Estimating the Determinants and Effects of Participation in the USDA's Conservation Reserve Program. - PowerPoint PPT Presentation

Loading...

PPT – Estimating the Determinants and Effects of Participation in the USDA's Conservation Reserve Program. PowerPoint presentation | free to download - id: b0ffe-MTZjO



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

Estimating the Determinants and Effects of Participation in the USDA's Conservation Reserve Program.

Description:

parcels restricted under CRP will be worth at least as much as those that are not ... Does CRP enrollment depend, empirically, on variables likely to influence ... – PowerPoint PPT presentation

Number of Views:59
Avg rating:3.0/5.0
Slides: 30
Provided by: KCI6
Learn more at: http://www.ncsu.edu
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Estimating the Determinants and Effects of Participation in the USDA's Conservation Reserve Program.


1
"Estimating the Determinants and Effects of
Participation in the USDA's Conservation Reserve
Program."
  • Prepared for Camp Resources XV
  • August 7-8, 2008
  • Jacob N. Brimlow
  • Ph.D. Candidate
  • Agricultural and Resource Economics
  • NCSU

2
USDA Conservation Reserve Program (CRP)
National Enrollment 36.8 million acres
(1.8b/yr) Minnesota Enrollment 1.8 million
acres
  • Goals
  • reduce soil erosion, enhance air and water
    quality, expand and improve wildlife habitat and
    wetlands
  • Retires cropland using 10-15 year contracts
  • Compensates landowners using annual rental
    payments, cost share assistance, and incentive
    payments


3
Enrolling in the CRP ( general sign-ups since
1990)
  • Landowner Bids
  • The Environmental Benefits Index (EBI) Score
  • Landowner chooses land to enroll, conservation
    practice to adopt, and rental rate/cost share
    assistance to request
  • Seven EBI factors are tallied to compute overall
    score
  • - cost factor
    penalizes higher rental rate bids
  • Bids are ranked by EBI score, and EBI cutoff
    determined by FSA after all bids are received

4
Question
Who cares?
5
Hypothesis
6
Hypothesis
Yes
7
Hypothesis
Note CRP is voluntary Assume Landowners are
profit maximizers
landowners will not enroll in CRP unless profits
increase
parcels restricted under CRP will be worth at
least as much as those that are not
Hypothesis Ceteris paribus, CRP enrollment will
have a non-negative effect on the value of
enrolled farmland
8
Estimation
  • y - vector of explanatory variables
    (productivity, location, etc)
  • A - CRP enrollment

and I think
  • z - vector of explanatory variables
    (productivity, location, etc)

9
Enrollment
Does CRP enrollment depend, empirically, on
variables likely to influence land value?
10
Estimation Enrollment
  • z - vector of explanatory variables
    (productivity, location, etc)
  • A - CRP enrollment (continuous or binary)

Literature
  • County Data
  • Parks and Kramer (1995)
  • Esseks and Kraft (1988)
  • Plantinga, et. al. (1990)
  • Goodwin and Smith (2003)
  • Isik and Yang (2004)
  • County/Farm Data
  • Roberts and Lubowski (2007)
  • Jake
  • Key Variables Land Productivity, Government
    payments, Erosion, CRP bids/payments
  • Results Mixed

11
Estimation
  • y - vector of explanatory variables
    (productivity, location, etc)
  • A - CRP enrollment

and Im pretty sure
  • z - vector of explanatory variables
    (productivity, location, etc)

selection bias/correlated errors...
12
Estimation Farmland Value and Conservation
Programs
  • Positive Effect
  • Shoemaker (1989)
  • No Effect (Insignificant)
  • Vitaliano and Hill (1994)
  • Nickerson and Lynch (2001)
  • Negative Effect
  • Taff (2004)
  • Shultz and Taff (2004)
  • Anderson and Weinhold (2005)
  • Taff and Weisberg (2007)
  • Goodwin, et. al. (working)
  • Key Variables Land Productivity, Location
  • Estimation Issues Selection bias, data quality,
    sample size

Estimate the effect of enrollment in the CRP
13
Farmland Value
  • Township Data
  • (Log of) Farmland value per acre 2007
  • Proportion of township enrolled in CRP
  • Productivity (CPI) Scale 1-100
  • weighted average productivity of township by soil
  • proportion of land in productivity grade
  • Population
  • growth 1990-2000, 2000-2007
  • level 1990, 2000-2007
  • Location (county, NASS region)

14
(No Transcript)
15
(No Transcript)
16
Lets talk about...
- data resolution (county, township, parcel,
mixed) - data type (spatial?) - look at
eligible cropland only - estimation strategy
(two-stage/IV, diff in diff, spatial?) - option
values (option to enroll, option to develop)
17
Thank You!
18
/yr
/yr
150
100
CRP
50
A
A
0
A
0
.5 A
A
Average Productivity 100
Average Productivity 100
Enrollment 0
19
Quick View Enrollment Data
  • Farm-level Data
  • CRP enrollment (tillable acres)
  • Average productivity (CER...more to follow...)
  • Tillable acreage
  • Location (county, NASS region)

17
20
Quick View Enrollment Regression
21
Productivity Data
Parcel/Farm Analysis Crop Equivalency Rating
(CER) - county index 0-100 - captures erosion,
climate, soil permeability - generated in some
counties as early as 1972 - only available in
select counties
Township Analysis Crop Productivity Index (CPI) -
county index 0-100 - captures ability of soil
grow corn - NO erosion or climate adjustments -
generated 2007 - available state-wide
22
Censored Regression
Observation summary 4240 left-censored
246 uncensored
42 right-censored
NP1
/year
NP2
NP3
NP4
NP5
Acres A
A1, A2 0
A3
A5 A
A4
23
Model Implication
Where A is the acreage enrolled, c is the per
acre payment for retiring land from production,
and z is a vector of variables that affect the
net productivity of land.
Test using
24
Crop Equivalency Rating (CER)
  • Reflects the net economic return per acre of soil
    when property is managed for the highest net
    return.
  • adjusted for weather
  • CERs are relative to other properties in each
    county
  • But,
  • limits sample size
  • out of date

25
Enrollment Summary Stats
26
Model
/year
NP1 a0 a1 z1 a2 A
NP2 a0 a1 z2 a2 A
A
0
27
Model
/year
NP1 a0 a1 z1 a1 A
NP2 a0 a1 z2 a1 A
s1
b
s2
A
0
A1
28
The Conservation Reserve Program (CRP)
29
Enrollment Remaining Issues
1. Productivity Data (Crop Equivalency Rating -
CER) - covers only some counties, and is out of
date 2. Productivity-Acreage Link -
confidentiality issues have made finer resolution
difficult 3. Government Payments Data - land
characteristics or dollars ?
About PowerShow.com