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The Influence of Rising Commodity Prices on the Conservation Reserve Program

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  • Hellerstein, Daniel
  • Malcolm, Scott

Abstract

This report considers how increased commodity prices might influence enrollment in and benefits from the Conservation Reserve Program (CRP) using two complementary models: a likely-to-bid model that uses National Resources Inventory data to simulate offers to the general signup portion of the CRP and an opt-out model that simulates retention of current CRP contracts. Under several higher crop price scenarios, including one that incorporates 15 billion gallons of crop-based biofuels production, maintaining the CRP as currently configured will lead to significant expenditure increases. If constraints are placed on increasing rental rates, it might be possible to meet enrollment goals with moderate increases in CRP rental rates-but this will mean accepting lower average Environmental Benefits Index scores as landowners with profitable but environmentally sensitive lands choose not to enroll.

Suggested Citation

  • Hellerstein, Daniel & Malcolm, Scott, 2011. "The Influence of Rising Commodity Prices on the Conservation Reserve Program," Economic Research Report 262244, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uersrr:262244
    DOI: 10.22004/ag.econ.262244
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    Cited by:

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    2. Nick Hanley & Simanti Banerjee & Gareth D. Lennox & Paul R. Armsworth, 2012. "How should we incentivize private landowners to ‘produce’ more biodiversity?," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 28(1), pages 93-113, Spring.
    3. Peter Bridgewater & Mathieu Régnier & Roberto Cruz García, 2015. "Implementing SDG 15: Can large‐scale public programs help deliver biodiversity conservation, restoration and management, while assisting human development?," Natural Resources Forum, Blackwell Publishing, vol. 39(3-4), pages 214-223, August.
    4. Yasarer, Lindsey M.W. & Sinnathamby, Sumathy & Sturm, Belinda S.M., 2016. "Impacts of biofuel-based land-use change on water quality and sustainability in a Kansas watershed," Agricultural Water Management, Elsevier, vol. 175(C), pages 4-14.
    5. Osteen, Craig D. & Vasavada, Utpal, 2012. "Agricultural Resources and Environmental Indicators, 2012 Edition," Economic Information Bulletin 132048, United States Department of Agriculture, Economic Research Service.
    6. LI, Liqing & Ando, Amy W. & Kirwan, Barrett E., 2017. "The Impact of Conservation Programs on Local Employment: A Case of Conservation Reserve Program," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 259195, Agricultural and Applied Economics Association.
    7. Chad Lawley, 2014. "Changes in Implicit Prices of Prairie Pothole Habitat," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 62(2), pages 171-190, June.
    8. 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).
    9. Ren, Jie & Campbell, James B. & Shao, Yang, 2016. "Spatial and temporal dimensions of agricultural land use changes, 2001–2012, East-Central Iowa," Agricultural Systems, Elsevier, vol. 148(C), pages 149-158.
    10. Ruiqing Miao & Hongli Feng & David A. Hennessy & Xiaodong Du, 2014. "Assessing Cost-Effectiveness of the Conservation Reserve Program and its Interaction with Crop Insurance Subsidies," Center for Agricultural and Rural Development (CARD) Publications 14-wp553, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    11. Wang, Tong & Jin, Hailong & Kreuter, Urs & Teague, Richard, 2021. "Expanding grass-based agriculture on marginal land in the U.S. Great Plains: The role of management intensive grazing," Land Use Policy, Elsevier, vol. 104(C).
    12. Thapa, Bhawna & Chapagain, Binod P. & McMurry, Scott T. & Smith, Loren M. & Joshi, Omkar, 2024. "Understanding landowner participation in the Conservation Reserve Program in the U.S. High Plains region," Land Use Policy, Elsevier, vol. 141(C).
    13. Brian Cornish & Ruiqing Miao & Madhu Khanna, 2022. "Impact of changes in Title II of the 2018 Farm Bill on the acreage and environmental benefits of Conservation Reserve Program," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(2), pages 1100-1122, June.

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