August 10, 2008

Idle Land Now Valuable


CRP by the numbers 1985 Year the CRP was initiated 34.7 million CRP acres in America 1.1 million CRP acres to expire on Sept. 30, 2008 3.8 million CRP acres to expire on Sept. 30, 2009 4.4 million CRP acres to expire on Sept. 30, 2010 50 percent increase in national requests to end CRP contracts early 34,000 CRP acres removed early nationwide in April 36,890 CRP acres removed early nationwide in May 15,000 previous national average of CRP acres removed early each month $201.4 million paid to Iowa landowners for CRP $112.7 million paid to Illinois landowners for CRP $38.6 million paid to Wisconsin landowners for CRP -- Source: United States Department of Agriculture and Farm Service Agency News You can use

In late June, the farming world held its breath.

Nationally, 34.7 million acres enrolled in the Conservation Reserve Program could be affected. About 4 million of those are in Iowa, Illinois and Wisconsin.

If the government said yes, farmers could save some cash and possibly their farms. If the government said no, millions of acres could be preserved for posterity.

"The issue was as vital as it ever was," said Kent Kulver, executive director at the Delaware County (Iowa) Farm Service Agency.

Such is the battle over the CRP, pitting economic interest against environmental concern. For farmers considering leaving the program, the price would be steep, even in these corn-rich days fueled by ethanol demand. But environmentalists argue the loss of invaluable land could be the ultimate cost.

Cause and effect

June punched farmers right in the corn belt. Rain and floods destroyed almost 10.8 million acres of crops nationwide, including a combined 3.4 million in Iowa, Illinois and Wisconsin.

With grain supplies diminished, prices soared. Corn spiked at $7.46 per bushel, and livestock producers begged for relief from the millions of acres perfect for pasture.

Those acres were enlisted in the CRP - a program that allows landowners to set aside ground for conservation methods and in turn receive money from the government. Contracts are signed for 10 years, and once enrolled, the only way out is paying the government back every penny received, plus interest and a penalty.

Then, in July, Secretary of Agriculture Ed Schafer announced that landowners in disaster-declared counties could release cows on CRP land to graze, as part of a critical feed use provision - although they would take a 25 percent reduction in the annual amount earned from the land.

The next day, a federal judge halted the process by granting a temporary restraining order against the USDA and the Farm Service Agency, upon the request of the National Wildlife Federation and six of its affiliates.

So, farmers and landowners waited and wondered what the USDA would do next.

Money, money, money

By removing CRP land early, landowners who are farmers can till the land that once housed prairie grass or water strips and instead plant the yellow gold fetching such a high price as a result of increased ethanol demands.

Eldon Busch, of Bellevue, Iowa, said he understands he entered a contract when he signed up for CRP in 1995 and again in 2005. And while he believes in honoring the contract, he said the government does not, as it altered the terms after he signed in 2005.

"I would take it out in a minute if they let me take it out," he said.

The government paid competitive rent when he entered. Now, he said he could receive about $100 more per acre each year if he rented his 280 acres in CRP to other farmers.

Chris Ludescher, of Dubuque, agreed. "I'm getting paid about half of what I possibly could be getting paid," he said.

But money does not matter to some.

"I see more value in preserving the land for future generations, than trying to squeeze every penny out of it," he said.

Kulver oversees many of the CRP requests in Delaware County in Iowa, and he said most landowners enter the contract with the goal of conserving resources.

"They're not greedy," he said. "They're just asking for a fair rental price, and everything has changed recently, as far as the economics are concerned. All we know here is that when you put land in the CRP, it comes out healthier than it was before when that time is up."

Not an option

The waiting has ended.

During the first days of August, the secretary of Agriculture discussed the USDA's decision to not remove penalties for farmers seeking early exit from CRP.

He had his reasons. Corn prices have receded. Damage was less than estimated. Corn crops are on track to be the second largest on record.

"Owners, of course, have the option of taking their acres out of the program early in exchange for returning all payments they have received plus interest and a penalty," he said. "Some are doing so now."

Nationwide, the FSA has seen a 50 percent increase in requests to exit early, despite the extra cost. However, this is not necessarily bad news for the USDA, which, according to the 2008 Farm Bill has to slash CRP involvement by 2.7 million acres. In the next two years, 9.3 million acres are scheduled to expire from the program.

For now, Kulver said, not too many landowners in his area are asking to get out.

"But tell them there's no penalties, and I guarantee we'd have a significant amount asking about it," he said.

Originally published by BEKAH PORTER TH staff writer/[email protected]

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