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No early outs for CRP lands
GARDEN CITY, KAN.
(hppr) -
There are just over 34 million acres of land enrolled in the Conservation Reserve Program, or CRP, a voluntary program that gives annual rental payments to landowners for planting permanent vegetation on idle, highly erodible farmland.
When I visited with Tom Klassen, who owns Klassen Farms in Finney County, he drove me out to see his CRP lands.
Nat sound break: going to show you one of the guzzlers I talked to you about.
Guzzlers a device that looks like a piece of corrugated iron tilted above large containers are used to collect water from dew or rain. Wildlife then has a fairly dependable source of water. These guzzlers are just one thing that Klassen had to install when he converted his land into CRP lands. Klassen says it costs about 20,000 dollars to put a quarter section of ground into CRP. The cost of converting land is shared, but this cost-share has to be paid back if a contract is broken early, along with all rental payments, and liquidation damages which is essentially 25% of one annual rental payment.
At the end of July, farmers wanting to end their Conservation Reserve Program contracts early without penalty were surely disappointed when the United States Department of Agriculture decided not to allow penalty-free release. Rod Winkler is a program specialist for the Farm Service Agency in Kansas.
Rod Winkler: You know in the current environment we're operating in, with high commodity prices and cash rental rates increasing there's certainly been a greater interest to look at different options out there in terms of farmers across the state of Kansas looking at doing something different with their land other than enrollment in the Conservation Reserve Program.
Here in Finney County, KS, Terry Algrim has fields of CRP land. Native grasses and the occasional sunflower give the land an untouched look enhanced by the sounds of wildlife. When Algrim first entered the program, he enrolled nearly a fourth of his acreage.
Terry Algrim: A year or two ago when the grain prices went up you know I thought maybe I shouldn't have put that land in CRP.
Algrim is not the only farmer who has thought about changing his grassy CRP fields back into fields of grain, which means breaking a contract meant to last 10 or fifteen years. Although Algrim did not choose to break his, Rod Winkler says others have.
Rod Winkler: So yeah, there have been some landowners across the state, not in huge numbers, but there has been a percentage who have opted to buy out of their contracts and that involves refunding money and paying some liquidation damages and the expenditure of that depends upon how many years they've been in the program.
Winkler says the number of people exiting the program early this year is not of the magnitude many think. According to a press release from the USDA, "this spring, the number of acres being withdrawn early with financial benefits being repaid was running more than 50 percent higher." Repaying all benefits received on the land can be costly and combining that with the cost of converting the land into use for crops can just add to that. Tom Klassen of Finney County says he has seen the cost of materials rise considerably.
Tom Klassen: Anhydrous ammonia, a year ago this time when I fertilized ground that I was going to go with wheat, it was 350 dollars a ton and now it's a thousand dollars a ton. So some people just see the grain prices as being high and the farmers really doing well, but our expenses have gone up comparably.
Rod Winkler of the Farm Service Agency thinks many factors went into the USDA decision not to allow penalty-free early release of lands from the CRP program.
Rod Winkler: The price of grain, the price of feed going to livestock, the price of forage out there and so there was a lot of different factors they considered and put into that decision they came down to and this will be the second year in a row they came down to the decision that they're not going to allow early outs without penalty.
For HPPR, I'm Lindsey Fields.
© Copyright 2009, hppr
(2008-09-07)
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When I visited with Tom Klassen, who owns Klassen Farms in Finney County, he drove me out to see his CRP lands.
Nat sound break: going to show you one of the guzzlers I talked to you about.
Guzzlers a device that looks like a piece of corrugated iron tilted above large containers are used to collect water from dew or rain. Wildlife then has a fairly dependable source of water. These guzzlers are just one thing that Klassen had to install when he converted his land into CRP lands. Klassen says it costs about 20,000 dollars to put a quarter section of ground into CRP. The cost of converting land is shared, but this cost-share has to be paid back if a contract is broken early, along with all rental payments, and liquidation damages which is essentially 25% of one annual rental payment.
At the end of July, farmers wanting to end their Conservation Reserve Program contracts early without penalty were surely disappointed when the United States Department of Agriculture decided not to allow penalty-free release. Rod Winkler is a program specialist for the Farm Service Agency in Kansas.
Rod Winkler: You know in the current environment we're operating in, with high commodity prices and cash rental rates increasing there's certainly been a greater interest to look at different options out there in terms of farmers across the state of Kansas looking at doing something different with their land other than enrollment in the Conservation Reserve Program.
Here in Finney County, KS, Terry Algrim has fields of CRP land. Native grasses and the occasional sunflower give the land an untouched look enhanced by the sounds of wildlife. When Algrim first entered the program, he enrolled nearly a fourth of his acreage.
Terry Algrim: A year or two ago when the grain prices went up you know I thought maybe I shouldn't have put that land in CRP.
Algrim is not the only farmer who has thought about changing his grassy CRP fields back into fields of grain, which means breaking a contract meant to last 10 or fifteen years. Although Algrim did not choose to break his, Rod Winkler says others have.
Rod Winkler: So yeah, there have been some landowners across the state, not in huge numbers, but there has been a percentage who have opted to buy out of their contracts and that involves refunding money and paying some liquidation damages and the expenditure of that depends upon how many years they've been in the program.
Winkler says the number of people exiting the program early this year is not of the magnitude many think. According to a press release from the USDA, "this spring, the number of acres being withdrawn early with financial benefits being repaid was running more than 50 percent higher." Repaying all benefits received on the land can be costly and combining that with the cost of converting the land into use for crops can just add to that. Tom Klassen of Finney County says he has seen the cost of materials rise considerably.
Tom Klassen: Anhydrous ammonia, a year ago this time when I fertilized ground that I was going to go with wheat, it was 350 dollars a ton and now it's a thousand dollars a ton. So some people just see the grain prices as being high and the farmers really doing well, but our expenses have gone up comparably.
Rod Winkler of the Farm Service Agency thinks many factors went into the USDA decision not to allow penalty-free early release of lands from the CRP program.
Rod Winkler: The price of grain, the price of feed going to livestock, the price of forage out there and so there was a lot of different factors they considered and put into that decision they came down to and this will be the second year in a row they came down to the decision that they're not going to allow early outs without penalty.
For HPPR, I'm Lindsey Fields.
© Copyright 2009, hppr
