Munich Personal RePEc Archive

The effect of rental rates on the extension of Conservation Reserve Program contracts

Cooper, Joseph C. and Osborn, Tim (1998): The effect of rental rates on the extension of Conservation Reserve Program contracts. Published in: American Journal of Agricultural Economics , Vol. 80, No. 1 (February 1998): pp. 184-194.

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Abstract

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.

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