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The Relationship between Productivity, Opportunity Cost, and CRP Soil Rental Rates

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  • Pratt, Bryan
  • Hendricks, Nathan
  • Iovanna, Rich
  • Wallander, Steven

Abstract

The Conservation Reserve Program (CRP) is the largest agri-environmental program in the United States, with the majority of acres enrolling through land retirement mechanisms. The program seeks to correctly assess the opportunity cost of enrollment, neither over- nor under-incentivizing participation. Within county, this is based on the relationship between soil productivity and rental rates, but the magnitude of this relationship is an empirical question. We address this relationship with county-level estimates based on survey data, estimates based on parcel sales data, and estimates based on remotely-sensed yields. The estimated relationship between soil productivity, yields, and opportunity cost vary across approaches, but a one percent change in soil productivity may be associated with less than a one percent change in opportunity cost. We also illustrate that the likelihood of application to the program varies in highly non-linear ways with respect to estimated relative soil productivity.

Suggested Citation

  • Pratt, Bryan & Hendricks, Nathan & Iovanna, Rich & Wallander, Steven, 2026. "The Relationship between Productivity, Opportunity Cost, and CRP Soil Rental Rates," 2026 Annual Meeting, July 26 - 28, 2026, Kansas City, Missouri 404743, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea26:404743
    DOI: 10.22004/ag.econ.404743
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    References listed on IDEAS

    as
    1. Ruben N. Lubowski & Michael J. Roberts, 2005. "How Cost-Effective Are Land Retirement Auctions? Estimating the Difference between Payments and Willingness to Accept in the Conservation Reserve Program," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(5), pages 1239-1247.
    2. repec:ags:aaeach:376304 is not listed on IDEAS
    3. Zhang, Wei & Li, Yanggu & Bovay, John, 2025. "Yield Impacts of Agricultural Conservation Programs," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 40(4).
    Full references (including those not matched with items on IDEAS)

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