CRP still popular
We live in a world of cause-and-effect relationships. Plant corn in June and you'll have low yields (been there). Eat too much and you'll gain weight (done that).
The Conservation Reserve Program (CRP) is the cause in a lot of cause-and-effect relationships. Its effects have rippled through the farm community for 21 years. And 21 years after it was initiated, the CRP is still going strong.
The first CRP contracts were signed in March 1986, just three months after the program was authorized by the 1985 farm bill. It was popular with landowners almost from the beginning. Nearly 34 million acres were enrolled between 1986 and 1989.
Some of the effects started showing up right away. The primary goal of the CRP in those early years was to reduce soil erosion on highly erodible cropland.
Evidence abounds that the CRP did reduce soil erosion, although it wasn't particularly precise at targeting the most vulnerable acres. And some of the benefits are lost when that land leaves the program.
Born of hardship
The mid-1980s were characterized by grain surpluses, foreclosures, bankruptcies, and falling land prices. So, although the primary goal of the CRP in those early years was to protect farmland from erosion, other effects it had were to whittle away at burdensome surpluses and stabilize land prices. Plus, it provided a stable source of income for a lot of retirees and widows, many of whom put whole farms in the program. And it provided a reliable source of revenue for a lot of farmers who only put part of their ground in the CRP.
The effect the CRP had on rural communities is hard to quantify, although lots of people have tried. Even though the acreage for any county was capped at 25% of the cropland, ag suppliers lost sales on everything from fuel to fertilizer. And elevators lost the opportunity to earn marketing margins on the bushels of grain that weren't raised.
Winners and losers
However, other businesses sometimes benefited from the improved cash flow that CRP brought to many of their customers. And in some areas, like the Dakotas, hunters soon flooded in with dollars to spend as wildlife numbers rebounded.
A study by the USDA Economic Research Service (ERS) determined that the annual benefits of the CRP's impact on wildlife and soil erosion amounted to roughly $38 per acre (The average CRP payment in 2006 was $48.88 per acre. Payments went to about 739,000 contracts on 425,000 farms).
The ERS study went on to say that only about 10% of these benefits accrue to the landowner as on-site benefits. The other 90% accrue over a broader region. That goes a long way toward justifying the use of public funds to finance the CRP.
The effect of the CRP on individual farmers varied, also. Both established and beginning farmers sometimes found they could not compete with what the government was paying per acre for rent. However, some farmers put their poorest ground in the CRP and transitioned out of farming. As they did that, other farmers gained access to their better land, which was not enrolled in the CRP.