Now that President Donald Trump has signed the 2018 Farm Bill into law, NACD’s Government Affairs Team will be releasing a series of blog posts to break down the bill in more detail with the expected changes folks can expect on the ground as USDA works to implement the new law.
The Conservation Reserve Program (CRP), first created in the 1985 Farm Bill, has undergone a number of changes over the last several farm bills, including changes in overall acreage and an increased focus on specific resource concerns through special initiatives. The new farm bill allows for an increased acreage cap, while also addressing the issue of CRP competing with farmers for productive land by reducing rental rates, cost-share and incentive payments.
Acreage Cap & Allocation
The 2014 Farm Bill reduced overall CRP acres from a cap of 36 million acres to 24 million acres. While there were several reasons for this reduction, NACD had concerns this reduction may have gone too far. In the fall of 2017, along with not having a national sign up for CRP general acres, the Farm Service Agency (FSA) stopped accepting applications for CRP continuous acres, noting the program was too near its 24 million acre cap to do so.
NACD supported an increase to the CRP acreage cap and Congress agreed by establishing a new acreage cap at 27 million acres in the 2018 Farm Bill. Within this cap, however, there are several allocations that must be met by USDA. There is a continuous acreage “floor” that must be at least eight million acres in fiscal year 2019, rising to 8.6 million acres by the end of this farm bill. Additionally, two million acres must be allocated to the CRP Grasslands Program. On top of that, 60 percent of available acres for enrollment must be awarded using a proportional, historic allocation.
Rental Rates and Cost Share Payments
NACD supported an increase in the CRP acreage cap but not at the expense of other conservation programs. To do this, Congress had to find a way to pay for the increased acres within the program itself. This was done partially be reducing rental rates per acre. Rental rates for general acres are reduced to 85 percent of the county average, while rates for continuous acres are reduced to 90 percent of the county average. This reduction is compounded for subsequent reenrollments.
According to the Conference Report, Congress “increased CRP’s annual enrollment acreage cap and reduced the soil rental rate limits in hopes that CRP will more accurately serve one of its fundamental purposes: retiring the most sensitive lands without competing with local farmland rental markets (which may preclude some farmers from having access to prime farmland). By incorporating changes in the program that are more market-based, the Managers are hopeful that highly productive land will not be taken out of production while remaining affordable for those who wish to utilize it for production agriculture.”
In addition to rental rates, landowners enrolled in CRP may receive further payments for certain practices installed. The new farm bill limits practice cost-share payments to the actual cost to install the practice and caps the cost-share for seed mixes to 50 percent of the actual cost of the seed. Regarding seed mixes, this cap was implemented due to concerns that recent increases to the complexity as well as the expense of certain seed mixtures have not only led to frustrations by landowners, but have also potentially wasted taxpayer dollars.
Clean Lakes, Estuaries and Rivers (CLEAR) Initiative
The 2018 Farm Bill creates a new initiative under CRP continuous sign-up called the Clear Lakes, Estuaries and Rivers (CLEAR) initiative. These contracts will support conservation practices aimed at reducing sediment loading, nutrient loading and harmful algal blooms in these water bodies to better address water quality concerns. Of the total CRP allocation given to Continuous CRP (see above), a minimum of 40 percent of these acres must be dedicated to the CLEAR initiative. The conference report also states that Congress expects USDA to place a greater emphasis on reporting on the improvements to water quality achieved due to the increased adoption of water quality practices that will go into effect as a result of CLEAR.
Grazing on CRP Acres
NACD believes that allowing more grazing on CRP land can be done in an environmentally sound way and can actually improve the health of the land, and we were pleased to see increased opportunities for grazing in the 2018 Farm Bill. This farm bill included many of the same allowances for grazing during emergencies without rental rate reductions included in prior farm bills. However, this farm bill adds another opportunity to graze CRP acres while not reducing rental rates.
Approximately halfway through a CRP contract, landowners must implement what is known as mid-contract management. Prior to this law, if a landowner chose to graze this land in order to keep the land properly managed, they would receive 25 percent reduction in their rental rates. At the request of NACD, Congress changed the law so that now a landowner may graze the land as part of their mid-contract management activities and not receive a payment reduction. Additionally, by grazing the land instead of using another technique, the federal government will reduce the amount of cost-share to landowners, saving taxpayer dollars as well. NACD believes this is a win-win for the landowner by providing them an economic benefit and the environment by introducing large animals which can improve the stand of the established cover.
Conservation Reserve Enhancement Program (CREP)
Before the 2018 Farm Bill, the Conservation Reserve Enhancement Program (CREP) was not explicitly authorized in statute and was a partnership between USDA and the states. The new farm bill authorizes CREP in the statute for the first time and allows nongovernmental organizations to be the lead partner but requires them to provide at least 30 percent of the total program cost. For state-led projects, the percentage will be a negotiation between USDA and the state.
The bill incentivizes more enrollment of riparian buffers in CREP, including forested riparian buffers, by authorizing the Agriculture Secretary to make-cost share payments for forested riparian buffer maintenance throughout the length of the agreement and to cover up to 100 percent of the cost incurred by the owner or operator.
The 2018 Farm Bill created two new pilot programs within CRP. The first, known as CLEAR 30, provides a longer contract option for the CLEAR initiative mentioned above in an effort to incentivize more landowners to retire these lands for longer than the traditional 10-year CRP contract. According to the Conference Report: “The Managers intend for this pilot to serve as a tool for measuring demand for longer-term CRP contracts and to provide insights into the conservation benefits associated with long-term contracts.”
The other is the Soil Health and Income Protection (SHIP) pilot program. This pilot will offer short term (three to five year) contracts to landowners to remove the least productive land from their operation, up to 15 percent of the total eligible land on that farm. In return, the landowner would receive 50 percent of the normal CRP rental rate based upon the cash rent of the county. The landowner will still be required to plant cover on these acres at the cost of the landowner, though the landowner may still harvest the acres for seed or hay/graze the land outside of the primary nesting season. If the landowner is a beginning, limited-resource or socially-disadvantaged farmer, or if the landowner is a veteran, they would receive 50 percent cost-share for the seeds and would receive 75 percent of the county rental rate.
Transitioning out of CRP
Land coming out of CRP has long been a concern due to the investment taxpayers have made to temporarily retire that land to improve resource concerns. There is no stipulation on how the land may be utilized upon expiration of the contract, and for those landowners who are interested in farming the land again, whether that land is eligible to enroll into the Environmental Quality Incentives Program (EQIP) or Conservation Stewardship Program (CSP) has been murky. Additionally, there has been concern that in order to be eligible for these programs after their CRP contact expired, the farmer would have to “create” a resource concern that didn’t already exist.
This farm bill makes clear that landowners may enroll in either EQIP or CSP during the final year of their CRP contract and not jeopardize their payments. Additionally, landowners may begin implementing the approved practice during this final year in preparation for returning that land to production.
Tags: 2018 Farm Bill