The following article is from DTN’s “carefully placed observer.”
The Conservation Reserve Program is perhaps USDA’s best known, most successful and largest conservation program. It offers long-term contracts to owners of fragile land who voluntarily stop cultivation, insure cover crop protection and receive negotiated annual payments in return. It has been in place since the mid-1980s, and included just over 31.1 million acres of the 351.1 million acre U.S. major cropland base in 2011, but has been declining as some producers decide not to re-enter land with maturing contracts in response to current relatively high crop prices.
Traditionally, the CRP has been wildly popular among conservationists who believe the degree of protection it provides fragile land is essential, among producers who want to scale back production in favor of a guaranteed annual rental, and among hunters and fishermen who value its contribution to water quality and wildlife habitat. That is less true now, as the program is increasingly being criticized by livestock producers. CRP land cannot be grazed, except in special circumstances, so the program reduces resources available for feed production. And, it has attracted considerable attention from budget hawks who would cut its program’s $2 billion annual cost to ease the federal deficit.
In addition, an argument is being made now by some agricultural groups that modern management practices, especially those with reduced tillage, can adequately protect much of this land without removing it from production completely.
Among these groups is the National Grain and Feed Association, an association of elevator operators and feed manufacturers and a long-time critic of the program who is now receiving more attention than it did earlier. The association is telling Congress that it should take the politically unpopular step of cutting the size of the CRP substantially, and change the program rules significantly because current federal budget pressures “make it imperative to allocate farm program spending in ways that provide sufficient funding for federal crop insurance and conservation programs for working farmlands.”
NGFA said it sees “compelling evidence” that millions of acres of productive farmland currently idled in the CRP are suitable for row-crop production “and are needed to meet growing demand for food, feed, biofuels and exports.” As a result, the organization proposes that the current 32-million-acre CRP cap be reduced, mainly by changing eligibility standards so that prime farmland (Land Classes 1 and 2) could not be included in future enrollments and re-enrollments.
The group also would change several of the program’s more technical rules — including elimination of USDA’s discretion to exceed the limit of 25 percent of a county’s farmland that can be enrolled, a limit intended to limit the program’s economic consequences in heavy-enrollment counties. And, it wants penalty-free early outs of Land Classes 1, 2 and 3, provided that producers doing so be required to implement prudent conservation practices.
Currently, landowners who return CRP land to production before their contracts expire are subject to nearly prohibitive penalties, including repayment of all CRP payments made to date, plus interest—including any cost-share payments.
Also, NGFA recommends a more stringent environmental benefits index used to define eligibility, as well as a three-to-five year freeze or limit in CRP rental rates compared to average county rental rates to reduce the program’s impact on local markets, and a limit to the number of CRP general sign-ups offered.
For many observers, a modest reduction in the CRP seems like a relatively pain-free way to cut farm-bill spending without threatening main line safety net protections. Still, it is fair to note that farm bill politics are unlike any other because of the widely disparate groups that sometimes join to push a cause or stop a recommendation. So, once the bill leaves the tender care of the Ag committees, it may well face strange coalitions in the floor debate who want bigger cuts in safety net spending in this time of strong farm revenues, or more support for recreation, or for conservation; or, who may want stronger support for nutrition programs.
And, that’s not all. The Ag committees are trying desperately to tamp down tensions among commodities, and among regions, apparently with limited success — disputes that can stalk a bill at almost any time unless it has broad, deep support from the coalitions involved.
So, while it appears that the negatives now associated with the CRP will lead to a greater trimming this time around, that is one more potential area of tension that the congressional Ag leaders need to measure carefully as they decide how and when to proceed in this important debate, Washington Insider believes.
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Posted with DTN Permission by Haylie Shipp