In 2023 the estimated nitrogen (N) load for the Chesapeake Bay exceeded the 2025 target by 38 million pounds, indicating that further reductions in N loads are needed.
Conservation water buffers. Photo credit: USDA.
Authors: Chenyang (Nate) Hu, Wei Zhang, Darrell Bosch
What Is the Issue?
In 2023 the estimated nitrogen (N) load for the Chesapeake Bay exceeded the 2025 target by 38 million pounds, indicating that further reductions in N loads are needed. Because agriculture is a significant contributor to estimated N loads for the Bay (Figure 1), it is likely that some further reductions will need to come from agriculture. A yield reserve (enhanced nutrient management) program is one option for nutrient reduction. A yield reserve refers to reducing N fertilizer applications to crops below standard recommendations. Farmers are compensated for yield losses that result from lower N applications.
Another option is cropland retirement, such as the Conservation Reserve Program (CRP). Converting row cropland to conservation cover can reduce nutrient loads. However, environmental benefits may be reduced by “slippage”, in which retired cropland is replaced with less productive cropland that was previously pasture or fallow land. We compared a yield reserve program with expanded land retirement program for U.S. agriculture at three levels of increased federal expenditures: $500 million, $750 million, and $1 billion.
Figure 1. Estimated 2023 N Loads by Source Sector. Source: https://www.chesapeakeprogress.com/clean-water/watershed-implementation-plans
What Did We Find and Why Does It Matter?
Yield reserve subsidies reduce excess N from corn production by 15 to 32% nationwide and by 25 to 31% in the Chesapeake Bay Watershed (Figure 2) depending on the assumed budget expenditure to compensate farmers for implementing a yield reserve. Excess N is defined as applied commercial fertilizer N that is not removed by the harvested crop. The yield reserve causes acreage and production of corn, soybeans, and sorghum to increase, while acreage and production of other major crops like wheat decline. The increase in corn production reflects a “rebound” effect of yield reserve payments. The rebound occurs because savings from lower N applications per acre alongside government payments increase the profitability of corn and bring more cropland into corn production. Soybean and sorghum production increase because these crops are grown in rotation with corn.
CRP expansion reduces excess N from corn production by 1 to 2% nationwide (Figure 2). Excess N increases slightly in the Chesapeake Bay Watershed due to more corn production in the Watershed. The effectiveness of CRP expansion is undercut by slippage. For each one hundred acres of cropland retired under CRP in the U.S., approximately 76 to 79 acres of non-cropland would be converted to cropland, offsetting the N reduction benefits of the CRP.
These findings suggest that incentivizing adoption of conservation practices such as a yield reserve on cropland may be more cost effective than land retirement in reducing N loadings. Targeting conservation dollars toward the most effective practices as well as toward those areas where such practices deliver the largest benefits can help policymakers achieve conservation goals with limited resources.
Figure 2. Change (%) in Excess N under Yield Reserve (left) and CRP (right) Scenarios
What Did We Do?
We estimated increases in subsidies for CRP expansion and yield reserve using the REAP (Regional Environment and Agriculture Programming) model and USDA projections of agricultural production in 2030. The basic decision unit for crop production in REAP is the crop rotation made up of some combination of 10 field crops (barley, corn, cotton, hay, oats, rice, silage, sorghum, soybeans, and wheat). REAP uses commodity demand and supply relationships to estimate market-clearing crop prices and amounts bought and sold. Crop production is estimated separately for 273 geographic regions of the continental U.S.
We modeled a Yield Reserve Program that would compensate farmers for losses in net revenues from reducing N applications in corn production given that corn typically has the highest N fertilizer applications among the 10 field crops. The effects of land retirement were implemented assuming they take the form of an increase in CRP acreage. To put these two programs on an equal footing for comparison purposes, we examined three scenarios involving $500 million, $750 million, or $1 billion in additional federal expenditures on each of the two programs. We estimated the reduction in N load from the two programs as the reduction in excess N from corn production, which is defined as total N fertilizer applied to corn minus the amount of N removed by corn.
Publication completed for this work
Hu, C., Zhang, W., & Bosch, D. (2025). Improving ecosystem services from US agriculture: Yield reserve vs. land retirement. Journal of Environmental Quality, 54, 1307–1321. https://doi.org/10.1002/jeq2.70094
