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General CRP Sign-Up Underway

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A general Conservation Reserve Program (CRP) sign-up is currently occurring at local Farm Service Agency (FSA) offices throughout the United States. The general CRP sign-up period runs from May 20 through June 14. General CRP sign-ups were also held in 2012 when 3.6 million acres were accepted into CRP, in 2011 with 3.75 million acres were accepted into CRP and in 2010 when about 4.2 million acres were accepted into CRP. CRP was originally established in the 1985 Farm Bill, and today has over 700,000 CRP contracts on over 390,000 farms, with just fewer than 27.0 million acres under some-type of CRP contracts.

The bids that are offered into CRP for 2013 will be evaluated, using the environmental benefits index (EBI). USDA plans to target the most environmentally sensitive land with the 2013 CRP sign-up, in order to reduce soil erosion, protect water and air quality and to enhance wildlife protection and carbon sequestration. There will continue to be special focus on buffer strips near rivers and streams. Following are the EBI factors used by FSA to evaluate CRP contract offers:

  • Water quality benefits from reduced erosion, runoff and leaching.
  • Wildlife habitat benefits from land covers on CRP contract acreage.
  • On-farm benefits from reduced soil erosion.
  • Air quality benefits from reduced wind erosion.
  • Benefits that will likely endure beyond the CRP contract period.
  • Cost per acre for the CRP rental contract.

Producers with existing CRP contracts that are expiring in 2013 will have no preferential status for keeping their land in the CRP program after this year, and must re-submit a new CRP bid to be re-enrolled in the CRP program. Land that is currently not enrolled in CRP may also be offered up for enrollment in CRP for 2013. The CRP contracts that are accepted will become effective on Oct. 1, 2013, with the first CRP payments in September 2014.

USDA adjusts the maximum annual CRP rental rates for CRP sign-up each year on a county-by-county basis. The maximum rental rates are based on the relative productivity of the soils within each county, and on the average dryland cash rental rate for each county, based on data from the National Agriculture Statistics Service (NASS). Landowners are provided the maximum allowable CRP rental rate prior to the decision for CRP sign-up. They may offer land for a potential CRP contract at that rental rate, or may choose to lower the rental rate that is offered. Lowering the acceptable rental rate below the maximum allowable rental rate may increase the likelihood of acceptance of the CRP offering, since land cost is one of the factors considered for approval CRP contracts.

The current average CRP land rental in the U.S. is $60.84/acre; however, CRP rental rates vary widely from state-to-state, and within different regions of a given state. The current average CRP rental rate in Minnesota is $75.73/acre; however, most CRP annual land rental rates in southern Minnesota are considerably higher than the state average rate. Some other current average CRP rental rates for Midwestern states are: Iowa at $140.54/acre, South Dakota at $66.03/acre and North Dakota at $41.18/acre. USDA tries to keep the maximum CRP acreage in any given county at 25% of the total tillable acres in that county, but USDA does have the authority to exceed that limit to meet highly erodible land requirements, and if there is deemed to be no adverse economic impacts from the added CRP acreage in that county.

As of April 2013, there was a just under 27.0 million acres enrolled in CRP, which is down from 31.1 million acres on Sept. 30, 2009, and down 27% – 9.8 million acres – from 36.8 million acres on Sept. 30, 2007. Currently there are approximately 21.5 million acres under general CRP contracts, 3.9 million acres under continuous CRP contracts, 1.3 million acres under CREP contracts and 340,000 acres in the Farmable Wetland program. The continuous CRP program targets the most sensitive environmental land areas, such as filter strips, buffers, wetlands, etc. The CREP program is a CRP partnership with state conservation programs, which target specific watersheds.

There are a total of 3.3 million acres of CRP land set to expire on Sept. 30, 2013. In 2012, CRP contracts expired on 6.5 million acres, but landowners offered only 4.5 million acres for enrollment into CRP during the general CRP sign-up period. Of that total, USDA accepted approximately 3.9 million acres into the program, resulting in a net reduction of about 2.1 million acres. Strong crop prices and net farm incomes from crop production in 2011 and 2012, along with increasing cash rental rates, probably discouraged landowners from re-enrolling some crop land into CRP in 2012. Continued strong crop prices and further increases in cash rental rates in 2013 are likely to again affect the number of expiring CRP acres that are offered for re-enrollment during the current CRP sign-up period. A CRP enrollment similar to 2012 would likely reduce the total CRP acreage to under 26 million acres by the end of 2013.

There is a lot of uncertainty regarding the future of the CRP program. The current CRP acreage cap is 32 million acres, which was set by the 2008 Farm Bill, which was a reduction from the maximum CRP acreage of 39 million acres from 2002-2008. Both the U.S. Senate and U.S. House Agriculture committees have passed versions of a new farm bill that would reduce the maximum level of CRP acreage to 25 million acres or less over the next five years (2014-2018).

The CRP program remains extremely popular with many farm, wildlife and environmental organizations, as well as with members of Congress. The bottom line is that CRP has 27 years of success in protecting sensitive environmental lands, reducing soil erosion, improving water quality and enhancing wildlife. The program will likely continue to be a major USDA conservation program for many years to come. For more information on the general CRP sign-up, or the continuous CRP, land owners should contact their local FSA office, or go to the USDA CRP website.

 

Editor’s note: Kent Thiesse is a former University of Minnesota Extension educator and now is Vice President of MinnStar Bank, Lake Crystal, MN. You can contact him at 507-726-2137 or via e-mail at kent.thiesse@minnstarbank.com.

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