USDA’s Farm Service Agency (FSA) announced today that it will enroll 4.3 million acres of the farmland offered by landowners for the Conservation Reserve Program’s (CRP) 39th general sign-up. This is the first general sign-up for the CRP since 2006.
Over 50,000 landowners submitted bids for CRP contracts, totaling 4.8 million acres. Of the 4.8 million acres offered, approximately 2.7 million acres (57 percent) were re-enrollment offers and 1.6 million acres (43 percent) were first-time enrollment offers. The overall 91.6 percent acceptance rate was quite high.
Landowners in 40 states successfully bid acres into the program. The top five states in terms of acreage accepted into the program were Texas, Colorado, Kansas, Oklahoma, and Montana, the same largely wheat acreage that has historically been bid into CRP. Acreage Texas, Colorado, and Kansas combined equaled just over half of the total acreage signed up.
In terms of rental rates to be paid by the government, the average for this sign-up was $46 an acre, with the range running from $26 an acre in Wyoming and $28 an acre in Montana to $165 an acre in Iowa and $131 an acre in Illinois.
The purpose of the CRP is to conserve and improve soil, water, and wildlife resources by temporarily removing land from agricultural production. Under the CRP general sign-up provision, USDA offers annual rental payments and cost-share assistance to farmers to establish long-term conserving cover, primarily grasses and trees, on land that has been in row crop production.
The 2010 general sign-up will bring total CRP enrollment to 31.2 million acres nationwide, which is 800,000 acres under the Program’s statutory cap of 32 million acres. This will leave only 800,000 acres available for continuous enrollment in the Continuous Sign-up CRP Buffer Initiative (cCRP) and for the Conservation Reserve Enhancement Program (CREP) and the State Acres for Wildlife Enhancement program (SAFE), which target CRP acres to projects in which the states partner with USDA in providing incentives and resources to encourage farmers and ranchers to enroll.
FSA estimates that the acres will meet requests for cCRP, CREP and SAFE through FY2011. NSAC is strong proponent of the cCRP and CREP components and will be working to ensure that there there will continue to be sufficient CRP acreage to meet farmer demand for cCRP and CREP enrollment should FSA propose another CRP general signup.
No information has been released as yet by USDA concerning the projected ten year cost of this sign-up relative to the up to $2 billion made available to offset the cost from the savings generated from the recent standard reinsurance agreement between USDA and crop insurance companies. That reinsurance agreement is projected to save $6 billion overall, of which the Administration proposes to spend $2 billion on this CRP sign-up plus additional expenditures for risk management and crop insurance purposes.
The issue of whether the cost of this CRP sign-up needed to be offset by USDA has been controversial. Since Congress already paid for a nearly 32 million acre CRP in the 2008 Farm Bill, some members of Congress maintain that the Administration should not have insisted on, essentially, paying for it for a second time. The House Agriculture Committee as well as the U.S. Government Accountability Office are investigated the s0-called “administrative pay-go” practice to determine its legitimacy and its potential effect on current and future farm bill funding. NSAC is very concerned about this issue and will be watching the ongoing investigations closely.