Ag Policy Blog

A couple of people in Iowa earlier this week on Twitter expressed some frustration over land put into the Conservation Reserve Program that might not be as environmentally sensitive as suggested. They also raised concernsabout the rental rates paid for that land, allowing the landowners to potentially dart off to retirement rather than either farming the ground or leasing it out to someone who would farm it.

Still, USDA highlighted in its enrollment announcement last week that contracts were issued 411,000 acres, but the demand from landowners was for 1.8 million acres to join the program. USDA stated it was one of the most selective years in the program's 30-year history.

CRP was at 37 million acres in 2007 as the corn boom was launching. The acreage in the 2008 farm bill was brought down to 32 million acres, then the 2014 farm bill started to ratchet down the cap to 27.5 million acres in 2014; 26 million acres in 2015; 25 million acres for 2016 and then 24 million acres for next year.

There was a belief in Congress that high commodity prices would discourage participation in the program. Additionally, cutting CRP acres allowed Congress to declare a cost savings.

The CRP demand in the latest signup has led Agriculture Secretary Tom Vilsack to suggest that as Congress begins to put together a farm bill next year it might be better to start with looking at the need rather than the savings. "There's a significant demand out there that a cap of 24 million acres doesn't seem to be aligned with desire, the need and the demand," Vilsack said. "There's clearly a desire and a demand for more participation in the program than we have the authority to provide, whether it's continuous or general."

USDA also has added more than 330,000 acres in continuous CRP acres so far this year, which puts the continuous program on pace to top last year's record of more than 860,000 acres added to continuous CRP. The continuous signup allows farmers to enroll areas such as wetlands, buffer strips and areas specifically pegged for wildlife habitat and is considered more targeted than the general enrollment.

But some groups pushed hard to dial back the idea of CRP being merely a land-idling program for times when prices are low. Randy Gordon, president of the National Grain and Feed Association, said NGFA would be "very engaged" in any discussion about raising the cap. Any efforts should look at defining what the base is for land qualified as environmentally sensitive and highly erodible.

"Markets can ebb and flow and to try to size the CRP based on what we think market prices are doing and what landowner demand is going to be, we don't think is the right equation," Gordon said in an interview with DTN this week.

Gordon added NGFA has encouraged USDA in the past to leave room under the cap to keep signing up more acreage in the continuous program.

"We generally were very pleased at the latest signup," Gordon said. "It showed good enrollment of continuous signup acres, which are the most environmentally sensitive and offer the best benefits in terms of water quality."

Gordon also expressed concern about idling tracts of ground. That especially shuts off land to beginning or young farmers that are looking for more acreage to rent. Gordon added he was somewhat baffled by a statement by Vilsack that CRP pumps money into local communities. Some analysis instead suggests that CRP can hinder local economies.

"We can document towns that have dried up and blown away because the landowners left town, took their money and moved away," Gordon said. He added, "That was really one of the tragedies we saw when CRP wasn't an environmental program but more of an acreage-idling program."

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