly related to the underlying natural dynamics addressed above. For instance, the reason crop rotations are so agronomically and economically relevant is mostly due to their effects on nitrogen and pest cycles.

In permanent agricultural systems, crop rotations are probably the single most important dynamic management decision a farmer faces. Rotating crops allows for natural replenishment of nutrients (especially nitrogen), reduces the opportunity for large-scale pest outbreak, and allows farm systems to benefit from biological diversity over time. These rotations are highly relevant to agronomic and economic outcomes. The agronomic benefits of rotations almost always outweighs their opportunity costs.

Tillage is another dynamic management decision for farmers. Practices such as no-till or low-till increase soil organic matter and reduce erosion, but also can allow for increased weed growth and soil compaction. The academic and extension literatures highlight the wide heterogeneity of benefits and costs of different tillage practices across the countries in the world. In any optimized tillage practice, there is likely to be a multi-year strategy where a farmer tills more in some years than in others.

Finally, irrigation is yet another dynamic farming practice. While much of the countries are rain-fed, many areas rely on irrigation in agriculture. Recent advances in precision irrigation (such as the adoption of drip irrigation systems) have allowed farmers to use more water more  actively. The trade-off has been an increase in soil salinity since flood irrigation is often required to “flush out” salts from the soil. Also, in multi-year cycles of drought, management of irrigation water and soil moisture content is a long-term management problem rather than a current-growing-year problem. 

Currently, the primary policies concerning soil health are conservation practices. These practices involve things like crop rotations, cover cropping, nutrient management, and residue and tillage management; practices that each address different components of soil health as outlined in figure 1. Farmers can receive cost-sharing from the government (essentially a discount) to implement these practices on their farms.

One concern about the conservation practices is that they likely crowd-out private conservation. In other words, many farmers who engage in soil health practices would likely continue doing so (to a greater or lesser extent) even if the government of countries were not paying them to do so. If this is true, it means that the government is paying not to internalize an externality, but simply to support farmers. From a public finance perspective, this is inefficient.

Another concern about the conservation practices is that they are often not fine-tuned to a farmer’s particular situation. Payments for conservation practices generally do not change depending on the farmer’s location or surroundings, even though the public benefits of conservation vary widely across different locations. For instance, adopting integrated pest management on a farm surrounded mostly by prairie or forest provides fewer public benefits than adopting integrated pest management on a farm in the midst of widespread monoculture row-crops.

In addition to the policies, soil health is also impacted by market-based carbon sequestration policies such as the Regional Greenhouse Gas. Under such policies, farmers are seeking payments for adopting carbon-sequestering behaviours, including the forestation of their land. Scientist Haim et al. (2015) explore how these policies are affecting agricultural land use and soil carbon levels. They point out that regional carbon policies have often lead to “leakage,” where the conservation of carbon in one location is replaced by more carbon-intensive activities in other locations. This highlights the importance of a policy that operates at the same level as the problem it aims to solve. For a global pollutant like carbon, a global policy is the least distortionary.

As soil carbon has become a more and more important component of the global carbon conversation, a new set of tools and resources has emerged to quantify the potential role of soils in carbon sequestration. For instance, the COMET-Farm tool – an assessment produced by Natural Resources Conservation Service (NRCS) of United States Department Of Agriculture (USDA), and Colorado State University – allows farmers and ranchers to estimate their entire operation’s “carbon footprint” under different management scenarios. A particular benefit of COMET-Farm is that it leverages spatially specific data on soil type and climate patterns to provide spatially differentiated predictions.

Where soil health is concerned, there are several current policy challenges and opportunities. A particularly persistent question for policymakers is: what drives producers’ decisions to adopt more sustainable soil management practices? There are two broad ways to approach this question. The first is to approach behaviour adoption from an economic perspective. This approach focuses on the external conditions for agricultural production rather than individual producer attributes. In this view, behaviour adoption does not depend on the specific farmer and her individual perceptions. The second way to approach the question of adoption is to explore individual producers’ stated reasons for choosing to adopt or not to adopt new practices. While this approach is less generalizable from a theoretical perspective, it may offer helpful insights into the practical implementation of policy. Numerous studies have highlighted how less-educated, less professionally-connected, and less-experienced producers are less likely to adopt soil-conserving production practices. Furthermore, there are some behavioural and practical considerations that disseminators of information should keep in mind.

The single largest challenge to effective soil health policy is the lack of data explaining how soil health indicators, agricultural practices, and agricultural production all affect each other over time in all the myriad settings across the countries. Without clear and accessible data or expensive private solutions (such as “precision” nutrient management techniques), farmers and policymakers both are left relying on heuristics, best-guesses, and rules-of-thumb. There is thus a compelling case to be made that the government of countries more broadly should encourage and fund public research exploring the interconnections between soil health and agricultural productivity. Farmers need analytic models that allow them to use data respectively. Without well-established and understood ecological and agronomic relationships, increased access to soil health data is unhelpful. Put another way, public research should be pursued with the explicit goal of implementation. 

Another opportunity for soil health policy is a subsidy for agricultural renters to enact soil health production practices. In a situation where a farmer owns her own land, the maximization problem. However, a renter does not directly benefit from leaving a farm with healthy soils, and may not internalize the full dynamic benefits of maintaining healthy soils. There is an open question to whether this market failure requires public intervention or whether it ought to be resolved privately between the landowner and the renter. If salience of information is a large problem, public intervention may be justified.

The farmers who adopt soil conservation practices face lower premium rates for federal crop insurance. This proposal would encourage farmers to create more ecologically resilient farms that are less susceptible to systematic losses, thus aligning incentives. This is an intriguing proposal and worth considering. However, crop insurance is already a highly distorting policy that is used more as a subsidy to the agricultural sector than as an actuarily fair risk management strategy. 

The most basic opportunity for soil health policy is one that incentivizes farmers to learn about (1) how soil health dynamics affect production dynamics and vice-versa, and (2) the values of their own soil health indicators. For many farmers, it is hypothesised that search costs are perceived to be too high to incorporate holistic and multidimensional soil health information into their annual production decisions. Many farmers’ response to soil health issues is practised on a year-to-year basis rather than in a long-term dynamic framework: what is the proximate limiting factor to production? What is the immediate method to address that limiting factor? The government may have a role in providing farmers with the low-cost information necessary for them to successfully internalize their own dynamic benefits of managing soil health. Perhaps there is room for a free or highly-subsidized soil testing service or perhaps a more systematic and subsidized soil testing program run through state extension services. Farmers, just like any other producers, face meaningful trade-offs between the short-term and the long-term. To the extent that public policy can empower farmers to accurately quantify the long-term effects of their soil management decisions, the more optimal will be farmers’ behaviour.

While there is certainly room for policy to address the soil health issue, it is sceptical that the economic social optimum is drastically different from what we observe currently. The main benefits of healthy soils are almost certainly internal: farmers likely directly benefit from healthy soils more than society does and large farmers especially have much to gain from small improvements in farm-wide productivity. It is presumed that in many cases, the failure to adopt soil conservation practices is more or less an intentional decision where the farmer’s discount rate is sufficiently high to value short-term benefits over long-term benefits. Under traditional economic welfare analysis, this is only a problem if “society” has a lower discount rate than the farmers. 

Future research into soil health should fall into two broad categories: scientific and economic. On the scientific front, we need to know more about how different soil health indicators, production practices, agricultural inputs, and production yields affect each other over time. These relationships certainly vary depending on location, soil type, crop type, and climate. 

On the economic front, we need better estimates of farmers’ real and perceived search costs for soil health information. Is knowledge really a limiting factor to farmers making optimal decisions, or are farmers appropriately optimizing their (private) behaviour already? Also, further work on studying how public subsidies crowd out private conservation behaviours continues to be useful.

Lastly, there may be important scale relationships among the public benefits of soil health. Consider, for instance, erosion. Suppose all farms in county A operate with frequent tillage and high rates of erosion. Now suppose half of the farms in county B engage in no- or low-till farming. The effect of one farmer adopting no-till practices will probably have much higher public benefits in county B than in county A due to scale effect and complementarities over physical space. This is an important component of soil health conservation behaviours, and one that has been relatively unexplored in much of the current public discussion on the issue.

To the extent that there remain market failures in soil health, either through high search costs, positive externalities, or owner/renter misalignment incentives, there is a role for public policy. Policy should focus on making information about a farmer’s own soil’s health and its dynamic effects on production cheap and easily accessible. Policy should also focus on subsidizing the external benefits of soil health while attempting to avoid crowding out private conservation behaviour.

Behaviours that support long-term soil health contribute to sequestering atmospheric carbon, and have a role to play in climate policy. However, permanent carbon sequestration is only achievable with permanent changes to soil management or land use. Short-term policies aimed at carbon sequestration will only have short-term climate benefits.

It remains an open question how far the soil health status quo is from an economic social optimum. If farmers are in fact internalizing many of the potential benefits of soil health, their behaviour suggests a high discount rate on the future. If this is the case, and farmers’ discount rates do not systematically differ from society’s discount rate, then the current state of soil health may be very close to an economic equilibrium and our world will see a greater reduction in soil resources and soil health before a meaningful transition to ecological sustainability. On the other hand, if market failures are large enough, or if society’s discount rate is small enough, public policy could make a meaningful impact on farmer behaviour and the evolution of our soil resources.

The broad conclusions of this strand of literature are that in order to adopt soil-conserving practices, farmers /producers must (1) perceive negative outcomes from soil degradation, (2) trust their sources of technical information, (3) not face prohibitive costs or lost profits from implementing new practices, and (4) believe that the new practices will produce some meaningful economic, environmental, or human health benefits.

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