LAND CONVERSION AND THE CONSERVATION RESERVE PROGRAM (CRP) IN NORTH CAROLINA

Abstract

This paper will explore the economic factors that influence a rural landowner’s decision to either continue planting crops or to enroll land in CRP. Specifically, I will estimate the extent to which federal commodity subsidies encourage North Carolina farmers to continue producing crops on agricultural land that may otherwise convert to CRP. I will also devise hypothetical policy scenarios related to conservation and commodity government payments in the 2007 Farm Bill to predict land use conversion. My hypotheses are:

Commodity subsidies promote inefficiency by encouraging farmers to till unproductive land that would otherwise convert to other uses such as CRP; If the 2007 Farm Bill reduced commodity payments and/or expanded the CRP program, the amount of CRP-enrolled land would increase.