The US Conservation Reserve Program: The evolution of an enrollment mechanism

- The USDA's CRP retires cropland to provide ecosystem services.
- CRP uses a competitive auction to select offers.
- An environmental benefits index, with cost an additive factor, ranks offers.
- All offers are subject to a parcel specific bid cap.
- Alternative auction mechanisms (quota and reference price) are considered.

The United States Department of Agriculture's Conservation Reserve Program (CRP) has evolved from near open enrollment, to competitive enrollment, and now to a mixture of competitive and targeted enrollment. This paper reviews the history of the CRP and the evolution of its enrollment mechanism. I discuss the use of bid caps and the Environmental Benefits Index bid ranking mechanism in the “general” CRP; and the use of highly targeted, but non-competitive, “continuous” CRP. Possible challenges of these designs are discussed, and alternative auction mechanisms are considered that could be more cost effective.

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