Wednesday, June 16, 2010

Challenges Facing USDA’s Conservation Reserve Program

Reductions in maximum Conservation Reserve Program (CRP) acres mandated by the 2008 Farm Act, along with relatively high agricultural commodity prices, could lead to reduced overall environmental benefits and higher CRP costs.

ERS is analyzing alternative enrollment policies and practices that could increase environmental benefits per enrolled acre and lower program costs.

ERS research conservatively estimates CRP benefits of $1.3 billion per year, excluding carbon sequestration, ecosystem protection, and other less easily quantified benefits.

The effectiveness of changes will depend on improved data and models to more accurately estimate the environmental benefits provided by competing offers to enroll land in the CRP.

After a period of relative stability, the CRP faces a number of changes. The 2008 Farm Act reduced the CRP’s maximum enrollment to 32 million acres—4.6 million acres less than the program’s peak acreage in 2007. Moreover, increases in agricultural commodity prices since 2006 not only increase CRP costs, but may decrease landowner interest in the CRP if further increases are expected in the future. And, if program goals evolve in response to emerging environmental concerns, such as climate change, the location and types of practices installed on CRP lands may change, possibly affecting wildlife habitat and other environmental services provided by the program.

These factors create additional incentives for USDA to pursue efforts focusing on improved targeting, encouraging the use of better conservation practices, and heightening competition among bidders—steps that hold promise for increasing the environmental benefits and lowering the cost of the CRP. Such efforts would benefit from better—even if still imperfect—scientific information.

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