Beneficial Management Practice (BMP) Adoption – Direct Farm Cost/Benefit Tradeoffs

Abstract

Monte Carlo simulation was used to examine the on-farm economics from adoption of Beneficial Management Practices (BMPs) on four representative Alberta cropping farms. Adoption of shelterbelts, buffer strips, residue management, and the addition of annual and perennial forages, field peas, and oats in crop rotations were included as BMPs that contribute positively to Ecological Goods and Services production from agriculture. Results suggest positive on-farm benefits associated with perennial forage and field pea BMPs. Conversely, BMPs that reduce availability of land for cropping activities, such as shelterbelts and buffer strips, and BMPs that do not increase revenues, such as oats and annual forages in rotation, are costly to producers. The results presented and discussed in this report have important policy implications. Policy mechanisms that incorporate positive mechanisms may improve adoption of BMPs that are costly to producers, while extension mechanisms, such as information programs, may improve the adoption of economically feasible BMPs.