Long-Term Efficacy of the Federal Conservation Reserve Program Relative to Feasible Agricultural Land-Use Alternatives and Free Market Competitive Viability

The Conservation Reserve Program (CRP) is a voluntary program for agricultural landowners designed to promote conservation of groundwater, topsoil, wildlife, and environmental preservation. CRP benefit, from a programmatic standpoint, is well documented in the academic literature. Less understood, however, is how individual program participants benefit from the CRP and whether the CRP rental payments and other forms of payments to farmers from the federal government adequately compensate for decreased agricultural production. Using Adam Smith's conceptualization of the invisible hand as interpreted by Wight, this study sought to evaluate the motives of individual participants and to understand whether participants gain financial benefit compared to those producers who do not participate in the program. Data from five counties in a Midwestern state were collected for a 10 year period between 1996 and 2005. A simple linear regression analysis was used to evaluate how CRP rentals related to wheat production. The impact on profitability identified whether there was parity between program participation and free market production. Key findings suggest that producers are not financially benefiting from program participation and are making land use choices that are contradictory to CRP programmatic goals. This means that program participants may be at a financial disadvantage, and the federal government is not achieving the conservation goals as expected. This study promotes positive social change by offering a way to better understand the relationship between the practice of agriculture and environmental conservation. This study also identifies ways that land utilization could be optimized in a way that benefits taxpayers and program participants in the long term.