Assessing Cost-effectiveness of the Conservation Reserve Program (CRP) and Interactions between the CRP and Crop Insurance

Ruiqing Miao, Hongli Feng, David Hennessy and Xiaodong Du

Land Economics, 2016, vol. 92, issue 4, 593-617

Abstract: We examine the U.S. Conservation Reserve Program (CRP) enrollment design while accounting for the CRP’s interactions with the federal crop insurance program. We find that the current CRP is not cost-effective despite its intent to balance benefits and costs. Based on CRP contract-level data, we show that adopting a cost-effective enrollment design and incorporating crop insurance subsidies into the CRP’s Environmental Benefits Index would significantly increase the CRP acreage, environmental benefits, and savings on crop insurance subsidies, while leaving government outlay unchanged. Large geographical redistributions of CRP acreage would also occur. We further investigate the cost-effective design’s robustness to CRP benefit misspecifications.

JEL-codes: Q18 Q24 (search for similar items in EconPapers)
Date: 2016
Note: DOI: 10.3368/le.92.4.593
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:uwp:landec:v:92:y:2016:i:4:p:593-617

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