The Conservation Reserve Program (CRP), first enacted in 1985, seeks to achieve both conservation and agricultural supply control objectives through voluntary, long-term (10 year contracts) retirement of cropland. By fall 2000, the program had enrolled about 31.4 million acres nationwide, and North Dakota ranked third among the states, with 3.2 million contracted acres, or 11 percent of the state's total cropland. Although long-term land retirement offers a variety of environmental benefits, as well as providing a stable income to participating landowners, large-scale land retirement can pose adverse economic impacts for nearby communities, primarily because agricultural supply and service sector businesses may be adversely affected. This study was undertaken to examine the local socioeconomic effects of the Conservation Reserve Program in rural areas of North Dakota. Interviews with agricultural and community leaders in six rural areas of North Dakota revealed that the CRP was perceived to have both positive and negative effects. The program was considered a substantial benefit to landowners, providing them with a guaranteed income from some of their least productive land. In addition, the environmental benefits of the program, including reduced soil erosion, improved water quality, and enhanced wildlife populations, were widely recognized. Negative effects cited by the leaders focused on the adverse impacts of cropland retirement on the farm supply and service sector and the role of the CRP in declining farm numbers and rural depopulation. A survey of more than 1,000 CRP contract holders provided additional perspective regarding the program's effects. Leading reasons for enrolling land in the CRP were to reduce erosion/increase soil fertility (24%), reduce income risk (23%), CRP was economically attractive (22%), and provide a transition to retirement (11%). The contract holders also reported that the land they enrolled in the CRP had lower yields than other land in the area, by an average of 5 percent. Forty-two percent of the respondents had enrolled 150 acres or less and only 21 percent had enrolled more than 450 acres. Of the contract holders who had once farmed but were no longer farming, only 23 percent indicated that the CRP influenced their decision to quit farming. On the other hand, of the respondents who were currently farming, 31 percent indicated that the CRP had been instrumental in keeping them on the farm. When the leaders were asked for suggestions to improve the program, their responses reflected three major themes. One group felt that the CRP should focus on highly erodible land and that recent changes in enrollment criteria have allowed too much productive farmland to be enrolled. Another group of respondents argued for periodic haying of the CRP land (e.g., every third or fourth year), a measure they thought that would both improve the wildlife habitat value of the land and provide a feed base for livestock producers. Finally, a number of leaders in each study area suggested options to increase recreational access to CRP land. They believe that increased economic activity associated with recreational activities (primarily hunting) may offer their communities a means to offset some of the economic losses associated with land retirement.

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Agribusiness & Applied Economics Report No. 476

 Record created 2017-04-01, last modified 2017-08-02

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