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Impact of High Crop Prices on Environmental Quality: A Case of Iowa and the Conservation Reserve Program

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  • Silvia Secchi
  • Bruce A. Babcock

Abstract

Growing demand for corn due to the expansion of ethanol has increased concerns that environmentally sensitive lands retired from agricultural production into the Conservation Reserve Program (CRP) will be cropped again. Iowa produces more ethanol than any other state in the United States, and it also produces the most corn. Thus, an examination of the impacts of higher crop prices on CRP land in Iowa can give insight into what we might expect nationally in the years ahead if crop prices remain high. We construct CRP land supply curves for various corn prices and then estimate the environmental impacts of cropping CRP land through the Environmental Policy Integrated Climate (EPIC) model. EPIC provides edge-of-field estimates of soil erosion, nutrient loss, and carbon sequestration. We find that incremental impacts increase dramatically as higher corn prices bring into production more and more environmentally fragile land. Maintaining current levels of environmental quality will require substantially higher spending levels. Even allowing for the cost savings that would accrue as CRP land leaves the program, a change in targeting strategies will likely be required to ensure that the most sensitive land does not leave the program.

Suggested Citation

  • Silvia Secchi & Bruce A. Babcock, 2007. "Impact of High Crop Prices on Environmental Quality: A Case of Iowa and the Conservation Reserve Program," Center for Agricultural and Rural Development (CARD) Publications 07-wp447, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    • Handle: RePEc:ias:cpaper:07-wp447
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    Citations

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    Cited by:

    1. Jacinto F. Fabiosa & John C. Beghin & Fengxia Dong & JAmani Elobeid & Simla Tokgoz & Tun-Hsiang Yu, 2010. "Land Allocation Effects of the Global Ethanol Surge: Predictions from the International FAPRI Model," Land Economics, University of Wisconsin Press, vol. 86(4), pages 687-706.
    2. Guo, Huanhuan & Li, Bo & Hou, Ying & Lu, Shubing & Nan, Bo, 2014. "Rural households' willingness to participate in the Grain for Green program again: A case study of Zhungeer, China," Forest Policy and Economics, Elsevier, vol. 44(C), pages 42-49.
    3. Petrolia, Daniel R. & Ibendahl, Gregory A., 2008. "Conservation Programs: Will Grain Production Reclaim Acres in the South?," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 40(2), pages 559-572, August.
    4. Bhattacharya, Suparna & Azzam, Azzeddine M. & Mark, Darrell R., 2009. "Ethanol and Meat in the U.S.: A Multi-Market Analysis," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49371, Agricultural and Applied Economics Association.
    5. Wade, Tara & Kurkalova, Lyubov A. & Secchi, Silvia, 2012. "Using the logit model with aggregated choice data in estimation of Iowa corn farmers’ conservation tillage subsidies," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124974, Agricultural and Applied Economics Association.
    6. Abbasi, Tasneem & Abbasi, S.A., 2010. "Biomass energy and the environmental impacts associated with its production and utilization," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(3), pages 919-937, April.
    7. Katona-Kovacs, Judit, 2008. "Analysis of agri-environmental measures in Hungary – a regional perspective," Studies in Agricultural Economics, Research Institute for Agricultural Economics, vol. 107, pages 1-18, March.
    8. LI, Liqing & Ando, Amy W. & Kirwan, Barrett E., 2017. "The Impact of Conservation Programs on Local Employment: A Case of Conservation Reserve Program," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 259195, Agricultural and Applied Economics Association.
    9. Sung, Jae-hoon & Miranowski, John A., 2016. "Information technologies and field-level chemical use for corn production," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235858, Agricultural and Applied Economics Association.
    10. Chang, Hung-Hao & Chen, Yu-Hui, 2011. "Are participators in the land retirement program likely to grow energy crops?," Applied Energy, Elsevier, vol. 88(9), pages 3183-3188.
    11. Moon, Jin-Young & Apland, Jeffrey & Folle, Solomon & Mulla, David, 2016. "A Watershed Level Economic Analysis of Cellulosic Biofuel Feedstock Production with Consideration of Water Quality," Sustainable Agriculture Research, Canadian Center of Science and Education, vol. 5(3).
    12. Sengupta, Sanchita, 2010. "Three Essays in Environmental and Agricultural Issues," ISU General Staff Papers 201001010800002848, Iowa State University, Department of Economics.
    13. Delshad, Ashlie B. & Raymond, Leigh & Sawicki, Vanessa & Wegener, Duane T., 2010. "Public attitudes toward political and technological options for biofuels," Energy Policy, Elsevier, vol. 38(7), pages 3414-3425, July.
    14. William W. Olney, 2012. "Offshoring, immigration, and the native wage distribution," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 45(3), pages 830-856, August.
    15. Christian Langpap & JunJie Wu, 2011. "Potential Environmental Impacts of Increased Reliance on Corn-Based Bioenergy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 49(2), pages 147-171, June.
    16. Douglas G. Tiffany, 2009. "Economic and environmental impacts of U.S. corn ethanol production and use," Regional Economic Development, Federal Reserve Bank of St. Louis, issue Apr, pages 42-58.
    17. Mark E. Eiswerth & G. Cornelis Van Kooten, 2010. "Balancing Bio‐Energy Cropping Benefits and Water Quality Impacts: A Dynamic Optimization Approach," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 58(4), pages 463-480, December.
    18. Carmen Bain & Theresa Selfa, 2013. "Framing and reframing the environmental risks and economic benefits of ethanol production in Iowa," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 30(3), pages 351-364, September.

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