Interest in CRP may drop: Lower payment rates possible
Though the 2018 Farm Bill doesn’t make major revisions to federal conservation programs and policies, it includes “subtle changes” that could limit interest in the widely used Conservation Reserve Program, or CRP, according to a new federal government report.
Area farm group leaders say that’s OK with them.
“CRP is both good and bad,” and isn’t a program that farmers want to rely on heavily, said Dennis Haugen, president of the North Dakota Grain Growers Association, and a Hannaford, N.D., farmer and agribusinessman.
The farm bill is the centerpiece of federal food and agricultural policy. A new farm bill has been approved every five to seven years since 1933. The current farm bill, officially known as the Agriculture Improvement Act of 2018, was approved in late 2018 and covers 2019 to 2023.
The report, published in the December issue of Amber Waves, a publication of the U.S. Department of Agriculture’s Economic Research Service, or ERS, notes that the new farm bill continues CRP and the other four major USDA conservation programs. The new farm bill also keeps overall conservation funding roughly the same as it was under the 2014 Farm Bill, somewhere between $5 billion and $6 billion annually in 2019-2023.
But the 2018 Farm Bill makes changes in CRP rental payments, which could lead to lower payment rates and less interest in the program, the report said.
In addition, the new farm bill increases funding for the Environmental Quality Incentives Program, or EQIP, one of the other four major conservation programs.
CRP makes annual payments to farmers who take environmentally sensitive cropland out of production for 10 to 15 years. Established in 1985, CRP reached peak enrollment in 2007 when 36.7 million acres were in the program nationwide. The program was popular in North Dakota, South Dakota, Montana and northwest Minnesota.
But since 2008, nearly 13 million acres have left the program, much of it going back into crop production. That reflects strong crop prices from 2008 to 2013 and new farming practices that reduce the risk of farming what had been environmentally sensitive land.
In contrast, EQIP provides financial assistance to farmers who adopt or install conservation practices on land in agricultural production, or what’s often referred to as “working lands.” EQIP “may fund anything from a single practice addressing a single resource concern to broader, more comprehensive farm-level plans,” EPS said.
Under the new farm bill, EQIP funding rises from $1.75 billion in fiscal year 2019 to $2.025 billion in fiscal year 2023, the ERS report said.
It might appear that the new farm bill encourages CRP — the program’s overall acreage cap is increased from 24 million to 27 million acres.
But the farm bill also creates new limitations on the maximum rental payment that can be received under a CRP contract.
The restrictions are based on new parcel-specific “soil rental rates” that, with some exceptions, are the maximum annual rental payments allowable in CRP, ERS said.
The soil rental rates largely reflect county-average cash rental rates for nonirrigated cropland. They help to ensure that CRP payments are in line with local land-rental rates and reflect variations in the productivity and rental value of land, according to the report.
That “could reduce incentives for landowners to offer land for CRP enrollment and lessen the program’s role in the land market,” the report said.
Farmers prefer to farm land instead of putting it in CRP and consequently are most interested in conservation programs that allow land to stay in production, said Theresia Gillie, a Hallock, Minn., farmer, and a past president of the Minnesota Soybean Growers Association.
She doubts the current period of poor crop prices and limited farm profitability will encourage farmers to put land, or try to put it, in CRP.
Haugen said he also thinks it’s unlikely that there will be a surge of interest in CRP.
CRP can be beneficial when it takes marginal land out production. But it also can hurt agricultural communities when large amounts of land go into the program, hurting businesses that rely on sales of ag products such as chemicals and equipment, he said.