Additionality and Persistence of Afforestation Incentives: Evidence from the Conservation Reserve Program

For years, the U.S. Department of Agriculture, and increasingly private incentive programs, have provided financial assistance to farmers to plant new forestland in place of commodity crops. Afforestation of cropland can provide multiple ecosystem services. However, as with any voluntary incentives, an increase in ecosystem services depends on the degree to which realized afforestation is additional and persistent. Incentives are additional if farmers would not have switched to timber without government assistance; and defined as persistent if managers of new timberland do not simply return their land to crops after their afforestation contracts end. In this study, we assess the long-run impacts of incentives for afforestation of cropland in USDA’s Conservation Reserve Program. We estimate impacts using a regression discontinuity design, relying on the Conservation Reserve Program’s General Signup auction mechanism. We use remote-sensing data to detect the extent of trees within tracts of land that rejected and accepted offers in the program. We find that more than 50 percent of land enrolled is additional; and that impacts are persistent as well, with most long-run impacts coming from parcels that have exited the program.