What might be causing this rainbow-like effect on the ground?
This is very unusual and I've never seen it before, though I have seen other rainbow effects such as double and triple rainbows. What they all have in common is a mist of water droplets lit up by the sun. If you have ever seen a dew drop (and who hasn't) you will have noticed that when the sunlight struck it a pretty coloured light came from it. When you moved your head a little, the light changed colour. This is because white light is bent by the water droplet, and the different wavelengths bend to different degrees, so which colour you see depends on the angle of your eye to the dew drop. It's the same with a rainbow, but in this case there are millions of water droplets. It is also the case with the rainbow-like phenomenon in your photo, but instead of being high in the sky, the water droplets are hugging the ground. 

So how could this happen? One possibility that occurs to me is that rain fell on hot ground, and quickly evaporated. As it evaporated into cold air, it condensed into water droplets, so you had this fine aerosol hanging low over the ground. Struck by sunlight, the white light was diffracted in the same way as in a rainbow or a dewdrop or the mist from a garden hose.