While growers may be generally pleased to have the opportunity to re-enroll or extend certain Conservation Reserve Program (CRP) contracts expiring from 2007 through 2010, regional consequences of re-entry may be both good and bad.
Growers say decisions to renew their contracts could potentially affect crop production, crop prices, cash rent and land use.
“CRP is a good opportunity to manage marginal soils, and I personally am glad to see the program continued,” says Bill Chase, grower from Wolsey, SD, who heads up the National Corn Growers Association (NCGA) Production and Stewardship Action Team. “Opinions on this issue vary from region to region. But some would make the argument right now that we don't need more acres in corn production, given current corn prices. While some farmers feel cash rents may fall if land leaves CRP and goes into production, it's questionable that would be the effect we would see.”
Nearly 40 million acres are currently enrolled in CRP. To determine who is eligible to re-enroll or extend CRP contracts, USDA's Farm Service Agency (FSA) will use the Environmental Benefits Index (EBI) in place when the contracts were first written. The EBI assigns point scores to the contracts, and nationally ranks all CRP enrollment offers.
Several environmental factors are used in the EBI, including improving wildlife habitat, water and air quality, and reducing soil erosion.
EBI scores are based on a 100 percentile divided into five tiers. CRP producers in the top 20% can re-enroll their land in new contracts, and producers with wetlands in the top ranking can receive contract terms of 10-15 years.
CRP producers ranking within the second tier, between 61-80%, can extend their contracts for five years, while third tier producers will be allowed to extend contracts by four years. Those ranking in the fourth tier, between 21-40%, can receive three-year extensions. And those contracts in the fifth tier can extend their contracts by two years.
USDA's goal with the re-enrollment and extension remains environmental.
“Balance is the key to any good conservation plan. We're offering farmers and ranchers re-enrollments and contract extensions to take full advantage of the environmental benefits of this program,” says USDA Secretary Mike Johanns.
“Many widespread environmental benefits have evolved” from CRP, says USDA, including reductions in soil erosion that are reaching more than 450 million tons per year, and increasing air quality due to less airborne contamination. USDA notes sediment and nutrient runoff into rivers and streams is improving, too.
Next spring FSA will contact CRP producers with contracts expiring Sept. 30, 2007, to discuss whether the contracts are eligible for re-enrollment or extension. The 15-year contracts expiring at the same time are not eligible.
In the meantime, FSA will update CRP rental rates to better reflect local market rates for cropland on new contract re-enrollments, and will review cropland enrollment limits on a county-by-county basis.
“I believe we'll see some land come out of CRP because cash rents are higher now and landowners can get more renting the land instead,” says Neal Bredehoeft, soybean farmer from Alma, MO, and American Soybean Association (ASA) chairman. “ASA is in favor of conservation on working lands, and that includes CRP.”
A list of CRP acres by state with contracts expiring in 2007-2010 can be found at www.fsa.usda.gov/dafp/cepd/crp.htm. For more information on the CRP program, visit the FSA Web site at www.fsa.usda.gov.