Anthony Aerts, Esq.
In exchange for payments to the farmer or rancher, CRP allows the Secretary to take highly erodible farmland out of production for at least 10 years. Farmland is eligible for CRP if the agricultural production capability of the land would be substantially reduced for future generations if the land were to stay untreated or if the land could not be farmed in compliance with certain requirements. Not only does CRP cover farmland, but CRP can also be used to promote and preserve grassland that is devoted to vegetation, water quality, and wildlife habitats. CRP was established in 1985, and the 2018 Farm Bill reauthorizes the program through FY 2023.
The Farm Service Agency (i.e. “FSA”) has tracked the number of acres enrolled in CRP since the program’s enactment. The earliest data available provides the total number of acres enrolled in CRP since the end of FY 1986. Nebraska had maintained steady acreage enrollment of over 1 million acres since 1989; however, since 2012, Nebraska’s enrollment in CRP has declined. At the end of FY 2017, only 800,378 Nebraska acres were enrolled in the program. This decline in enrollment is not unique to the State of Nebraska.
The 2018 Farm Bill makes some changes to the existing CRP rules, including increasing the total number of acres that can be enrolled in CRP from 24 million to 27 million acres by the end of FY 2023. The Secretary of Agriculture has discretion to reserve up to 2 million of the total acres eligible for CRP for unused grasslands that would have a positive impact on water quality. This specific reservation for grassland could prove beneficial for Nebraska ranchers given the State’s abundant grassland and water resources. When determining how to allocate the eligible acres amongst the states, the Secretary of Agriculture considers a state’s historical enrollment rate and makes an allocation based on historical averages and future interest. In other words, only a portion of the 27 million total eligible acres will be allocated to Nebraska for CRP enrollment.
The 2018 Farm Bill also makes changes to CRP to address drought and flooding. According to the National Integrated Drought Information System, which was authorized by Congress in 2006, Nebraska’s longest duration of drought lasted 348 weeks between 2002 and 2008. However, the most intense period of drought occurred in 2012 when nearly 78% of Nebraska land was affected. The 2018 Farm Bill allows CRP lands to be used for emergency haying and grazing during droughts, floods, or wildfires without reducing the amount paid to the farmer or rancher for having enrolled his or her acres in CRP (the “Rental Rate”).
The 2018 Farm Bill also makes changes to Rental Rates in order to better align Rental Rates with the local market-based rates. Better Rental Rates for farmers and ranchers could improve the incentive to enroll in CRP. The Rental Rate for enrolling farmland is typically significantly higher than that for enrolling grasslands. Rental Rates are calculated on a county by county basis. As an example, according to the USDA’s CRP data, the 2018 Rental Rate in Lancaster County for farmland was $159, whereas the rental rate for grassland was $33.
Overall, the 2018 Farm Bill makes positive changes to CRP. The Farm Bill permits more acres to be enrolled in CRP overall, protects the ability of farmers and ranchers to use CRP land to address emergency situations, and betters the calculation of Rental Rates with market rates. Nebraska is full of farmers and ranchers who are already good stewards of the State’s land and water resources. The changes made through Title II of the 2018 Farm Bill gives them a better opportunity to preserve the good life for future generations.
Please contact Rembolt Ludtke LLP with any CRP-related questions you may have. The attorneys in our Agricultural Practice Group stand ready to assist your farming or ranching operation in all your CRP needs, including (i) reviewing and helping you understand your CRP contract(s); (ii) drafting leasing agreements that take into account CRP arrangements on the lease land; (iii) exploring options for maximizing CRP benefits to your operation; (iv) advising on the tax consequences of CRP enrollment; and (v) assisting with ongoing program compliance.
This article is provided for general information purposes only and should not be construed as legal advice. Those requiring legal advice are encouraged to consult with their attorney.
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