Thousands of U.S. farmers have a decision to make this month, as they must choose to either keep their acres in the Conservation Reserve Program (CRP) or put those acres into crop production.

Conservation Reserve Program (Photo: usgs.gov)

Nationwide, there are 1.1 million acres in CRP contracts that will expire this month. Landowners holding those contracts will be weighing their options, making a judgment on whether to renew or to pull their acres out of the CRP program.

The number of CRP acres up for renewal jumps to 3.8 million acres in 2009, and then 4.4 million acres in 2010, according to a statement from U.S. Agriculture Secretary Ed Schafer in July.

Typically, the type of land that is enrolled in the CRP program is environmentally sensitive and erodible. The program was designed to keep those lands out of production to conserve soil and protect water resources, as well as to improve wildlife habitat. With millions of acres of farmland in CRP, the program also tends to protect against the overproduction of crops and can help maintain steady grain prices.

CRP has long had its detractors. Those critical of the program have called it a wasteful handout to landowners, paying farmers not to farm. Since its creation in the early 1980s, however, the program has been renewed every five years as a part of the federal farm bill. In 2005, the USDA spent approximately $1.7 billion in CRP payments to landowners.

Now that global demand is strong and commodity prices are high, many farmers may choose against renewing their CRP contracts to plant more corn and other grains. The CRP rental rates simply are notas lucrative as planting a field of corn.

In an interview last week with the Iowa Independent, Iowa Secretary of Agriculture Bill Northey said farmers are going to have some difficult decisions to make regarding CRP. Northey said some farmland may now be worth significantly more in cash rent than in CRP. For those farmers, he said, “it’s got to be really hard to keep it in CRP. You’ve got to really believe in [CRP] to keep it in, when you could be getting almost twice as much by farming it.”

With CRP rental rates not keeping up with the value of farmland, landowners will consider the bottom line.

“I run into some farmers out there that ask about it. I can see that they’re thinking about it,” said Northey. “They’re trying to figure out what to do.”

Opponents of alternative fuels such as ethanol have pointed to federal renewable fuels incentives as the reason farmers may choose to opt out of CRP. The demand for corn has increased because of ethanol, but landowners will consider other factors as well.

The penalties for taking land out of a CRP contract before the agreed-upon time can be steep. A farmer typically must return all payments received during the entire period of the CRP contract in order to be released early from the contract.

A simple lack of flexibility in the program may be what turns some farmers off. The USDA attempted this year to release CRP land for haying and grazing under its critical feed use program, but that action was mostly thwarted by a lawsuit filed by the National Wildlife Federation. Because of that lawsuit, it is now more difficult for the USDA to use its discretion and release CRP for feed uses when farmers really need it.

U.S. Secretary of Agriculture Ed Schafer visited the 2008 Farm Progress Show in Boone, Iowa on Thursday.

Implementation of the new farm bill will ultimately be handed off to the next presidential administration, U.S. Secretary of Agriculture Ed Schafer said at a press conference in Iowa Thursday.

Schafer told agriculture reporters at the 2008 Farm Progress Show that the implementation of the new farm bill is “going well,” with the work about two weeks ahead of schedule.

“We have prioritized the programs, and some programs come to us with certain timelines and deadlines,” said Schafer. “We’re working through methodically to produce the rules and regulations. And, importantly, we understand that we will not get this farm bill fully implemented before the end of this administration. So it will go off into the next administration.”

One of the major tasks that Schafer’s department must complete soon is the implementation of the new country-of-origin labeling program for retail food products. Country-of-origin labeling was passed into law in 2002, but was never implemented by the U.S. Department of Agriculture. The new farm bill that passed this year mandates that the labeling law be implemented by Oct. 1. Schafer said that the USDA is on track to do so and has published its interim final rule for the program.

“I believe we came up with a set of regulations that are understanding of people’s concerns, of producers’ concerns, and the cost to the consumer,” he said. “I like the regulations the way they came out. There’s a lot of controversy all the way around, but I think we struck a good balance with this, and we are in the position to deliver it on October 1.”

Schafer said he anticipates “bumps in the system” regarding regulation of the program. He said the USDA will allow a six-month implementation period in which the department will work with retailers and producers for a smooth transition. During the six-month period, he said, the USDA won’t be “coming in with the hammer or the summons book, but we’re coming in to say this is the new law, this is how we work through it. So we’ll have that grace period to work through so we can get it implemented properly.”

Other aspects of the farm bill will cost more to implement than the USDA has been given, he said, noting that the department cannot implement some of the new programs with the hardware and software currently in place. He has requested an additional $179 million from Congress to fund the shortfall. “One difficulty that we’re facing is we required and asked for $200 million for implementation for the new farm bill, and we received about $55 million, so we simply don’t have enough money.”

Schafer also discussed the Conservation Reserve Program, which has been in the news recently following a lawsuit filed by the National Wildlife Federation. Schafer said he would like to see legislation passed that would bring more flexibility to the program and allow the USDA to change CRP contracts. “The conversation has definitely not stopped,” he said. “It is being pursued legislatively on the hill, which is where the final answer is going to rest.”

A total of $87.5 million in Emergency Conservation Program funds will be distributed between 34 states that were affected by natural disasters, announced U.S. Agriculture Secretary Ed Schafer Thursday. Iowa will receive $12,208,500, the largest amount of the 34 states.

The funds will be distributed to help landowners repair soil and water conservation structures, remove flood debris, and restore fences. Funding will also be used to carry out water conservation measures in other states that have suffered drought.

“This funding will allow farmers and ranchers to repair the unusually harsh damage to conservation efforts caused by the disaster conditions, notably flooding and drought,” said Schafer in a news release. “USDA has worked shoulder to shoulder with producers when weather turns against them, and we remain involved to help in the weeks and months of recovery afterward.”

A statement from the USDA explains that for land to be eligible for the funds, the natural disaster must create new problems that if untreated will impair and affect the land’s productive capacity, among other criteria.

USDA Farm Service Agency county committees will conduct on-site inspections of damage to determine land eligibility.

The 2008 Farm Progress Show returns to Iowa this year, in an all-new location near Boone. The event runs from Aug. 26-28, with more than 500 exhibitors showing farm equipment and technology.

U.S. Secretary of Agriculture Ed Schafer is expected to visit the show on Thursday, Aug. 28.

The new facility, located near the intersection of highways 30 and 17, will be the biennial location of the show for the next 20 years. The show will rotate each year between the Iowa location and a location at Decatur, Ill.

A series of seminars will be held to share the latest information on marketing and farm management, and there will be a center dedicated to conservation information where specialists will be on hand to answer questions. The conservation center will provide information about government programs, including the Conservation Security Program, Conservation Reserve Program, Environmental Quality Incentives Program, the Shelterbelt Program, the Forest Land Enhancement Program and the Wetland Reserve Program.

Conservation Reserve Program (Photo: usgs.gov)

The U.S. Department of Agriculture has backed away from a proposal to release more conservation lands for crop production.

U.S. Secretary of Agriculture Ed Schafer announced Tuesday that the USDA will not move forward with a plan to allow landowners a penalty free “early-out” of Conservation Reserve Program contracts. Schafer said that the proposal was deemed unnecessary after reviewing the current condition of crops and feedstocks around the country.

In a press conference held Tuesday, Schafer said grain prices have dropped in recent weeks, easing pressure on livestock feed markets and lessening the need for any further steps to be taken at this time.

“Despite the damage and disruption caused by the very severe floods that hit the Midwest last month, the indications so far are that the impact on this year’s corn and soybean crops will be less than what was originally feared,” said Schafer. “The markets have been reacting favorably to the good growing weather we have been experiencing in recent weeks and encouraging reports on crop conditions. Cash prices for corn are down 25 percent and for soybeans 14 percent from their record highs just last month.”

The Conservation Reserve Program has been in the news quite frequently this summer, as the USDA has sought to relax the rules of the program in a number of different ways to make available more livestock feed.

But that didn’t sit well with environmental organizations like the National Wildlife Federation, which recently sued the USDA to block a release of CRP acres for haying and grazing under the Critical Feed Use program. That issue was resolved with a U.S. District Court ruling last week.

This week’s announcement involved a different proposal which would have allowed landowners who are currently under CRP contract with USDA to be allowed completely out of their contracts without paying the usual penalty.

In Tuesday’s press conference, Schafer was asked about the relationship of this week’s announcement to last week’s court ruling. He answered by saying that the Critical Feed Use court ruling did not affect the USDA’s decision on the “early-out” proposal.

“As far as the court ruling, we see these as separate issues,” said Schafer. “But the most critical important issue I think is that that was not tied to early out without penalty decision; nor did our attorneys here feel that that decision affected what this decision might be.”

Iowa has approximately 1.8 million acres of land enrolled in the CRP program. When enrolled in the program, landowners sign 10- to 15-year contracts with the USDA and agree to leave the acres out of production. The farmers receive a regular payment from the government, and the program protects environmentally sensitive land and provides wildlife habitat.

The penalties for taking land out of a CRP contract before the agreed-upon time can be steep. A farmer typically must return all payments received during the entire period of the CRP contract in order to be released early from the contract.

Schafer said that even without any action by the USDA, a large amount of CRP land will become available for crop production soon as many current CRP contracts simply expire on their own.

Schafer said that nationwide there are 1.1 million acres in CRP contracts that will naturally expire this September. Landowners will then have the option to renew those contracts. That number jumps to 3.8 million acres in 2009, and then 4.4 million acres in 2010, said Schafer. “So, large blocks of land will be available for other uses, if landowners choose to pursue them.”