Conservation Reserve and Conservation Compliance Programs: Implications for Resource Adjustment

Conservation Titles of the 1985 Food Security Act lead to agricultural market and resource use adjustments. This study explores how the Conservation Reserve Program (CRP) and the Conservation Compliance (CC) Program influence land use, commodity markets, input and technology use, production costs, and the environment. In the case of the Conservation Reserve Program, CARD/FAPRI commodity models are used to generate a baseline and to evaluate the impacts of increasing the amount of land in the reserve. In the case of the Conservation Compliance Program, the CARD ARIMS model is used to generate a baseline without the program and then to evaluate the impacts of imposing erosion restrictions consistent with the conservation compliance provisions. Lower stocks and higher commodity prices would be consequences of expanding the CRP. Resource adjustment associated with conservation compliance can be protracted and may be costly. Insofar as CRP reduces production and strengthens prices, it also can have the effect of increasing the intensity of input use in the remaining planted area. Conservation compliance clearly influences cropping patterns and choices of technology, as well as rates of soil erosion. While production cost increases of 2-4 percent seem relatively small, this could mean as much as 6-15 percent decline in net farm income.