Importance of Contract Attributes on Conservation Reserve Program Enrollment Decisions in the Prairie Pothole Region

Abstract

U.S. farmers’ interest in CRP has waned. Enrollment for 2015 was targeted at 26 million acres but as of the end of February, actual enrollment had declined to 24.6 million acres (USDA, 2015). Available studies point to recent fluctuations in commodity prices as a predominant factor in this enrollment gap. Other potentially influencing factors remain understudied, including farmer preferences for contract design. A choice experiment survey was conducted in the Prairie Pothole region to assess these preferences. An exploded logit model was used to evaluate the preference heterogeneity among program attributes. Results indicate that an increase in the maximum payment, length of contract, and the government’s share of establishment cost increase the utility of farmers, whereas, fixing terms at the beginning of the contract and imposing more land use restrictions on enrolled land have a negative impact on farmers’ utilities.