Conservation Reserve Program enrollment decisions in the Prairie Pothole Region

Abstract

The Conservation Reserve Program (CRP) has retained support from farmers and the conservation community for three decades. Beneficial to farmers, the program is voluntary, does not require a permanent easement or the transfer of property rights, and provides fixed income and other financial support. However, high and volatile commodity prices in recent years have increased the opportunity cost of participating, and program enrollment has decreased. This paper considers the influence of contract design on the enrollment decision and estimates the trade-offs between rental rates and program attributes. A stated preference discrete choice experiment was completed during in-person interviews with farmers in the Prairie Pothole Region. Rental payment and establishment cost paid by the government had a direct relationship with likelihood of program enrollment. Tighter restrictions on the use of enrolled land had a negative effect, especially among farmers with livestock. Likelihood of enrollment increased with age, and age decreased responsiveness to increasing maximum bid and to tighter restrictions on land use. Expression of concerns about the CRP affected the degree of responsiveness among farm operators to changes in program attributes. Addressing these concerns through program design or education may serve to increase interest in the program. Farmers were willing to take a lower rental payment under program conditions they considered more favorable including an increased government share for stand establishment and a flexible land use policy. Consideration to introducing CRP contracts with flexible attributes, especially land use constraints, is warranted.