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    Geographic Information Systems Lab

    A Crop Choice Model for post-CRP Decisions

    Victor Gauto and Steven J. Taff
    Department of Applied Economics
    University of Minnesota

     As a complement to this project, the U MN Department of Applied Economics developed a crop selection model. The model can be used to predict CRP parcel owners’ decisions under different economic and policy scenarios. 

    The core model is similar in concept—but not in detail—to those used in Valentas et al. (2009) and in Turner et al. (2010). The logic is simple: if the price offered for a given crop is high enough, the owner will switch from whatever was being grown before (if different) to the demanded crop. In the present version, each CRP parcel owner faces the decision: given 2010 prices and costs, is it financially prudent to renew my CRP contract. For present purposes, we assume all examined contracts expire in 2010 and can be renewed or not renewed without penalty.

    The prediction model is a set of Microsoft Access queries that mimic farmer crop selections for each parcel at each crop price level. As was the case with the two prior uses of this approach, the essential components are crop choices, crop yields, crop production costs (including shipping and handling), and crop prices. Land owners are assumed to select that crop that promises the highest annual net return.

    Decisions on crop selection are made at CRP parcel level. In the model, “parcels” are defined as all geographically discrete parcels currently (2007) in CRP. Some of the following description is drawn directly from the present authors’ contributions to Valentas et al.

    For full details on the model, please contact Steven J. Taff at sjtaff@umn.edu.

     

    References

     

    Turner, Clarence, Dennis R. Becker, Steven J. Taff, Grant M. Domke, and Victor Gauto. Assessing Forestation Opportunities for Carbon Sequestration in Minnesota. Minnesota Forest Resources Council. January 2010.

    Valentas, K. J., V. Gauto, P. Gillitzer, M. von Keitz, C. Lehman, S. J. Taff, and D. Wyse. White Earth Biofuels Feasibility Study. University of Minnesota. March 2009.09.

     


     



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