By ANN HINCH
Assistant Editor

WASHINGTON, D.C. — Shortage of hay isn’t the only concern driving some farmers to want to pull their land out of the Farm Service Agency’s (FSA) Conservation Reserve Program (CRP).

Many state and regional grain and feed partners affiliated with the National Grain and Feed Association (NGFA), as well as other independent organizations, joined NGFA last month to ask USDA
Secretary Mike Johanns to reconsider his decision to not allow penalty-free early release of acreage from CRP for 2007. They noted weather uncertainties – such as delayed planting and, now, dry and drought conditions – could lessen this year’s corn crop, unless extra land was planted at the time.

Johanns did not budge. According to Randy Gordon, vice president for communications and government relations for NGFA, Johanns has not yet made a decision for 2008, but NGFA hopes he will this season in order to give farmers time to plan for next spring.

Gordon said the request is so farmers can meet market food and ethanol demand and “is not just pulling land willy-nilly into production.”

Because of higher corn prices, Steve Brown, executive officer with Indiana FSA, said some landowners whose contracts expired this year have elected not to renew the 10- and 15-year leases.

“There’s a lot of guys who take small acreages out,” he said. “They think they can farm it.”

These are, of course, free of penalty. Anyone still in a contract wanting to remove their land early from CRP faces expensive penalties, including repayment to FSA of all past rental monies, all past cost-share payments and a fine of 25 percent of one annual rental payment.

“There’s a reason this ground is in CRP,” Brown said, referring to wildlife habitat.

Regarding the most environmentally sensitive 8 percent of CRP land under continuous protection nationwide, NGFA concurs. “We would agree with that (protection),” Gordon said.

As for the other 92 percent, John Johnson, FSA deputy administrator for farm programs, said if it is eligible for CRP, it is probably not arable corn land. But NGFA believes given the investment needed to turn it into farmland, no requests to withdraw from CRP would be frivolous.

“We think the producer should make that decision, and not the government,” Gordon said. “Even if there were no penalty for early outs, there are still some significant costs to returning that land to production.”

He added FSA has acknowledged of 33 million non-continuous acres under CRP, between four and seven million could probably be successfully planted.

NGFA and its partners are also asking Johanns not to authorize a general CRP sign-up now or in 2008, to stick only to continuous-protection land sign-ups.

This may seem incompatible with NGFA’s opinion that producers should decide for themselves, but Gordon said it’s not the same.

“With the increased market demand (for biofuel crops), it’s not appropriate for the government to compete with the private market for this land,” he explained, referring to rental payments made with tax dollars.

“How high would the government have to bid to get up to those land values?” he asked, adding it would drive up private land lease and sale prices in those areas.

As for landowners willing to pay the penalty for an early-out, Johnson said, “I’m getting reports on occasion, requests like that, but it’s not substantially higher than requests we get in an average year.”

He added it’s not always farmers wanting to plant – there are also landowners wanting to sell to developers, for example.

This farm news was published in the June 27, 2007 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee.