Economic Impact Analysis of Post-CRP Policy Options in South Dakota

The primary objective of the study was to determine the major economic impacts on South Dakota of alternative future CRP decisions. Three steps were followed to find the economic impacts. First, the relative productivity differences between South Dakota CRP land and South Dakota crop land were determined. County Soil Survey Books and NRCS conservationists provided the necessary information for this step\u27s completion. The second step determined the profitability of post-CRP land uses by sub-state region for three post-CRP policy options. CARE budgeting was employed using relative productivity information to find crop/forage net returns under full CRP, reduced CRP, and no CRP extension scenarios. In step three the economic impacts of alternative CRP land use scenarios on different regional and state economic sectors were determined. Information from the CARE budgeting was used in IMPLAN input/output analyses to determine each policy\u27s broader economic impacts. Separate impact models were developed for the state and each of eight sub-state regions. Reducing CRP extension levels was found to have negative impacts on economic indicators in most regions and state-wide. The induced effects of lost producer income under no or reduced CRP drove the results. Generally, direct and indirect effects from reducing CRP were positive. Moving from full CRP to less CRP positively affected economic indicators in agricultural-related industries and negatively impacted economic indicators in non-agricultural industries. Which CRP policy is best for South Dakota depends upon the goal society is trying to achieve (agricultural versus non-agricultural)