3
What are the economic
soil erosion, water quality, air quality, wildlife
discussion by reviewing the establishment,
habitat, and conservation priority areas,
growth, and likely future reduction of
which are measured using an index known
the CRP to individual farmers, to the
and environmental
as the Environmental Benefits Index (EBI)
local agricultural economies and rural
implications when the
(USDA 2012a). Bids with higher EBI are
communities, and to the environment.
accepted first until the budget is used up.
Understanding the full costs and
size of CRP continues
benefits of the CRP to our economic and
to downsize?
environmental well-being is key for any
Understanding
Figure 1 shows cumulative CRP enrollment from 1986 to 2011. CRP acreage built up in the late 1980s and the early 1990s and reached its first peak (35 million acres) in 1994, at an annual rental cost paid by the USDA of over $1.74 billion. As the first group of signups began to expire, the total enrollment decreased slightly and then began to increase again. The program reached its maximum acreage of 36.77 million acres in 2007, at an annual rental cost of $1.76 billion. Since then, total CRP acreage has been decreasing gradually.
future policy decisions on the program.
the full costs and
Individual Economic Impact
benefits of the CRP
There is strong evidence that the CRP
to our economic and
generates significant economic benefits
environmental well-
to society. Some of these benefits go to the participating landowners directly, while
being is key for any
others occur primarily off the farm as a
future policy decisions
result of improved environmental quality,
on the program.
which supports recreational activities. • Economic Benefits from reduced soil
As of February 2012, the CRP contained
erosion. Reduced soil erosion from
29.77 million acres, including those
CRP land has both on-site and off-site
enrolled in general and continuous
economic benefits.
signups and the Conservation Reserve Enhancement Programs (USDA 2012b).
–– The on-site economic benefits
The 2008-2011 declines in CRP acreage
include increased soil productivity
coincide with the increase in agricultural
from reduced soil erosion, which
commodity prices since 2007.
was estimated at $122 million per year, with approximately 60 percent
If the recent trend of high commodity
of the benefits coming from future
prices continues, CRP enrollment will likely
yield increases and 40 percent from
shrink even more in the future because
decreased input use, such as fertilizer,
higher commodity prices increase the
when CRP acres are returned to
opportunity cost of CRP participation.
production (Sullivan et al. 2004).
This raises an important question: What
–– Off-site benefits include reduced
are the economic and environmental
sediment in surface waters, which,
implications when the size of CRP
in turn, precludes the need (and
continues to downsize? This brief paper
expense) to dredge or otherwise
provides important data points for the CRP
remove soil that blocks or threatens
Implications of a Reduced Conservation Reserve Program