Certain landowners are paid by the government to remove their land from agricultural production. Photo courtesy of the Farm Service Agency.
Agricultural landowners who are not renewing their agreements this year with the federal government to keep their land out of production have the ability to put that land back to work earlier, a potential boost to wheat and other crop production amid global shortages, the U.S. Department of Agriculture announced Thursday.
Those who have land enrolled in the Conservation Reserve Program now have the option to terminate their contract early if they are in the final year of the contract. Under normal circumstances, landowners would have to wait until October to put the CRP land back into production or would be required to repay the money they’ve received from the program.
“They can now voluntarily terminate without penalty for those acres that are coming out of that program,” U.S. Secretary of Agriculture Tom Vilsack told a U.S. Senate committee on Thursday, “so that they’d be in a position to do work now on that land, to either prepare it for a crop or to potentially think about other crops that can be grown during the course of the winter.”
He said the equivalent of about 1 million acres of agricultural land is leaving the program this year — the difference between the acres that are expiring and the newly enrolled acres this year. In March, about 22.1 million acres were actively enrolled, according to USDA data.
President Joe Biden has warned that people “are going to starve to death” if millions of tons of wheat and corn in Ukraine is unable to be exported because of the ongoing Russian invasion, which began more than three months ago.
Ukraine is a significant producer and exporter of those crops, much of which is sold to African nations. Ukrainian officials have accused Russian troops of destroying farms and stealing grain and equipment. It’s not yet clear how much the war will affect Ukraine’s crop production this year.
Agriculture groups such as the American Farm Bureau Federation have been pining for months for the USDA to release CRP farmland back into production without penalty to help boost the global food supply.
In letters to CRP landowners this week, the USDA offered early terminations to those who hadn’t renewed their enrollment.
Russian President Vladimir Putin’s “unjustified invasion of Ukraine has cut off a critical source of wheat, corn, barley, oilseeds and cooking oil, and we’ve heard from many producers who want to better understand their options to help respond to global food needs,” Zach Ducheneaux, administrator of USDA’s Farm Service Agency, said in a press release Thursday. “This announcement will help producers make informed decisions about land use and conservation options.”
CRP contracts typically last for 10 to 15 years. Landowners set aside the land to reduce soil erosion and improve water quality and wildlife habitat, and the government pays them per acre. Those rental payments vary widely, depending on where the land is located.
Payments for Iowa land have the highest average at about $234 per acre, according to a recent USDA report. Payments for Nevada land were the lowest at about $10 per acre.
Landowners can end those contracts whenever they chose, but they must repay the rental payments with interest and face a potential additional penalty. The USDA periodically offers early termination without repayment or penalty. In 2017, the department offered it to certain landowners to encourage land sales to new farmers and ranchers.
“I think it’s a great step in the right direction, but I believe that we can do more,” U.S. Sen. John Boozman, R-Arkansas, told Vilsack during a Senate agriculture committee meeting Thursday, which was convened to address the challenges facing farmers and rural communities.
Boozman said early terminations should be more broadly offered to CRP participants to “allow potentially millions of acres to return to food production.”
Vilsack said the USDA is seeking to balance short-term and long-term global food concerns — especially as they pertain to climate change — and that CRP’s emphasis is on less desirable agricultural land.
“We basically have been focusing on highly erodible areas,” Vilsack said, “areas that are not particularly productive.”
Senator calls for supplemental crop insurance
Sen. John Hoeven, R-North Dakota, said the USDA should offer to supplement potential crop insurance payments to farmers who are late to plant this year.
Corn planting in North Dakota has been severely delayed this year by wet weather. Just 20% of the state’s corn had been planted as of Sunday, compared to the five-year average of 66%, according to a recent USDA report.
Wednesday was the final planting day to get full crop insurance coverage for most of the state’s counties. Hoeven worries that some farmers might not plant because it’s too financially risky.
“In a time of food inflation, we want as many of them as possible planting a crop,” he said.
Vilsack said he would consider the proposal.
USDA data show that corn planting in at least 11 states is behind the five-year average, including most of the top-producing states. Iowa leads the country in corn production and, thanks to a stretch of favorable weather, was close to catching up with the five-year average on Sunday. Still, there are concerns that early planting delays will affect yield potential.
Minnesota, a major corn producer, had planted 60% of its corn compared with the five-year average of 86% as of Sunday. Soybean planting was also significantly delayed in that state and in North Dakota.
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