Effect of Cover Crop on Farm Profitability and Risk in the Southern High Plains

Ram N. Acharya, Rajan Ghimire, Apar Gc and Don Blayney
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Ram N. Acharya: Department of Agricultural Economics and Agricultural Business, New Mexico State University, Las Cruces, NM 88003, USA
Rajan Ghimire: Agricultural Science Center, New Mexico State University, 2346 NM 288, Clovis, NM 88101, USA
Apar Gc: School of Economic Sciences, Washington State University, Pullman, WA 99164, USA
Don Blayney: Department of Agricultural Economics and Agricultural Business, New Mexico State University, Las Cruces, NM 88003, USA

Sustainability, 2019, vol. 11, issue 24, 1-13

Abstract: Cover cropping has been promoted for improving soil health and environmental quality in the southern High Plains (SHP) region of the United States. The SHP is one of the more productive areas of the country and covers a large landmass, including parts of Oklahoma, New Mexico, and Texas. This region faces challenges in sustainable crop production due to declining water levels in the Ogallala Aquifer, the primary source of water for irrigated crop production. This study examines the impact of integrating cover crops in the winter wheat ( Triticum aestivum L)-based rotations on farm profitability and risk in the SHP. The study combines experimental yield data with other secondary information, including market prices, to conduct simulation analysis and evaluate the risk involved in introducing cover crops in a wheat-fallow cropping system. The results show that, due to the additional monetary costs involved, none of the cover crop options is economically viable. However, when secondary benefits (erosion control and green nitrogen) or government subsidies are included in the analysis, one of the cover crop options (peas) dominates the fallow alternative. Moreover, when the secondary benefits and a government subsidy are combined, two cover crop alternatives (peas and oats) emerge as more profitable options than leaving land fallow. These results highlight the importance of agricultural research and extension programs that are making a concerted effort to develop more productive farming techniques and increase public awareness about the long-term benefits of adopting soil health management systems such as cover cropping in the SHP region.

Keywords: sustainability; subsidy; risk; profitability soil erosion; nitrogen fixation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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