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The Conservation Reserve Program, Off-Farm Work, and Farm Household Technical Efficiencies

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Abstract

Using data from a national survey of farm households in the United States, this paper examines the effects of farm households’ decisions to participate in the Conservation Reserve Program (CRP) and to work off the farm on the technical efficiency of farm household production. After controlling for the self selection bias in estimating the multiple output-oriented distance functions, results show that operators’ decisions to work off the farm (both separately and combined with participation in CRP) lead to higher technical efficiencies for farm household production— implying improvements in the resource allocation between farm and other productive activities by farm households. The technical efficiencies of household production of those farm households participating only in the CRP are lower.

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WP 2009-33 December 2009

Sponsorship

This research was sponsored in part by Cooperative Agreement No. 43-3AEL-2-80074 between the USDA’s Economic Research Service, Resource Economics Division and Cornell University, College of Agriculture and Life Sciences, Department of Applied Economics and Management.

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2009-12-01

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Charles H. Dyson School of Applied Economics and Management, Cornell University

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