Journal Article

The Effect of Rental Rates on the Extension of Conservation Reserve Program Contracts

Joseph C. Cooper and C. Tim Osborn

in American Journal of Agricultural Economics

Published on behalf of Agricultural and Applied Economics Association

Volume 80, issue 1, pages 184-194
Published in print February 1998 | ISSN: 0002-9092
Published online February 1998 | e-ISSN: 1467-8276 | DOI: http://dx.doi.org/10.2307/3180280
The Effect of Rental Rates on the Extension of Conservation Reserve Program Contracts

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  • Renewable Resources and Conservation
  • Agricultural Economics

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Given that the majority of conservation reserve program (CRP) contracts on approximately 36 million acres of enrolled land expire concurrently, re-enrollment decisions by farmers and the federal government have high budgetary implications. Using a survey of over 8,000 CRP contract holders, we apply an ordered response discrete choice model to explicitly model the range in rental rates over which the representative farmer may be ambivalent to renewing the CRP contract. Given the empirical results from the ordered response model, we estimate acreage re-enrollment as a function of the rental rate and compare them to results of a binomial choice model.

Keywords: CRP contracts; ordered probit; re-enrollment; respondent indifference; Q180; Q240

Journal Article.  0 words. 

Subjects: Renewable Resources and Conservation ; Agricultural Economics

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