The Conservation Reserve, the largest U.S. land-idling program, has shrunk to its smallest size since the late 1980s, when it was only a couple of years old. With low commodity prices forecast for years into the future, putting a pinch on farm income, economist David Widmar says a proposal to expand the reserve, which pays landowners an annual rent in exchange for retiring fragile farmland for 10 years or longer, “is likely to capture broad political appeal.”
“Not only would an expanded [Conservation Reserve Program] be appealing to agricultural producers in today’s economic environment, CRP also resonates well with wildlife and environmental interests, especially in light of recent water quality concerns in Iowa and Ohio,” writes Widmar at the Agricultural Economic Insights blog. “This will especially be true if farm incomes remain low and the pressure to assist farmers exists [such as it was in the 1980s]. In the meantime, keep an eye out for those ‘Make CRP Great Again’ hats.”
Lawmakers are expected to begin preliminary work next year for the farm bill due in 2018.
Enrollment in the reserve is down 34 percent since 2007, when the agricultural boom began. In four states, Texas, Kansas, North Dakota and Montana, participation fell by 1 million acres apiece, writes Widmar. The reductions “played an important role in the recent expansion of corn and soybean acres, especially in North Dakota and South Dakota.”
Corn and soybeans are the two most widely planted crops in the United States. They have expanded into areas in the Plains, traditionally the home of wheat production. Farmers sowed 49.6 million acres of wheat land this year, the smallest amount since 1970.
At present, there are 23.8 million acres in the reserve, just under the 24-million-acre ceiling written into the 2014 farm law. Enrollment peaked at 36.8 million acres in 2007. Congress chose the ceiling as a cost-saving measure and because farmers wanted to pursue high commodity prices rather than idle land. Crop prices have fallen since 2013 and interest in the reserve is on the rise.
When USDA held the first “general” signup for the reserve in three years, it attracted the strongest competition in the 30-year history of the program. USDA announced last month that it selected 411,000 of the 1.8 million acres offered for the program, the lowest acceptance rate ever. Landowners get an annual payment of $51 an acre for land entering through general enrollments, which are open to everyone. The program costs about $2 billion a year.
The Conservation Reserve was created in the 1985 farm law, written during an agricultural recession. It provided a welcome source of income to farmers and helped reduce U.S. crop production. It was not uncommon during those stressful years for landowners to list CRP income when offering farmland for sale.