Is participation in agri-environmental programs affected by liquidity and solvency?

• Financial constraints have an impact on economic well-being of farm families.
• We investigate the role of liquidity and solvency on participation in CRP and EQIP.
• We find that liquidity and solvency negatively impact participation in CRP and EQIP.
• Access to Internet positively impacts a farmer's participation in CRP and EQIP.
• Beginning farmers are more likely to participate in EQIP program.

Financial constraints, both in the short and long run, have an impact on economic well-being of farm families. Additionally, financial constraints have an impact on production efficiency and technology adoption. This study investigates factors affecting farmers’ participation in the agri-environmental programs like Conservation Reserve Program (CRP) and the Environmental Quality Incentives Programs (EQIPs) in the U.S. particular attention is given to the roles of liquidity and solvency on participation in CRP and EQIP. Results show that both liquidity and solvency have a negative impact on participation in such programs. Additionally, we found that access to the Internet plays an important role in the farmer's decision to participate in CRP and EQIP. Our results also suggested that beginning farmers are more likely to participate in EQIP program.