THE EFFECT OF RENTAL RATES ON THE EXTENSION OF CONSERVATION RESERVE PROGRAM CONTRACTS

Given that the majority of conservation reserve program (CRP) contract s on approximately 36 million acres of enrolled land expire concurrent ly, re-enrollment decisions by farmers and the federal government have high budgetary implications. Using a survey of over 8,000 CRP contrac t holders, we apply an ordered response discrete choice model to expli citly model the range in rental rates over which the representative fa rmer may be ambivalent to renewing the CRP contract. Given the empiric al results from the ordered response model, we estimate acreage re-enr ollment as a function of the rental rate and compare them to results o f a binomial choice model.