Integrating Farmer Decision-Making to Target Land Retirement Programs

Wanhong Yang and Murat Isik

No 22062, 2003 Annual meeting, July 27-30, Montreal, Canada from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: This paper develops a model to examine the impacts of uncertainty about crop production and irreversibility of program participation on determining land rental payments and least-cost land retirement targeting in the Conservation Reserve Enhancement Program. Results show that under risk aversion only, the marginal cost of abatement and the average land rental payment are less than those under risk neutrality. However, under uncertainty and irreversibility, the marginal cost and the average land rental payment are considerably higher than those under risk neutrality or risk aversion only. It is important to incorporate uncertainty and irreversibility into the design of land rental payments and in determining participation constraints.

Keywords: Farm Management; Land Economics/Use (search for similar items in EconPapers)
Pages: 29
Date: 2003
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea03:22062

DOI: 10.22004/ag.econ.22062

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