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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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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.

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File URL: http://www.card.iastate.edu/publications/DBS/PDFFiles/07wp447.pdf
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Bibliographic Info

Paper provided by Center for Agricultural and Rural Development (CARD) at Iowa State University in its series Center for Agricultural and Rural Development (CARD) Publications with number 07-wp447.

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Date of creation: May 2007
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Handle: RePEc:ias:cpaper:07-wp447

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Keywords: agricultural markets; Conservation Reserve Program; environmental quality.;

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Cited by:
  1. Katona-Kovacs, Judit, 2008. "Analysis of agri-environmental measures in Hungary – a regional perspective," Studies in Agricultural Economics, Research Institute for Agricultural Economics, issue 107, March.
  2. Fabiosa, Jacinto F. & Beghin, John C. & Dong, Fengxia & Elobeid, Amani & Tokgoz, Simla & Yu, Tun-Hsiang, 2009. "Land Allocation Effects of the Global Ethanol Surge: Predictions from the International FAPRI Model," Staff General Research Papers 13054, Iowa State University, Department of Economics.
  3. 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.
  4. Petrolia, Daniel R. & Ibendahl, Gregory A., 2008. "Conservation Programs: Will Grain Production Reclaim Acres in the South?," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 40(02), August.
  5. 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.
  6. William W. Olney, 2012. "Offshoring, immigration, and the native wage distribution," Canadian Journal of Economics, Canadian Economics Association, vol. 45(3), pages 830-856, August.
  7. 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.

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