The Relationship between Productivity, Opportunity Cost, and CRP Soil Rental Rates

Bryan Pratt, Nathan Hendricks, Rich Iovanna and Steven Wallander

No 404743, 2026 Annual Meeting, July 26 - 28, 2026, Kansas City, Missouri from Agricultural and Applied Economics Association

Abstract: The Conservation Reserve Program (CRP) is the largest agri-environmental program in the United States, with the majority of acres enrolling through land retirement mechanisms. The program seeks to correctly assess the opportunity cost of enrollment, neither over- nor under-incentivizing participation. Within county, this is based on the relationship between soil productivity and rental rates, but the magnitude of this relationship is an empirical question. We address this relationship with county-level estimates based on survey data, estimates based on parcel sales data, and estimates based on remotely-sensed yields. The estimated relationship between soil productivity, yields, and opportunity cost vary across approaches, but a one percent change in soil productivity may be associated with less than a one percent change in opportunity cost. We also illustrate that the likelihood of application to the program varies in highly non-linear ways with respect to estimated relative soil productivity.

Keywords: Resource; /Energy; Economics; and; Policy (search for similar items in EconPapers)
Pages: 22
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea26:404743

DOI: 10.22004/ag.econ.404743

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