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Recreational Impacts of the Conservation Reserve Program: A Break-Even Approach

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  • Siegel, Paul B.
  • Johnson, Thomas G.

Abstract

The Conservation Reserve Program (CRP) achieves supply control, income and improved environmental quality by paying farmers to substitute vegetative cover for crops on highly erodible land. The CRP has important economic impacts from the perspective of farmers and from the perspective of the regional economy. This study evaluates the CRP from each perspective. Previous studies of the CRP estimated the negative effects of reductions in crop production and the partially offsetting positive effects of payments to farmers and expenditures on vegetative cover. This study analyzes the additional positive economic impacts of increases in recreational activity stemming from improved environmental quality. A break-even approach was used to analyze the impacts of recreational activities which are anticipated, but whose precise magnitude is unknown . It was found that break-even levels for regional employment and income could be achieved if farmers received breakeven payments of $65/acre and if CRP-induced increases in recreational spending were $5-10/acre. Previous studies treat compensation paid to farmers in different manners, resulting in large variations in estimates of the program's impacts. This study presents a consistent method of dealing with the economic impacts of environmental and social programs, such as the CR~, whose objectives include decreased output with compensation for producers. This study is based on the CRP in Virginia, but the analysis of economic impacts of the CRP is also applicable to other regions, with appropriate adjustments for local conditions.

Suggested Citation

  • Siegel, Paul B. & Johnson, Thomas G., 1990. "Recreational Impacts of the Conservation Reserve Program: A Break-Even Approach," Staff Papers 232546, Virginia Polytechnic Institute and State University, Department of Agricultural and Applied Economics.
    • Handle: RePEc:ags:vtaesp:232546
    DOI: 10.22004/ag.econ.232546
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    References listed on IDEAS

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    2. Robbin Shoemaker, 1989. "Agricultural Land Values and Rents under the Conservation Reserve Program," Land Economics, University of Wisconsin Press, vol. 65(2), pages 131-137.
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    4. Mortensen, Timothy L. & Coon, Randal C. & Leitch, Jay A. & Leistritz, F. Larry & Ekstrom, Brenda L., 1989. "Economic Impact of the Conservation Reserve Program in North Dakota," Agricultural Economics Reports 23177, North Dakota State University, Department of Agribusiness and Applied Economics.
    5. Mortensen, Timothy L. & Coon, Randal C. & Leistritz, F. Larry & Leitch, Jay A. & Ekstrom, Brenda L., 1989. "Regional Economic Impact of the Conservation Reserve Program: An Application of Input-Output Analysis," Staff Papers 121748, North Dakota State University, Department of Agribusiness and Applied Economics.
    6. Martin, Michael V. & Radtke, Hans & Eleveld, Bart & Nofziger, S. Dianne, 1988. "The Impacts Of The Conservation Reserve Program On Rural Communities: The Case Of Three Oregon Counties," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 13(2), pages 1-8, December.
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