In 2007, USDA's land retirement programs accounted for
almost half of all the Department's conservation expenditures
(see the Background chapter).
Under these programs, USDA offers rental payments and
other incentives to farmland owners who convert land
from agricultural production to land covers deemed more
environmentally beneficial. In 2007, USDA spent over
$1.82 billion
in rental payments and other incentives
on the Conservation Reserve Program (CRP)
to retire over 36.8 million acres of cropland. In addition,
$139 million spent on the Wetlands Reserve Program (WRP)
increased protected wetland acreage to over 1.88 million
acres.
(See the Background chapter
for total budget allocations for these programs).
The Food, Conservation,
and Energy Act of 2008 continued
a trend started in 2002, of shifting conservation
support towards working lands programs. However, land
retirement is still economically and environmentally
important (see an overview
of the 2008 program provisions and economic implications).
In this chapter, we review the trends, status, and challenges
facing both the CRP and the WRP.
The Conservation Reserve Program
The Conservation
Reserve Program (CRP) was established by the Food
Security Act of 1985 and began enrolling farmland
in 1986. The program uses contracts with agricultural
producers and landowners to retire highly erodible
and environmentally sensitive cropland and pasture
from production for 10-15 years. Enrolled land is
planted to grasses, trees, and other cover, thereby
reducing erosion and water pollution and providing
other environmental benefits (as well as reducing
the supply of agricultural commodities).
Enrollment in CRP increased rapidly once the program
got underway, with nearly all eligible applicants accepted.
Approximately 34 million acres were enrolled during the
first 9 signups (between 1986 and 1989). In the early
years, CRP eligibility was limited to about 100 million
acres of land with highly erodible soils, with per-acre
payments based on a regional average of cropland rental
rates (along with half the cost of establishing permanent
cover).
The CRP was not the first farmland retirement program
operated by the Federal Government, nor was it the only
land diversion program operating at the time of its
enactment. The Soil Bank Program, established in 1956,
expired in the early 1970s. Furthermore, annual paid
land diversion and Acreage Reduction Program (ARP) requirements
continued through 1995. In fact, diverted acres outnumbered
CRP enrollment until 1990. However, these earlier land
diversion programs focused on supply control for crops
and did not require environmental/habitat management.
The primary goal of the CRP in the years immediately
following its creation was to reduce soil erosion on
highly erodible cropland.
d
The Food, Agriculture, Conservation, and Trade Act of
1990 expanded eligibility for CRP beyond highly erodible
land. The 250 million acres of eligible land included
several "Conservation Priority Areas" (the
Chesapeake Bay, Long Island Sound, and Great Lakes watersheds),
State water quality priority areas, and smaller plots
of land adopting high-priority conservation practices.
USDA also made two significant changes to program enrollment
criteria:
- An environmental benefits index (EBI) that accounts for multiple environmental concerns was used to rank offers. The EBI weights a number of different concerns, including water quality, air quality, and soil erodibility.
- Maximum allowable rental rates were based on a soil-specific estimate of the rent earned on comparable local cropland. Use of soil specific maximum rental rates enabled USDA to enroll environmentally sensitive, but highly productive, land into the program.
Maximum available EBI points
in CRP signup #33 |
Wildlife
[100] = |
Cover (introduced grass, native
grass, trees) [50]
+ Wildlife enhancement [20]
+
Wildlife priority zones [30] |
Water quality [100] = |
Location within designated State
water quality zone [30]
+ Groundwater quality [25]
+ Surface water quality [45] |
Erosion [100] = |
Erodibility index [100] |
Enduring benefits [50] = |
Enduring benefits (tree plantings,
wetland restoration,
existing trees, grass seeding) [50] |
Air quality [45] = |
Wind erosion impacts [25]
+ Wind erosion soils [5]
+ In air quality zones [5]
+ Carbon sequestration [10] |
Costs [150] = |
Per-acre rent [125]
+ No cost- share [10]
+ Bid
below maximum rate [15] |
Source:
FSA; see their program
fact sheet for more details. |
Following passage of the Federal Agriculture Improvement
and Reform Act of 1996, wildlife habitat was added to
the EBI. A continuous signup was initiated for acreage
devoted to specific conservation practices, such as filter
strips, riparian buffers, grassed waterways, field windbreaks,
shelterbelts, living snow fences, salt-tolerant vegetation,
shallow water areas for wildlife, and wellhead protection.
Enrollment was capped at 36.4 million acres. In 1997,
continuous signups were augmented by the Conservation
Reserve Enhancement Program (CREP), a Federal-State
partnership designed to encourage farm conservation practices
that meet specific State and national conservation and
environmental objectives. These include impacts to water
supplies, loss of critical habitat for threatened and
endangered wildlife, soil erosion, and reduced habitat
for fish populations.
With early contracts expiring, signups conducted in
1997 and 1998 enrolled over 22 million acres. Unlike
the early signups, competition was keen, with all bids
ranked using the EBI. Because the bid process meant that
already enrolled lands were not automatically re-enrolled,
the distribution of CRP enrollment shifted somewhat during
the 1990s.
Although a roughly equal number of counties (about 23%)
gained and lost CRP acreage between 1990 and 2002, there
was little redistribution of acreage across ERS's Farm
Resource Regions. The Northern Great Plains gained slightly,
at the expense of the Heartland (probably due to the
lower rental rates requested by Plains bidders) and the
Southern Seaboard (where many CRP acres planted in trees
were not offered for re-enrollment).
Under the terms of this wave of contracts, between 2007
and 2010 over 75 percent (28 million acres) of existing
CRP contracts were scheduled to expire. For several reasons,
including distributing the administrative burden over
time, in 2006 FSA offered holders of expiring CRP contracts
a chance to re-enroll or extend their contracts. Approximately
82 percent (22.9 million acres) of these acres were re-enrolled
or extended. Hence, expiring acres will vary between
3.9 and 5.6 million acres per year over the next 5 years.
The Food, Conservation, and Energy Act of 2008 continued
the CRP, but reduced the enrollment cap to 32 million
acres. However, because of the number of contracts scheduled
to expire, the cap leaves room for a steady stream of
new enrollments.
Between 2007 and 2010, over 75 percent (28 million acres)
of existing CRP contracts were scheduled to expire. For
several reasons, including distributing the administrative
burden over time, in 2006 FSA offered holders of these
CRP contracts a chance to re-enroll or extend their contracts.
Approximately 82 percent (22.9 million acres) of these
acres were re-enrolled or extended. Hence, expiring acres
now vary between 3.9 and 5.6 million acres per year
over the next 5 years.
Overall, the CRP started as a program with a soil conservation
and commodity-reduction agenda, in a time when the farm
sector was weathering a severe economic downturn. As
conservation effects were identified and quantified,
other stakeholders recognized CRP's potential for generating
multiple environmental benefits, and CRP evolved beyond
soil conservation, with greater weight given to wildlife
habitat, air and water quality, and carbon sequestration.
The amount of land enrolled in CRP does not necessarily
reflect the amount of land removed from production. First, "slippage," the
reallocation of lands outside the program (such as pastureland)
to cropland uses, may occur. Second, land enrolled in
CRP might have left production even without the program.
The Wetlands Reserve Program
The Wetlands
Reserve Program (WRP) was established by the Food,
Agriculture, Conservation, and Trade Act of 1990. The
stated emphasis of WRP is to protect, restore, and
enhance the functions and values of wetland ecosystems
to attain:
- Habitat for migratory birds and wetland-dependent
wildlife, including threatened and endangered species,
- Protection and improvement of water quality,
- Attenuation of water flows to reduce flooding,
- Recharge of ground water,
- Protection and enhancement of open space and
aesthetic quality,
- Protection of native flora and fauna contributing
to the Nation's natural heritage, and
- Contribution to educational and scientific
scholarship.
In 1991 and 1992, WRP enrollment consisted of pilot
projects in a limited number of States. The program was
fully operational in 1994, has continually increased
wetland acreage to the present, and has been legislated
to continue wetland restoration through 2012. The WRP
has sought the greatest wetland functions and values,
along with optimum wildlife habitat, on every acre enrolled.
In pursuing these goals, WRP has undergone some changes.
Most importantly, in the earlier years a "walk away" strategy
was often used: parcels were allowed to return to their
wetland condition with no other intervention. However,
this strategy led to poor wetland function. So, a "full
restoration" strategy was adopted in the late 1990s.
Full restoration implies considerably more site preparation
(for example, undoing land leveling). At least 70 percent
of each project must be restored to the original natural
condition (to the extent practicable). The remaining
30 percent can be restored to "other than natural" conditions.
d
d
With enrollment approaching 2 million acres, the Food,
Conservation, and Energy Act of 2008 reauthorized the
WRP, increasing the area cap to 3.041 million acres through
2012. See more on the implications of 2008
program provisions for land retirement.
Current Status of Land Retirement
As of September 2008, the CRP enrolled 34.7 million
acres of land at an annual rental cost of $1.76 billion
per year (average cost of about $50.82/acre per year).
The bulk of this land was
enrolled via "general" signupabout 30.6
million acres.
The remaining acres are in "continuous" signup,
which includes 182,000 acres of farmable wetlands (small
non-floodplain wetlands). Most CRP land is in the Northern
Great Plains, Prairie Gateway, and Heartland.
CRP
status as of September 2008 |
Sign-up
type |
Contracts |
Farms |
Acres |
Annual
rental payments |
Number |
($
million) |
($/acre) |
Total CRP |
771,674 |
431,867 |
34,715,465 |
$1,766 |
$50.88 |
|
General1 |
389,211 |
253,892 |
30,542,941 |
$1,346 |
$44.07 |
|
Continuous |
382,463 |
223,179 |
4,173,524 |
$420 |
$100.68 |
|
|
Non-CREP2 |
306,909 |
183,413 |
2,864,736 |
$255 |
$89.18 |
|
|
CREP3 |
63,848 |
42,376 |
1,126,710 |
$143 |
$127.29 |
|
|
Farmable wetland4 |
11,706 |
9,345 |
182,078 |
$21 |
$116.98 |
The Food, Conservation, and Energy Act of 2008 contains
several changes to the CRP. The most significant change
is that, starting on October 1, 2009, the acreage cap
is lowered to 32 million acres. Assuming all general
signup contracts scheduled to expire by October 2009
are allowed to do so, and all continuous contracts are
re-enrolled, about 30.6 million acres will be enrolled
in the CRP. Thus, to reach the 32 million acre cap, FSA
will either have to conduct a new general signup, or
offer another round of extensions.
As of March 2007, WRP enrollment reached 1.88 million
acres. The WRP uses three enrollment schemes: permanent
easements, 30-year easements, and 10-year cost share
agreements. Nearly 80 percent of WRP lands are enrolled
in permanent easements. Expenditures in 2006 were about
$137 million (at an average cost of $1,300 per acre for
each contract). Average contract size is 179 acres. Much
of WRP land is in the Mississippi Delta; the prairie
pothole portion of the eastern Dakotas, Minnesota, and
Iowa; and New York, Oregon, and California.
WRP
status as of March, 2007 |
Total
enrolled acres |
1.88
million |
Average
acres per contract |
179 |
Size of contracts
(percent of program contracts): |
|
Under 100 acres |
60 |
|
100 to 500 |
32 |
|
501 to 1,000 |
6 |
|
Over 1,000 acres1 |
2 |
Size
of contracts (percent of program acres): |
|
Under 100 acres |
13 |
|
100 to 500 |
26 |
|
501 to 1,000 |
21 |
|
Over 1,000 acres1 |
30 |
Type
of easement (percent of program acres): |
|
Permanent |
80 |
|
30 year |
14 |
|
10 year2 |
6 |
1/ Many of the larger projects
are the result of multiple landowners enrolling
in the program, creating a single large area of
land.
2/ The 10-year option is a cost-sharing agreement, not an easement.
Source: ERS analyses of
WRP contract data, NRCS. |
Impacts and Challenges
Over their lifespans, the CRP and WRP have provided an array of environmental benefits, including erosion reduction, wildlife enhancement, biodiversity, and flood control.
Examples
of impacts of the CRP and WRP |
Impact |
Findings |
Sources |
CRP:
Soil erosion |
Soil
erosion would increase by 220 million
tons/year (60% wind, 40% water) if the
CRP were terminated. |
Claassen
et al., 2001 |
CRP:
Bird
populations |
Termination of the CRP would result in a 2% to
52% decline in grassland bird species in North Dakota
and South Dakota, depending on species. |
Niemuth
et al., 2007 |
CRP:
Pheasants populations |
Ring-necked pheasant numbers in 9 States increased because of improved habitat
due to the CRP. |
Nielson
et al., 2006 |
CRP:
Duck
populations |
From 1992 to 2004, the CRP led to a net additional 2 million ducks per year in the Prairie Pothole region. |
Reynolds
et al., 2007 |
CRP:
Monetary
measures of value |
Improvements
in wildlife viewing and pheasant hunting due to the
CRP are estimated to be over $700 million per year,
plus over $35 million per year from improved water-based
recreation. |
Feather
et al., 1999 |
WRP:
Wildlife and
fish |
A
7,500-acre project in Oklahoma provides habitat for
256 species, some of which are unusual for the State
(such as wood storks and white ibis). |
USDA/NRCS |
WRP: Louisiana
black bear |
Louisiana black bear populations
reached all time lows in the 1950s. Thanks to
habitat restoration efforts such as WRP, bear numbers
are now estimated at 500 to 700. |
USDA/NRCS |
WRP: Flora
and wildlife classroom |
The John W. Carter Wetland Restoration
Easement, Outdoor Classroom and Nature Trail, is
a 140-acre WPR easement in South Carolina that will
serve as an outdoor classroom for students, organizations,
and clubs. |
USDA/NRCS |
WRP: Diversity
highlights beauty |
New York has restored potholes
of varying depths, emergent marsh, wooded wetland,
and upland buffer. Their diversity highlights the
beauty of wetland restoration projects. Their innovative
designs maximize wildlife benefits and restore the
natural variability to the landscape. |
USDA/NRCS |
WRP:
Flooding |
In
Missouri, WRP has been used to breech levees on 16,000
acres, which has reduced flood heights and downstream
flooding. |
USDA/NRCS |
WRP:
Threatened
and endangered
species |
In
Oregon, deep pools were included in a restoration
project to increase the habitat of the endangered
Oregon chub. |
USDA/NRCS |
However, despite the successes of the programs, each
faces challenges.
Selecting acres when managing for multiple objectives. The
CRP and WRP seek to improve more than one environmental
resource. Given that more acres are offered to each
program than can be accepted, and that different parcels
would provide different levels of environmental attributes,
a mechanism that accounts for tradeoffs (between different
environmental resources) is necessary. For example,
the CRP uses the EBI to choose acres. The weights used
in the EBI are based on the informed judgment of a number
of scientists and land managers about their relative
value. However, modifications in the EBI—and in what
lands are enrolled—could increase the social benefits
of the program. For example, ERS
research found that using the 15th signup (1997) EBI for
all CRP acres, rather than the simple erodibility criteria
used at CRP's inception increased the value of several
outdoor recreation activities by over $350 million per
year.
Management modifications. As experience with
the programs grows, opportunities for fine-tuning emerge.
For example, land disturbances (such as grazing and
controlled burns) every several years are often necessary
to maintain vegetative diversity and good wildlife habitat.
However, such actions are often costly to the landowner
and require monitoring by USDA. While these concerns
have limited the use of such fine-tuning, significant
improvements in program performance may be possible
with relatively minor changes, such as changes in rental
schemes to encourage more active management, or the
use of third-party monitoring.
Eligibility expansion. The success of voluntary
programs such as the CRP and WRP depends on farm participation.
The expansion of eligibility criteria greatly increases
the pool of potential participants. For example, the
CRP's refocus from erosion to a broader array of conservation
priorities increased the pool of eligible acres from
about 100 million to 250 million. While this brings
in a greater variety of environmentally valuable lands,
it may make it more difficult to address a single environmental
issue.
National wetlands goals. A current national environmental goal
is to increase wetland acres nationwide. However, the
reduction in Clean
Water Act jurisdiction over isolated wetlands underscores
the need to use nonregulatory means.
The WRP, with its proven record of protecting wetlands, and the CRP's Farmable
Wetlands Initiative and continuous signup, may acquire additional importance
as a means of achieving this national goal.
Alternative bid mechanisms. Currently, to account
for land retirement costs, the WRP bases easement payments
on assessed value. In contrast, the cost component of the CRP's EBI allows
landowner's to reduce their bid in order to improve the odds of acceptance. Although
this feature of the EBI can reduce program costs, other enrollment mechanisms
that utilize USDA information more effectively may yield even greater costs
savings. For example, in 2006, the WRP implemented an experimental reverse
auction bid mechanism. The reverse auction allowed landowners to resubmit bids
if they judged (based on their bid's cost-benefit ratio, relative to other
bids) that NRCS would not accept their offer at the initial bid value. The
reverse auction pilot program reduced easement acquisition costs by 14 percentsaving
nearly $820,000 in Fiscal Year 2006.
Demand and price volatility for agricultural commodities. The
swings in demand for and prices of agricultural commodities,
such as those seen in 2007 and 2008, complicate the
management of land retirement programs. Rental rates
for new contracts may substantially increase during
periods of high prices, and there may be calls for ramping
up production by releasing current contracts, or by
allowing limited uses (such as haying and grazing).
When demand shrinks and prices fall, interest in land
retirement programs may possibly increase, straining
USDA resources, but also presenting an opportunity to
enroll land with high environmental values. Managing
these challenges requires careful allocation of program
funds and acreage, and the ability to adjust to changing
economic conditions while maintaining a long-term perspective.
|