Working Farm Participation and Acreage Enrollment in the Conservation Reserve Program

Journal of Agricultural and Applied Economics, Apr 2007 by Lambert, Dayton M, Sullivan, Patrick, Claassen, Roger

Among Conservation Reserve Program (CRP) participants, there is a distinction between farm households using the program to ease out of farming and those using the program to augment production receipts. We find evidence that factors other than crop or livestock revenue and environmental factors are associated with program participation and acreage enrollment among farmers who continue agricultural production. Program payments and farm size are positively associated with the amount of land enrolled in the CRP, and characteristics of participants in land retirement and working-lands CRP components are similar.

Key Words: acreage enrollment, Conservation Reserve Program, land retirement, program participation, working farms, working-land conservation

JEL Classifications: Q24, Q28

The Conservation Reserve Program (CRP) was authorized by the Food Security Act of 1985 to retire environmentally sensitive land from agricultural production. In return for an annual rental payment and partial reimbursement for the cost of establishing and maintaining approved groundcover, participants agree to take cropland out of production for 10 to 15 years and plant grasses, trees, and other conservation cover. Since its inception, the CRP has been the largest conservation program administered by the U.S. Department of Agriculture (USDA), In 2004, farmers and landowners were paid $1.8 billion in costshare and rental payments on roughly 35 million acres of land enrolled in the CRP. Contracts for nearly 80% of the acres currently enrolled in the CRP are due to expire before 2010, leaving policymakers and program managers with important decisions about the future direction of the USDA's conservation efforts. But the ultimate impact of any conservation program depends upon the voluntary participation of farm operators and land owners. Current CRP participants will be deciding whether to renegotiate their expiring contracts, and other eligible operators will be deciding whether or not to offer any of their cropland for enrollment into the program. How these decisions are made will affect not only who participates in the CRP, but how they participate, and with what environmental consequences.

While the CRP is designed to retire land from farm production and is therefore not commonly thought of as a working-land conservation program, about 40% of the program participants continue producing farm commodities for sale after enrolling in the CRP. A small group of high-priority conservation practices, including riparian buffers, grass filter strips, and contour strips, is eligible for assistance under the CRP as well as other working-land conservation programs supported by the USDA.1 This article focuses on the factors associated with working farm operators participating in the CRP and the types of conservation practices they implement.2 Interest in, and budget outlays and expenditures for, the USDA's other workingland programs have increased in recent years. Knowledge about the attributes associated with operators participating in the workingland component of the CRP may provide some insight about future participation in the Environmental Quality Incentives Program and the Conservation Security Program.

The criteria we use to distinguish workingland and land retirement components of the CRP are based on definitions used in the 2001 Agricultural and Resource Management Survey (ARMS). Ten reimbursable conservation activities were considered in the 2001 ARMS: (1) improving wildlife habitat, (2) planting entire fields to grasses or legumes, (3) planting entire fields to trees, (4) installing wildlife food stands or feeding areas, (5) establishing rare or endangered habitats, (6) restoring wetlands, (7) installing grass filter strips, (8) installing grass contours, (9) planting riparian buffers, and (10) planting grass waterways. We classified the first six practices into those that are consistent with the land retirement component of the CRP. The remaining practices are consistent with working-land practices and are typically associated with the continuous signup portion of the program.3 Any of these practices may be reimbursable under the program, but in general, larger parcels not involving high-priority conservation structures are less likely to qualify for the continuous signup program.

This article has two research objectives. The first objective is to compare the farm structure, household characteristics, and operator attributes of farms that participate in the CRP and continue producing agricultural commodities with farms not participating in the program. We test the hypothesis that farm structure and operator attributes of households participating in the working-land and land retirement components of the CRP are different from nonparticipants using means separation procedures. We then focus on the attributes of CRP participants that have used the program to retire farmland from production versus those that use CRP to adopt practices consistent with working farmland.