Research on the adoption of rural innovations is reviewed and interpreted through a cross-disciplinary lens to provide practical guidance for research, extension and policy relating to conservation practices. Adoption of innovations by landholders is presented as a dynamic learning process. Adoption depends on a range of personal, social, cultural and economic factors, as well as on characteristics of the innovation itself. Adoption occurs when the landholder perceives that the innovation in question will enhance the achievement of their personal goals. A range of goals is identifiable among landholders, including economic, social and environmental goals. Innovations are more likely to be adopted when they have a high ‘relative advantage’ (perceived superiority to the idea or practice that it supersedes), and when they are readily trialable (easy to test and learn about before adoption). Non-adoption or low adoption of a number of conservation practices is readily explicable in terms of their failure to provide a relative advantage (particularly in economic terms) or a range of difficulties that landholders may have in trialing them.

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The farm-level economics of conservation agriculture (zero tillage, mulching and crop rotation) are described, reviewed and modelled. The economics are defined broadly to include not just shortterm financial benefits and costs, but also the whole-farm management context, constraints on key resources such as labour and capital, risk and uncertainty, interactions between enterprises, and time-related factors, such as interest rates and the urgency of providing for the farm family. A wealth of evidence shows that these economic factors and variables related to them have significant influences on farmers' decisions about adoption of conservation agriculture. Literature on the farmlevel economics of conservation agriculture for resource-poor farmers is reviewed. There is not a large body of high-quality relevant studies. Those that have been published highlight that the economics are highly heterogeneous and need to be considered on a case-by-case basis. Their results tend to indicate that it would be profitable to adopt conservation agriculture or components of it (although not in all cases). This contrasts with disappointing adoption in many of the regions of interest. Potential reasons for this disparity are discussed. A general model of the farm-level economics of conservation agriculture and its components is presented, and used to illustrate influences on the overall economic attractiveness of conservation agriculture. Key factors that would tend to discourage adoption in situations that otherwise look favourable include: the opportunity cost of crop residues for feed rather than mulch, the short-term reduction in yields under zero tillage plus mulching in some cases, combined with short planning horizons and/or high discount rates of farmers, farmer aversion to uncertainty, and constraints on the availability of land, labour and capital at key times of year. Good quality economic analysis should be used more extensively to guide research and extension in this area, particularly in relation to the targeting of effort, and adaptation of the system to suit local conditions.

The choice of policy mechanisms for encouraging environmentally beneficial land-use change should depend on the relative levels of private (or internal) net benefits, and public (or external) net benefits. A map of recommended policy mechanisms is developed, depending on the relative levels of these variables. Positive incentives, negative incentives, and extension need to be targeted carefully to appropriate projects-where private net benefits are closer to zero, and/or public net benefits are more extremely positive or negative. Technology development is suggested where private net costs outweigh public net benefits. No action is recommended for many potential projects. (JEL Q58, Q24) 84(2)Pannell: Policy Choice for Environmental Benefits

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