Regional Impacts of the Conservation Reserve Program in the Southeast with Conversion to Trees: An Application of Input-Output Analysis

The Conservation Reserve Program (CRP) was designed to both conserve soil and increase farm income. Soil erosion would be reduced by a reduction in the intensity of land use. Farm income would be increased by reducing the number of acres in production, which would decrease the supply of agricultural commodities, thus raising prices and farm income. While the CRP has been justified on these two goals alone, it is nevertheless important that local decision-makers understand the impact of the program on their local economies. The CRP can also have a significant impact on rural communities. A decline in farm acreage causes a decline in spending for agricultural inputs and may cause a decline in consumer spending due to reduced farm profits. Communities in primarily agricultural areas are especially vulnerable to CRP-induced reductions in economic activity. The purpose of this paper is to address the impact of the CRP on the local economy of a region dependent upon agriculture. The analysis emphasizes the impact of the CRP in a region that is being converted almost exclusively to trees. A regional input-output model is employed to evaluate these impacts.