06.18.21 | Newsletter
USDA announces higher, non-targeted CRP rental rates
The U.S. Department of Agriculture (USDA) announced June 14 that it opened sign-up for the Conservation Reserve Program (CRP), offering rental rates that are 10 percent more than the maximum allowed by the 2018 farm law.
The 2018 farm law capped CRP rental rates for general sign-ups at 85 percent of the county average rental rate for non-irrigated cropland and 90 percent for continuous sign-ups. However, USDA is adding a 10 percent inflationary adjustment to the rental rates effectively raising the caps to 95 percent for general CRP and 100 percent for continuous CRP.
For the continuous CRP sign-up, USDA is increasing the practice incentive payment from 20 percent of the cost-share of establishing grass to 50 percent. USDA already pays 50 percent of the expense to establish grass, so the additional 50 percent through the practice incentive payment will result in USDA paying 100 percent of the establishment costs for continuous CRP. USDA will continue to pay 50 percent of the grass establishment cost for land enrolled through general CRP. Land enrolled through a water quality practice in the continuous CRP will receive a 20 percent increase in the rental rate, which is up from a 10 percent increase in the previous sign-up.
In April, USDA announced a goal to enroll up to 4 million new acres in CRP by raising rental payment rates and expanding the number of incentivized environmental practices allowed under the program. Currently, there are 20.8 million acres enrolled in CRP and an estimated 15 million acres in expired CRP contracts (since the inception of CRP) that never returned to crop production, netting to more then 35 million acres of U.S. cropland that have been idled by CRP.
NGFA President and CEO Mike Seyfert issued a statement on June 14, noting that NGFA supports working lands programs like the Environmental Quality Incentives Program (EQIP) and Conservation Stewardship Program (CSP).
“However, NGFA is deeply concerned with proposals to expand the CRP that will take significant acreage out of production and place the U.S. at a competitive disadvantage globally, while risking making it harder for beginning and socially disadvantaged farmers to compete on rental rates and gain access to land needed to expand their operations,” Seyfert said.
“Congress established the maximum CRP rental rate levels to help ensure CRP is targeting marginal farmland and not competing with farmers for productive farmland,” he noted. “NGFA supported these changes in the 2018 law and is concerned by USDA’s decision to offer CRP rental rates exceeding the statutory maximums by 10 percent and believes the higher rates will lead to enrollment of productive farmland. This decision also runs counter to signals from the market encouraging farmers to maintain and expand production. Programs that increase acreage idling in the United States weaken our food and agricultural supply chains and send market signals to competitors to plant more acres, resulting in negative climate and environmental impacts.”
USDA’s deadline to sign-up for general CRP is July 23 and Aug. 6 for continuous CRP.
NGFA is working on a study commissioned by the National Grain and Feed Foundation to analyze the effects of targeted conservation practices on environmental and economic health.