Impact of changes in Title II of the 2018 Farm Bill on the acreage and environmental benefits of Conservation Reserve Program

Abstract

The 2018 Farm Bill lowered the maximum rental payments for the Conservation Reserve Program (CRP) by 10%-15% and increased the acreage enrollment cap by 3 million acres. We show that CRP acreage will decrease by 1.18 million acres (associated with a 3.3% environmental benefit decrease of the CRP) as a result of the rental rate reduction and that CRP acreage will increase by 2.32 million acres (associated with a 6.2% environmental benefit increase of the CRP) because of the acreage cap increase. The largest impact on CRP acreage and environmental benefits is predicted to occur in the Plains and the South.

Nonlinear effects of conservation reserve program rental rates on land enrollment under varying crop price regimes

“…For instance, Jang and Du (2018) found a negative relationship between growing degree days and CRP participation. In contrast, Cornish et al (2022) found a mixed association between growing degree days and CRP acreage but with varying statistically significant levels across different agricultural regions. As expected, we find a positive relationship between the national CRP enrollment cap and CRP acreage, as a 1% increase in the national cap increases CRP acreage by 0.09%.…”

“…Due to computational challenges resulting from missing data and zero enrollment in some counties during the analysis, counties in the Atlantic and Western regions were excluded. Furthermore, the exclusion of these regions is supported by a recent study by Cornish et al (2022), which reveals an insignificant connection between CRP rental payments and CRP land acreage in the Atlantic and Western parts of the United States. 5 The ideal situation is to separate the acreage data into their respective signups and subprograms due to the differing objectives of the program.…”

“…2 Government support payments reduce farm operational risk, increase farm revenue, and serve as supplementary income, especially for retiring and partially operating farms (Lambert et al, 2007). Third, we include a lag of CRP acreage as an explanatory variable to account for annual CRP changes, as we expect current levels of CRP acreage in a county to be affected by previously enrolled CRP acreages (Cornish et al, 2022). Fourth, we include weather variables growing degree days and accumulated precipitation in the growing season as these affect farm productivity, and likely landowners' decisions to participate in the CRP.…”

“…Þ where a t is the total new acreage in year t, EBI t is the average EBI points in the county in year t. The acreage and EBI dataset are reported by the Farm Service Agency (FSA). We are grateful to Cornish et al (2022) for sharing their EBI dataset with us for this exercise.…”

“…Existing research on the CRP covers various aspects, including factors influencing land enrollment for conservation purposes (Cornish et al, 2022; Isik & Yang, 2004; Jang & Du, 2018; Plantinga et al, 2001), the effect of CRP participation on land values (Berger et al, 2020; Wu & Lin, 2010; Lubowski et al, 2008), the relationship between crop prices and CRP enrollment (Hellerstein & Malcolm, 2011; Secchi & Babcock, 2007), and bidding behavior and compliance in the conservation programs (Secchi et al, 2008; Jacob et al, 2016; Holland et al, 2020). Previous studies examining the impact of CRP rental rates on enrollment have generally found a positive and significant relationship, though the magnitude of this effect varies across subregions (Cornish et al, 2022; Plantinga et al, 2001). However, we have identified three areas in previous studies that may need to be considered, particularly in examining the influence of CRP rental rates on CRP enrollment.…”