The Conservation Reserve signup that opens on Monday could see landowners idle the largest amount of fragile cropland in years, said Agriculture Secretary Sonny Perdue, although some analysts say lower government payment rates will hold down enrollment. The 2018 farm law raised the acreage ceiling for the reserve, the largest U.S. land-idling program, by 3 million acres.
Created in 1985 during an agricultural recession, the reserve sends an annual rental payment to landowners who agree to take fragile land out of crop production for 10 years or more. In its early years, the program sometimes looked like an income buttress for a weak farm sector. In recent decades, environmental benefits, such as improved water quality, less runoff, and increased wildlife habitat, have been given higher priority. The government spent $1.9 billion on the reserve in fiscal 2019.
Some 22 million acres are enrolled at present, 2 million fewer than the cap set in the 2014 farm law. At the same time, contracts expire on 5.4 million acres next Sept. 30, so it’s possible there will be a large turnover in the reserve as well as an overall increase in enrollment. “We’re hoping to see one of our largest signups in many years,” said Perdue in announcing a “general” signup — the first in three years — running from next Monday to Feb. 28, 2020. A general signup allows landowners to offer large tracts of land for enrollment
“We know we’ve got room to grow, and there’s going to be a lot of opportunities for landowners to get into the program,” said Richard Fordyce, head of the Farm Service Agency, which oversees the reserve.
The 2018 farm law was the first since 2008 to increase the ceiling for enrollment. But Congress reduced the payment rate per acre to offset the cost of expanding the reserve. In the past, payments were based on average land rental rates in a county. Now payments will be 85 percent of local rental rates for land that enters the reserve through a general signup and 90 percent for land accepted under the “continuous” signup for high-priority practices, such as creating filter strips, on small tracts.
“In our preliminary baseline, we only have a small net increase in [Conservation Reserve] acreage over the next few years — we assume that the limitations on rental rates will result in fewer folks trying to enroll acreage than would have been the case otherwise,” said Pat Westhoff of the FAPRI think tank at the University of Missouri. “We also have very low confidence in this.” It will be hard to build enrollment totals in the reserve because of the large volume of land under expiring contracts, he said.
For its part, the USDA estimated that 24.7 million acres will be in the reserve in 2021, a net increase of 2.7 million acres from the current level. Enrollment will climb slowly over the next four years to plateau at about 26.8 million acres, said the USDA in its 10-year agricultural baseline. The 2018 farm law set a ceiling of 27 million acres and reserved 2 million of the 3 million-acre increase for grasslands.
“Most notable is the fact that Congress has increased or decreased the program’s acreage cap … coinciding with low or high crop prices,” wrote University of Illinois economist Jonathan Coppess in a 2017 retrospective. High commodity prices lead Congress to reduce the enrollment cap and low commodity prices encourage a higher ceiling. “If prices are low, [the reserve] might provide a better return on some lands through the federal rental payments, but it can be difficult to compete with production returns when prices are high.”
The USDA said it will hold a general signup annually in the future; it has held five since 2010. A Conservation Reserve grasslands signup, intended to protect grazing lands, will be offered each year after the general signup. The 2020 grasslands signup will run from March 16 to May 15. Payments will be 75 percent of a pasture rental rate calculated by the USDA.
Enrollment is ongoing for “continuous” high-priority practices and “will focus primarily on water quality within the Clean Lakes, Estuaries, and Rivers (CLEAR) Initiative,” said the USDA.
The National Wildlife Federation said the USDA needed to correct “absolutely unnecessary cuts to incentive payments” for land stewardship practices in the program. The National Sustainable Agriculture Coalition said that incentive payments ought to be set at maximum levels for “continuous” and CLEAR practices.
Enrollment in the Conservation Reserve Program peaked at 36.77 million acres in 2007 and has declined by nearly 15 million acres since then.
The USDA home page for the program, including fact sheets about the reserve and general signups, is available here.
A one-page summary of Conservation Reserve enrollment and outlays is available here.