Farmland Retirement's Impact on Rural Growth

Abstract

CRP is approaching its 20th year of operation. From its inception, concerns have been raised that by retiring millions of acres of cropland, the program could disadvantage farming communities already hard hit by farm sector consolidation and globalization. Clearly the CRP does not benefit everyone, and the conservation benefits enjoyed by society may come at the expense of a few industries and regions. Nonetheless, results of ERS analyses suggest that CRP does not come at the expense of longrun economic growth in nearby communities. Even high levels of CRP enrollment have only a modest impact on total county employment, and this impact is relatively short lived. ERS simulations suggest that, in the longer term, CRP enrollment may increase local nonfarm output and employment, and bolster household income if the program increases farm commodity prices and improves recreational opportunities. No statistically significant evidence was found that high CRP enrollments were associated with systematic population declines at the county level.

Keywords: conservation reserve program, conservation policy, rural economies

JEL Classification: Q24, Q18