Contract noncompliance in agricultural conservation programs: Panel evidence from Louisiana, USA
Cost-share contracts, offered through working lands programs, are instrumental in addressing environmental externalities from agriculture and generating ecosystem services. However, the persistent trend of noncompliance with cost-share contractual terms has become a problem for funding agencies and...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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Cambridge University Press
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| Series: | Agricultural and Resource Economics Review |
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| Online Access: | https://www.cambridge.org/core/product/identifier/S1068280523000394/type/journal_article |
| _version_ | 1797356830664425472 |
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| author | Santosh Pathak Hua Wang Naveen C. Adusumilli |
| author_facet | Santosh Pathak Hua Wang Naveen C. Adusumilli |
| author_sort | Santosh Pathak |
| collection | DOAJ |
| description | Cost-share contracts, offered through working lands programs, are instrumental in addressing environmental externalities from agriculture and generating ecosystem services. However, the persistent trend of noncompliance with cost-share contractual terms has become a problem for funding agencies and policymakers. This paper aims to study noncompliance issues within the US working lands programs using historical county-level panel data (1997–2019) from Louisiana. The results show that noncompliance is attributed more to cancellations than terminations due to flexible provisions within the cancellation option. The significant incentive effect of payment obligations reveals that revisiting payment rates could reduce contract noncompliance and mitigate moral hazard. |
| first_indexed | 2024-03-08T14:35:31Z |
| format | Article |
| id | doaj.art-b68405bf4de54b8bbc0d755f19b8dbf3 |
| institution | Directory Open Access Journal |
| issn | 1068-2805 2372-2614 |
| language | English |
| last_indexed | 2024-03-08T14:35:31Z |
| publisher | Cambridge University Press |
| record_format | Article |
| series | Agricultural and Resource Economics Review |
| spelling | doaj.art-b68405bf4de54b8bbc0d755f19b8dbf32024-01-12T06:01:26ZengCambridge University PressAgricultural and Resource Economics Review1068-28052372-261412610.1017/age.2023.39Contract noncompliance in agricultural conservation programs: Panel evidence from Louisiana, USASantosh Pathak0https://orcid.org/0000-0002-4689-4711Hua Wang1Naveen C. Adusumilli2https://orcid.org/0000-0003-4493-9215Department of Agricultural Economics and Agribusiness, Louisiana State University (LSU) and LSU Agricultural Center, Baton Rouge, LA, USALouisiana Department of Education, Baton Rouge, LA, USADepartment of Agricultural Economics and Agribusiness, Louisiana State University (LSU) and LSU Agricultural Center, Baton Rouge, LA, USACost-share contracts, offered through working lands programs, are instrumental in addressing environmental externalities from agriculture and generating ecosystem services. However, the persistent trend of noncompliance with cost-share contractual terms has become a problem for funding agencies and policymakers. This paper aims to study noncompliance issues within the US working lands programs using historical county-level panel data (1997–2019) from Louisiana. The results show that noncompliance is attributed more to cancellations than terminations due to flexible provisions within the cancellation option. The significant incentive effect of payment obligations reveals that revisiting payment rates could reduce contract noncompliance and mitigate moral hazard.https://www.cambridge.org/core/product/identifier/S1068280523000394/type/journal_articleContractscost-shareCSPEQIPmoral hazardnoncomplianceQ15Q58D82 |
| spellingShingle | Santosh Pathak Hua Wang Naveen C. Adusumilli Contract noncompliance in agricultural conservation programs: Panel evidence from Louisiana, USA Agricultural and Resource Economics Review Contracts cost-share CSP EQIP moral hazard noncompliance Q15 Q58 D82 |
| title | Contract noncompliance in agricultural conservation programs: Panel evidence from Louisiana, USA |
| title_full | Contract noncompliance in agricultural conservation programs: Panel evidence from Louisiana, USA |
| title_fullStr | Contract noncompliance in agricultural conservation programs: Panel evidence from Louisiana, USA |
| title_full_unstemmed | Contract noncompliance in agricultural conservation programs: Panel evidence from Louisiana, USA |
| title_short | Contract noncompliance in agricultural conservation programs: Panel evidence from Louisiana, USA |
| title_sort | contract noncompliance in agricultural conservation programs panel evidence from louisiana usa |
| topic | Contracts cost-share CSP EQIP moral hazard noncompliance Q15 Q58 D82 |
| url | https://www.cambridge.org/core/product/identifier/S1068280523000394/type/journal_article |
| work_keys_str_mv | AT santoshpathak contractnoncomplianceinagriculturalconservationprogramspanelevidencefromlouisianausa AT huawang contractnoncomplianceinagriculturalconservationprogramspanelevidencefromlouisianausa AT naveencadusumilli contractnoncomplianceinagriculturalconservationprogramspanelevidencefromlouisianausa |