Description:
Using a mixed-mode survey of 568 farmer respondents in the Boone and North Raccoon River watersheds in Iowa, we utilize a discrete choice experiment to examine farmer behavioral response to a new policy design of conservation programs---enrollment restrictions in cost-share programs. Using a random parameters logit model, we first show how farmers' preferences for conservation practices change when enrollment restrictions are imposed in conservation programs. Our results suggest that eligible farmers are more likely to choose a conservation contract with enrollment restrictions. We next consider three contracts with per-acre payments similar to those offered in Iowa's EQIP program---incentivizing cover crops ($40), no-till ($10), and split nitrogen application ($9) for two years---and compare willingness-to-accept for these contracts with and without enrollment restrictions. Mean willingness-to-accept estimates for the cover crops, no-till, and split nitrogen application contracts decrease by 82%, 92%, and 93%, respectively, when enrollment restrictions are introduced. In addition, estimated participation supply curves demonstrate higher enrollment when introducing enrollment restrictions, though this is especially true for low compensation levels, and enrollment decreases as the proportion of farmers who are ineligible for the conservation contract rises