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Assessing Cost-effectiveness of the Conservation Reserve Program (CRP) and Interactions between the CRP and Crop Insurance

Author

Listed:
  • Ruiqing Miao
  • Hongli Feng
  • David A. Hennessy
  • Xiaodong Du

Abstract

We examine the U.S. Conservation Reserve Program (CRP) enrollment design while accounting for the CRP’s interactions with the federal crop insurance program. We find that the current CRP is not cost-effective despite its intent to balance benefits and costs. Based on CRP contract-level data, we show that adopting a cost-effective enrollment design and incorporating crop insurance subsidies into the CRP’s Environmental Benefits Index would significantly increase the CRP acreage, environmental benefits, and savings on crop insurance subsidies, while leaving government outlay unchanged. Large geographical redistributions of CRP acreage would also occur. We further investigate the cost-effective design’s robustness to CRP benefit misspecifications.

Suggested Citation

  • Ruiqing Miao & Hongli Feng & David A. Hennessy & Xiaodong Du, 2016. "Assessing Cost-effectiveness of the Conservation Reserve Program (CRP) and Interactions between the CRP and Crop Insurance," Land Economics, University of Wisconsin Press, vol. 92(4), pages 593-617.
    • Handle: RePEc:uwp:landec:v:92:y:2016:i:4:p:593-617
    Note: DOI: 10.3368/le.92.4.593
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    Citations

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    Cited by:

    1. Wallander, Steven & Hellerstein, Daniel M. & Johnsen, Reid, 2018. "Cost Effectiveness of Conservation Auctions Revisited: The Benefits of Information Rents," 2018 Annual Meeting, August 5-7, Washington, D.C. 274457, Agricultural and Applied Economics Association.
    2. Assogba, Noel Perceval & Zhang, Daowei, 2022. "The conservation reserve program and timber prices in the southern United States," Forest Policy and Economics, Elsevier, vol. 140(C).
    3. Youngho Kim, 2023. "Payments for Ecosystem Services Programs and Climate Change Adaptation in Agriculture," Economics Series Working Papers 1054, University of Oxford, Department of Economics.
    4. Zheng, Yanan & Goodhue, Rachael E., 2022. "Intensive or Extensive Margin Effects? Growers’ Responses to the Restriction of High-Volatile Organic Compound (VOC) Pesticide Products in the San Joaquin Valley, California," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322085, Agricultural and Applied Economics Association.
    5. repec:ags:aaea22:335971 is not listed on IDEAS
    6. Rosenberg, Andrew B. & Pratt, Bryan & Arnold, David & Williams, Ryan, 2024. "Land Use of Rejected, Enrolled, and Expiring Fields in the Conservation Reserve Program," Economic Information Bulletin 344828, United States Department of Agriculture, Economic Research Service.

    More about this item

    JEL classification:

    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land

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