Cost of Maintaining CRP in Presence of Biofuels

We analyze the effect of an emergence of biofuel industry on the Conservation Reserve Program. The government expenditure on Conservation Reserve Program needs to increase dramatically to keep the current scale of CRP program when the biofuel industry is considered. We propose that the development of bioenergy crops on expiring CRP land is a potential way to reconcile the conflict between a sharp increase in government CRP budget and its environmental protection goal. CRP program can also be combined with the Biomass Crop Assistance Program (BCAP) to achieve the goal of environmental protection and low carbon society at the same time.