Economics of Wetland Conservation: Farm Programs and Income Tax

Recent changes in federal farm policy remove incentives to wetland conversion for agricultural production. The "swampbuster" provision of the Food Security Act of 1985 denies eligibility for farm program benefits on any land to persons who grow agricultural commodities on converted wetlands after December 23, 1985. In addition, tax reform legislation pending in both the House and the Senate would repeal or substantially restrict income tax provisions that effectively reduce the cost of wetland conversion or agriculture or help shelter part of the gain from the sale of converted wetlands.