Effect of corn ethanol production on Conservation Reserve Program acres in the US

The increase in corn ethanol production has raised concerns about its indirect impacts on the expansion of cropland and implications for the environment and continues to be a controversial issue. In particular, land enrolled in the Conservation Reserve Program (CRP) declined by 7.2 million acres between 2007 and 2012 while corn ethanol production more than doubled. However, the extent to which this decline in CRP acres can be causally attributed to increased ethanol production is yet to be determined. Using a dynamic, partial equilibrium economic model for the US agricultural sector we find that doubling of corn ethanol production over the 2007-2012 period (holding all else constant) led to the conversion of 3.2 million acres of unused cropland, including 1 million acres in CRP, to crop production. While substantial in magnitude, we find that these land use changes due to biofuel production accounted for only 16% and 13% of the total reduction in unused cropland and in CRP acres, respectively, that occurred over the 2007-2012 period. We also find that the land use change per million gallons of corn ethanol has declined non-linearly over time from 453 acres to 112 acres over the 2007-2012 period.