Under increasing pressure from agricultural interests to address rising food prices, the U.S. Department of Agriculture (USDA) appears to be considering allowing a penalty-free, early release of land enrolled in the Conservation Reserve Program (CRP), according to the Wildlife Management Institute. USDA Secretary Ed Schafer recently announced that the timetable on making a decision on this for the 2009 crop year has been accelerated from a late August/early September target date to late July and possibly sooner.

This action, if carried out by USDA, is likely to generate significant interest among CRP enrollees due to the current, record-high prices for many agricultural commodities. This, in turn, would have serious, negative impacts on the nation's soil, water and wildlife resources. Because CRP targets highly erodible, marginal cropland, many in the conservation community argue that the action will do little to lower food prices but that it will expose the country's most sensitive croplands to high rates of erosion. In addition, the grassland now holding soil in place provides ideal habitat for many species of wildlife, which will be imperiled if that vegetation is tilled. ?

A mechanism already exists for landowners who want to opt out of CRP contracts before they expire. It requires, however, that those who terminate CRP agreements prior to the end of the contact term must reimburse the federal government for the rental and cost-share payments they received to establish a cover crop, plus interest on those payments. Producers also are assessed a 25-percent penalty on the rental payments that they have received. The proposed early out arrangement call for no such penalties. The opponents argue that a penalty-free, early out cheats taxpayers, whose money has underwritten the hugely successful CRP program. This is particularly true for the funds used to cost share establishment of the cover crops, with the understanding that those plantings would remain in place for the full term of the contract.

Besides considering early outs for CRP lands, USDA has regularly authorized its use for emergency haying and grazing, typically to help offset impacts of droughts or other natural disasters. However, on May 27, 2008, the agency, using its authority to modify contracts that would allow penalty-free haying and grazing, announced an unprecedented use of haying and grazing (after the primary nesting season) on up to 24 million CRP acres to address high livestock feed costs. USDA was sued over this decision. On July 8, federal judge John Coughenour of the Western District of Washington issued a temporary restraining order (TRO). It enjoined USDA from entering into new modifications to CRP contacts to allow haying and grazing, and it called for the agency to advise CRP enrollees who already modified their contracts (to provide for haying and grazing as a result of this announcement) that they, too, are enjoined from participating in these activities. A hearing date on this issue has been set for July 17.

On a related note, USDA announced on July 7 that it was releasing CRP lands for emergency grazing only in counties designated as presidential disaster areas because of flooding. The action allows for immediate grazing and applies to parts of 16 states. Landowners who participate will have their CRP rental payments reduced by 25 percent. USDA interpreted that these lands are not affected by the TRO issued by Judge Coughenour. (pmr)