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The last of those is definitely true...well over half of the county in which I reside is now in CRP (including a sizable fraction of ours). The reason is only that it was an available option at a time when a significant number of those farming it were, as my Dad, at the age of retirement and the kids (including me) had left owing to various factors, a lot having to do w/ the great "land depression" after the Carter era grain embargoes that killed the small grain export markets.
No, the average production of the similar land still in production has actually increased dramatically since the time of the initial CRP put-ins. This is owing to continuing improvements in genetics as well as practices. Low- and no-till has had marked success in actually tilth as opposed to degrading it combined w/ decreasing inputs. Of course, the cultivation cycle include rotation, including fallow periods. This is a mandatory part of an effective pest control strategy even without the consideration of fertility.
There is chance that any significant numbers of people living on and farming it for a living will not continue to improve practices, not degrade them. It is economically required to survive as well as common sense. Plus, if my input requirements were to skyrocket owing to such practice, my friendly hometown banker would immediately demand to know why and put a stop to my endangering his collateral! :)
I've not and do not advocate widespread removal of CRP ground--I only mentioned it as it is there in quite large acreages and could, if circumstances were right, be returned to production. If the 2007 farm bill reduces the payout as much again as the last time, I think it will be inevitable that a sizable amount be broken back out as it will not be feasible economically to maintain it with it not producing more than it would be at that point. I'm hoping it won't, but making long term plans just in case...