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The Impact of the Conservation Reserve Program on the Sale Price of Agricultural Land

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  • Schmitz, Nick
  • Shultz, Steven

Abstract

Hedonic price modeling of 1,951 non-pasture agricultural land sales across North Dakota indicates that land enrolled in the Conservation Reserve Program (CRP) sold for 14 percent less than otherwise similar cropland over the 2000 to 2004 time period. This price discount is assumed to result from the increasing opportunity costs associated with maintaining agricultural land in conservation, particularly in light of the steadily increasing commodity prices over the study period. Similar findings have recently been reported in the adjacent state of Minnesota. These multi-state results explain why many landowners nationwide are actively lobbying the USDA to allow voluntary opt-outs of remaining CRP contracts. This may also indicate the need to either shorten the length of future CRP contracts and/or to have CRP payment values tied to commodity and/or land price indices. Continued research on this topic would be facilitated and improved with the inclusion of parcel-specific (GIS based) CRP enrollment data.

Suggested Citation

  • Schmitz, Nick & Shultz, Steven, 2008. "The Impact of the Conservation Reserve Program on the Sale Price of Agricultural Land," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2008, pages 1-9.
    • Handle: RePEc:ags:jasfmr:189878
    DOI: 10.22004/ag.econ.189878
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    References listed on IDEAS

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    Cited by:

    1. Mykel R. Taylor & Nathan P. Hendricks & Gabriel S. Sampson & Dillon Garr, 2021. "The Opportunity Cost of the Conservation Reserve Program: A Kansas Land Example," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 43(2), pages 849-865, June.
    2. Garr, Dillon & Taylor, Mykel, 2016. "The Presence Of Conservation Reserve Program Contracts And Their Effect On Kansas Agricultural Land Values," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 230146, Southern Agricultural Economics Association.

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