Penalties for taking land out of Conservation Reserve Program will remain, USDA says

The Department of Agriculture announced Tuesday that it will not eliminate penalties for farmers who plant crops on land they placed in the Conservation Reserve Program. Intense lobbying efforts were organized by bakers and livestock owners in hopes of erasing the penalties in order to boost the wheat harvest and lower crop prices, Andrew Martin writes for The New York Times. Their arguments were strengthened following the Midwest floods in June that washed away fields, amplifying fears of a poor harvest.

A larger crop is now forecast compared to those soon after the floods, Agriculture Secretary Ed Schafer said, citing a 25 percent drop in corn prices and a 14 percent decrease in soybean prices from peak levels. Conservationists and hunting groups applauded the ruling because they had argued that lifting the penalties would have shredded the program, which has 34.7 million acres, primarily in the Great Plains. "The Conservation Reserve Program is the holy grail of conservation, and we are pleased that the USDA will maintain the program and the benefits that it has had," says Bart James, director of agriculture conservation policy for Ducks Unlimited. Robb MacKie, president and chief executive of the American Bakers Association, argues that continuing the penalty will hurt business owners and consumers effected by high commodity and food prices. "It's outrageous that the government is going to pay these folks not to grow when they want to grow on these acres," he said. Hog farmers struggling to pay for feed will also be hurt by the decision, the National Pork Producers said.

Schafer announced in May that more than half the acres farmers had put into the program could be used for hay and grazing following the completion of the bird-nesting season, "but in explaining Tuesday why he would not go further and lift penalties to allow farmers to plant on conservation, explained that economic forces were already shrinking the program," Martin writes. Farmers brought 288,726 acres back into production in the last 19 months by paying their way out of the program, and farmers with contracts that expire in coming years may opt or of the program, especially if commodity prices remain high.

Schafer's decision could be reconsidered depending on crop conditions. The Rural Blog posted an item on July 24 that discussed the permanent junction that prevented the USDA from releasing more acreage in the Conservation Reserve Program for haying and grazing.