December 9, 2002

Recreation Helps to Offset CRP-Based Agricultural Losses

The economic burden of the Conservation Reserve Program (CRP) is not as great as once thought because of an increase in CRP-based recreational revenue, a North Dakota State University study shows.

According to Dean A. Bangsund, research scientist for the NDSU Department of Agribusiness and Applied Economics, the average agricultural revenue loss among 16 North Dakota counties analyzed in the study was $50.2 million, while the average revenue brought in by CRP-based hunting was $12.8 million. Recreational (hunting) revenues, on the average, offset agricultural loss by 26 percent in the study areas.

Average CRP-based recreational revenue from the 16 counties studied was $9.45 per CRP-acre. When agricultural loss was included, the overall net economic loss in the study areas was estimated at $27 per CRP-acre. "The economic downfall of the CRP is not as sizable as it was thought to be," Bangsund says.

According to Bangsund, the study shows that hunting-based revenue does not offset agricultural loss equally across the state. In the northwest portion of the state recreational revenue from CRP-based hunting offset agricultural loss by as much as 88 percent. Hunting due to CRP in eastern counties only offset 10 percent of agricultural loss. The offset in the central portion of the state varied from 26 to 41 percent.

The CRP has been in existence in North Dakota for more than 14 years. North Dakota ranks third only to Texas and Montana in total acres enrolled. Several areas of North Dakota are at or near the program limitations for enrollment with nearly 25 percent of the tillable crop land in CRP. These numbers prompted NDSU economists to look at what extent recreational use of CPR acreage is offsetting agricultural loss across North Dakota.

The study looked at the average annual agricultural revenue loss due to the implementation of the CRP between the years of 1996 and 2000 and compared it to revenue brought to rural areas from recreational (hunting) activity.

The recreational revenue is expected to keep climbing in years to come. "If hunting levels continue to rise and agricultural revenues remain similar, the ability of rural economies to offset agricultural losses stemming from the CRP will also increase. The future success of rural economies offsetting CPR-based agricultural losses will largely be dependent on pheasant and waterfowl hunting," Bangsund says. This accounts for over 80 percent of the income generated from CRP-based hunting in North Dakota.

Bangsund, economist Larry Leistritz, and research associate Nancy M. Hodur estimated agricultural revenue using income that would have occurred if the land were taken out of the CRP and returned to agricultural uses such as cropland, haying, grazing or permanent cover. They then subtracted current CRP payment on the enrolled land. This provided them with an estimated net agricultural effect on post-CRP lands.

Hunting impacts were calculated using revenue from pheasant, waterfowl and deer hunting. The amount of revenue brought in by local rural, nonlocal rural, and urban resident and nonresident hunters was taken into consideration. They found that resident hunters account for 61 percent of CRP-based hunting revenues in rural areas, with urban resident hunters accounting for 60 percent of all resident hunter expenditures.

To view a complete report on this study visit http://agecon.lib.umn.edu/cgi-bin/detailview.pl?paperid=5792.

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Source: Dean Bangsund (701) 231-7471, bangsund@ndsuext.nodak.edu
Writer: Deana Oe (701) 231-8371, deana.oe@ndsu.nodak.edu
Editor: Tom Jirik (701) 231-9629, tjirik@ndsuext.nodak.edu