Land use impacts of the Conservation Reserve Program: An analysis of rejected offers

Abstract

The Conservation Reserve Program is the largest agricultural land retirement program in the United States, with more enrolled acreage entering the program through a competitive auction called the General Signup than any other component. In this study, we assess the land use impacts of the Conservation Reserve Program by observing the land use decisions of parcels following the 2016 General Signup. We estimate land use impacts using a regression discontinuity design based on the Environmental Benefits Index, the program's selection and ranking mechanism. Our estimates largely rely on the auction design of the General Signup, such that we observe the land use decisions of rejected offers. We also use information on the rental rates of these offers to understand what the program pays to retire land in different uses. We estimate that a marginal acre of land enrolled in the Conservation Reserve Program replaces 0.30 acres in cropland, 0.25 acres in mixed forage, 0.32 acres in grassland, 0.12 acres in idle or fallow land, and 0.01 acres in timberland. We also find that enrollments from newly offered fields are more likely to displace cropland and less likely to displace grassland than returning fields. Consequently, we estimate that new enrollments lead to 47% greater reductions in water-driven erosion and 12% greater reductions in wind-driven erosion, compared to fields with prior enrollment.