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The Conservation Reserve Program: An Economic Assessment

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  • Young, C. Edwin
  • Osborn, C. Tim

Abstract

The Conservation Reserve Program (CRP) will boost net farm income and improve environmental quality over the life of the program (1986-99). These gains will come at the cost of somewhat higher food prices and Government administrative expenses, and potential downturns in farm input industries and other local economic activity tied to farming where enrollment is heavy. The authors estimated the net economic benefits of the program to range between $3.4 billion and $11.0 billion in present value, based on the effects covered in this report. Any estimate of the net Government expense of the CRP is highly dependent upon projected commodity market conditions and assumed levels of the acreage reduction program in the absence of the CRP. Prior to the 1988 drought, the authors estimated a small net Government expense. A more recent estimate made after the 1988 drought and with higher assumed acreage reduction levels in the absence of the CRP resulted in a significantly higher net Government expense.

Suggested Citation

  • Young, C. Edwin & Osborn, C. Tim, 1990. "The Conservation Reserve Program: An Economic Assessment," Agricultural Economic Reports 262029, United States Department of Agriculture, Economic Research Service.
  • Handle: RePEc:ags:uerser:262029
    DOI: 10.22004/ag.econ.262029
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    References listed on IDEAS

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    1. Taff, Steven J. & Runge, C. Ford, 1988. "Wanted: A Leaner and Meaner CRP," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 3(1), pages 1-3.
    2. Economic Research Service, 1985. "Analysis of Policies to Conserve Soil and Reduce Surplus Crop Production," Agricultural Economic Reports 307992, United States Department of Agriculture, Economic Research Service.
    3. John E. Floyd, 1965. "The Effects of Farm Price Supports on the Returns to Land and Labor in Agriculture," Journal of Political Economy, University of Chicago Press, vol. 73, pages 148-148.
    4. Salathe, Larry E. & Price, J. Michael & Gadson, Kenneth E., 1982. "The Food and Agricultural Policy Simulator: The Dairy-Sector Submodel," Journal of Agricultural Economics Research, United States Department of Agriculture, Economic Research Service, vol. 34(3), pages 1-14, July.
    5. Dicks, Michael R. & Reichelderfer, Katherine, 1987. "Choices for Implementing the Conservation Reserve," Agricultural Information Bulletins 309353, United States Department of Agriculture, Economic Research Service.
    6. Barbarika, Alex, Jr. & Langley, Jim, 1989. "The Conservation Reserve Program: Long-Term Budgetary And Farm Sector Impacts," 1989 Annual Meeting, July 30-August 2, Baton Rouge, Louisiana 270476, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Shoemaker, Robbin, 1989. "The Conservation Reserve Program and Its Effect on Land Values," Agricultural Information Bulletins 309481, United States Department of Agriculture, Economic Research Service.
    8. Schaible, Glenn D., 1989. "Irrigated Acreage in the Conservation Reserve Program," Agricultural Economic Reports 308072, United States Department of Agriculture, Economic Research Service.
    9. Salathe, Larry E. & Price, J. Michael & Gadson, Kenneth E., 1982. "The Food and Agricultural Policy Simulator," Journal of Agricultural Economics Research, United States Department of Agriculture, Economic Research Service, vol. 34(2), pages 1-15, April.
    10. Ribaudo, Marc O. & Colacicco, Daniel & Langner, Linda L. & Piper, Steven & Schaible, Glenn D., 1990. "Natural Resources and Users Benefit from the Conservation Reserve Program," Agricultural Economic Reports 308085, United States Department of Agriculture, Economic Research Service.
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    Cited by:

    1. Heimlich, Ralph E. & Claassen, Roger, 1998. "Agricultural Conservation Policy At A Crossroads," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 27(1), pages 1-13, April.
    2. Wu, Feng & Guan, Zhengfei & Yu, Fan & Myers, Robert J., 2013. "The spillover effects of biofuel policy on participation in the conservation reserve program," Journal of Economic Dynamics and Control, Elsevier, vol. 37(9), pages 1755-1770.
    3. Katherine Baylis & Peter Feather & Merritt Padgitt & Carmen Sandretto, 2002. "Water-Based Recreational Benefits of Conservation Programs: The Case of Conservation Tillage on U.S. Cropland," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 24(2), pages 384-393.
    4. Magleby, Richard & Sandretto, Carmen & Crosswhite, William & Osborn, C. Tim, 1995. "Soil Erosion and Conservation in the United States: An Overview," Agricultural Information Bulletins 309733, United States Department of Agriculture, Economic Research Service.
    5. Wu, JunJie & Weber, Bruce, 2012. "Implications of a Reduced Conservation Reserve Program," C-FARE Reports 156625, Council on Food, Agricultural, and Resource Economics (C-FARE).
    6. Skaggs, Rhonda K. & Kirksey, R.E. & Harper, Wilmer M., 1994. "Determinants And Implication Of Post-Crp Land Use Decisions," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 19(2), pages 1-14, December.
    7. Lin, Haixia & Wu, JunJie, 2005. "Conservation Policy and Land Value: The Conservation Reserve Program," 2005 Annual meeting, July 24-27, Providence, RI 19417, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    8. David A. Fleming, 2014. "Slippage effects of land-based policies: Evaluating the Conservation Reserve Program using satellite imagery," Papers in Regional Science, Wiley Blackwell, vol. 93, pages 167-178, November.
    9. Wiebe, Keith & Tegene, Abebayehu & Kuhn, Betsey, 1996. "Partial Interests in Land: Policy Tools for Resource Use and Conservation," Agricultural Economic Reports 262040, United States Department of Agriculture, Economic Research Service.
    10. Walls, Margaret & Riddle, Anne, 2012. "Biodiversity, Ecosystem Services, and Land Use: Comparing Three Federal Policies," RFF Working Paper Series dp-12-08, Resources for the Future.
    11. Uchida, Shinsuke, 2014. "Indirect Land Use Effects of Conservation: Disaggregate Slippage in the U.S. Conservation Reserve Program," Working Papers 186644, University of Maryland, Department of Agricultural and Resource Economics.
    12. Claassen, Roger & Hansen, LeRoy T. & Peters, Mark & Breneman, Vincent E. & Weinberg, Marca & Cattaneo, Andrea & Feather, Peter & Gadsby, Dwight M. & Hellerstein, Daniel & Hopkins, Jeffrey W. & Johnsto, 2001. "Agri-Environmental Policy at the Crossroads: Guideposts on a Changing Landscape," Agricultural Economic Reports 33983, United States Department of Agriculture, Economic Research Service.
    13. Canning, Patrick N., 1991. "Estimating Producer Welfare Effects of the Conservation Reserve Program," Journal of Agricultural Economics Research, United States Department of Agriculture, Economic Research Service, vol. 43(1), pages 1-7.
    14. Ribaudo, Marc O. & Heimlich, Ralph & Peters, Mark, 2005. "Nitrogen sources and Gulf hypoxia: potential for environmental credit trading," Ecological Economics, Elsevier, vol. 52(2), pages 159-168, January.
    15. Ervin, David & Algozin, Kenneth & Carey, Marc & Doering, Otto & Frerichs, Stephen & Heimlich, Ralph & Hrubovcak, Jum & Konyar, Kazim & McCormick, Ian & Osborn, Tim & Ribaudo, Marc & Shoemaker, Robbin, 1991. "Conservation and Environmental Issues in Agriculture: An Economic Evaluation of Policy Options," Staff Reports 278567, United States Department of Agriculture, Economic Research Service.
    16. Krause, Kenneth R., 1992. "The Beef Cow-Calf Industry, 1964-87: Location and Size," Agricultural Economic Reports 305706, United States Department of Agriculture, Economic Research Service.
    17. Kozloff, Keith & Taff, Steven J., 1990. "Perspectives On Competitive Bidding: Retirement Of Environmentally Sensitive Farmland," Staff Papers 13822, University of Minnesota, Department of Applied Economics.
    18. Lynch, Sarah, 1994. "Designing Green Support Programs," Policy Studies Program Reports, Henry A. Wallace Institute for Alternative Agriculture, number 134111, March.

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