First off I want to apologize to David G. for jumping on him/his post about the CRP program. I caught him in my ire against the CRP program. I will out line my reasoning for my view of the CRP program.
The program had far reaching unintended repercussions. Some of them where caused by the Federal government's reasoning for the program and others where caused at the local level.
The program was flawed in it's design. The stated purposes was to Conserve Soil, curtail over production and help wild life.
1) Removing the lower producing ground does not reduce production very much. The erodible ground usually was lower producing ground.
2) The guidelines where too easily manipulated at the local level. This allowed personal bias to "bend" the program to their benefit. An example of this is what ground was deemed "highly erodible". The local county Soil conservation agent had a very broad latitude in what he determined was highly erodible. This made the ground deemed "highly erodible: vary widely county to county. Even within the same county it did as well. IF you wanted to get into the program you could lobby/nag the local soil conservation agent into deeming your ground highly erodible. I will admit I did not want involve in this program or the ones that followed for highly erodible land. Basically some where willing to give up control of their ground for government money and some where not. Therefore little of my the ground I owned at that time was deemed "highly erodible".
3) The program turned out to be very anti young/beginning farmer. It did this in several ways. One being begin farmers usually start out with the less desirable land and work their way into better ground over time. The CRP program targeted the low quality ground. So it directly took land out of production from a larger percentage of younger farmers in general. Even if the ground did not go into the program it caused a sudden rise in rental rates that was not based on economic reasons related to production agriculture. This effect was not just on the lower quality ground either. It rippled through out the entire renal land market.
4) The rental rates where higher than the current rental rates of the time. This may not have been nation wide but it sure was around here. I have talked to other farmers from other states an they in general had the same experience. At the time local rates were in the $100-150 an acre range. CRP came in at $125-175 per acre. So with corn selling for $1.50-1.75 and a $20-40 dollar per acre profit, rents went up $25-50 over night. This added to the economic pressure already on many active farmers.
5) How did the rental rates get this way??? Local ASCS boards. The average county board member tends to be older. Therefore closer to retirement and usually a land owner will low to zero debt. These members had a personal bias towards wanting higher rental rates. Adding to the issue was they could easily have a personal gain by this. I know in my county ALL of the board members had land in the CRP program.
6) The program targeted passive farmers/landowners. The higher rental rates and them being government paid/guaranteed, really made this an attractive program for retired farmers and absentee landlords. So this was another way it put additional pressure on active farmers. Most farmers paying for ground could not use the program very successfully for economic reasons. A lot of farmers retired early to get the guaranteed payments. Remember this was in the mid to late 1980s times were tough.
7) Little protection for the actual person that was actively farming the ground. Yes you had to sign off for the landlord to put the land into the program. This was a smoke screen. The landlord could throw you off the land and "farm" it for ONE year. Then they could sign the ground up the next year. so you either paid a higher rent than the CRP program paid or you lost the ground. That being right then or one year later. Either way the landlord could go into the program without the renter having much say in it.
8) A few years in they added a "corn bonus" payment. This really hurt active farmers. This payment was $2 per bushel based on your ASCS established yield. This was paid upfront. So you could get higher rent PLUS this corn bonus. An example( real one too): farm sold for $600 an acre. The "new" owner put it into the CRP program. he got it in at $185 and acre rent. The ASCS corn yield was 110 BPA. So he got $405 and acre the very first year. Great investment IF you could afford the land. Very few active farmers could buy land. They were struggling just to survive the hard economic times. A lot of land went to absentee landowners in that time period.
9) The cost benefit for the resulting erosion control/reduction did not get a very good result for the dollars spent. Several reasons for this, with the biggest being whole field/farms bids being accepted. You take that land that was marginally erodible being deemed highly erodible this made a lot of acres in the program really did not gain much erosion reduction. Also every county wanted a certain percentage in the CRP. In counties with land that really did not erode much they deemed pretty flat farms erodible.
10) Another thing effected was the local economy. In some areas of the prairie states it decimated the local AG economy. Some of these had as high as 50% plus signed into the program. I know of agriculture supply businesses failing and towns drying up faster as result of the less active farming.
In my personal case I lost 500 acres of rented ground out of 1200 in a two year period. Then my rents on the remaining acres when up while corn and soybean prices stayed the same of dropped. This really added to the pressure for me to have to go get an off farm job to survive.
I think a better designed program would be better for all involved. Target the really erodible ground. Filter strips being an excellent example of good things. Severely limit whole farm/field sign ups. The past CRP did help wild life. Make that a separate program. A field in the middle of grain country with little wild life around is not really going to help much. Land with wild life around will get a much better result.
Whatever program there is it will have faults. This is one reason to NOT have any type of these kind of programs. The government really should not be this involved in our lives.
The program had far reaching unintended repercussions. Some of them where caused by the Federal government's reasoning for the program and others where caused at the local level.
The program was flawed in it's design. The stated purposes was to Conserve Soil, curtail over production and help wild life.
1) Removing the lower producing ground does not reduce production very much. The erodible ground usually was lower producing ground.
2) The guidelines where too easily manipulated at the local level. This allowed personal bias to "bend" the program to their benefit. An example of this is what ground was deemed "highly erodible". The local county Soil conservation agent had a very broad latitude in what he determined was highly erodible. This made the ground deemed "highly erodible: vary widely county to county. Even within the same county it did as well. IF you wanted to get into the program you could lobby/nag the local soil conservation agent into deeming your ground highly erodible. I will admit I did not want involve in this program or the ones that followed for highly erodible land. Basically some where willing to give up control of their ground for government money and some where not. Therefore little of my the ground I owned at that time was deemed "highly erodible".
3) The program turned out to be very anti young/beginning farmer. It did this in several ways. One being begin farmers usually start out with the less desirable land and work their way into better ground over time. The CRP program targeted the low quality ground. So it directly took land out of production from a larger percentage of younger farmers in general. Even if the ground did not go into the program it caused a sudden rise in rental rates that was not based on economic reasons related to production agriculture. This effect was not just on the lower quality ground either. It rippled through out the entire renal land market.
4) The rental rates where higher than the current rental rates of the time. This may not have been nation wide but it sure was around here. I have talked to other farmers from other states an they in general had the same experience. At the time local rates were in the $100-150 an acre range. CRP came in at $125-175 per acre. So with corn selling for $1.50-1.75 and a $20-40 dollar per acre profit, rents went up $25-50 over night. This added to the economic pressure already on many active farmers.
5) How did the rental rates get this way??? Local ASCS boards. The average county board member tends to be older. Therefore closer to retirement and usually a land owner will low to zero debt. These members had a personal bias towards wanting higher rental rates. Adding to the issue was they could easily have a personal gain by this. I know in my county ALL of the board members had land in the CRP program.
6) The program targeted passive farmers/landowners. The higher rental rates and them being government paid/guaranteed, really made this an attractive program for retired farmers and absentee landlords. So this was another way it put additional pressure on active farmers. Most farmers paying for ground could not use the program very successfully for economic reasons. A lot of farmers retired early to get the guaranteed payments. Remember this was in the mid to late 1980s times were tough.
7) Little protection for the actual person that was actively farming the ground. Yes you had to sign off for the landlord to put the land into the program. This was a smoke screen. The landlord could throw you off the land and "farm" it for ONE year. Then they could sign the ground up the next year. so you either paid a higher rent than the CRP program paid or you lost the ground. That being right then or one year later. Either way the landlord could go into the program without the renter having much say in it.
8) A few years in they added a "corn bonus" payment. This really hurt active farmers. This payment was $2 per bushel based on your ASCS established yield. This was paid upfront. So you could get higher rent PLUS this corn bonus. An example( real one too): farm sold for $600 an acre. The "new" owner put it into the CRP program. he got it in at $185 and acre rent. The ASCS corn yield was 110 BPA. So he got $405 and acre the very first year. Great investment IF you could afford the land. Very few active farmers could buy land. They were struggling just to survive the hard economic times. A lot of land went to absentee landowners in that time period.
9) The cost benefit for the resulting erosion control/reduction did not get a very good result for the dollars spent. Several reasons for this, with the biggest being whole field/farms bids being accepted. You take that land that was marginally erodible being deemed highly erodible this made a lot of acres in the program really did not gain much erosion reduction. Also every county wanted a certain percentage in the CRP. In counties with land that really did not erode much they deemed pretty flat farms erodible.
10) Another thing effected was the local economy. In some areas of the prairie states it decimated the local AG economy. Some of these had as high as 50% plus signed into the program. I know of agriculture supply businesses failing and towns drying up faster as result of the less active farming.
In my personal case I lost 500 acres of rented ground out of 1200 in a two year period. Then my rents on the remaining acres when up while corn and soybean prices stayed the same of dropped. This really added to the pressure for me to have to go get an off farm job to survive.
I think a better designed program would be better for all involved. Target the really erodible ground. Filter strips being an excellent example of good things. Severely limit whole farm/field sign ups. The past CRP did help wild life. Make that a separate program. A field in the middle of grain country with little wild life around is not really going to help much. Land with wild life around will get a much better result.
Whatever program there is it will have faults. This is one reason to NOT have any type of these kind of programs. The government really should not be this involved in our lives.
