The Conservation Reserve Program: A Literature Review

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  • Agribusiness&AppliedEconomicsReport723March2014

    TheConservationReserveProgram:ALiteratureReview

    CherylJ.Wachenheim

    WilliamC.Lesch

    NeerajDhingra

    DepartmentofAgribusinessandAppliedEconomicsAgriculturalExperimentStationNorthDakotaStateUniversity

    Fargo,ND581086050

  • TheauthorsaregratefultoDeltaWaterfowlFoundation,Bismarck,ND,forprovidingfinancialsupportforthisproject.TheywishtothankMr.JohnDevneyforhisassistancethroughout.NorthDakotaStateUniversitydoesnotdiscriminateonthebasisofage,color,disability,genderexpression/identity,geneticinformation,maritalstatus,nationalorigin,publicassistancestatus,race,religion,sex,sexualorientation,orstatusasaU.S.veteran.Thispublicationisavailableelectronicallyatthiswebsite:http://agecon.lib.umn.edu/.Pleaseaddressyourinquiriesregardingthispublicationto:DepartmentofAgribusiness&AppliedEconomics,P.O.Box6050,Fargo,ND581086050,Phone:7012317441,Fax:7012317400,Email:ndsu.agribusiness@ndsu.edu.NDSUisanequalopportunityinstitution.

    Copyright2014byWachenheim.Allrightsreserved.Readersmaymakeverbatimcopiesofthisdocumentfornoncommercialpurposesbyanymeans,providedthatthiscopyrightnoticeappearsonallsuchcopies.

  • i

    TableofContents

    Page

    ListofTables................................................................................................................................................ii

    ListofFigures...............................................................................................................................................ii

    Abstract.......................................................................................................................................................iii

    Introduction.................................................................................................................................................1

    CommodityPricesandtheConservationReserveProgram........................................................................3Slippage........................................................................................................................................................6

    InvestigatingtheLandValueQuestion........................................................................................................7

    ProfilingProducersEnrolledintoCRP..........................................................................................................8 PredictingEnrollment............................................................................................................................8 BiddingBehavior...................................................................................................................................9 ProducerAttitudes,PerceptionsandIntentions...................................................................................9

    ContractholdersviewsonCRPlanduseforrecreation..........................................................................14

    Summary...................................................................................................................................................16

    Conclusions...............................................................................................................................................17

    Bibliography..............................................................................................................................................19

  • ii

    ListofTables

    TablePage

    1 ReasonsrespondentsenrolledinCRP.............................................................................................102 Distributionofresponsesonattitudequestions............................................................................11

    ListofFigures

    FigurePage

    1 PrairiePotholeRegionoftheUnitedStates.....................................................................................3

  • iii

    Abstract

    TheConservationReserveProgram,oneofmorethantwentyvoluntaryconservationprogramsadministeredbytheUnitedStatesDepartmentofAgriculture,wasinitiatedundertheAgriculturalActof1985andhasevolvedundersubsequentfarmbills.Today,enrollmentacresareselectedamongqualifyinglandbasedonanenvironmentalbenefitsindex.Totallandenrolledwilldroptoamaximumof24millionacresundertheAgriculturalActof2014.ThisreportcoversabroadscopeofexistingliteraturerelatedtotheConservationReserveProgram.Althoughmuchoftheliteratureisdatedandnotreflectiveoftodaysmarkets,thecurrencyofthemessageisthatlandownersrespondtofinancialincentives.Further,uncertaintyaboutthecostsandfinancialbenefitshasenduredasahindrancetoenrollmentthatmayotherwisebeattractivetolandowners.Researchsupportstheinfluenceofahostofadditionalfactors,includingthosenonfinancial.Afocusonconsiderationoflocalconditionsandspecificconservationpracticeswillaidfutureresearch,althoughspecificitymustbebalancedagainstincorporatinglandownerconsiderationofotherlandusealternatives.Theliteratureemphasizestheneedtoeducatedecisionmakersonallaspectsofconservationprogramoptionslikelytoinfluencetheirenrollmentdecisionusingavenuethatisaccessibletothem.Thisinformationshouldstresseconomicfactorsandfocusonspecificssuchastheimpactofaspecificconservationpracticelocallyandthelikelyeconomicimpactofvariousoptionsfortheindividualproducer.Weshouldlookforinnovative,efficientmethodstoincreasefarmeraccesstothisinformationtoincludesocialnetworksandpeereducation.

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    TheConservationReserveProgram:ALiteratureReview

    Introduction

    Recentupwardshiftsindemandandpriceforcornandsoybeans,twocommoditiesgrownonanincreasingnumberofacreswithinthePrairiePotholeRegion(PPR)oftheUnitedStates,havebeenidentifiedtobetheprimarydriversofproducerdecisionsregardingparticipationintheConservationReserveProgram(CRP)inthearea(Stubbs,2012;Rashford,WalkerandBastian,2010).TheConservationReserveProgramisavoluntarylongtermlanddiversionprogramadministeredbytheFarmServiceAgency(FSA)oftheUnitedStatesDepartmentofAgriculture(USDA).Inthisprogram,farmersidlefromproductiontheirenvironmentallysensitivelandsforconservationuseinexchangeformonetarycompensationandtechnicalassistance.ItisoneofovertwentyvoluntaryconservationprogramsintheUnitedStates(Stubbs,2013).ProgramsspecificallygearedtowardslandretirementandeasementssuchasCRPcomprisedapproximately42%ofavailableconservationfundingin2012.TotalfinancialoutlaystoCRPenrolleeswere$31.5billionfrom1995to2012(EnvironmentalWorkingGroup,undated).AsofDecember2013,therewere25.6millionacresenrolled(FarmServiceAgency,2014).

    EarlyUSDAconservationprogramsbeganinthe1930swithafocusonreducingsoilerosionandincreasingavailabilityofwaterforagriculture.Inthe1950s,theSoilBankProgram,authorizedbytheAgricultureActof1956,focusedonreducingbotherosionandcommoditystocks.TheseearlyeffortssettherootsforwhatistodaytheCRP,aprogramauthorizedbytheFoodSecurityActof1985asalongtermcroplanddiversionprogram.TheprimaryobjectivesoftheCRPwereandremainconservationorientedratherthanrelatedtosupplycontrol.Onlylandusedinproductionwaseligible.

    TheFoodAgriculturalConservationandTradeActof1990broadenedeligibilityofCRPtoincludemoreenvironmentallysensitiveland,thathighlyerodible,andexpandedexistinggoalsofreducingsoilerosionandimprovingsoilqualitytoincludeimprovingwildlifehabitatandwaterquality(Jacobs,ThurmanandMarra,2011).In1991,thebiddingprocedurewaschangedsothatanEnvironmentalBenefitsIndex(EBI)wasemployedinrankingbidsandamaximumrentalratewasdeterminedforcomparablecropland(SoilandWaterConservationFoundationandEnvironmentalDefenseFund,2008).TheFederalAgriculturalandImprovementandReformActof1996addedwildlifehabitattotheEBIandprovidedotheroptionsforfarmerstoparticipate(Kirwan,LubowskiandRoberts,2005).Acontinuoussignupwasinitiatedforacreagedevotedtospecificconservationpractices.In1997,theUSDAestablishedtheConservationReserveEnhancementProgram(CREP),apartnershipbetweenthefederalgovernmentandthestatewithinwhichthelandresides.Theprogramwasdesignedtoencouragefarmconservationpracticesthatmeetspecificstateandnationalconservationandenvironmentalobjectives(FarmServiceAgency,undated).

    In2002,theeligibilityofcroppinghistoryrequirementforCRPenrollmentwasincreasedandchangesweremaderelatedtocontractextensionandreenrollment.Arequirementwasaddedthattherebeanequitablebalancebetweenprogramobjectives.Eligibilityrequirementswereonceagainchangedinthe2008FarmBill.Changesincludedareductioninthetotalacreagecapfrom39.2millionin2009to32millionin20102012,additionoflocalpreferencecriteria,authorizationfortheUSDASecretarytowaive

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    the25%ofcountycap,allowancethatcurrentlyenrolledlandbeautomaticallyconsideredforreenrollment,andarequirementfortheUSDAtopostrentalrates.

    TheAgriculturalActof2014legislatesadropinmaximumCRPacresfrom32millionto24millionoveritsfiveyearlife.Itallowscontractholderstoterminatecontractsinfiscalyear2015forlandenrolledforatleastfiveyearsandinaneligiblelandclass.

    LanddevotedtoCRPisimportanttothePrairiePotholeRegion(PPR),anareaspanningpartsofthreeCanadianProvinces(Alberta,SaskatchewanandManitoba),andportionsoffiveUSstates(Montana,NorthDakota,SouthDakota,MinnesotaandIowa;Figure1).EstimatesputoverhalfofNorthAmericanmigratorywaterfowlasnestinginthePPR(EnvironmentalProtectionAgency,undated).Withinthisregion,CRPandtheWetlandsReserveProgram(WRP)haverestoredapproximately5.4millionacresofwetlandandgrasslandhabitats(Gleasonetal.,2008).Increasingacreagedevotedtoagriculturalproductionchallengesthesewildlifehabitatgainsthroughoutthisuniquegeologicalandbiodiverselandscape.

    Reducedconservationacreshasresultedinlossestoplantandanimalhabitat,increasesinexternalcostsexpressedaslostcarbonsequestration,reducedwaterquality,increasederosion,andreductionofotherenvironmentalbenefitsimpactingmanyconstituents,bothlocalanddownstream(WrightandWimberly2013;Reynoldsetal.2007;Niemuthetal2007).Lawley(2013)helpsexplainwhy.Overthepasttwodecades,discountsonwetlandshaveincreasedatleast40%andabouthalfoftheprairiepotholesandsurroundinggrasslandshavebeenconvertedforproduction,owingtolowercostconversioncoupledwithincreasedbenefitsfromcropproduction.

    WhereLeschandWachenheim(2014)reportedontheliteratureconsideringfactorsaffectingadoptionofconservationpracticesonworkinglandsandinlandretirementprogramsotherthanCRP,thecurrentreportreviewsliteraturetoidentifyfactorscontributingtoCRPenrollmentorreenrollmentdecisions.StudiesreportingonthefinancialaspectofagriculturalmarketsandenrollmentinCRP,howslippageaffectsprogresstowardsprogramobjectives,theimpactofCRP,otherconservationprogramsandactivitiesonlandvalues,andlandownerbiddingarealsoconsidered.Finally,researchprofilingproducersenrolledintheCRPanduseofCRPlandforrecreationisdiscussed.

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    Figure1.PrairiePotholeRegionoftheUnitedStates

    From:Jacobs,ThurmanandMarra(2011).

    CommodityPricesandtheConservationReserveProgram

    Thisreviewconsidersaconfluxoffactorsfacinglandowners;perhapsthemostnotablebeingtherapidriseincommoditypricesanditsresultanteffectonopportunitycostoflandwhichotherwiseisormightbedevotedtoconservation.Stubbs(2012)andRashford,WalkerandBastian(2010),amongothers,notethedownwardshiftinCRPenrollmentinresponsetoincreasingcommodityprices.Nonreenrollmentofmarginal,aswellasotherwiseproductive,tillablelandscurrentlyplantedtograssesunderthetermsoftheCRPisbeingattributedtotheirgrowingvalueinproduction.Otherfactorscontributingtothereductioninconservationacresincludingthegreateravailabilityofproductiontechnologies(e.g.,shortseasonhybrids),farmprogrampaymentsandsubsidies,includingthoseforcropinsuranceinvitingrowcroppingofsoybeansandcorninareaspreviouslyexcessivelyrisky,anddemandforagriculturallandasasafehavenforstable,althoughmodestreturnsbynonagriculturalownerinvestorsarecoveredinmoredetailinLeschandWachenheim(2014).

    Theaforementionedrepresentfactorsaffectingchangesinopportunitycostsfacinglandconsideredforconservation.InalookattheeffectofCRPrentalrateasanopportunitycost,CooperandOsborn(1998)modeledCRPextensionsundervaryinglevelsofrentalpayment(capitatedat$130/acre)andundervaryingconditionsofhaying/grazing(allowedornot)throughouttheUnitedStates.Asexpected,effectofrentalratewaspositive.TheinfluenceofacresofnonCRPlandusedforlivestockonlikelihoodofreenrollingwaslargerforthescenarioallowinghaying/grazingthanforthatnot.Farmincome,marketvalueofadjacentland,anderosionrateallnegativelyaffectedlikelihoodofreenrolling.Retiredfarmersweremorelikelytoreenrollinthenograzing/hayingscenariothanothers,andlesslikelytoreenrollinthescenarioallowinggrazing/hayingthanothers.Thismaybebecauseofageneralpreferencebyretiredfarmersagainstparticipatinginacontractthatinvolvesworkingtheland.Livestockownersweremorelikelytoacceptthenohaying/grazingscenariothanwerenonlivestockownersatbidlevels

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    higherthanandlowerthanthecurrentrentalratealthoughlivestockownerspreferredthescenarioinwhichhaying/grazingwasallowed,especiallyatlowerrentalrates.

    SecchiandBabcock(2007)modeledtheeffectsofrisingcornandsoybeanpricesonthereturnofCRPtoproductionstatusinIowa.BecausemoreproductivesoilswereenrolledintoCRPatlowerrates(andhigherprogramcost)throughoutthestate,thelargestproportionofCRPcontractswerefoundinlowerproductivitysoilsinthesouthernandnortheasternareasofIowa.TheauthorsdevelopedsupplycurvesforCRPlandatexistingrentalratesundercornpricescenariosrangingfrom$2to$5/bushelwiththeassumptionthatsoybeanpricesremainedabove$4perbushel1.Atthatpointintime,cornpricesat$3perbushelwouldforetellthemigrationofaboutonehalfofthestatesCRPacreagebackintoproduction(approximatelyonemillionacres),whileanincreaseto$5perbushelwouldresultinabouta70%shiftfromCRPintoproduction.TheauthorsconcludedhigherCRPprogrampaymentswouldberequiredtoreversethisdirection,estimatingthatadoublingofannualrentalratesundertheassumptionof$4perbushelcornpricewouldresultintheretentionofonemillionacres,incomparisonwithabout700,000acresundercurrentpaymentrates.

    GillAustern(2011)employedaseriesofmodelstoevaluatetheimpactofcornprices,cornyield,stateGNP,andcornacreageonCRPenrollmentswithintheCornBeltregion(Indiana,Illinois,Iowa,Missouri,Nebraska,OhioandKansas)overthetimeframe1986to2010.IncreasingcornpricesgenerallypredictedreductionsinCRP,and,dependingonthemodel,thesereductionsrangedfrom135,000to250,000acres(estimatedtobebetween13and22%ofenrolledacres)overathreeyear,laggedimpactwindow.Cornyieldsdidnotcontributetomodelefficacy,andresultsforstateGNPweremixed,althoughtheyfavoredanegativerelationshipwithCRPenrollments.Theauthorpointsoutshorttermspikesinpricesarenotlikelytoimpactenrollments,whereasthedatarevealthatafterthethreeyearperiod,impactsarefelt.ThisdelayineffectmaybeattributabletocostsarisingfromremovaloflandfromCRP,andcostsofreturningthatlandtoproduction,andislikelyassociatedwithproducermanagementofrisksandreturnsresultingfromlandconversiondecisions.

    ThemostcomprehensiveexaminationoftherelationshipbetweenCRPacreageandcroppricesisfoundinthecontributionsofHellersteinandMalcolm(2011).Theyemployedtwosimulationbasedtechniques,includingalikelytobidmodel(LTB;whatmighthappenifthelandscapeforCRPwasstartedfromscratchandallacreagesweretobeenrolledatonetime),andanoptoutmodel(O/O).IntheO/Ocase,thecurrentCRPacresaregivenandthemodelisdeployedinthepredictionofwhichacreswouldbeconvertedtocertaincommoditiesundervaryingcommodityprices,ethanolpolicy,andrentalpayments.

    Basicquestionsaddressedinclude:theimpactofhighpricesandincreasingdemandforcornonCRPenrollment;theimpactofhigherCRPrentalratesonprogramexpendituresandlandtypesenrolled;andhowreductioninsizeofCRPwouldaffectprogramdistribution.TheauthorsinvestigatedfourpossiblescenariosforshiftsinCRPincluding:1Thisassumption,employedinthisstudyandelsewhere,maynotwellmimictheprogramasemployed.MaximumbidratesforCRPenrollmentarebasedonasoilsuitabilityindex,whichrelativelycloselymimicslocalrentalrates(i.e.,itisunlikelythatCRPrentalrateswouldnotchangeinresponsetoevenmoderatechangesincommodityprices).

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    Useofabaselinereflectingconditionsin2005,using2005croppricesintheLTBmodel;

    Amediumpricescenariowhichmakesuseofcroppricesobservedin2007;avariantexaminestheimpactofahypotheticalincreaseinCRPrentalratesof60%overthoseofthatyear;

    Acircumstanceinwhichdemandforethanolrisesfrom6.5billiongallonsto15billiongallons;avariantincludesCRPrentalrateadjustmentsasinthemediumpricevariant;

    Ahighpricesituationinwhichcroppricesintherangeofthosethatoccurredin2008areexamined;andavariantinwhichanacrosstheboardincreaseinCRPratesof120%isapplied.

    Theauthorsinvestigatetheeffectsofthevariousscenariofactorsonseveralvariablesofinteresttopolicymakers,includingnumberofacrestobeoffered,averageEnvironmentalBenefitsIndex(EBI),levelofforegonenetagriculturalrevenue,rentalpayments,andproportionaldistributionofCRPacresacrosstenregions.Whilethestudyprovidesfornationalestimates,itdoesnotaffordstatebystateanalysesorcompilationinorderthatthePPRbeexamined.Notethatinthecaseofbothcornandsoybeans,morerecentmarketpriceshavebeennotablyhigherthanthosetestedbyHellersteinandMalcolm,alimitationwhichsuggeststhatrecenttimesmayhaveexceededtheupperboundariesofinferencepossiblefromthisstudy.

    LikelytoBidModeling.Underthefirstscenario,authorscomparedthenumberofofferspredictedbythemodelandrespectiveapprovedcontracts(baseline,whatis).Thesewereverycloseinoutcome.Forexample,thepredictednumberofoffers/contractswouldhavecovered51.9millionacres,and30millionacres,respectively.Inreality,theactualamountofacreageofferedwas49.2millionacresandthenumberofapprovedcontractsreflected32.6millionacres.Predictivevalidityofthemodelwasquitegoodonanationallevel,andthisisimportanttoestablishingthevalueofthemodelinsubsequentscenarios.ValidityoftheLTBmodeldecreasedwhenappliedtoindividualregions.

    TheanalysisofthevariousLTBscenariossuggestedseveraloutcomes.First,sharpincreasesincommoditypricesoccurringintheabsenceofincreasinglevelsofCRPrentalcontractpaymentswillresultinreductions,perhapsdramatic,inoverallCRPacreage.Second,underwhattheauthorstermedhighpricecommodityscenarios,adoublingoftheaveragepaymentwouldpossiblyensurelargenumbersofoffersandwouldpermittheFarmServiceAgency(FSA)toscreenforpropertieswiththeoverallhighestEBIindexscores.Third,landqualitiesofacreageenrolledwillchangedependingonthescenariofacedbythedecisionmaker.

    OptOutModeling.WhereasLTBmodelingassumedthatCRPstartsanew,andprovidedforconsiderationofalllands,theO/OmodelmaybemorerealisticinthatitispredicatedonactualenrolledCRPacresandmaybetterreflectthediversityoflandownership.Thismodelingreliedoncontractdatatakenfrom2008attheleveloftheparceltopredictwhatuseofthelandwouldoccurifCRPweretoconclude.FuturelandusewaspredicatedonhistoricuseofthelandpriortoenrollmentintoCRP,andtookintoaccountthelikelyrevenuestreamunderthemostlikelycroppingscenarioweretheparceltobereturnedtoproduction.ThismodelalsoassumednopenaltyforearlyoptoutfromtheCRPprogram.ScenarioanalysesdeployedundertheLBTmodelwerethesamehere,althoughregionaloutcomeswerenotexamined.

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    Underaconstant(noadjustmenttoCRPpayment)rentalratescenario,wheat,soybeans,barleyandcorn,inthatorder,hadthehighestprobabilitiesofconversion,supplantingCRPacreage,giventheirhistoricplanting.Approximately9.4millionacreswouldreturntoproduction.WeretheUSDAtoadjustrentalratesupward(60%),theorderofplantingalternativesdidnotchange,althoughthemodelforecastedonly5.9millionacresleavingtheprogram.

    SummaryofFindings:ThefindingsfromthesetwomodelsareinformativeaboutthenumberandnatureofacreslikelytoleavetheCRPundervaryingconditionsofrentalrateandcommoditypricing,aswellasundertheconditionofastrongbiofuelspolicy.ItisnoteworthythatastrongbiofuelsprogramislikelytohaveonlyaslightimpactonCRPasbothmodelsdemonstratedwithlikelyreductionoflessthantwomillionacresandonlyslightdeclinesintheEBI.BothmodelsunderscoredthesensitivityofCRPtocommoditypricesintermsofthenumberofacresenrolled,aswellastheEBIofthoseparcels.Inbothscenarios,moreproductivebutalsomoresensitivelandswouldbeamongthosetofirstdeparttheprogram.CRPenrollmentswhichotherwisemightbereducedundercommoditypricepressureswerepredictedtobehigherundertworentalpaymentscenarios,thosereflecting60%and120%increases,contingentonthelevel(moderateorhigh)ofcropprices.UndertheLBTscenario,theimpactsofhigherpriceonCRPenrollmentswoulddifferbyregion.UnderthemorerealisticO/Omodel,highpricecommoditiesintheabsenceofhigherrentalrateswouldresultinapproximatelyonethirdofCRPshiftingtoproduction.Regionalconsiderationswerenotinvestigated.Repeatedforemphasis,readersshouldbeespeciallysensitivetotheapplicabilityofthesefindingssincerecentcommoditypricesarewellabovethosetested,suggestingstillhigherlossesintheabsenceofadjustmenttofederalpayments.ThiswillbetemperedbytheprogramedadjustmentofCRPrentalratestothevalueofthelandundercurrentmarketconditions(i.e.,locallandrentalrates).

    Slippage

    Slippage,referringtolessthananacretoacrematchbetweenreductioninproductionandenrollment,reducestheenvironmentalbenefitsofCRP.Slippagecanresultfromthepracticeofsubstitutingcurrentnoncroplandinproduction(currentlyfallow,idle,orothernonfarmedparcels)forthoseenteredintotheCRP.Wu(2000)reportedthatforevery100acresenrolledintheCentralU.S.during19821992,some20acresofnewlyconvertedlandsoccurred.2ThelargestcoefficientinthepredictionofslippagewasthenumberofCRPacresenrolledasaportionoftotallandarea(positiverelationship).

    TheUSDAestimatedthatthelossofrangelandandgrasslandbetween1982and2003wasapproximately24.5millionacres,withmostofthisoccurringduringthefirst10yearCRPperiod(UnitedStatesGovernmentAccountabilityOffice2007).IntheNorthernPlains(KS,NE,ND,SD),lossesduringthisperiodwereestimatedtobebetween4.85and6.69millionacres.Thisalsowaslikelyinfluencedbytheavailabilityoffederallysubsidizedcropinsurance,thoughoffsettosomedegreebyFSAprovisionssuchasSodbusterorSwampbuster,theformerrequiringthedevelopmentofconservationplansandpenaltiesfornewtillageofnativeparcelswhentheyaredefinedashighlyerodible.TheGAOreportalsoreferencesasurveyofNRCSofficialsinthefourstateswherethenumberoflocalofficialsreportingthat

    2StatesinthestudyincludedND,SD,NE,KS,MN,IA,MO,WI,IL,IN,MIandOH.

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    Sodbusterisoflittleassistanceinlimitingtheconversionofnativegrasslandtocroplandwasveryhigh,rangingfrom44%(NorthDakota)to70%(Nebraska).

    Finally,LichtenbergandSmithRamirez(2011)illustratedthattheuseofcostsharinginMarylandwouldincreasetheuseofconservationpractices,butwasalsofoundtoreducevegetativecover,resultinginthepossibilityofgreaterharmthangoodwithrespecttoerosion,carbonsequestration,andotherdesirableoutcomes.

    InvestigatingtheLandValueQuestion

    ResearchwhichhasconsideredtheimpactofentryintoCRPonthevalueoflandorthatofadjoiningparcelsislimited.LinandWu(2005)investigatedtheeffectofCRPonbothfarmlandanddevelopedlandpricesusingdatadrawnfromapproximately2,900countiesinthelower48states.Theyshowedapositiveandstatisticallysignificantaverageimpactonfarmlandpricesofapproximately$25peracre(1.8%)withgreatesteffectsobservedamongtheMountain(9.8%),Southern(6.4%)andNorthernPlains(4.5%)regions.LessereffectswereobservedintheregionsoftheCornBeltandAppalachia.TheyweresmallestintheLakeStatesandtheNortheast.Overall,CRPhadapositiveandsignificanteffectondevelopedlandpricesinallareasexcepttheLakeStatesandtheSoutheast.Averageimpactondevelopedlandpriceswasabout$274peracre(0.6%).Theauthorsnotethat,intheMountain,NorthernPlainsandSouthernPlains,landpriceswereconsiderablylowerthanthenationalaverage,andlandproductivityonaveragewasloweraswellandspeculatedthattheCRPcontractoffersamoreprofitablealternativeintheseregionsthanfarming,allthingsequal.

    WuandLin(2010)decomposedestimatesoftheeffectsofCRPonfarmlandvaluesbyregionintothevalueofagriculturalreturns,thegrowthpremium,andtheoptionvalue.TheNorthernPlainsincurredthestrongestCRPeffectonthevalueofagriculturalreturns,about$42peracre(12%).Ontheotherhand,thepresenceofCRPexpressedadampeningeffect,ashypothesized,onthegrowthpremium(14%)andoptionvalue(5%)intheNorthernPlains.Theauthorsspeculatethatthiswaslikelyduetotheabsenceofdevelopmentalpressuresonlandpricesinthesparselypopulatedregion.

    ArelatedstudybyChambleeetal.(2011)investigatedtheimpactofmorepermanentconservationforms(e.g.,easements,landtrusts,feesimpleacquisition)onvaluesofsurroundingparcelsusingdatafromacountyinNorthCarolina.Theirfindingssuggestthattheeffectsofprivatelandconservationonsurroundinglandpricesvarybytypeofconservation.TheirstudydidnotdirectlyaddressfederallysponsoredprogramssuchasCRP.

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    ProfilingProducersEnrolledintoCRP

    Severalstudiesinvestigatedthecharacteristics,motivations,beliefs,andattitudesofCRPcontractholders3.UnliketheemphasisinamajorityofstudiesreviewedinLeschandWachenheim(2014),noneoftheCRPspecificliteratureconsideredtheimpactofthesedifferentfactorsonvalueofCRPtothelandownerorontheirlikelihoodof(re)enrollinginCRPcontracts.Infact,becausechoiceswithtradeoffswerenotexplicitlyinvestigated,theworkconsideredheremayoverstatetheimportanceofvariousfactorstothelandownersandingeneraldoesnotallowestimationoftherelativeimportanceoftheirpriorities.OneexceptionisLambertetal.(2006a;2006b)whopredictedthelikelihoodofparticipatinginalandretirementprogram.

    PredictingEnrollment

    LambertandSullivan(2006),Lambert,etal.(2006a;2006b),Lambert,etal.(2007);andLambert,SullivanandClaassen(2007)examinedlandretirementprogramsalongwithworkingland,structuralandvegetativeconservationpractices,andconservationcompatiblepractices.DatawasdrawnprimarilyfromtheUSDAsAgriculturalResourceManagementSurvey(ARMS)of20012003.Thesamplewaslimitedtofamilyfarms(accountingfor98%ofallfarmsand94%ofallfarmlandin2003),butexcludedcooperativeandcorporatefarms.Factorsimportantinthechoicetoparticipateinworkinglandsandlandretirementprograms,thepercentageofacreageenrolledinCRP/CREP/WRP,andthenumberofconservationstructuresadoptedwerereviewedinLeschandWachenheim(2014).Thoseimportanttolandretirementprogramsarehighlightedhere.

    Thepresenceofalandretirementprogramwasshowntobeinverselyrelatedtohighvaluecrops,butpositivelyrelatedtoownershipoftheparcel.Useofalandretirementprogramwasalsolinkedpositivelywithowninglandclassifiedashighlyerodible.Noassociationwasfoundbetweenuseoflandretirementandofffarmincome/totalhouseholdincome,proximitytoastream,orgrossincomenetofgovernmentpayments.

    PresenceofgraincropswasfoundtobeinverselyrelatedtothepercentageoflandenrolledinCRP/CREP/WRP.Ownershipoftheland,governmentpayments,andthepresenceofafemaleoperatorwereallfoundtobepositivelyassociatedwiththeoccurrenceofCRP/CREP/WRP.Noassociationwasestablishedbetweenpercentageoflandenrolledinaretirementprogramandhighvaluecrops,householdsize,afarmbirthright,locationproxemicstoawatersourceorenvironmentallysensitiveland,orthepresenceofahighlyerodiblelandindex.

    3EarlierstudiesofCRPholderswereconductedbyMcLeod,MillerandPerry(19981999)inthestateofOregon;Hatley,Ervin,andDavis(1989)intheHighPlainsofTexas;Onianwa,Wheelock,andHendrix(1999)andOnianwaetal.(1999)inAlabama;KalaitzandonakesandMonson(1994)inMissouri;McLeanMeyinsse,Hui,andJoseph(1994)inLouisiana;GustafsonandHill(1993)andHodur,Leistritz,andBangsund(2002)inNorthDakota,andAllenandVandever(2003)inSouthDakota.WiththeexceptionoftheNDandSDstudies,thesearenotaddressedindetailheregiventhedisparitybetweendecisiondriverstoday,andthoselikelyfactorsintheearlieryearsoftheprogram.

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    BiddingBehavior

    SeveralstudieshavelookedattheCRPbiddingprocess.Initially,themaximumacceptablebidforaparceloflandandtheamountoflandwhichwouldbeacceptedintotheprogramwereunknowntolandownerbidders.Overtime,landownersincreasedtheirbidsasadditionalinformationbecameavailable(Shoemaker,1989;ReichelderferandBoggess,1988;Kirwan,LubowskiandRoberts,2005).

    ResearchfindingssuggestthatlandownerbidsarealsoresponsivetotheEnvironmentalBenefitsIndex(EBI)(Vukina,SehngandMarra,2008;Kirwan,LubowskiandRoberts,2005),especiallyamongthoseinhighrentareas(Jacobs,ThurmanandMarra,2011)andthathighrentarealandownerstendedtoofferalargerdiscount(lowerbidrelativetothemaximumbid)thandidlandownersfromlowerrentareas.ThemarginaleffectoftheConservationPriorityAreawasalsogreaterinhighrentareas,andingeneral,landownersconsideredthosepointsearnedduetolocationinthePPCPAtobemoreimportantinenvironmentalimpactthanotherpointscomprisingEBI

    Vukina,ZhengandMarra(2008)lookedatbiddingbehaviorwhentheexogenouslydeterminedenvironmentalbenefitsindexandtheendogenousbidwerebothconsideredinbidacceptance.Inthebiddingprocess,preferenceisallottedtolowerbidsforlandwithahigherEBI.ThestudywasconductedusingdataforNorthCarolinaforthefirstsignupsincetheenvironmentalscoringrubricwasintroducedandproducersthereforefacedconsiderableuncertaintyaboutbidacceptance.InadditiontoconsideringEBIwhenbidding,landownersconsideredthelongertermproductivityeffectsofconservationpracticeontheirfarm;andhenceofferedreducedbids,concurringwithfindingsofMarraandVukina(1998)andVukinaetal.(2008).ItalsoconcurredwithHodur,Leistritz,andBangsund(2002)whofoundimprovedsoilproductivitytobeadecisionfactorforenrollmentamongNorthDakotafarmers.Tothecontrary,Miranda(1992)foundthisbenefitwasnotfullyconsideredinlandownerbids.

    ProducerAttitudes,PerceptionsandIntentions

    AllenandVandever(2003)employedanationalsurveyofCRPcontracteestoexaminearangeoffactorsassociatedwithadoption,maintenance,use,andotheroutcomesassociatedwiththeprogram.Despiteitsearlyadministration,itrepresentsthemostcomprehensiveapproachtodate.Some1,400usableresponsesresultedfromanFSAgeneratedsampleofapproximately2,200contracteesdeliveredviaamailsurveyinstrument.ThesampledrawnwasproportionaltotheincidenceofregionalCRPcontracts.

    Contractholderswereaskedtheiropinionsonarangeofenvironmentalandsocialbenefitsassociatedwiththeprogram.Controlofsoilerosion(mentionedby85%ofrespondents),wildlifepopulationmanagement(73%),andtheopportunitytoviewwildlife(59%)werethemostoftenidentifiedbenefits.Approximately80%ofrespondentsreportedthattheweightattachedtomaintenanceorimprovementofwildlifehabitatwasappropriate;fewerthan10%inanyregionsuggestedtoomuchemphasiswasappliedhere.Improvedwaterquality(39%),opportunitiestopersonallyhunt(38%),andscenicimprovementstothefarmorlandscape(37%)alsoreceivedmentionbymorethanonethirdofrespondents.Controlofdriftingsnow(30%),improvedairquality(29%),greaterpermanencetosurfacewater(24%),potentialincreaseinfutureincome(17%),andincreaseinopportunitytoleaselandforhunting(12%)werealsomentioned.

  • 10

    Althoughroughly25%ofcontracteesreportednonegativeeffectsfromtheCRP,othersreportedCRPasasourceofweeds(mentionedby29%ofrespondents),afirehazard(19%),orasasourceofunwantedrequestsforhunting(18%).Appearance(unkempt;13%),theattractionofunwantedwildlife(9%),andnegativeeffectsonthelocaleconomy(8%)werementionedalongwithreductioninproductionlands(4%).

    ManagementofCRPbythecontracteesdifferedbyregion.Forexample,thoserespondentsfromMountainstatesclearlypreferredgrazingoveralternatives(63%),comparedwiththoseintheCornBeltwhoseinterestingrazingcouldbedescribedaslessthanlackluster(10%).Mostrespondentswere,atthattime,satisfiedwiththerangeofmanagementalternativesavailable,althoughasignificantnumberwouldhavepreferredmoreintensivemanagementwithanincreasedlevelofpayment.

    Atthestatelevel,earlyresearchbyGustafsonandHill(1993)provideddetailedinsightsintopostCRPlandusesamongNorthDakotacontractees.Amailsurveyofcontracteesresultedinapoolof351usableinstruments(39%responserate).Mostrespondentswereolder(60%>55;onethird>60),withaboutonethirdofcontracteesresidingatthelocationoftheCRP.Anadditional39%livedwithinfivemilesoftheparcel(s),andanotheronefifthresidedbetween5and20miles.ThemostprevalentplantingpriortoentryintoCRPwaswheat(60%),followedbybarley(14%).ReportedrationaleforCRPenrollmentisshowninTable1,ledbyriskmanagementandconcernforsoilerosion.

    Table1.ReasonsrespondentsenrolledinCRP PercentageResponding

    ReasonsforEnrolling Agree Uncertain DisagreeLowrisk 81 10 9

    Concernforsoilerosion 79 9 12Providewildlifehabitat 71 14 15Mostprofitableuse 67 23 10

    Nonewfarmequipment 56 14 30Meetconservationcompliance 48 20 32

    Morefreetime 46 15 39Closetoretirement 44 11 45

    Source:Gustafson,CandCLHill(1993)FutureLandUseDecisionsofNorthDakotaConservationReserveProgramParticipants,DepartmentofAgriculturalEconomics,AgriculturalExperimentStation,NorthDakotaStateUniversity,page9(table7)(revised).

    Theauthorsinvestigatedbusinessrelatedfactorscontributingtothedecisiontoparticipate,andfoundthattheleadingcomponentwasavoidanceofadditionalequipmentinvestments(47%),followedbyincreasedincome(38%)andavoidanceofdebt(37%).StatedintentionsforpostCRPusewereledbyreturntocropping(52%),rentalforfarmingpurposes(21%),anduseofthepropertyforgrazingorhaying(18%).Saleofthelandwasmentionedbyonlyfourpercent.Onthesideofinputs,useofCRPallowedfordiversionoflabortootherfarmactivities(61%),andfreedtimeforleisure/family(29%)whilealsoreducingtheneedforhiredlabor(26%)andenablingofffarmemployment(25%).ThedecisiontofarmpostCRPwaslargelyaneconomiconeinthatproducerssawitasincreasingincome

  • 11

    (65%;veryimportant),withconcernsforsoilerosion(51%;veryimportant)andlossofsteadystreamofincome(49%;veryimportant)alsohighlyrankedasselfreported.TherangeofbeliefsconcerningCRPcanbefoundinopinionstatementsoftheday,showninTable2.Mostproducers/contracteesweredesirousofcontractextensionsfor10years,withmorethanhalfinterestedinpermanentCRPagreements(57%).However,nearlytwothirdssoughttogrowcropsonCRPparcels(63%),withnearlyonehalf(44%)reportingthattheywouldconditiontheirCRPdecisionsoncommodityprices.TheaveragepercentageofCRPpaymentsthatwenttofarmdebtretirementwasabout39,withabout17%allocatedtoleisure/familylifestyle.Table2.Distributionofresponsesonattitudequestions

    ResponsesAttitudeQuestions Agree Uncertain Disagree

    Extendcontracts10moreyears 84 14 2TakereductioninCRPpayment 12 29 59Reductioninpaymentsbutallowedtohay/grazeCRPland 40 28 32WantpermanentCRPcontract(s) 57 28 15GrowcropsonCRPland 63 27 10RaiselivestockonCRPland 26 36 38RetireafterCRPcontract(s)expire 27 28 45InclinedtoenrollinCRPifpaymentsdecrease 55 28 17LessinclinedtoenrollinCRPagainifagcommoditypricesincrease 44 39 17InclinedtoenrollinCPRagainifmoreofffarmjobsavailable 17 27 56Conditionoffarmequipmentwillaffectreenrollmentdecision 30 21 49StayinCRPtopayoffdebt 24 11 65

    Source:Gustafson,CandCLHill(1993)FutureLandUseDecisionsofNorthDakotaConservationReserveProgramParticipants,DepartmentofAgriculturalEconomics,AgriculturalExperimentStation,NorthDakotaStateUniversity,page16(table16)(revised).

    Hodur,Leistritz,andBangsund(2002)conductedacomprehensivesurveyoflandownerCRPcontractholdersin16countiesinND;13ofwhichareinthePPR.TheyobtainedthelistofCRPcontractholdersfromtheFarmServiceAgency.Thestudyalsoincludedpersonalinterviewswith,andasurveyof,communityleaders.Amongcontractholders,nosinglemotivatoremergedforenrollment,buteconomicreasonswerethemostcommon,concurringwiththefindingsofGustafsonandHill(1993).EconomicreasonsidentifiedbyHodur,Leistritz,andBangsundweredisaggregatedintoitsroleinreducingincomerisk(23%)andotherwiseprovidinganeconomicadvantage(22%).Theaveragecombinedtotalofthetwovariedbycountygroup,rangingfrom37%to59%.Thenextmostcommonmotivatorwasreducederosion/improvedsoilfertility(24%).AlsonotedwasthatCRPaidedthetransitiontoretirement.[Averageageofrespondentswas61years;45%weremorethan65yearsold.]Wildlife/huntingopportunitieswerenotanimportantmotivatoramongrespondents.Huntingopportunitieswerementionedbyonlytwopercentand,ofthese,82%werenotfarmersand75%hadlessthan150acresenrolled.

  • 12

    Importanceofmotivatorsdifferedbyrespondentageandsizeofoperation.AmongthosereportingtheirmainreasontohaveenrolledinCRPtoberetirementorcareerchange,64%wereatleast65yearsofageand81%wereatleast51yearsold.FortypercentofrespondentssaidthatCRPhelpedthemtransfertoretirement.TheremainderreportedthatCRPdidnotaffectthetransfer,saleorexpansionoftheiroperation.Soilissuesweremoreimportantasamotivatingfactorforthosewithlessthan150acresenrolledthanothers.Economicbenefitsweremoreimportanttofarmerswithgreaterthan450acresenrolledthantothosewithlessthan150acresenrolled.

    Lookingtothefuture,88%ofrespondentsindicatedtheywouldreenrollatleastsomeoftheirCRPacreage.EightythreepercentwoulddosoevenifcashrentalratesexceededCRPpayments,72%indicatingatleast75%oftheirlandunderthiscondition.Eightypercentindicatedtheywouldreenrollallenrolledacres.Ofthe12%whowouldnotreenrollanyland,68%wouldconvertsometocropproduction(43%wouldconvertalltocropproduction).Thirtyfourpercentindicatedtheywouldconvertsometohay.

    ContractholderswereaskedaboutthebenefitsofCRP.Fiftyninepercentsaiditwasimportant(veryorsomewhat)forremovalofmarginallandsfromproductionand,separately,toprovideamorestableincomesource.Seventytwopercentindicateditreducedincomerisk.Alsoincomerelated,aboutonethird(separately)indicatedithelpedcovershortandlongtermdebt,providedincomeforfamilylivingexpenses,andoffsetincomelossesonothercropland.Importanceoftheseidentifiedbenefitsdidnotdiffermuchbylocale.ThreefourthsagreedthatCRPisacosteffectivemeanstoidlecropland(averageresponsewas4.0ona1=stronglydisagreeand5=stronglyagreeLikertscale).Theyagreedithelpedwithsoilerosiononmarginalcropland(4.5),reducedflooding(3.9)andimprovedwaterqualityinadjacentareas(3.9).

    LocalleadersnotedpositivesofCRPtobetheguaranteedincomeandthatthishadoftenmetorexceededcashrentopportunities;environmentaleffects(water,soil,wildlife);andthat,becausehayinghadbeenallowedduringseveredroughts,thepresenceofCRPofferedamorestablefeedsupply.

    ContractholdersagreedthatCRPbenefitsfarmersandsportsmen(recreationandwildlife).Hodur,Leistritz,andBangsundnotedthatevidencesuggeststhatCRPenhanceswildlifehabitatandthereforeuplandgamebirdandwaterfowlpopulationswhich,inturn,increasesrecreationalopportunities.AstrongmajorityoffarmerssaidCRPincreasedwildlifepresenceandhadapositiveeffectonhunting.And,inspiteofsomegeneralconcernthatCRPcontractholdersaremorelikelytoposttheirland,89%ofcontractholdersreportedtheyhadnotchangedtheirpostingbehaviorfrompreCRP.SeventeenpercentreportedtheyparticipatedinthePrivateLandsOpentoSportsmen(PLOTS)program.Themostprevalentreasonsfornotparticipatingwerethattheywerenotfamiliarwiththeprogram(41%),thattheyalreadyhadanestablishedcovercrop(25%),andthatthefinancialincentivewasnotadequate(24%).

    NegativesnotedbylocalleadersregardingCRPincludedtheimpactonthefarmsupplysector,increasedweedpressure,andeffectonruralpopulationandfarmnumbers.Hodur,Leistritz,andBangsundnotedthat42%ofcontractholdershadlessthan150acres(notgenerallyaviablesizefarm)somewhatmitigatingtheconcernregardingtheimpactofCRPonfarmacreagenumbers.Also,alargerpercentage

  • 13

    ofrespondentsamongthosefarming(31%)reportedCRPwasinstrumentalinkeepingthemonthefarmthanofthosenolongerfarmingwhosaidCRPinfluencedtheirdecisiontostopfarming(23%).

    ContractholderswereaskedwhatchangedasaresultoftheirenrollmentinCRP.Overall,farmersreportednochangeininputcostsandthatyieldswereapproximatelyfivepercentless.Fewreportedchangingfarmingpractices(machinery,labor,andmanagement).Eightythreepercentreportedtheydidnotchangecroppingpracticesonadjacentacres.However,amajorityreportedadoptingminimumnotillandretentionofgrassindrainageareas.Somealsoindicatedtheymadechangestosupportwildlife.Reductioninhiredlabor,familylabor,andmachinerywerereportedby22%,41%,and33%ofrespondents,respectively.

    FarmerswereaskedwhattheCRPcontractshouldinclude.Almosthalf(48%)agreedmorelandshouldbeenrolledinCRP(31%wereneutraland22%disagreed).Fiftyfivepercentthoughtthefocusshouldbeonmarginalfarmland(versuswildlife)(22%wereneutraland24%disagreed).

    LocalleaderswerealsoaskedfortheirrecommendationsfortheCRPprogram.Theysuggestedthat:1)theprogramshouldfocusonhighlyerodiblelandastheygenerallybelievedtherewas,atthetime,toomuchproductivelandintheprogram;2)periodichayingbeallowed,andthathayingbeallowedearlierintheseasontoimprovehayquality;and3)recreationalaccesstoCRPacres(mostlyhunting)beincreasedtooffseteconomiclossestocommunitiesfromlandbeinginCRP.Othersuggestionsweretochangeincentives/enforcementmechanismstoimproveweedcontrol;maketheenrollmentprocessmoreefficient;considerthattheprogrampunishesthoselandownersalreadypracticingenvironmentallyorientedmanagement(e.g.,notfarmingunsuitableland);providepermanentlandretirementunderCRP,anddecreaseacreageenrolledinanygivenarea.

    Janssenetal.(2008)surveyedjustunder800SouthDakotaCRPparticipants.Thosewithcontractswereolder(61versus53years)andoperatedsmallerfarms(74%reported

  • 14

    fences(59%),and/ortheestablishmentofwatersources(34%)receivedthemostmentionsaslimitationsforlivestockgrazingonCRPacres.

    Atthestatelevel,themostrecentprofilingofCRPcontractholdersandtheiruses/intentionstowardCRPisfoundintheworkofAtkinson,RomsdahlandHill(2011)whoconsideredfactorsinfluencingpastlanduseintentionsforCRPenrolledlandinthreeNorthDakotacountiescontainedwithinthePPR.Fortythree,andthirtypercentofrespondentsreportedprofitinfluencingfactorsofmarketpricesandtheexpectedcostofproduction,respectively,wouldbeveryimportant.Costsharingopportunitieswerealsonotedasimportant.Inadditiontorentsnotcompetitivewithlocalrentalrates,otherhurdlesincludedthoseassociatedwiththelackofprogramfitforthelocalarea,governmentbureaucracyassociatedwithenrollment,andnoncompetitiverentalrates.Conclusionscallformakinginformationaboutprogramsandtheirimplementation,especiallyasrelevanttotheindividualproducer,moreavailabletolandowners.As79%ofrespondentsreportedgettinginformationfromFSA,Atkinson,Romsdahl,andHillrecommendedFSAandNRCSworktoincreaseaccesstoandrelevance,clarityandcompletenessoftheinformationavailabletolandownersandworkonamoreaggressiveoutreachplan.

    ContractholdersviewsonCRPlanduseforrecreation

    AllenandWitter(2008)elicitedCRPcontractholdersviewsontheuseofCRPparcelsforrecreation,andtheeconomicsofrecreationalaccess.Usingaproportional,stratifiedsamplingdesign,CRPcontracteesweresamplednationwideduringfall,2007.Thefinalsampleofabout2,900farmersrepresentedaresponserateofsome74%,withweightingusedtorestoretheproportionalsamplerepresentation.Findingsrevealedthatmorethanonehalf(57%)ofproducersallowedsomeportionoftheirCRPtobeusedbyothersforrecreationalpurposes.Whenotherswerequeriedastowhytheirlandwasnotinuseforrecreation,onehalfstatedanoppositiontopropertyaccessbythoseunknowntothelandowner,and38%reportedthattheysimplywerenotasked.Morethanonehalfofrespondentsrelatedhuntingconcerns,i.e.,theythemselvesdidnothaveadequatehuntingproperty,and/ortheCRPlandwastooclosetohouse/farm/livestocktopermithunting.Outsideoffamilyandfriends,44%reportedprovidingaccesstoelevenormorepersonsduringthelastyear,withabout56%reportingaccessrequestsfromonetotenpersons.Byfar,themostcommonreasonforaccesswashunting(89%),withnearlyhalf(44%)reportinguseforwildlifeviewing.Userswerereportedby78%ofcontractholderstoincludethoselocaltothecommunity;39%reporteduserstoincludethosefromwithinthestatebutoutsidethelocalarea;and22%reporteduserstoincludethosefromoutofstate.

    Thesurveyalsorevealedthatabout5%ofCRPcontracteesreceivedsomeformofincomeforaffordingaccess.Amongthosenotreceivingsuchincome,approximately40%reportedthattheydidnotbelievethatfeesshouldbechargedforhuntingorotherrecreation;andaboutonequarter(26%)reportedthattheylackedsufficientlandtoleaseforhunting.Amongthe100responsesfromthosechargingafee,most(70%)chargedaonetime,upfrontfee,andnearlyonefifth(17%)revealedthattheirCRPwasenrolledinastateoperatedwalkinaccessprogram.Nearlytwothirds(62%)ofthosewhoobtainedfeesforCRPenrolledlandusealsoleasedothernonCRPlandsforhuntingorotherrecreationaluse.SeventypercentofrespondentsindicatedthatthepresenceofCRPoneitherthelandownersorneighborslandsdidnotinfluencetheirdecisionsaboutaccess.

  • 15

    TheaveragefeechargedbeforeCRPstatuswasobtainedwasjustunder$2peracre($1.90);postCRP,theaveragechargeperacrewas$6.13.IftheirlandwasnolongertobeenrolledinCRP,ownerswereapproximatelyevenlydividedastowhetherornottheywouldcontinuetoobtainrecreationaluseincome.UseofCRPforrecreationreportedlyvariedsomewhatbyregion,withthePlainsandWesternstatesreportingthelowestlevelsofaccess(51%;53%),andtheEastandMidweststatesthestrongest(58%;61%).Easternstatesweremostlikelytoobtainafeeforuse(19%),followedbyPlains(16%),Western(11%)andMidwestern(4%)counterparts.Theauthorsconcludedbyestimatingthatnationally,thenetadditionalfundsreceivedbyCRPholders(fromaccess),wasslightlyinexcessof$21million.

  • 16

    Summary

    TheConservationReserveProgram,oneofmorethantwentyvoluntaryconservationprograms,beganunderthe1985FarmBillandhasevolvedundersubsequentfarmbills.Today,enrollmentacresareselectedamongqualifyinglandbasedonanenvironmentalbenefitsindex,whichincludesthelandownersbid.Duringthelifeofthe2014AgriculturalAct,maximumenrollment(ceiling)willdropfrom32millionto24millionacres.

    ThisreportdiscussedfindingsfromtheliteratureregardingCRP.ThreestudiesexaminingtheimpactofcommoditypricesonCRPenrollmentandonemodelingCRPextensionsundervaryinglevelsofrentalpaymentsandwithandwithoutgrazingallowedwerereviewed.ThisliteratureandthatreviewedbyLeschandWachenheim(2014)emphasizedtheimportanceofeconomicfactorsinconservationdecisions,animportancethathasgrownastechnologyhasincreasedandimprovedproductionopportunities.ThesesametechnologieshavemitigatedtheefficacyofCRPtowardsconservationobjectivesduetoslippage.

    ThreestudiesinvestigatingtheeffectofCRPonthevalueofCRPenrolledandsurroundinglandwereincludedinthereview.Theliteraturesuggestsapositiveeffect,butthereisconflictingevidenceaboutwhetherlandowners(fully)considerthepositiveimpactofenrollmentonfuturesoilproductivitywhenbidding.Theliteratureprovidesevidenceoflearningfrompreviouslandownerenrollmentbidding,andthatbiddingbehaviordiffersbetweenhighrentlandsandothers.Discountsofferedbylandowners(thedifferencebetweentheirbidandthemaximumbid)havebeenshowntobelargerforhigherrentlands,butthereisalsoevidencethatownersoftheselandsaremoreresponsivethanotherstochangesinthemaximumrentalrateandinenvironmentalbenefitsindexscoring.

    ThisreportalsoconsideredliteratureprofilingproducersenrolledinCRP.LambertandSullivan(2006)andsubsequentpapersofferedtheonlyresearchreviewedwiththespecificobjectiveofidentifyingfactorscontributingtoCRPparticipation4.LambertandSullivanfoundthepresenceofalandretirementprogramtobedirectlyrelatedwithlandownershipandthepresenceofhighlyerodiblelandandindirectlyrelatedwithproductionofhighvaluecrops.Theyfoundthepercentageoflandenrolledinalandretirementprogramtobenegativelyrelatedtothepresenceofagraincropandpositivelyrelatedtofarmownership,participationinothergovernmentprograms,andthefemalegender.

    Onenationalandfivestatelevelstudiesinvestigatingthecharacteristics,motivations,beliefs,andattitudesofCRPcontractholderswerealsoreviewed.Thisliteratureingeneralmaysufferfromwhatwetermagreementbias.Bysomeformofquery,respondentswereaskedaboutthelevelofimportanceofvariousfactorstotheirdecisionmakingregardingCRP.Becausetheywerenotaskedtorankfactorsorotherwiseprioritizethem,therewassubstantialagreementamongrespondentsthatmanyeconomicandenvironmentalfactorswereimportant.Therewere,however,somegeneraltrends.Anearlynationalsurveyidentifiedenvironmentaladvantagestobemostimportantandalsoidentifiednonfinancialdisadvantagessuchastheeffectonthelocaleconomy,weeds,unwantedwildlife,andanunkemptappearance.Alternatively,fivestudiescoveringtheDakotasingeneralidentifiedeconomic

    4ThisworkwasreportedinmultiplepublicationsincludingLambertandSullivan(2006),Lambertetal.(2006a,2006b),Lambert,Sullivan,andClaasen(2007)andLambertetal.(2007).

  • 17

    factorsasthemostimportant,althoughrespondentsalsoidentifiedenvironmentalcontributionsandotherfactorsincludingbutnotlimitedtofarmtransition,effectonmachineryneeds,andtimeforofffarmemploymentandleisure.Severalofthesestudies,mostrecentlyAtkinson,RomsdahlandHill(2011),andtheworkofLeschandWachenheim(2014)concludedthatthedecisionmakingprocessbylandownerswouldbenefitfromadditionalinformationabouttheprogramthatisspecifictotheirsituation.FinallywasconsiderationofliteraturethatlooksatenrolleeviewsontheuseofCRPparcelsforrecreationandrecreationalaccess.AllenandWitter(2008)foundthataslightmajorityallowedaccess,mostoftenforhuntingandthatfewreceivedpaymentfordoingso,althoughthosereceivingpaymentsawthatpaymenttripleunderCRP.WillingnesstoallowaccessdifferedbyregionandwasnotreportedtohavechangedbythepresenceofCRPontheiroronneighboringland.

    Conclusions

    AlthoughmostoftheliteratureconsideringCRPenrollmentresponsetochangingeconomicconditionsisdatedandnotreflectiveofcurrentconditions,thecurrencyofthemessagethatlandownersrespondtofinancialincentivesremainsimportant.TheliteratureingeneralsuggeststhatsignificantincreasesinCRPrentalrateswouldberequiredtomaintainCRPenrollmentintherecentmarketenvironment.And,infactprogramrulesaccommodatethisasthemaximumbidrateisbasedonsoilproductivityandtheassociatedaveragecashrentforthecounty;thelatterofwhichgenerallyreflectscurrentmarketconditions.However,uncertaintyaboutthecostsandfinancialbenefitsappearstoremainasonehindrancetoenrollmentthatmayotherwisebeattractivetothelandowner.

    TheliteratureislesshelpfulregardingtheinfluenceofnonfinancialfactorsonCRPenrollment.Researchstudiesreviewedindividuallyandcollectivelyconcludedthatahostoffactorsareimportant;somanythatitisdifficulttodistinguishbetweenwhatisimportantandwhatisless,ornotimportant.Thiscanbeattributedtothenatureofthequeriesusedtoinvestigatelandownerperceptions.Toovercomethislimitationofexistingresearch,weproposetheuseofnonaidedquestions,particularlyduringfacetofaceinterviews,tohelpteaseoutthosefactorsmostimportanttospecificdecisionmakersandeliminatethosewithoutastronginfluenceonlandownerchoice.Further,ratherthanaskinglandownerstoeliminatefactorsthattheydonotconsiderorminimallyconsiderinthedecision(fewareactuallyeliminated),itmaybevaluabletoaskthemtoidentifythosethataremostimportantandtorankorotherwiseprioritizethem.

    LeschandWachenheim(2014)concludedthatimportantdifferencesinfarmerorfarmstructurecharacteristicsmaycallforestimationofseparateequationstoexplainconservationchoicesandthatclearlytargetedresearchobjectivesmaybetterserveanidentifiedaudiencethanmoregeneralizedresearchoveramorebroadlydefinedgroupoffarms,farmersandlocales.LimitingtheinvestigationtotheConservationReservePrograminpartaddressestheserecommendations.However,itisimportanttorecognizethatafocusonaparticularconservationpracticeand/orprogrammaybelimitingwhenconsideredinisolationifchoicesregardingconservationpracticesarenotindependent.Thatis,ifwedonotconsidertheavailabilityofotherconservationoptionsandthepotentialpresenceofexistingconservationorotherefforts,wemayfinditdifficulttoexplainwhatdrivesparticipationinasingleprogram.Itisalsorelevantwhetheralandownerisconsideringcontinued,notjustinitial,adoption,andthisisaconsiderationlargelylackingintheliterature.

  • 18

    Researchshouldaccountforslippage,whichcanlessentheimpactofCRPandotherconservationprogramenrollmentsontotalenrollmentacres.TheconsequenceofenrollmentintooroptingoutoftheCRPisnotacreforacrebecauseofslippage.ThisshouldbeexplicitlyconsideredduringstudydesignifresearchobjectivesaredifferentthansimplypredictingorexplainingenrollmentinCRP(e.g.,iftheresearchobjectiveistopredicttheeffectofapolicyorotherexternalchangeontotalconservationacres)inalocale.

    OneoverwhelmingmessagestemmingfromthisreviewandthatofLeschandWachenheim(2014)istoeducatedecisionmakersonallaspectsofconservationprogramoptionslikelytoinfluencetheirenrollmentdecisionaccurately,clearly,andusingavenuethatisaccessibletothem.Wheneverpossible,informationprovidedfocusonspecificssuchastheimpactofaspecificconservationpracticelocallyandthelikelyeconomicimpactofvariousoptionsfortheindividualproducer.And,itshouldstresseconomicfactors,includingthosethatmayotherwisenotbeconsideredbylandownerssuchastheimpactofenrollmentonvalueofthatland,orofadjoiningparcelsandonvalueforfeehunting.

    Weshouldlookforinnovative,efficientmethodstoincreasefarmeraccesstothisinformationtoincludesocialnetworksandpeereducation.Whatmattersmosttothetargetaudienceshouldbeemphasizedand,whattheyfear,addressed.Thisimpliesknowingthesefactorsanddevelopingcommunicationstrategiesresponsivetothesame.Itwillalsobehelpfultoworkonrelationshipsbetweenfarmersandexternalstakeholderssothateachbetterunderstandsandcanempathizewiththesituationoftheother.

  • 19

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