The Conservation Reserve (CRP) and Other Long-Term Agreement Programs
Barbara Johnson and Jeffrey Zinn

Multi-year contracts, ranging from 10 years agreements to permanent easements, have been a central component of agricultural conservation policy for the past two decades. They may be used either to retire land from production or to keep land in farming. Retired land can provide important environmental values, such as wildlife habitat, or reduce adverse effects of production techniques, such as reduced fertilizer applications. The land that is kept in farming is usually near urban areas where pressures to convert these lands to alternative more lucrative uses are most intense. The land retirement programs can also provide other benefits for agriculture by limiting the amount of land in production and thereby marginally raising crop prices, and setting a floor for land rental rates based on the amounts that the government is willing to pay. The program to keep land in agriculture provides significant amenities and keeps urban areas connected to agricultural production on a small scale, usually through such venues as farmers markets. The long term agreement programs, all funded by mandatory funding from the Commodity Credit Corporation, include:
The Conservation Reserve Program (CRP);
The Wetlands Reserve Program (WRP);
The Grasslands Reserve Program (GRP); and
The Farmland Protection Program (FPP).

The Conservation Reserve Program (CRP) was enacted in 1985 and has grown to become the most expensive conservation program, costing slightly less than $2 billion annually in recent years. The CRP is administered by the Farm Service Agency (FSA). Producers bid to retire highly erodible or environmentally-sensitive land from production during national signup periods. The FSA ranks bids based on their estimated environmental benefits and cost to the government. Successful bidders receive annual rental payments, as well as cost sharing and technical assistance to install conservation practices. Almost all the enrolled land is retired for 10 years. The CRP enrollment ceiling is 39.2 million acres, or more than 10 % of the approximately 375 million acres of crop land nationwide. Enrollment is limited to 25% of the crop land in a county.

About 35 million acres is currently enrolled. While most of these acres have been enrolled in general signups (the last one was held in June, 2003), some land can be enrolled in three other ways. First, producers who wish to enroll portions of fields with especially high environmental values, such as stream buffers, can sign up at any time through the continuous signup initiative; more than 2.1 million acres have been enrolled this way. Second, a federal-state partnership initiated by interested states (the Conservation Reserve Enhancement Program, or CREP) enables states to fund higher rental rates in small areas to attract greater participation. Currently, 25 states have enrolled about 589,000 acres in one or more CREPs. Third, up to 1 million acres of small isolated wetlands can be enrolled; about 100,000 acres has been enrolled under this option.

The Wetlands Reserve Program (WRP), enacted in 1990, uses permanent and temporary easements and long term agreements to protect farmed wetlands. Enrollment has now surpassed 1.5 million acres, with participation concentrated in states bordering the lower Mississippi River. Permanent easements have been placed on more than 90% of the enrolled acres. The current law authorizes enrollment of 250,000 acres per year, and a total enrollment of 2.275 million acres by the end of FY2007. Easements can be delegated to other federal and state agencies with the necessary expertise. A January, 2001 Supreme Court decision, known as the SWANCC Decision, that exempted small and isolated wetlands that lie within a single state from the federal wetlands regulatory program administered by the U.S. Army Corps of Engineers under §404 of the Clean Water Act. This decision has increased the importance of WRP (and the isolated wetlands component of the CRP) in federal wetland protection efforts.

The Grasslands Reserve Program (GRP) was enacted in the 2002 farm bill to retire up to 2 million acres (or spend up to $254 million) under arrangements that can range from permanent easements to 10 year agreements. Easements can be delegated to other federal and state agencies with the necessary expertise, like in the WRP. Enrollment started in FY2003, and more than 240,000 acres were placed under contract. Approximately $38 million was spent in FY2003 and $70 million will be available in FY2004.

A fourth program, the Farmland Protection Program (FPP, called the Farm and Ranch Lands Protection Program by USDA) is based on multi-year contracts like the programs above, but landowners are paid to keep the land in agriculture rather than retire it from production. These lands are generally being sought for residential or other development. It was enacted in the 1996 farm bill. Eligible land includes not only crop land, but also range, pasture, certain forest lands, and land containing historic and archeological sites. Unlike other conservation programs, certain private nonprofit organizations with experience in land preservation can compete public entities for these funds. Through FY2003, almost $177 million had been used to acquire easements on almost 105,000 acres in 37 states, with agreements pending on an additional 201,000 acres in every state.
In Congress

Congressional issues include setting limits on funding in annual appropriations legislation and determining the long-term environmental benefits of these programs. Even though these four programs all receive mandatory funding, Congress has limited them in the past below their authorized levels. With the FY2005 budget submission, the Bush Administration called for some reductions as well. The largest of these, as a percentage of the total funding, is the WRP. There has been little discussion whether these reductions are compromising program accomplishments in any way, although supporters of these programs repeatedly call for full funding. Calls for reductions may grow in the future if addressing the overall deficit becomes a higher priority for either the Administration of Congress. In the meantime, these can either viewed in one of two ways; as reductions (because they are less than had been authorized), or as less rapid increases, since many of the programs are far larger than they were before the 2002 farm bill was enacted (except the GRP, which was created in 2002). For two programs, there are also other possible reasons to limit funding; the CRP is approaching its enrollment ceiling, and the WRP is limited to the maximum number of contracts that NRCS estimates that it can process with current staff levels.

When these programs were being considered by Congress, they were all endorsed by many interests for the large and widespread environmental benefits that they would provide. However, the benefits being provided on enrolled acres have yet to be widely measured, and since these programs are very expensive, both overall and on a per acre basis, being able to document and measure these benefits has become more important. For the newest program, the GRP, there are probably few benefits to measure as yet, while land in the oldest of these programs, the CRP, presumably has provided many benefits for many years. Also, benefits from the permanent agreements should be enduring, but benefits from the shorter term arrangements, such as the 10 years contracts under the CRP, could rapidly disappear, depending on the decisions of property owners after contracts end. USDA is initiating a Conservation Effects Assessment Project which will include a nationwide assessment of benefits and more in-depth studies in 20 watersheds. This analysis should be very useful to Congress in future appropriations deliberations and as it considers the next generation of conservation policy in the next farm bill.

CRS Products

CRS Report RS21613(pdf), Conservation Reserve Program: Status and Current Issues.

CRS Contacts: Barbara Johnson (7-0248) and Jeffrey Zinn (7-7257)

Page last updated July 30, 2004.

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