The predicted effect of projected climate change on the economics of conservation tillage

We evaluate the economics of conservation tillage (chisel till and no till) and examine the impact of projected climate change on the economic attractiveness of reduced tillage practices. We use data from a long-term (39-yr) field experiment in Indiana to estimate yield response functions describing the relationship between tillage practices and corn (Zea mays L.) and soybean (Glycine max L.) yields in poorly drained (but systematically tile-drained) soils, and the mediating role of weather and crop rotation on that relationship. We subsequently couple estimated yield functions with stochastic simulations of weather variables under current and projected climatic regimes to construct distributions describing the probability that conservation tillage will result in higher profits than more intensive tillage under alternative crop rotations. We calculate the subsidy, if needed, that would make a risk-neutral farmer indifferent between conservation and intensive tillage practices under alternative climatic regimes. A key finding of this study is that projected climate change enhances the economics of conservation tillage, thereby substantially reducing the economic hurdle required to induce its adoption in the study area. The framework developed and demonstrated can be applied to areas with different soils and growing conditions to examine the economics of conservation tillage under current and future climate.