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USDA Increases CRP Payments on Targeted Lands

High grain prices could lead to less conservation land entering USDA program.

Capping out a week of conservation announcements, March 2 Secretary of Agriculture Tom Vilsack announced an initiative targeting 1 million acres under the Conservation Reserve Program to be targeted for grasslands and wetlands. Vilsack made the announcement at Commodity Classic as well as at the White House Conference on Conservation featuring many cabinet members to engage directly with conservation leaders from all 50 states.

The goal of the new CRP grasslands and wetlands initiative is to increase enrollment of environmentally sensitive land through targeted signups. USDA's Farm Service Agency (FSA), which administers CRP, will set aside acres within the 32-million acre program for specific enrollments that benefit duck nesting habitat, upland birds, wetlands, pollinators and wildlife.

Rather than wait for a general sign-up (the process under which most CRP acres are enrolled), producers whose land meet eligibility criteria can enroll directly in this "continuous" category at any time. Some of the changes brought on by the expansion will take place immediately and some will be initiated in the coming months.

The 1 million acre expansion for CRP includes 100,000 acres for a new pollinator practice; 200,000 acres for wetland restoration including important habitats with threatened or endangered species; 400,000 acres for SAFE, a program that provides flexibility to meet specific needs of high-value wildlife species; and 300,000 acres for duck nesting habitat and upland bird populations.

Recently, USDA announced two additional CRP sign-ups: a four-week general sign-up beginning on March 12 and ending on April 6; and a continuous sign-up for Highly Erodible Cropland beginning this summer, which seeks to protect the nation's most environmentally sensitive lands. The Highly Erodible Cropland initiative permits landowners to enroll up to 750,000 acres of land with an Erodibility Index (EI) of 20 or greater.

Related: The move was welcomed by conservation groups.

Incentive may not be enough
To encourage producers to sign up their most environmentally valuable acres FSA will increase the Signing Incentive Payments (SIPs) to $150 per acre from the current level of $100 per acre. The incentive is offered on most continuous practices and will include wetland restorations, pollinators and upland bird habitat.

Currently, about 30 million acres are enrolled in CRP. The offer comes as 6.5 million acres of land are set to expire from conservation programs this fall. That land could return to tillage at a time when high crop and land prices are enticing more farmers to put the land into production, according to Agriculture Secretary Tom Vilsack.

But with crops fetching higher prices, such as soybeans, which increased 9.5% last month to $13.13 a bushel, more farmers are likely to consider returning their farmland to crops rather than participating in CRP, said Brent Sohngen, an agricultural economist with Ohio State's Ohio Agricultural Research and Development Center.

Land is typically enrolled into CRP for 10 or 15 years and can then be re-enrolled. While most acres do re-enroll, this year it's going to be harder to convince more farmers to do so, he said.

With crop prices at historic highs due to increased global food demands and higher commodity prices that have caused land values to rise, more farmers are finding that they can make more profit by renting their land to other farmers for production, said Sohngen.

"You'll probably be lucky to get 70 to 80% of land back into the program this year as more and more farmers are likely to take the risk and farm the land," he said. "While a lot of farmers will be happy to keep their land in CRP because it didn't make sense to farm the land for a number of reasons, more farmers on a bigger scale than in previous years are thinking they could get higher prices farming the land.

In the general sign-up that occurred March 14 through April 15 last year, 2.2 million acres of the 4.4 million acres with an expiring CRP contract did not re-enroll. However, after taking into account newly enrolled land, acres in CRP declined in net by 1.5 million acres. Thus, despite the high prices that existed in 2011, acres in CRP declined by around one-third of the expiring contract amount, said Carl Zulauf, an agricultural economics professor and a researcher with OARDC.

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