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Will CRP Acres Increase in the 2018 Farm Bill?

Congress has adjusted the enrollment cap on the Conservation Reserve, which pays landowners an annual rent to idle fragile land, in every farm bill since the program was created in 1985. With commodity prices in a trough, there are calls for a sizable increase in the reserve, a step that could affect wheat production far more than corn or soybeans according to a back-of-the-envelope estimate.

At its field hearing in Michigan over the weekend, the Senate Agriculture Committee heard calls by Ducks Unlimited and the American Soybean Association for an expansion in the reserve, now limited to 24 million acres, its smallest size since 1988. In February, the hunting and wildlife habitat group Pheasants Forever asked a House Agriculture subcommittee for a 40-million-acre reserve. That would be somewhat larger than the peak enrollment of 36.8 million acres in 2007.

“Lands enrolled in CRP (Conservation Reserve Program) help absorb farm field runoff before it hits the ditch or stream, help recharge groundwater resources and help keep the soil on the landscape,” said Kyle Rorah of Ducks Unlimited at the Senate hearing. Rorah did not say how large the reserve should be nor did Michigan farmer David Williams, speaking for the American Soybean Association. Williams said ASA delegates adopted a resolution at their annual meeting “to increase CRP acreage, though we did not take a position on how much, what kind, or how to pay for it.”

While USDA stresses how the reserve reduces soil erosion, protects water quality and provides wildlife habitat, the program long had an unspoken role as a source of steady income during hard times on the farm and a way to close the throttle on prolific U.S. crop production.

If Conservation Reserve enrollment returned to its 2007 peak, the 12.9 million acres taken out of production would translate into a 12% drop in wheat production; corn would fall 4% and soybeans 3%, according to calculations by economist David Widmar at the Agricultural Economic Insights blog. The impact on stockpiles would be much more profound by bringing supplies more into line with current demand, wrote the Purdue economist.

“Small changes in acres and production can have significant impacts on ending stocks,” wrote Widmar. “Without considering changes in usage (or demand), changes for corn, soybeans, and wheat were all large.”

Wheat would be affected the most, said Widmar, because some 6 million acres of the 12.9 million acres exiting the Conservation Reserve since 2007 were in wheat territory.

A large-scale expansion of the Conservation Reserve could cost billions of dollars — hard to obtain in the current anti-spending mood on Capitol Hill.

Minnesota Rep. Collin Peterson has suggested that more land could be enrolled if USDA offered lower payments for high-cost projects such as filter strips. Agriculture Secretary Sonny Perdue said a week ago that partial-field enrollments were a possibility within the 24-million-acre limit. “I don’t think it’s that many more acres,” he said. “It would be taking less productive acres out of production, which would be better for their bottom line and better for our overall supply management situation.”

Some farm groups say it would be a better use of money to focus on working lands programs, which encourage stewardship on cropland. Those programs have a much lower cost per acre. And some young farmers complain that land retirement programs drive up the cost of available farmland, to their detriment.

Economist Jonathan Coppess, of the University of Illinois, said Congress has expanded the Conservation Reserve if commodity prices were low while it was writing a farm bill and reduced its size during boom times. The 24-million-acre cap set in the 2014 law was a budget-cutting step; landowners were pulling land out of the reserve anyway as crop prices soared.

“This back-and-forth over acres reflects some of the policy issues for CRP,” wrote Coppess at farmdoc Daily. Crop prices rice or fall frequently while Conservation Reserve contracts run for 10 years or longer. “Finally, crop prices and production returns are also not the measure of programs designed to protect and conserve natural resources such as soil, water, and habitat.”

FERN’s Ag Insider. Produced by FERN
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