Consider the Conservation Reserve Program (CRP) as a Land Investment Option
The USDA offers landowners a voluntary Conservation Reserve Program, referred to most often as CRP.
What is CRP?
CRP is a guaranteed rental contract for land that has been farmed three out of the last five years, is considered highly erodible (HEL) and can be used for conservation benefits. When land values took off a few years ago, so did CRP payments, with increases to well over $300 per acre. Not a bad return when you consider the local Farm Service Agency (FSA) will also cover approximately 90% of the cost of seeding. Although land prices have leveled off, CRP payments are currently in the $225 -$275 per acre price range for land that has a CSR2 value of 70 or higher. These payments are made annually and usually require a minimum of a ten-year contract. FSA rental rates are based on the relative productivity of the soils within each county and the average dry-land cash rental rate.
How do I Manage CRP?
Once the vegetative covers are established, usually 1-3 years, there is a requirement for the landowner to control noxious weeds, as well as volunteer trees that might show up. Maintenance costs are usually very low.
CRP is a Long-Term Investment
The economics are only a small part of why a landowner should consider signing highly erodible land. The real benefit is to the soil and wildlife. Having healthy soil and controlling soil erosion will pay big dividends in the long run. In this day and age, people and corporations alike tend to look at profit in the short term. Enrolling land in the CRP Program is a long-term strategy that can and will benefit your pocketbook, as well as the environment. Marrying conservation and economics isn’t always easy, but CRP allows the landowner to do just that.
Potential Conservation Benefits of CRP
Many acres of land in Iowa have been in a corn-soybean rotation for decades. This practice often ends up reducing soil organic matter. Soil with less organic matter means less water-holding capacity. It also reduces the soil’s ability to stay in place, which results in soil erosion. By controlling runoff, CRP helps to reduce groundwater contamination and will ensure cleaner lakes, rivers, ponds and streams.
CRP Wildlife Benefits
Another benefit to enrolling farmland in CRP is helping to provide a habitat for wildlife. Vegetative cover can provide an ideal nesting habitat for pheasant and quail. This can offer an additional income stream for CRP participants who have fields with good pheasant populations. CRP can help to increase wildlife populations in many parts of the country.
Learn More About CRP
Landowners can get further details about CRP at their local FSA office. There are many things to consider when deciding if CRP is a good option, such as the soil productivity rating of a particular field, local county rental rates, what type of CRP contract fits your situation, what grass species to use and what your long-term goals are. There are many positive reasons to consider guaranteed rental income over the ten year life of the contract: a large portion of seeding costs will be reimbursed, an upfront signing incentive payment (SIP) and practice incentive payments (PIP).
CRP Is a Smart Investment
With recent lower returns from corn and soybean production, CRP can be a good alternative, especially for land that is highly erodible and would benefit by giving it a rest. The benefits of enrolling land in CRP are many, both economic and environmental and in the long run will help the landowner to be able to truly say they passed on the farm and the soil in better condition than when they began farming it. No small accomplishment in this day of tight margins!
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Editor’s note: The current version of the pending 2018 Farm Bill has language in it that limits CRP payments to 80% of the current county cash rental rates.
Dave Andrews grew up on a grain and livestock family farm operation near Melbourne, Iowa where he continues an active management role. He has done agricultural consulting in Ukraine, Azerbaijan, Tanzania and has managed large agricultural projects in Romania and the Philippines. Most recently, he retired as Executive Director of Michael Fields Agricultural Institute in East Troy, Wisconsin and has moved back to Ames with his wife and teen-age daughter. He holds BS and MS degrees from Iowa State University and is currently Managing Director of AgHound LLC where he stays busy consulting with conventional and organic farmers.