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The Conservation Reserve Program: Economic Implications for Rural America

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Author Info

  • Sullivan, Patrick
  • Hellerstein, Daniel
  • Hansen, LeRoy T.
  • Johansson, Robert C.
  • Koenig, Steven R.
  • Lubowski, Ruben N.
  • McBride, William D.
  • McGranahan, David A.
  • Roberts, Michael J.
  • Vogel, Stephen J.
  • Bucholtz, Shawn

Abstract

This report estimates the impact that high levels of enrollment in the Conservation Reserve Program (CRP) have had on economic trends in rural counties since the program's inception in 1985 until today. The results of a growth model and quasi-experimental control group analysis indicate no discernible impact by the CRP on aggregate county population trends. Aggregate employment growth may have slowed in some high-CRP counties, but only temporarily. High levels of CRP enrollment appear to have affected farm-related businesses over the long run, but growth in the number of other nonfarm businesses moderated CRP's impact on total employment. If CRP contracts had ended in 2001, simulation models suggest that roughly 51 percent of CRP land would have returned to crop production, and that spending on outdoor recreation would decrease by as much as $300 million per year in rural areas. The resulting impacts on employment and income vary widely among regions having similar CRP enrollments, depending upon local economic conditions.

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File URL: http://purl.umn.edu/33987
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Bibliographic Info

Paper provided by United States Department of Agriculture, Economic Research Service in its series Agricultural Economics Reports with number 33987.

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Date of creation: 2004
Date of revision:
Handle: RePEc:ags:uerser:33987

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Related research

Keywords: Community/Rural/Urban Development; Land Economics/Use;

References

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  1. Stephan J. Goetz & David L. Debertin, 1996. "Rural Population Decline in the 1980s: Impacts of Farm Structure and Federal Farm Programs," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(3), pages 517-529.
  2. Parks, Peter J. & Schorr, James P., 1997. "Sustaining Open Space Benefits in the Northeast: An Evaluation of the Conservation Reserve Program," Journal of Environmental Economics and Management, Elsevier, vol. 32(1), pages 85-94, January.
  3. Richard Blundell & Monica Costa Dias, 2000. "Evaluation methods for non-experimental data," Fiscal Studies, Institute for Fiscal Studies, vol. 21(4), pages 427-468, January.
  4. Graham Pyatt, 2001. "Some Early Multiplier Models of the Relationship between Income Distribution and Production Structure," Economic Systems Research, Taylor and Francis Journals, vol. 13(2), pages 139-163.
  5. Hamilton, Lynn L. & Levins, Richard A., 1998. "Local Economic Impacts Of Conservation Reserve Program Enrollments: A Sub-County Analysis," Conference Papers 14486, University of Minnesota, Center for International Food and Agricultural Policy.
  6. Stephan J. Goetz & Anil Rupasingha, 2002. "High-Tech Firm Clustering: Implications for Rural Areas," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(5), pages 1229-1236.
  7. Hodur, Nancy M. & Leistritz, F. Larry & Bangsund, Dean A., 2002. "Local Socioeconomic Impacts Of The Conservation Reserve Program," Agribusiness & Applied Economics Report 23551, North Dakota State University, Department of Agribusiness and Applied Economics.
  8. Reed, W. Robert & Rogers, Cynthia L., 2003. "A study of quasi-experimental control group methods for estimating policy impacts," Regional Science and Urban Economics, Elsevier, vol. 33(1), pages 3-25, January.
  9. Spreen, Thomas H., 2006. "Price Endogenous Mathematical Programming Models and Trade Analysis," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 38(02), August.
  10. Bucholtz, Shawn & Roberts, Michael J., 2002. "Slippage Or Spurious Correlation: An Analysis Of The Conservation Reserve Program," 2002 Annual meeting, July 28-31, Long Beach, CA 19714, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  11. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January.
  12. Feather, Peter & Hellerstein, Daniel & Hansen, LeRoy T., 1999. "Economic Valuation of Environmental Benefits and the Targeting of Conservation Programs: The Case of the CRP," Agricultural Economics Reports 34027, United States Department of Agriculture, Economic Research Service.
  13. Bangsund, Dean A. & Leistritz, F. Larry & Hodur, Nancy M., 2002. "Rural Economic Effects Of The Conservation Reserve Program In North Dakota," Agribusiness & Applied Economics Report 23564, North Dakota State University, Department of Agribusiness and Applied Economics.
  14. McGranahan, David A., 1999. "Natural Amenities Drive Rural Population Change," Agricultural Economics Reports 33955, United States Department of Agriculture, Economic Research Service.
  15. Martin, Michael V. & Radtke, Hans & Eleveld, Bart & Nofziger, S. Dianne, 1988. "The Impacts Of The Conservation Reserve Program On Rural Communities: The Case Of Three Oregon Counties," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 13(02), December.
  16. Hoppe, Robert A. & Perry, Janet E. & Banker, David E., 2000. "ERS Farm Typology for a Diverse Agricultural Sector," Agricultural Information Bulletins 33657, United States Department of Agriculture, Economic Research Service.
  17. Ribaudo, Marc O. & Heimlich, Ralph & Claassen, Roger & Peters, Mark, 2001. "Least-cost management of nonpoint source pollution: source reduction versus interception strategies for controlling nitrogen loss in the Mississippi Basin," Ecological Economics, Elsevier, vol. 37(2), pages 183-197, May.
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Citations

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Cited by:
  1. Daniel C. Monchuk & John Miranowski & Dermot J. Hayes & Bruce A. Babcock, 2005. "Analysis of Regional Economic Growth in the U.S. Midwest, An," Center for Agricultural and Rural Development (CARD) Publications 05-wp392, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  2. Claassen, Roger & Lubowski, Ruben N. & Roberts, Michael J., 2005. "Extent, Location, and Characteristics of Land Cropped Due to Insurance Subsidies," 2005 Annual meeting, July 24-27, Providence, RI 19546, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  3. Wilson, Joshua & Thilmany, Dawn D., 2005. "Exploring Spillover Effect of Public Investments in Conservation Programs onto Agritourism," 2005 Annual meeting, July 24-27, Providence, RI 19189, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  4. Hansen, LeRoy T., 2007. "Conservation Reserve Program: Environmental Benefits Update," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 36(2), October.
  5. Brady, Michael P. & Nickerson, Cynthia J., 2009. "A Spatial Analysis of Conservation Reserve Program Participants: The Impact of Absenteeism on Participation Decisions," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49369, Agricultural and Applied Economics Association.
  6. Boisvert, Richard N. & Chang, Hung-Hao, 2005. "Explaining Participation in the Conservation Reserve Program and its Effects on Farm Productivity and Efficiency," 2005 Annual meeting, July 24-27, Providence, RI 19321, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  7. Anonymous, 2007. "Estimating Water Quality, Air Quality, and Soil Carbon Benefits of the Conservation Reserve Program," FAPRI-MU Report Series 44777, Food and Agricultural Policy Research Institute at University of Missouri.
  8. Claassen, Roger & Cattaneo, Andrea & Johansson, Robert, 2008. "Cost-effective design of agri-environmental payment programs: U.S. experience in theory and practice," Ecological Economics, Elsevier, vol. 65(4), pages 737-752, May.

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