communities. The counties with low CRP enrollment regularly have around 50% more young or new farmers compared to high CRP enrollment counties (USDA, 2004, 60-62). There is clearly a negative correlation between CRP enrollment and having new farmers, as the reduction in supply of farmland makes it more difficult for people to become farmers. So CRP distorts the economy away from farming through the increased production costs caused by the decreased supply of the main factor of production, farmland. The CRP also reduces the supply of farm commodities to increase their price, as a secondary effect, which is alleged to aid farmers; however, these high crop prices have other effects throughout the economy. It is clear that while these higher crop prices might benefit farmers, they will have a detrimental effect on anyone who purchases farm outputs, which includes essentially all consumers. The prices of corn, wheat, soybeans, and other crops that are retired from production will increase and cause consumers to not be able to buy as much food products. This artificial effect on prices will reduce the wealth and satisfaction of these consumers, as it causes them to generally shift away from purchasing crop products to attaining less desired ends. Also, while some farmers might experience initial profits with the higher crop prices caused by the reduction in supply. These profits would dissipate, as input prices, including for land, would increase. This input price increase would occur because the prices would be bid up by farmers seeking profit from the increased crop output prices. The costs of farming would rise and the initial profit to farmers would be washed away (Carden, 2009, 17-18). However, CRP
communities. The counties with low CRP enrollment regularly have around 50% more young or new farmers compared to high CRP enrollment counties (USDA, 2004, 60-62). There is clearly a negative correlation between CRP enrollment and having new farmers, as the reduction in supply of farmland makes it more difficult for people to become farmers. So CRP distorts the economy away from farming through the increased production costs caused by the decreased supply of the main factor of production, farmland. The CRP also reduces the supply of farm commodities to increase their price, as a secondary effect, which is alleged to aid farmers; however, these high crop prices have other effects throughout the economy. It is clear that while these higher crop prices might benefit farmers, they will have a detrimental effect on anyone who purchases farm outputs, which includes essentially all consumers. The prices of corn, wheat, soybeans, and other crops that are retired from production will increase and cause consumers to not be able to buy as much food products. This artificial effect on prices will reduce the wealth and satisfaction of these consumers, as it causes them to generally shift away from purchasing crop products to attaining less desired ends. Also, while some farmers might experience initial profits with the higher crop prices caused by the reduction in supply. These profits would dissipate, as input prices, including for land, would increase. This input price increase would occur because the prices would be bid up by farmers seeking profit from the increased crop output prices. The costs of farming would rise and the initial profit to farmers would be washed away (Carden, 2009, 17-18). However, CRP