Prescriptive use of Environmental Indices: A "How To" Guide for Conservation Programs

A framework for analyzing conservation programs that rank applications using environmental indices is presented. We derive the optimal bid from the farmer's perspective for both land retirement and working lands agri-environmental payment programs and we analyze how these solutions depend on program design parameters. The distinction is made between environmental objectives based on whether the farmer exercises control or not over the level proposed in a bid to participate in a program. The optimization model is solved analytically for two cases - a land retirement and a working lands program - highlighting the differences in the results.