Corn-Based Ethanol Production and Environmental Quality: A Case of Iowa and the Conservation Reserve Program |
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Authors: | Silvia Secchi Philip W Gassman Jimmy R Williams Bruce A Babcock |
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Institution: | (1) Agribusiness Economics, Southern Illinois University, Agriculture Building, Mailcode 4410, 1205 Lincoln Drive, Carbondale, IL 62901, USA;(2) Center for Agricultural and Rural Development, Iowa State University, Ames, IA, USA;(3) Blackland Research and Extension Center, Temple, TX, USA |
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Abstract: | Growing demand for corn due to the expansion of ethanol has increased concerns that environmentally sensitive lands retired
from agricultural production and enrolled into the Conservation Reserve Program (CRP) will be cropped again. Iowa produces
more ethanol than any other state in the United States, and it also produces the most corn. Thus, an examination of the impacts
of higher crop prices on CRP land in Iowa can give insight into what we might expect nationally in the years ahead if crop
prices remain high. We construct CRP land supply curves for various corn prices and then estimate the environmental impacts
of cropping CRP land through the Environmental Policy Integrated Climate (EPIC) model. EPIC provides edge-of-field estimates
of soil erosion, nutrient loss, and carbon sequestration. We find that incremental impacts increase dramatically as higher
corn prices bring into production more and more environmentally fragile land. Maintaining current levels of environmental
quality will require substantially higher spending levels. Even allowing for the cost savings that would accrue as CRP land
leaves the program, a change in targeting strategies will likely be required to ensure that the most sensitive land does not
leave the program. |
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