"Estimating the Determinants and Effects of Participation in the USDA's Conservation Reserve Program." Prepared for: Camp Resources XV August 7-8, 2008.

Slides:



Advertisements
Similar presentations
FARM SERVICE AGENCY Conservation Reserve Program Conservation Reserve Program.
Advertisements

Conservation Programs and Agricultural Policy The New Landscape Bradley D. Lubben Extension Agricultural Economist Kansas State University Policy and ag.
Chapter 3 Size Requirements 1. Overview of Size Requirements Initial qualifying tracts must meet a minimum size requirement Qualifying tracts may contain.
Farmland Values and Leasing Key Questions Chapter 20 §What determines the value of farmland? §What are the advantages and disadvantages of owning vs. leasing?
MANAGING FARMLANDS FOR WILDLIFE Richard E. Warner, University of Illinois at Urbana-Champaign Jeffery W. Walk, Illinois Chapter of The Nature Conservancy.
Direct Government Payments and Agricultural Land Values: Alabama in Perspective Charles Barnard Economic Research Service The views expressed in this presentation.
Evaluating Bids in the U.S. Conservation Reserve Program Ralph E. Heimlich Deputy Director for Analysis, Resource Economics Division, Economic Research.
Increased Ethanol Production Impacts on Minnesota Wetlands Dr. David Kelley University of St. Thomas 2013 Minnesota Wetlands Conference.
F I A New Orleans, Louisiana 2013 The Nation’s Forest Census A Vision for FIA Over the Next Five Years Greg Reams FIA Program Leader USDA Forest Service.
USDA Conservation Programs Sorting Out the Pieces: A Conference for Women Landowners Protecting Your Farm’s Soil & Water March 1, 2013.
Practice – CP-39 Farmable Wetland Program Constructed Wetland.
1 Economic and Environmental Co-benefits of Carbon Sequestration in Agricultural Soils: Retiring Agricultural Land in the Upper Mississippi River Basin.
Restoration and Enhancement Delivery on Private Lands Lessard Outdoor Heritage Council Monday, January 26, 2009 Kevin Lines Board of Water and Soil Resources.
The U.S. Experience With Land Retirement for Natural Resource Conservation Ralph E. Heimlich Deputy Director for Analysis, Resource Economics Division,
Working Lands Programs Food, Conservation, and Energy Act of 2008 Jim Pease Dept of Agricultural & Applied Economics Virginia Tech 540/
Propensity Score Matching A Primer in R 1 David Zepeda Assistant Professor Supply Chain & Information Management Center for Health Policy.
U.S. Department of Agriculture Structure and Programs
Protecting Working Lands: Through USDA Conservation Programs Denise Coleman National Farm and Ranch Lands Protection Program Manager USDA, Natural Resources.
Land Rent – Base or Bubble? What is fair? What are my options?
Influence of the Natural Resources Conservation Service on Alabama Agriculture Robert N. Jones State Conservationist USDA-Natural Resources Conservation.
Easement Programs Voluntary Programs –Willing buyer & willing seller.
Farm Management Chapter 20 Land  Control and Use.
Conservation Provisions of the 2014 Farm Bill Bradley D. Lubben, Ph.D. Extension Assistant Professor, Policy Specialist, and Director, North Central Risk.
Impacts of Climate Change on Corn and Soybean Yields in China Jintao Xu With Xiaoguang Chen and Shuai Chen June 2014.
Agroforestry Assistance §History §Technical §Financial.
Economic and Biophysical Models to Support Conservation Policy: Hypoxia and Water Quality in the Upper Mississippi River Basin CARD Resources and Environmental.
Measuring Carbon Co-Benefits of Agricultural Conservation Policies: In-stream vs. Edge-of-Field Assessments of Water Quality. Measuring Carbon Co-Benefits.
1 Food, Conservation, and Energy Act of 2008 (Farm Bill) Disclaimer: Provisions provided in this presentation are subject to change or interpretive differences.
Conservation Reserve Enhancement Program USDA Farm Service Agency.
NRCS Programs Provide Biofuel and Biomass Opportunities for Producers Switchgrass harvest for biofuels, Photo: NRCS Iowa.
Co-Benefits from Conservation Policies that Promote Carbon Sequestration in Agriculture: The Corn Belt CARD, Iowa State University Presented at the Forestry.
North Dakota Agricultural Land Valuation Model Dwight Aakre/Ron Haugen Farm Management Specialists March 2012.
Chapter 7 Conservation Reserve Program 1. The Conservation Reserve Program (CRP) Administration of CRP –The provisions of G.S (d) apply only.
APPLYING CONSERVATION TO THE TEXAS LANDSCAPE Norman Bade, NRCS State Resource Conservationist Conservation Provisions of the 2002 Farm Bill (Farm Security.
CRP LAND: It’s in your hands. Many Contracts Set to Expire More than 1 million acres of CRP contracts are set to expire by October, 2009 More than 1 million.
Using GIS to Compare Different Uses of Farm Land and its Profitability Carrie Foster Feb 26, 2008.
Econometric Estimation of The National Carbon Sequestration Supply Function Ruben N. Lubowski USDA Economic Research Service Andrew J. Plantinga Oregon.
Title II: Conservation Andy Seidl, Colorado State University.
Assessing Alternative Policies for the Control of Nutrients in the Upper Mississippi River Basin Catherine L. Kling, Silvia Secchi, Hongli Feng, Philip.
Status of the CEAP National Assessment Robert Kellogg Jerry Lemunyon Natural Resources Conservation Service, USDA.
The Capitalization of Decoupled Government Subsidies Into Agricultural Land Values By James Whitaker Prepared for the Conference on Domestic and Trade.
THE ADMINISTRATION OF WILDLIFE MANAGEMENT Wildlife Management Unit 1 Part 2.
1 Food, Conservation and Energy Act of Farm Bill Highlights Increases funding for conservation programs Focuses on Agricultural and Forestry.
FSA UPDATE. FSA
Linking Land use, Biophysical, and Economic Models for Policy Analysis Catherine L. Kling Iowa State University October 13, 2015 Prepared for “Coupling.
Biofuel Policy Effects on Soil Erosion C. Robert Taylor, Auburn University Ronald D. Lacewell Texas A&M.
1 Food, Conservation and Energy Act of Information on NRCS Conservation Programs EQIP-Environmental Quality Incentives Program WHIP-Wildlife Habitat.
1 Food, Conservation & Energy Act of 2008 Conservation Stewardship Program (CSP) USDA Natural Resources Conservation Service.
Santhi et al.ASAE1 Environmental and Economic Impacts of Reaching and Doubling the USDA Buffer Initiative Program on Water Quality C. Santhi 1, J. D. Atwood.
1 CONSERVATION STEWARDSHIP PROGRAM (CSP) Continuous Sign-Up Kick-Off Steve Parkin Stewardship Program Team August 10, 2009.
Conservation Provisions of the 2002 Farm Bill Farm Security and Rural Investment Act of 2002.
CONSERVATION RESERVE PROGRAM Preparing producers for land use and conservation decisions.
Modeling the Impacts of Forest Carbon Sequestration on Biodiversity Andrew J. Plantinga Department of Agricultural and Resource Economics Oregon State.
NRCS Role in Soil Conservation Mark Myers, Soil Conservationist Lancaster County, Pennsylvania Winter Farmers Meeting February 25, 2016.
The impacts of information and biotechnologies on corn nutrient management Jae-hoon Sung and John A. Miranowski Department of Economics Iowa State University.
Kotchikpa Gabriel Lawin Lota Dabio Tamini
Farmland Leases: A Reset Needed
Governing PES: What can be learned from comparing Chinese and American experiences of restoring degraded cropland? Runsheng Yin.
Lyubov Kurkalova, Catherine Kling, and Jinhua Zhao
Lyubov Kurkalova, Catherine Kling, and Jinhua Zhao
Texas Water Resources Institute
Lyubov Kurkalova, Catherine Kling, and Jinhua Zhao
By: Emilie R. Cooper School of Forest Resources
Federal Shutdown Impacts
Farm Service Agency (FSA) Natural Resource Conservation Service (NRCS)
CRP Snippets from the 2018 Farm Bill.
Government Conservation Programs
Prasenjit Ghosh, Ruiqing Miao, and Emir Malikov (Auburn University)
Natural Resources Conservation Service
Presentation transcript:

"Estimating the Determinants and Effects of Participation in the USDA's Conservation Reserve Program." Prepared for: Camp Resources XV August 7-8, 2008 Jacob N. Brimlow Ph.D. Candidate Agricultural and Resource Economics NCSU

USDA Conservation Reserve Program (CRP) Goals: reduce soil erosion, enhance air and water quality, expand and improve wildlife habitat and wetlands Retires cropland using year contracts Compensates landowners using annual rental payments, cost share assistance, and incentive payments National Enrollment : 36.8 million acres ($1.8b/yr) Minnesota Enrollment: 1.8 million acres **

Enrolling in the CRP ( “general” sign-ups since 1990) Landowner “Bids”: The Environmental Benefits Index (EBI) Score Landowner chooses land to enroll, conservation practice to adopt, and rental rate/cost share assistance to request Seven EBI factors are tallied to compute overall score - cost factor penalizes higher rental rate bids Bids are ranked by EBI score, and EBI cutoff determined by FSA after all bids are received

Question Does enrollment in the CRP affect the value of enrolled farmland? Who cares?

Hypothesis Does enrollment in the CRP affect the value of enrolled farmland?

Hypothesis Yes Does enrollment in the CRP affect the value of enrolled farmland?

Hypothesis Note: CRP is voluntary Assume: Landowners are profit maximizers landowners will not enroll in CRP unless profits increase parcels restricted under CRP will be worth at least as much as those that are not Hypothesis: Ceteris paribus, CRP enrollment will have a non-negative effect on the value of enrolled farmland

Estimation y - vector of explanatory variables (productivity, location, etc) A* - CRP enrollment and I think z - vector of explanatory variables (productivity, location, etc)

Enrollment Does CRP enrollment depend, empirically, on variables likely to influence land value?

Estimation: Enrollment County Data Parks and Kramer (1995) Esseks and Kraft (1988) Plantinga, et. al. (1990) Goodwin and Smith (2003) Isik and Yang (2004) County/Farm Data Roberts and Lubowski (2007) Jake z - vector of explanatory variables (productivity, location, etc) A* - CRP enrollment (continuous or binary) Key Variables: Land Productivity, Government payments, Erosion, CRP bids/payments Results: Mixed Literature

Estimation y - vector of explanatory variables (productivity, location, etc) A* - CRP enrollment and I’m pretty sure z - vector of explanatory variables (productivity, location, etc) selection bias/correlated errors...

Positive Effect Shoemaker (1989)* No Effect (Insignificant) Vitaliano and Hill (1994) Nickerson and Lynch (2001) Negative Effect Taff (2004)* Shultz and Taff (2004) Anderson and Weinhold (2005) Taff and Weisberg (2007)* Goodwin, et. al. (working) * Estimate the effect of enrollment in the CRP Key Variables: Land Productivity, Location Estimation Issues: Selection bias, data quality, sample size Estimation: Farmland Value and Conservation Programs

Farmland Value –Township Data (Log of) Farmland value per acre 2007 Proportion of township enrolled in CRP Productivity (CPI): Scale weighted average productivity of township by soil proportion of land in productivity “grade” Population growth , level 1990, Location (county, NASS region) –

Let’s talk about... - data resolution (county, township, parcel, mixed) - data type (spatial?) - look at eligible cropland only - estimation strategy (two-stage/IV, diff in diff, spatial?) - option values (option to enroll, option to develop)

Thank You!

0 100 A $/yr A 50 A $/yr Average Productivity: 100 $CRP AA Parcel 2Parcel 1 Enrollment: 0 Enrollment:.5A

17 Quick View: Enrollment Data –Farm-level Data: CRP enrollment (tillable acres) Average productivity (CER...more to follow...) Tillable acreage Location (county, NASS region) –

Quick View: Enrollment Regression

Productivity Data Parcel/Farm Analysis Crop Equivalency Rating (CER) - county index captures erosion, climate, soil permeability - generated in some counties as early as only available in select counties Township Analysis Crop Productivity Index (CPI) - county index captures ability of soil grow corn - NO erosion or climate adjustments - generated available state-wide

Censored Regression Acres = A $/year A 1 *, A 2 * = 0A3*A3*A 5 * = A c NP 1 A4*A4* NP 2 NP 3 NP 4 NP 5 Observation summary: 4240left-censored 246 uncensored 42 right-censored

Model Implication Where A* is the acreage enrolled, c is the per acre payment for retiring land from production, and z is a vector of variables that affect the net productivity of land. Test using:

Crop Equivalency Rating (CER) Reflects the net economic return per acre of soil when property is managed for the highest net return. –adjusted for weather –CER’s are relative to other properties in each county But, –limits sample size –out of date

Enrollment Summary Stats

A $/year 0 A Model NP 1 = a 0 + a 1 z 1 + a 2 A NP 2 = a 0 + a 1 z 2 + a 2 A

A $/year 0 A1*A1* s1s1 s2s2 b A c Model NP 1 = a 0 + a 1 z 1 + a 1 A NP 2 = a 0 + a 1 z 2 + a 1 A

The Conservation Reserve Program (CRP)

Enrollment: Remaining Issues 1. Productivity Data (Crop Equivalency Rating - CER) - covers only some counties, and is out of date 2. Productivity-Acreage Link - confidentiality issues have made finer resolution difficult 3. Government Payments Data - land characteristics or dollars ?