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Friday, May 20, 2011

Conservation Reserve Program: Status and Current Issues

Tadlock Cowan
Analyst in Natural Resources and Rural Development

The Conservation Reserve Program (CRP), enacted in the 1985 farm bill, provides payments to farmers to take highly erodible or environmentally sensitive cropland out of production for 10 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 (SEIS) on the 2008 farm bill changes to CRP was completed in February 2010. On May 14, 2010, an interim rule was published in the Federal Register to implement the Transition Incentives Program. On September 27, 2010, another interim rule was published implementing other provisions of the 2008 farm bill. The final SEIS was available for public comment for a 30-day period beginning June 18, 2010. A final rule is expected by mid-year 2011. Following a review of the comments by FSA, a record of decision (ROD) for the CRP SEIS will be issued.

The national enrollment as of March 2011 stood at 31.2 million acres. Approximately 4 million acres of farmland was added through a general sign-up (number 39) in summer 2010, nearly 57% of which was acreage under contracts set to expire September 30, 2010. This was the first general sign-up since 2006. Approximately 84% of total CRP acreage is currently enrolled under general sign-ups. A new general sign-up (number 41) began March 14, 2011, and ended April 15, 2011. There was also 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. That sign-up has added 607,454 acres as of March 2011. Continuous sign-up 40 for FY2011 added 30,690 acres in March 2011 and now totals 120,295 acres. Total continuous sign-up acreage is over 5 million acres as of March 2011.

For FY2011, total CRP rental outlays are estimated at $1.85 billion, approximately the same as for FY2010. This projected total includes funding for rental payments, cost-share payments, and incentive payments. The average per-acre rental payment for general sign-ups is currently $45.87, and the average rental rate for CREP is nearly $129.93 per acre. The average rental payment for all CRP programs is $55.09 per acre.

Between 2007 and 2010, 27.8 million acres under CRP contracts expired. 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%). Contracts on an additional 4.4 million acres expired September 30, 2010. Approximately 75% of that expiring acreage has been reenrolled or had its contracts extended. On September 2011, 4.4 million acres will expire.

Date of Report: May 11, 2011
Number of Pages: 15
Order Number: RS21613
Price: $29.95

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