Document Type

Article

Publication Date

7-1-2009

Keywords

Sodsaver provision, 2008 Farm Bill, land use, crop production

Abstract

The "Sodsaver" provision, which is a part of the 2008 Federal farm bill, is designed to lessen the conversion of native grass into cropland by limiting federal farm program payments on these converted acres within the Prairie Pothole National Priority Area (PPNPA) in the Northern Plains. Governors of five states in the PPNPA, including South Dakota, were required to make the decision to adopt or not adopt the "Sodsaver" provision. This report includes information on: 1) South Dakota's experience with conversion of rangeland into cropland, 2) estimates of native grassland acres in the PPNPA of South Dakota, 3) potential change in net returns from a landowner or investor viewpoint, 4) an enterprise budget analysis to explore potential economic gain (loss) from conversion from cow-calf production to cropland, and (5) major factors influencing the policy decision of not participating in "Sodsaver". In 2005 and 2006 over 100,000 acres of native grass land in South Dakota were converted to cropland, with most of the converted acres in the Prairie Pothole regions of central and north central South Dakota. Some of the contributing factors to conversion of native grass to cropland are: a) rapid adoption of economically efficient crop technologies including no till and chemical burn down; b) crop insurance products that reduce revenue risk in higher risk regions; c) availability of disaster assistance payments on cropland especially in the event of drought and; d) more recently, much higher crop prices and returns relative to long-term crop prices and returns.

Comments

Copyright 2008 by Gary Taylor and Larry Janssen

Publisher

Department of Economics, South Dakota State University

Series Number

2009-1

Number of Pages

28

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