Precision Management for Enhancing Farmer Net Returns with the Conservation Reserve Program

Yield maps have successfully been combined with economic principles in establishing precision guided recommendations for enrollment in the Conservation Reserve Program (CRP). This can and has resulted in greater net returns for farmers than not enrolling in CRP or enrolling all eligible land in CRP without the consideration of foregone economic opportunities (Stull et al. 2004). This study expands these concepts by recognizing the adaptive behavior of the farmer and opportunities resulting from CRP participation. Thus, as a farmer adjusts production practices such as planting date in response to the reduced acreage afforded by CRP participation, optimal management decisions change. Consequently, altering production practices such as planting date in recognition of a new expected net return maximizing whole farm management framework allows further ability to take advantage of CRP. To the extent that this has been previously ignored, CRP economic benefits to the farmer’s net returns have been underestimated. This in turn heightens the possibility of CRP participation thereby enabling environmental enhancements. Whole farm modeling and mathematical programming are utilized to examine a case study for Kentucky corn and soybean producers. No-till corn and soybean production yields for varying planting dates, seeding rates, maturity groups and fertilizer application levels are simulated over 30 years and incorporated into the economic decisionmaking model. Preliminary results demonstrate the potential for added value under effective precision management through soil type CRP enrollment and revised land area allocation to optimal production practices. The resulting breakeven CRP payments differ considerably across soil types. While variable rate nitrogen application VRN usually results in greater CRP payment levels due to increased profitability through enhanced productivity, this in not globally true. There is evidence that the effectiveness and likelihood of participation in policies is dependent on interactions and recognition of the adaptive behavior of farmers.