Competing farm programs: Does the introduction of a risk management program reduce the enrollment in the Conservation Reserve Program?

Abstract

AbstractGovernment‐supported farm programs can provide farm operators with different economic incentives regarding the use of their land. We study two US farm programs relevant to hay and pastureland, the Conservation Reserve Program (CRP) and Pasture, Rangeland, and Forage (PRF) Index Insurance. Using county‐level enrollment and availability data, we find that the introduction of PRF reduces enrollment in CRP. This interaction potentially returns environmentally sensitive farmland back into production. We also document the heterogeneity of the effects over time and the dynamic effects across the length of exposure.