Agriculture groups urge quick reform of CRP rules

Cattle Market & Farm Reports, Editorials
Jan 3, 2005
by WLJ
The Conservation Reserve Program (CRP) needs to refocus on improvements to water and soil quality, according to a news release from four grain-related organizations.
Those organizations urged the USDA that substantial changes need to be made in the CRP to sustain growing demand for grains and oilseeds.
The CRP should shift away from whole-farm enrollments, the four organizations said in a joint statement submitted in response to USDA’s request for comments on long-term CRP policy. Under the CRP, enrolled acreage is idled under 10- to 15-year contracts, with USDA making annual rental payments and financing up to 50 percent of the cost of establishing ground cover or other approved conservation practices.
The National Grain and Feed Association (NGFA), National Oilseed Processors Association (NOPA), North American Export Grain Association (NAEGA) and North American Millers Association (NAMA) said there is “compelling evidence” that USDA should not simply reenroll the 16.1 million acres represented by CRP contracts scheduled to expire in 2007 and 6.1 million acres in 2008
The organizations recommended that USDA consider allowing a “large number” of the current contracts to expire, and only reenroll or extend those that provide the most significant environmental benefits. They noted that many soon-to-expire CRP contracts represent acres that do not meet USDA’s current environmental-benefits criteria used to evaluate CRP bids. Further, heavy CRP enrollment, particularly in the plains states, has had a devastating impact on some local economies. In addition, the organizations said the CRP has given short shrift to enhancing water quality, which they said arguably is U.S. agriculture’s top environmental challenge and currently accounts for only eight percent of the “non-market” benefits of the CRP.
“To enhance the intended benefits of the CRP, idled acres should focus on filter strips, buffers and the most environmentally sensitive lands, with a strong emphasis on substantially improving water quality,” the four organization said. “To make a significant long-term impact on soil erosion, conservation practices should be targeted to working farmland and assist farms to implement soil conservation practices.”
The NGFA, NOPA, NAEGA and NAMA said that fewer whole-farm enrollments in the CRP would reduce economic pressure on tenant farmers, which currently account for 70 percent of U.S. agricultural production and whose economic structure will “do much to determine if U.S. agriculture can remain competitive.” There is strong evidence that the CRP and other U.S. farm programs have artificially inflated land values, the organizations said. But the CRP is particularly “pernicious” because its payments flow solely to landowners and the program puts the U.S. government in direct competition with tenant farmers bidding for land, making rental land scarcer and more expensive.
The four groups recommended that USDA allow some whole-farm CRP enrollments to be bid back into active production, without penalty, to enable producers to capture opportunities from the current strong demand for grains and oilseeds while at the same time allowing those acres to be “feathered” back into production, thereby easing the transition to a lower-sized CRP.
The organizations also urged that the environmental benefits index (EBI) used by USDA to evaluate CRP bids be modified because it currently give equal weight to soil erosion, water quality and wildlife benefits. “Given the environmental challenges facing U.S. agriculture, equating wildlife benefits to the issues of soil erosion or water quality is irresponsible and not a good use of scarce economic resources,” the four organizations said. “Water quality is one of the most critical issues facing U.S. agriculture and this is where the CRP can make a significant contribution by focusing enrollment on buffers and filter strips.”
The groups urged USDA to more carefully evaluate the CRP benefits related to wildlife compared to the economic impact of idling land on local economies and U.S. agriculture’s ability to compete in global markets. “A common argument used to defend the CRP is that it is creating a niche industry catering to hunters and fishermen,” the organizations said. “Our members certainly are involved in and support these activities. But should those activities be subsidized through government payments?”
One of the most troubling aspects of the CRP cited by the organizations is the damaging economic impact it has on local economies. The groups strongly urged that USDA strictly abide by the stipulation that no more than 25 percent of available land in a county be enrolled in the CRP. The groups cited specific counties where CRP enrollment has reached 40 percent because of measurement error or other mistakes in policy implementation. “Policies need to be chosen very carefully so we don’t take away the lifeblood of communities that are still closely tied to production agriculture,” the organizations said.
In addition, the NGFA, NOPA, NAEGA and NAMA recommended that USDA increase the size of the CRP to 39.2 million acres (from 36.4 million acres) as a ceiling, not as a mandate, noting that continued CRP expansion will hamper U.S. agriculture’s ability to produce and compete in global markets. The organizations warned that the size of the CRP already has adversely affected the availability of land to build and grow an economic foundation for the grain, livestock, milling and processing sectors of the U.S. economy. “Creating overall growth opportunities for U.S. agriculture will be much more difficult if the United States becomes a big importer” of commodities for feed, animal and industrial uses.
Noting upcoming farm program policy deliberations for the 2007 Farm Bill, the four groups urged USDA to “proceed cautiously” so as not to idle vast amounts of acres in the CRP for another 10 to 15 years. “We encourage an approach that reflects the administration’s commitment to free enterprise and support for U.S. agricultural growth,” the organizations concluded. — WLJ