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The Pluses of Conservation Reserve Program

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Table of Contents

  • Introduction
  • The Great Depression and the First Conservation Programs
  • The Problems of the Conservation Programs
  • The Idea of the Conservation Reserve Program
  • The Benefits of CPR
  • The Interpretation of the Legislation
  • Possible Changes
  • Conclusion

Introduction

There are several inputs that go into creating a healthy crop, but no input is more important than land. The soil that farmers plant their crop in is very unique input because there is only a finite amount. It is very imperative that us, as farmers, take extremely good care of our most important asset. This is why the government created the Conservation Reserve program. CRP, in a nutshell, is basically a program that gives farmers incentive to take land out of production to help conserve our soil. The realization that conserving our land was a huge problem did not happen overnight, however. It took years of turmoil and suffering of our rural communities before country wide action was taken.

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The Great Depression and the First Conservation Programs

During the early 1900s a shortage of wheat struck European countries with start of the first world war. Midwestern farmers began breaking up more and more of the great plains to take advantage of the drastic prices increases. The plains had been seen an unusual amount of rain over the past few years which lead the midwestern farmers to believe that it would continue. For a while everything was great until October 24, 1929. This is the day that 16 million shares of stock were sold because of America’s shaky economy. Commodity prices plummeted. To counter this, many farmers began to plow up more of the great plains to try and break even. This event would later be coined the great depression. What the young farming community of the Midwest, who were still fairly new to the area, did not expect was there to be a ten-year period of drought. Due to a combination of increasingly dry weather and farmers trying to utilize every square inch of dirt they owned, the epidemic known as the dust bowl was born. Clouds of fertile top soil began to leave the plains. Many farmers went broke and had to pack up and leave in search of another form of income. It left the Midwest in shambles. It also affected other place besides the midwestern farming communities. Clouds of dust covered entire towns. The storms killed livestock, damaged buildings, and threatened any human life that had to breath the dust in. In response to this the first of the conservation programs were created. Shortly after becoming president, Franklin Delano Roosevelt created the Civilian Conservation Corps. The CCC alone planted 3 billion trees in a reforestation process. Lots of trees were planted on the useless soil that the midwestern farmers had left behind. Over time due to the efforts of these conservation programs, the farming community became stable yet again.

The Problems of the Conservation Programs

Many of the conservation programs put into legislation between the Dust bowl and the and our current Conservation Reserve program failed because they had cracks in their foundation. The main tactic was to use different allotment programs. In other words, farmers were only allowed to plant so much of each commodity. The problem with this was that only certain commodities were being controlled. Instead of completely taking land out of production, farmers simply opted to plant grains that they did not have a quota on. To solve this problem the USDA created the soil bank. The soil bank was a type of voluntary land retirement just like the modern-day conservation reserve program. It gave farmers an opportunity to rest soil while still getting a little money from the ground they were resting. This struggle continued on until the 1970s. During this time the soviet bread basket experienced severe crop failure. In response to this the United States sold ten million tons of wheat to the Soviet Union. A farming boom was born in America. Prices began to sky rocket once again and production increased. This farming boom would end up being the straw that broke the camel’s back. Increases in technology were allowing farmers to produce more on one acre of land than ever before. Most of these technological increases were pesticides and herbicides that allowed farmers to produce healthier crops. To make light of these technological changes average corn yields in the United States rose about 20 bushels per acre between 1960 and 1970. Once again, surpluses arose, and commodity prices took a turn for the worst. United States farmers began to deplete their land to make up for low farm prices. Farmers needed a program to relieve their financial burdens and to restore their most important asset, land.

The Idea of the Conservation Reserve Program

The Conservation Reserve Program was originally implemented in in 1985 when president Ronald Reagan signed the 1985 farm bill. The main idea of the Conservation Reserve Program is for farmers to voluntarily take marginal land out of production. Marginal land by definition is land that has little or no potential for profit. Some examples of marginal land would be areas that aren’t easily watered or even low areas of land where crops are prone to water damage. The program calls for marginal land in specific because about 11 percent of all crop land accounts for 53 percent of soil losses on non-irrigated farm lands. There are also a few other requirements for land to be eligible in the Conservation Reserve Program. The fields must have been planted at least four of the six previous farm years. Property being considered for CRP also has to be able to be planted in a normal manner. The owner of the land has also had to have owned the land for at least one year before the property is eligible. These requirements are put into place, so normal people cannot just go out and buy land and expect to be able to get rental payments for land that has never seen an agricultural commodity. Likewise, the land could have been used for grazing cattle or other livestock and also qualify for the Conservation Reserve Program. CRP contracts last 10-15 years. Participants are expected to plant a native plant either grass, shrubbery, or trees on the land enrolled. There are three main goals of this program and they are to help improve water quality, prevent soil erosion, and to reduce loss of wild life habitat. Costs of the planting process are shared between the government and the land owner. Although not all enrolled land is eligible, some property will be eligible for the Conservation Reserve Enhancement Program. This program combines funds provided by the normal CRP and other funds that are provided from the state to cover even more, if not all, of the cost to implement conservation projects. These special incentives are only available to farmers who have land in areas that are considered to have a higher than normal risk of environmental contamination. An example of this land would be farmland that is highly erodible and near a body of water that supplies water to a town.

The Benefits of CPR

There is also a wide range of benefits that comes from the Conservation Reserve program. Not only does CRP benefit each individual famer that has land enrolled in the program, but the Ag sector as a whole reaps the benefits. As I have mentioned before the government pays a rental rate to each farmer who has land enlisted in the program. Rent varies from location to location. In regard to these variations in payments, one could look and see that payments vary off of how productive the farm land enrolled in CRP is. For example, Madison Parish, which has some of the best farming ground in Louisiana, pays out a 121 dollars per acre enrolled. Richland Parish, which is a neighboring parish to Madison Parish, only pays out 69 dollars per acre enrolled. That’s just a little over half of what Madison gets from moving one parish over. Regardless of payment, the CRP program gives farmers a little relief in bad harvest years. A major time that it is beneficial to have land in CRP is when ag commodity prices are on the downward trend. With a maximum amount of 50,000 dollars to each individual with land enrolled, it can be a big relief to farmers who are experiencing hardship with their normal row crop.

Another way that the Conservation Reserve Program impacts the agricultural sector is that it helps bridge the gap between environmentalists and any farming related practices. Environmentalist tend to pin many of today’s environmental problems solely on the common practices of farmers. Farming does take a toll on the surrounding environment. Farmers use pesticides that are toxic to insects including bees, which is the most important species of all of the pollinators. The conservation reserve program actually has an initiative to facilitate new better habitats for honey bees. It involves planting high quality forage so that bees have a better food source over the winter. Another major environmental disaster caused by farming is oceanic dead zones. Dead zones are areas in the ocean where less oxygen is dissolved into the water. This causes a number of problems. Marine life in the affected areas are either eradicated or they flee to fresher waters. These dead zones are caused mostly by farmers using fertilizers in their farming practices. The fertilizer reaches the coast through the Mississippi river and creates algae blooms that are the culprit of the oxygen deprivations in the water. One of the latest of run-ins with environmentalists pertains to the amount of pollution that cows give off. Cows and other agricultural animals are responsible for 14.5 percent of global greenhouse gas emissions worldwide. They produce a gas, methane, which is considered to be one of the major causes of causes of global warming. The conservation reserve program shows that farmers are also aware of the effects of their practices. By putting land into CRP, it shows environmentalist and the rest of the population that the agricultural sector as a whole and farmers are taking the initiative to help fight off the consequences of our once poor farming practices.

The conservation reserve program also a couple other positive externalities from enrolling acres of land into the program. CRP has created a booming hunting industry from rising wildlife populations across the country. It positively impacts many rural areas across the United States. One of the main animals that were positively affected is the pheasant. Prior to the creation of the program, pheasant populations numbers had dropped to an all time low. This was caused by the farming boom that took place in the 1970s that I mentioned earlier. Shortly after the program was created, pheasant numbers in Iowa and other surrounding states sky rocketed. People who had land enrolled in CRP took advantage of the rising bird populations and began doing guided hunt. Now there are no shortage of places where people can come and hunt pheasants. It generally costs an individual around 600 dollars just to book a place to pheasant hunt in South Dakota. Hunting alone in South Dakota creates around 683 million dollars annually in revenues around the state. This number does not even account for the for revenue took in by all of the local businesses surrounding popular hunting destinations. Hunters will spend money at local diners, shops, and even gas station. CRP has been a huge boost in the rural development of these small farming communities. Pheasants are not the only game bird that benefit from the conservation reserve program. The duck population has been substantially impacted over the years of the program. CRP was responsible for an additional 25.7 million ducks in the United States Prairie Pothole Region during 1992-2003. Like pheasant hunting, duck hunting is a multi-billion-dollar activity across the country every year.

Finally, the Conservation Reserve program is responsible for helping conserve land for generations to come. Our world population is ever growing. From 1999 to 2019 the population of the world has grown from 6 billion people to 7.7 billion people. This means our land, in which we have a finite amount of, will be expected to produce enough food for this increasing population. It will be very important for people to keep practicing good conservation practices while trying to get even better crop yields to feed the world.

The Interpretation of the Legislation

Like all legislation, people will have discrepancies on how to interpret said legislation. In the case of the Conservation Reserve program there aren’t many case laws except for whether CRP rental payments should be subject to self-employment taxes. For farmers, the rental payments are subject to self-employment taxes on schedule F, profit or loss from farming. In the case of Morehouse v. Commissioner of Internal Revenue however the circumstances were different. Mr. Morehouse, who was not a farmer, inherited some land in South Dakota in which he then enrolled in the CRP program. He received two checks from the government for 37,872 dollars apiece. Since he was not a farmer, he didn’t include the income on the on schedule F, but rather he included it on the “self-employed” line of his tax filings. After two years, he received a letter from the IRS saying he had filed wrong and that expected the money that Mr. Morehouse had failed to pay. After going through the case, the eight court circuit judges decided that CRP rental payments for non-farmers were constituted under “rentals from real estate.” Mr. Morehouse was not asked to pay the taxes that the IRS was initially requesting.

Possible Changes

There are few changes that I believe need to be made and that are being made to the Conservation Reserve program in the future. The main change in CRP is that there needs to be more land enrolled into the program. The reason behind this is that taking land out of production decreases the number of agricultural commodities that are in the market. Historically, when more acreage is enrolled in the program, the prices that farmers receive for their grain is more favorable. Farmers desperately need higher prices because over the past few years prices have been significantly lower. Thankfully, with signing of the new farm bill the government has decided to increase the acreage cap from 24 million acres to 27 million acres by the year 2023. Hopefully this will help reverse the downward trends of prices that farmers have experienced over the last few years. Since technology is always increasing the amount of yield we can get off an acre, I believe that the acreage should do nothing but increase to counter market inflation and obviously to help conserve our land.

Conclusion

All in all, the Conservation Reserve program is an excellent initiative that allows farmers to take marginal or environmentally sensitive land out of production to receive a rental payment. This allows for better habitats for all wildlife across the United States. It also helps farmers by creating an alternate source income in down years. The CRP also bridges the gap between farmers and environmentalist by helping minimize the damage that farming activities inflict on the natural environment. Last but not least the Conservation Reserve program will help conserve our land and other resources for generations to come.

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