The Impact of Discretionary Rental Rate Adjustments in the Conservation Reserve Program

Abstract

This paper examines the causal impact of discretionary adjustments by local boards to counties’ soil rental rates for the Conservation Reserve Program on program enrollment over 2016-2022. I use a coarsened exact matching method to pair most similar counties and then estimate both the average treatment effect and the marginal treatment effect of rate changes. The results suggest that, on average, a $1 increase in a county’s soil rental rate leads to a 58.84 acre increase in county CRP general acreage enrollment, with no effect on highly beneficial continuous acreage lands. The results suggest that competitive general acres are much more price sensitive than continuous acres, and thus that county rate adjustments are highly effective at enrolling acres but increase enrollment costs for the most environmentally beneficial lands.