When the 2008 Farm Bill was given a stay of execution in the “fiscal cliff” deal in January, those of us outside of the Beltway were given few details about how the extension would impact producers and conservation programs. Conservation Title programs were supposed to be back—though some would be receiving limited funding.
One bright spot in the extension was confirmation that the Conservation Reserve Program (CRP) was reauthorized to accept applications for new acres and the national maximum acreage cap of 32 million acres was retained. Though it has come under attack through its history, the CRP is one of the most successful programs in the USDA portfolio—both in terms of environmental benefits and as a consistent source of income to landowners enrolled in the program. According the Summary of Active and Expiring CRP Cropland Acres by County produced by the Farm Service Agency in Kansas in January, there are over 212,000 acres worth of contracts set to expire in the state at the end of September 2013, and not opening enrollment could have been damaging to struggling wildlife populations and the economy.
On Feb. 16th, speculation was put to rest when USDA Secretary Tom Vilsack announced that both Continuous and General CRP applications will be accepted in 2013. Continuous CRP allows for the year-round enrollment of acres with the highest value to conservation and guarantees acceptance if offered acres meet the environmental criteria, while the more traditional General CRP allows landowners to offer whole or partial-field enrollment of cropland acres. General CRP offers are then ranked nationally, and the best applications are accepted into the program. This General Sign-up application period will be from May 20-June 14.
Another important announcement that Secretary Vilsack made was that there is to be a national review of Soil Rental Rates to potentially make CRP payments more competitive with commodities markets and land values. Soil Rental Rates (SRR) are per-acre payments based on common local cash rent rates and predicted soil productivity. Landowners with CRP contracts are then paid an annual rental payment based on the SRRs of the ground they have enrolled. Most counties have already completed this review, and conservationists and landowners will be happy to hear that these rates have increased in many places. Here in Stafford County, the proposed increase will raise the average SRR from $43/acre to $50/acre.
Though we are further below the national acreage cap than we have been during the last few General Sign-ups, it is still important to remember that offers are ranked nationally and proposed SRR increases are not just local. These, sometimes large, increases may drive more landowners throughout the Great Plains to seek reenrollment or new contracts, potentially leading to higher competition than was seen during the last General Sign-up. For example, the proposed increase of $43 per acre in Holt County, Missouri means that their average SRR payment will now be $195/acre. At those prices, with continued drought predicted in 2014, producers in states with higher land values may think about enrolling acres they had not previously considered. Thus, when submitting your CRP applications this year, you may also want to think about what you can do to maximize your rankings to increase the likelihood of your offer being accepted.
Rankings are calculated based on six factors called the Environmental Benefits Index (EBI). Generally, the easiest way to improve your ranking is to apply for practices that provide higher plant diversity. For example, applying for a CP2 contract will result in a lower EBI score than an application for CP25. That is because CP2 is a more “barebones” (lower plant diversity) practice that does not replicate natural prairie communities as well as CP25.
It is often true that more diverse seed mixes cost more money. However, choosing CP25 enrollment instead of CP2 can result in a final ranking as much as 87 points higher (if pollinator enhancements are added to the CP25 application). Since there are only 160 points possible, those 87 points become hugely important during competitive sign-ups, and because the Farm Service Agency cost-shares on CRP establishment, the difference in a landowner’s out-of-pocket expense for planting a standard CP2 seed mix or standard CP25 mix is only about $10/acre. In Stafford County, the landowner’s portion of seed cost for CP2 is about $40/acre or $49/acre for CP25. It should be noted, though, that CP25 does not allow haying/grazing to be used as a mid-contract management activity—unlike CP2. Therefore, landowners must weigh their need for flexibility in mid-contract management options and upfront cost savings against their desire for more surety that an offer will be accepted.
Remember that you have more options than those I have mentioned here. There are a number of different CRP practices and enhancements you can choose to apply for to make the most competitive bid possible while still fitting in with your goals and limitations. If you would like to learn more about CRP and the application/ranking processes, as well as ways to improve existing CRP stands for wildlife, I am always available to answer your questions. Please feel free to call me anytime at the NRCS office in St. John (549-3480) or on my mobile phone (620-338-7132).