A wetland thrives on former farmed land in Ohio. (Courtesy of the Environmental Protection Agency)
In the mid 80’s, the Conservation Reserve Program paid farmers to leave some 40 million acres of farmland fallow to protect themselves from falling commodity prices. Nature has since reclaimed the unused fields, but with rocketing crop prices, many think that land should be farmed once again. Host Bruce Gellerman talks with Chad Hart of the Center for Agricultural and Rural Development at Iowa State University.
GELLERMAN: since 1985, the federal government has paid farmers for fields they don’t sow. It’s called the Conservation Reserve Program. And it was designed to stabilize the price farmer’s got for their crops by limiting production. The CRP worked and then some. Not only did it save family farms, it also helped restore millions of acres of land that lay fallow. Benefiting the environment and wildlife. However today, with prices of farm commodities soaring, many farmers in the U.S. Department of Agriculture want to put the fallow fields back into production. But the National Wildlife Foundation says, not so fast. The environmental group won an injunction in federal court keeping the lands off-limits. At least temporarily. And that’s where things now stand with the CRP. We invited Chad Hart and agricultural economist at Iowa State University in Ames, to tell us where things are going. Hello Mr. Hart.
HART: Well it’s a pleasure to be here Bruce.
GELLERMAN: The Conservation Reserve Program as I understand it has really been a success story.
HART: It has been. It’s an environmental program around about 20 years. We’ve got around 35 million acres in the program preserving some environmental benefits.
GELLERMAN: Well providing environmental benefits by taking the land out of circulation and also providing an economic boost to family farms. It’s really helped them.
HART: It has. It was established at a time of low commodity prices and so the rental rates that the farmer’s received were a definite boost to their income.
GELLERMAN: Well how does it work? The farmer essentially gets paid not to grow on his land?
HART: The farmer sort of receives, if you will, essentially a rental rate to keep that land out of production. So it is based upon the productive capacity of the land and the farmer agrees in the contract to say, “Oh okay I’m not going to plant this land for the next ten years,” in exchange for that payment.
GELLERMAN: Hm, how much does he get?
HART: It varies. I think nationwide average is around 50 dollars an acre. For your higher producing land such as here in Iowa, more like a hundred dollars an acre.
GELLERMAN: So if a farmer was to raise say corn on his land in Iowa these days, how much would he get?
HART: On Iowa these days given the prices that we’re seeing today you’re talking about net returns probably on the order of six to seven hundred dollars an acre.
GELLERMAN: Ooh, so if I was a farmer who had signed on to CRP, I’d want to opt out, right?
HART: Given the prices we’re seeing today that makes it highly attractive to opt out of the CRP program.
GELLERMAN: And what would it cost me to opt out? I mean I signed a contract with the federal government.
HART: Yeah, you’ve signed the contract. And your penalty would be you would have to repay everything you’ve received on that contract so far plus at least 25 percent of the next year’s payment that you would receive.
GELLERMAN: So what does the Department of Agriculture propose doing?
HART: Well at least in the near term what they proposed in May was that they would release on a short-term basis CRP lands in order for emergency hanging and grazing where farmers could release livestock on the land to graze the land or they could harvest the forage on the land and feed that to their livestock. What we’ve seen with the droughts especially in the Southeast and Southwest and the flooding here in the upper Midwest, we’ve seen some sizable impacts on our agricultural production over the last couple of years. And so we’ve opened up CRP lands to grazing for livestock. Now the question becomes as we look down the road beyond this year, if they continue to have dry weather, what happens then?
GELLERMAN: Well and it’s not only cattlemen that would want relief from CRP.
HART: No, it’s not. What we’re seeing especially with the higher corn, soybean, and wheat prices we’re seeing today, you’re seeing pressure from other users of those products in order to try to bring prices down and one way to bring it down is to plant more land to those crops and produce those crops.
GELLERMAN: How does ethanol—corn-based ethanol—factor into the CRP?
HART: Corn-based ethanol would factor in mainly due to impacting commodity pricing. And so when we look at this economic opportunity that farmers have with the possibility of bringing CRP land out into production, one of the reasons for wanting to do that would be to produce more crops which would be utilized for biofuels. And so that’s one of the many reasons why we’ve seen higher commodity pricing and the attractiveness of opting out of the CRP program.
HART: Well in Iowa, like I say, we’ve seen much more wildlife habitat especially when we think about the Ring-Neck Pheasant for example. They utilize the buffer strips along the waterways that many of those are in the CRP program. You’re also seeing a reduction in soil erosion throughout Iowa due to the conservation practices and having this land idle at least for a ten-year period. That helps bring down the amount of soil entering into our water streams and flowing down to the Mississippi River Valley.
GELLERMAN: Well the National Wildlife Federation has sued the Department of Agriculture and gotten an injunction in federal court.
HART: Yeah we are seeing competing interests in looking at the CRP program and the changes that are being not only implemented but future proposals in changing the CRP program, how that’s going to play out between the environmental benefits we get versus the economic benefits of bringing that land into production.
GELLERMAN: Well can we do both? Is there a way of balancing the conservation and balancing the farmer’s need for finances?
HART: I think there is a possibility of that balance but it does take modifications to the program. Not all CRP land is as environmentally sensitive as any other piece. There are some more sensitive pieces that should be targeted to be kept within the CRP program. At the same time, having some of that, what we call the less marginal land, brought back out into production would help lower prices.
GELLERMAN: So you’ve got droughts, you’ve got floods that are affecting farmers, you’ve got the ethanol production raising the commodity prices…
HART: We’ve had a sort of perfect storm in terms of our commodity pricing and that there have been a lot of factors that have created a higher price situation out there and so that’s why we’re re-evaluating how we look at the CRP and how we target land to be in that program.
GELLERMAN: Well Mr. Hart I want to thank you very much I really appreciate your time.
HART: Well thank you very much it was a pleasure to be here Bruce.
GELLERMAN: Chad Hart is with the Center for Agricultural and Rural Development at Iowa State University.
Coming up new studies about coal. It’s a burning issue in China and a health hazard closer to home. That’s just ahead on Living on Earth.
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