An efficiency approach to managing Mississippi's marginal land based on the conservation reserve program (CRP)

The US Congress established the Conservation Reserve Program (CRP) in Title XII of the Food Security Act of 1985. The program, administered by the US Department of Agriculture (USDA), is a voluntary long-term cropland retirem ent program. USDA pays farm owners an annual per-acre rent and reimburses t hem for one-half of the cost of establishing a permanent land cover in exch ange for retiring highly erodible cropland for 10 years. The program is mea nt to boost net farm income and improve environmental quality over the life of the program (1986-1999). The paper presented here is a linear programmi ng application to the economic modeling of Mississippi's marginal agricultu ral land conversion to timber use. Under the adopted crop and timber prices , costs and yields, the optimal solution to maximize net returns to land wa s realized by placing all cropland into timber use. However, results from t his analysis indicate that from an economic standpoint, the optimal solutio n is highly sensitive to changes in crop and timber prices. Returns from ti mber production will not be realized until well into the future as compared to annual returns from crops. A farmer's personal time horizon may indeed impact on his land-use decision. Perhaps other criteria such as the 10 year s stability of CRP rent payments or externalities associated with crop reti rement such as a desire for wildlife habitat will affect farmers land-use d ecisions. Results from CRP sign-ups indicate that Mississippi's farmers hav e utilized the CRP by converting almost 514800 acres of marginal cropland i nto trees. Published by Elsevier Science B.V.