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Corn-Based Ethanol Production and Environmental Quality: A Case of Iowa and the Conservation Reserve Program

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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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Acknowledgments

We thank Todd Campbell for excellent computational assistance. This research was made possible in part by USDA-CSREES grant 2005-51130-02366, USDA-Rural Development grant 68-3A75-6-511 and EPA Collaborative agreement CR83371701-1. The views expressed here are those of the authors and do not necessarily represent the view of USDA or EPA.

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Authors and Affiliations

  1. Agribusiness Economics, Southern Illinois University, Agriculture Building, Mailcode 4410, 1205 Lincoln Drive, Carbondale, IL, 62901, USA

    Silvia Secchi

  2. Center for Agricultural and Rural Development, Iowa State University, Ames, IA, USA

    Philip W. Gassman & Bruce A. Babcock

  3. Blackland Research and Extension Center, Temple, TX, USA

    Jimmy R. Williams

Authors
  1. Silvia Secchi
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  2. Philip W. Gassman
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  3. Jimmy R. Williams
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  4. Bruce A. Babcock
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Corresponding author

Correspondence to Silvia Secchi.

Appendix

Appendix

Area and Program Costs Results From the Economic Simulations

See Tables 7 and 8.

Table 7 Area remaining in CRP for various crop prices and rental payments
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Table 8 Program costs corresponding to the CRP area above
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Secchi, S., Gassman, P.W., Williams, J.R. et al. Corn-Based Ethanol Production and Environmental Quality: A Case of Iowa and the Conservation Reserve Program. Environmental Management 44, 732–744 (2009). https://doi.org/10.1007/s00267-009-9365-x

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  • DOI: https://doi.org/10.1007/s00267-009-9365-x

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