How Cost‐Effective Are Land Retirement Auctions? Estimating the Difference between Payments and Willingness to Accept in the Conservation Reserve Program

• DOI: 10.1111/j.1467-8276.2005.00813.x
• Publication Date: 2005-11-16T18:48:14Z
• Authors: Barrett Kirwan; Ruben N. Lubowski; Michael J. Roberts
• Keywords: 2. Zero hunger; 0502 economics and business; 05 social sciences; 15. Life on land

The Conservation Reserve Program (CRP), established by the Food Security Act of 1985, offers annual rental payments to farm operators who voluntarily retire environmentally sensitive cropland under ten- to fifteen-year contracts. The CRP is notable for the size of both its budget and its environmental benefits. The CRP currently pays about $1.7 billion per year to retire about 34 million acres (equal to about 8% of U.S. cropland, or the size of Iowa). For comparison, Congressional appropriations for toxic waste cleanups under the Superfund program, one of the nation’s highest profile environmental initiatives, totaled $1.3 billion in 2003. To date, the CRP has disbursed over $26 billion in direct payments. Researchers have estimated that the environmental benefits exceed the program’s costs (Feather, Hellerstein, and Hansen; Ribaudo et al.).