Improving nitrogen management in US agriculture: Yield Reserve versus land retirement

Pressure to protect and restore water quality continues to drive demand for greater reductions in nitrogen (N) loads from US agriculture. Researchers have been evaluating agricultural production choices along both the extensive and intensive margins to improve ecosystem services. This study uses the US Department of Agriculture's Regional Environment and Agriculture Programming (REAP) model, a partial equilibrium simulation model that integrates agricultural production, land use, and environmental outcomes, to evaluate the cost-effectiveness of a Yield Reserve Program compared to an expansion of the Conservation Reserve Program (CRP) on revenues, costs, output, and potential reductions in N loads from the production of 10 major crops, both nationally and regionally. The findings indicate that the Yield Reserve Program outperforms the CRP in terms of achieving N reduction under equivalent government budget expenditures. However, the N reduction under the Yield Reserve Program is partially offset by the "rebound effect" on corn (Zea mays L.) acreage whereby corn acreage increases with the subsidized N reduction. The CRP expansion demonstrates a strong "slippage effect," where the expansion of CRP acreage simply brings marginal land into crop production resulting in a smaller-than-expected N reduction. Sensitivity analysis shows that higher percentage of Yield Reserve in terms of the amount of subsidized N reduction tends to be more cost-effective, and more inelastic land supply tends to reduce the "slippage" of CRP expansion.