Does Participation in the Conservation Reserve Program and/or Off-Farm Work Affect the Level and Distribution of Farm Household Income?

Abstract

Since both release resources from agricultural production, it is not surprising that decisions to work off the farm and to participate in the U. S. Conservation Reserve Program (CRP) are correlated. By incorporating these decisions into a heteroskedastic specification of a farm household income function, we identify their effects on mean income, as well as on the variability in income for groups of farm households participating in combinations of these activities. Our results indicate participation in CRP and off-farm work by the operator and the spouse increase farm household income, but these choices also decrease the variability in household income among participant households relative to that of other farm households with otherwise similar characteristics.