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Wednesday, May 19, 2010

Conservation Reserve Program: Status and Current Issues

Tadlock Cowan
Analyst in Natural Resources and Rural Development

The Conservation Reserve Program (CRP), enacted in 1985, provides payments to farmers to take highly erodible or environmentally sensitive cropland out of production for ten years or more. It is the federal government's largest private land retirement program. The program is administered by the Farm Service Agency (FSA) of the U.S. Department of Agriculture (USDA), with technical assistance provided by USDA's Natural Resources Conservation Service. The CRP also has several subprograms, the best-known of which is the Conservation Reserve Enhancement Program (CREP). 

The 2008 farm bill (P.L. 110-246) reauthorized CRP through FY2012 but reduced the maximum acreage level to 32 million acres, down from the previous cap of 39.2 million acres. Criteria for haying and grazing on CRP land were amended, and incentives were authorized to assist socially disadvantaged and beginning farmers in leasing or purchasing land under a CRP contract. A draft supplemental environmental impact statement on the 2008 farm bill changes to CRP was completed in February 2010. A final draft is expected by summer 2010. 

The national enrollment as of April 2010 stood at 31.2 million acres, a decrease of approximately 3.5 million acres from October 2008 and a decrease of approximately 2.5 million acres from September 2009. Secretary Vilsack announced in March that there would be a general signup in late spring or summer 2010, the first since 2006. Approximately 85% of total CRP acreage is enrolled under general sign-ups. There was a continuous enrollment sign-up during late spring and summer 2009 (number 37) that added 488,000 acres to CRP totals. Continuous sign-up 38 began in October 2009 and will continue to October 2011. 

For FY2010, outlays are projected to total $1.7 billion, approximately $250 million less than for FY2009. This projected total includes funding for rental payments, cost-share payments, and incentive payments. The average per-acre rental payment for general sign-up is currently $44.59, and the average rental rate for CREP totals over $129 per acre. The average rental payment for all CRP programs is approximately $53 per acre. 

Between 2007 and 2010, 27.8 million acres under CRP contracts will expire. Contracts for approximately 24 million (86%) of these acres have been renewed or extended. On September 30, 2009, contracts on approximately 3.9 million acres were set to expire. USDA announced a signup for contract extensions that ran from May 18 to June 30, 2009. Of the expiring 3.9 million acres, however, only about 1.5 million were offered extension contracts. About 55% of the eligible expiring acreage was in four states: Colorado, Kansas, Montana, and Texas. As of December 2009, participants holding contracts on 1.1 million acres originally set to expire September 30, 2009, had accepted extension offers (73%). An additional 4.5 million acres will expire September 30, 2010. Approximately 75% of the FY2010 expiring acres have been reenrolled or had their contracts extended.

Date of Report: May 13, 2010
Number of Pages: 14
Order Number: RS21613
Price: $29.95

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