Enduring Impacts of Land Retirement Policies: Evidence from the Conservation Reserve Program

We examine the persistence of cropland retirements induced by the Conservation Reserve Program (CRP), the largest U.S. conservation program. We analyze micro data on observed land-use choices following CRP contract expiration over 1995–1997 and predict that 42% of CRP acres would not have been returned to crops within a year if the program had expired in 1997. These results indicate that temporary cropland retirement payments under CRP generate land-use changes that often extend beyond contract periods. The analysis suggests that targeted signing bonuses for first-time enrollees would increase the longer-term impacts of CRP and perhaps other incentive-based land-use programs. (JEL Q24)