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New signups: Can CRP compete?

John Walter 03/11/2012 @ 11:32am

A new era of the Conservation Reserve Program (CRP) is being ushered in this week, one with a shifting focus from the initiative Ronald Reagan presided over 25 years ago.

In that early phase of the program, USDA once offered a generous "corn bonus" and included a goal of reducing crop production. The new program is more financially constrained and environmentally targeted than past signups, and it now co-exists with a farm economy stretching to increase production.

In the new general signup, which extends from March 12 to April 6, rental rates won’t change from last year’s signup, reflecting the fact that USDA is dealing with new political and marketplace realities.

Contracts on about 6.5 million acres of land currently in the CRP are set to expire on September 30, 2012.  A good percentage of those acres are likely destined for a return to cropland.

“With a tight budget, [USDA] will be unlikely to hold much of the land capable of producing wheat, corn, or soybeans,” says Ray Grabanski, marketing analyst and president of Progressive Ag, a private advisory firm.  “It’s likely a significant amount of acreage will be taken out.  I would guess that only half of the land will be back in CRP after the new signup.”

Grabanski believes enough land will exit the CRP next fall that it will pressure commodity prices in 2013 and beyond.

USDA officials agree that a major shift is in store for the CRP this year.

“We’re offering this general signup recognizing that there’s a lot of pressure to put land back into production,” Dan Steinkruger, executive director of the Nebraska Farm Service Agency, told Agriculture.com.  “Realistically, we are expecting that to happen.  It’s a political reality, too, that we’ll be dealing with a smaller CRP in the future."

Though the conversion to cropland of a fair share CRP is inevitable, Steinkruger suggests farmers consider  matching acres to their best use. “In evaluating re-enrollment we want farmers to consider keeping marginal or erodible areas in CRP. So if I have a quarter in CRP today maybe in 2013 I put 100 acres back into corn production but keep 60 acres of hillside in CRP.”

TWO NEW TWISTS ON TARGETING

USDA recently announced two additional continuous CRP initiatives that target the most environmentally sensitive lands and center on providing the greatest benefits to wildlife and other natural resources. 

In early March, USDA Secretary Tom Vilsack touted a new initiative aimed at preserving 1 million acres of grasslands and wetlands in the current 32 million acre program. The new effort will increase signing incentive payments to $150 an acre from the current level of $100. Changes in practices offered in the program include establishment of pollinator plantings, duck habitat, and upland bird buffers.

In February, USDA announced a Highly Erodible Cropland initiative that targets lands with an erodibility index of 20 or greater.  The wildlife-oriented program, which begins this summer, has a goal of attracting up to 750,000 acres.
 
WHAT PRACTICES TO PROMISE

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