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How Cost‐Effective Are Land Retirement Auctions? Estimating the Difference between Payments and Willingness to Accept in the Conservation Reserve Program
Author(s) -
Kirwan Barrett,
Lubowski Ruben N.,
Roberts Michael J.
Publication year - 2005
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1111/j.1467-8276.2005.00813.x
Subject(s) - agriculture , payment , principal (computer security) , agricultural economics , session (web analytics) , economics , political science , geography , business , finance , archaeology , computer science , advertising , operating system
The Conservation Reserve Program (CRP), established by the Food Security Act of 1985, offers annual rental payments to farm operators who voluntarily retire environmentally sensitive cropland under ten- to fifteen-year contracts. The CRP is notable for the size of both its budget and its environmental benefits. The CRP currently pays about $1.7 billion per year to retire about 34 million acres (equal to about 8% of U.S. cropland, or the size of Iowa). For comparison, Congressional appropriations for toxic waste cleanups under the Superfund program, one of the nation’s highest profile environmental initiatives, totaled $1.3 billion in 2003. To date, the CRP has disbursed over $26 billion in direct payments. Researchers have estimated that the environmental benefits exceed the program’s costs (Feather, Hellerstein, and Hansen; Ribaudo et al.).