The Conservation Reserve Program: Economic Implications for Rural America

Abstract

This report estimates the impact that high levels of enrollment in the Conservation Reserve Program (CRP) have had on economic trends in rural counties since the program's inception in 1985 until today. The results of a growth model and quasi-experimental control group analysis indicate no discernible impact by the CRP on aggregate county population trends. Aggregate employment growth may have slowed in some high-CRP counties, but only temporarily. High levels of CRP enrollment appear to have affected farm-related businesses over the long run, but growth in the number of other nonfarm businesses moderated CRP's impact on total employment. If CRP contracts had ended in 2001, simulation models suggest that roughly 51 percent of CRP land would have returned to crop production, and that spending on outdoor recreation would decrease by as much as $300 million per year in rural areas. The resulting impacts on employment and income vary widely among regions having similar CRP enrollments, depending upon local economic conditions.

Keywords: Conservation Reserve Program, CRP, rural development, rural employment, land retirement impacts, land-use changes, recreation spending