Harvesting benefits: Exploring the effects of second‐best policies on enhancing soil organic carbon stocks in agriculture

Agricultural subsidies can be an effective policy tool to enhance soil organic carbon sequestration. This paper assesses the effectiveness of a second‐best hypothetical policy which subsidizes additional canola hectares optimally for each soil zone in Saskatchewan in an effort to increase soil organic carbon. I develop a simulation model that includes on‐farm acreage responses and employs a novel field‐level dataset from the Saskatchewan Crop Insurance Corporation to measure changes in soil organic carbon stocks attributable to changes in cropping choices. I find that a policy offering optimal subsidies specific to each soil zone for additional hectares of canola, implemented in 2019 and continuing indefinitely for all insured fields in Saskatchewan, generates an external social benefit worth 14.7 billion Canadian dollars when the subsidy is set to maximize the net external social benefit, and 29.4 billion Canadian dollars when it is set to maximize the change in total welfare. This paper highlights the potential environmental and social benefits of second‐best policies as a cost‐effective alternative to traditional first‐best policies. It also shows how economic and biophysical models can be combined to estimate soil characteristics, thereby avoiding the high cost of direct measurement.

• Publication year

  2025

• Venue

  American Journal of Agricultural Economics

• Publication date

  2025-10-19

• Fields of study

  Not labeled

• Identifiers
  DOI 10.1111/ajae.70020
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

• No claims are published for this paper.

• No concepts are published for this paper.

• Soil organic carbon pools as influenced by 21 years of conservation agriculture management practices in Saskatchewan

  2024cited by this paper
• Incentive mechanisms of carbon farming contracts: A systematic mapping study.

  2024cited by this paper
• Crop rotations and canola yields: Evidence from field‐level data in Western Canada

  2024cited by this paper
• Soil health indicator responses to three years of cover crop and crop rotation in a northern semi-arid region, the Canadian prairies

  2024cited by this paper
• Impacts of conservation agriculture on soil C and N stocks and organic matter fractions: comparing commercial producer fields with a long-term small-plot experiment in Brown Chernozems of Saskatchewan

  2024cited by this paper
• Prospects and challenges in the use of models to estimate the influence of crop residue input on soil organic carbon in long-term experiments in Canada

  2022cited by this paper
• Challenges to voluntary Ag carbon markets

  2022cited by this paper
• Crediting agricultural soil carbon sequestration

  2022cited by this paper
• Comprehensive evidence implies a higher social cost of CO2

  2022cited by this paper
• Measuring and modeling soil carbon sequestration under diverse cropping systems in the semiarid prairies of western Canada

  2021cited by this paper
• Performance-Based Payments for Soil Carbon Sequestration Can Enable a Low-Carbon Bioeconomy.

  2021cited by this paper
• Fields from Afar: Evidence of Heterogeneity in United States Corn Rotational Response from Remote Sensing Data

  2021cited by this paper
• Carbon sequestration in French agricultural soils: A spatial economic evaluation

  2021cited by this paper
• Optimization of tillage rotation and fertilization increased the soil organic carbon pool and crop yield in a semiarid region

  2021cited by this paper
• Revisiting no-till’s impact on soil organic carbon storage in Canada

  2020cited by this paper
• Modeling Corners, Kinks, and Jumps in Crop Acreage Choices: Impacts of the EU Support to Protein Crops

  2020cited by this paper
• Distribution and abundance of Aphanomyces euteiches in agricultural soils: effect of land use type, soil properties, and crop management practices

  2020cited by this paper
• Additionality from Payments for Environmental Services with Technology Diffusion

  2019cited by this paper
• Farmers' willingness to participate in a big data platform

  2019cited by this paper
• Valuation of Soil Organic Carbon Stocks in the Contiguous United States Based on the Avoided Social Cost of Carbon Emissions

  2019cited by this paper
• Increasing crop yields and root input make Canadian farmland a large carbon sink

  2019cited by this paper
• Non-Mycorrhizal Plants: The Exceptions that Prove the Rule.

  2018cited by this paper
• Dry matter partitioning and residue N content for 11 major field crops in Canada adjusted for rooting depth and yield

  2018cited by this paper
• Crop rotation, tillage system, and precipitation regime effects on soil carbon stocks over 1 to 30 years in Saskatchewan, Canada

  2018cited by this paper
• Modeling Heterogeneous Farm Responses to European Union Biofuel Support with a Random Parameter Multicrop Model

  2018cited by this paper
• Impacts of Federal Crop Insurance on Land Use and Environmental Quality

  2017cited by this paper
• A two-stage stochastic mixed-integer programming approach to the competition of biofuel and food production

  2017cited by this paper
• Harvest index–yield relationship for estimating crop residue in cold continental climates

  2017cited by this paper
• The social costs of second-best policies: Evidence from agricultural GHG mitigation

  2017cited by this paper
• Optimal Sequential Plantings of Corn and Soybeans Under Price Uncertainty

  2015cited by this paper
• Diversifying crop rotations with pulses enhances system productivity

  2015cited by this paper
• Carbon sequestration in agricultural soils via cultivation of cover crops – A meta-analysis

  2015cited by this paper
• Multicrop Production Models with Multinomial Logit Acreage Shares

  2014cited by this paper
• Risk and Return in the Design of Environmental Policy

  2014cited by this paper
• Rotational Effects of Legumes and Non-Legumes on Hybrid Canola and Malting Barley

  2014cited by this paper
• Crop Supply Dynamics and the Illusion of Partial Adjustment

  2014cited by this paper
• Blackleg disease of canola mitigated by resistant cultivars and four-year crop rotations in western Canada

  2013cited by this paper
• The Encyclopedia of Saskatchewan

  2013cited by this paper
• The additionality problem with offsets: Optimal contracts for carbon sequestration in forests

  2013cited by this paper
• Modeling Agricultural Supply Response Using Mathematical Programming and Crop Mixes

  2012cited by this paper
• Influence of soil C, N2O and fuel use on GHG mitigation with no-till adoption

  2012cited by this paper
• Potential Environmental Impacts of Increased Reliance on Corn-Based Bioenergy

  2011cited by this paper
• Long term impact of no-till on soil properties and crop productivity on the Canadian prairies

  2011cited by this paper
• Carbon input to soil from oilseed and pulse crops on the Canadian prairies

  2009cited by this paper
• The efficiency of voluntary incentive policies for preventing biodiversity loss

  2009cited by this paper
• PRODUCER RESPONSES TO CARBON SEQUESTRATIONINCENTIVES IN THE NORTHERN GREAT PLAINS

  2008cited by this paper
• An analysis of crop choice: Adapting to climate change in South American farms

  2008cited by this paper
• An approach for estimating net primary productivity and annual carbon inputs to soil for common agricultural crops in Canada

  2007cited by this paper
• Reducing standard errors by incorporating spatial autocorrelation into a measurement scheme for soil carbon credits

  2007cited by this paper
• Seasonal and long-term resource-related variations in soil microbial communities in wheat-based rotations of the Canadian prairie

  2006cited by this paper
• A review of nitrogen fertilizer and conservation tillage effects on soil organic carbon storage

  2005cited by this paper
• The Optimal Length of an Agricultural Carbon Contract

  2005cited by this paper
• Impact of crop sequence decisions in the Saskatchewan Parkland

  2005cited by this paper
• Carbon Storage in Soils of the North American Great Plains: Effect of Cropping Frequency

  2005cited by this paper
• Joint Estimation of Technology Adoption and Land Allocation with Implications for the Design of Conservation Policy

  2005cited by this paper
• Land-Use Change and Carbon Sinks: Econometric Estimation of the Carbon Sequestration Supply Function

  2005cited by this paper
• Influence of Project Scale and Carbon Variability on the Costs of Measuring Soil Carbon Credits

  2004cited by this paper
• Design and Costs of a Measurement Protocol for Trades in Soil Carbon Credits

  2004cited by this paper
• Soil organic carbon sequestration rates by tillage and crop rotation : A global data analysis

  2002cited by this paper
• Economic Analysis of Agricultural Soil Carbon Sequestration: An Integrated Assessment Approach

  2001cited by this paper
• limate Change and Forest Sinks: Factors Affecting the Costs of Carbon Sequestration

  2000cited by this paper
• The incidental parameter problem since 1948

  2000cited by this paper
• The Costs of Carbon Sequestration: A Revealed-Preference Approach

  1999cited by this paper
• Preliminary estimates of the potential for carbon mitigation in European soils through no‐till farming

  1998cited by this paper
• Management effects on soil C storage on the Canadian prairies

  1998cited by this paper
• Economic Instruments and Environmental Policy in Agriculture

  1998cited by this paper
• Estimating Discrete-Choice Models of Product Differentiation

  1994cited by this paper
• Farm Production Decisions Under Cross and Conservation Compliance

  1991cited by this paper
• Modeling Government Program Participation Decisions at the Farm Level

  1989cited by this paper
• Estimating Supply Response in the Presence of Farm Programs

  1985cited by this paper
• Measuring Aggregate Supply Response under Instability

  1977cited by this paper
• Futures Prices in Supply Analysis

  1976cited by this paper
• Supply Analysis for Corn in the United States: The Impact of Changing Government Programs

  1972cited by this paper
• Estimates of the Aggregate U.S. Farm Supply Function

  1960cited by this paper
• Distributed lags and Estimation of Long-Run Supply and Demand Elasticities: Theoretical Considerations

  1958cited by this paper
• Estimates of the Elasticities of Supply of Selected Agricultural Commodities

  1956cited by this paper

• No citing papers are available for this paper.