Grain, Feed Interests Want CRP Lid Held

June 18, 2001

The National Grain and Feed Association and 17 affiliated state and regional grain and feed associations have joined in urging Congress not to expand the Conservation Reserve Program beyond its current 36.4-million-acre ceiling when writing the next farm bill. Instead, the grain and feed-based organizations urged Congress to focus on enhancing conservation programs that better protect land and water resources from agricultural runoff resulting from crop and animal agriculture production.

In joint testimony presented this month, the NGFA and affiliated state and regional associations said that expansion of the CRP beyond its current statutory limit would risk undermining the vitality of rural communities and U.S. agricultural competitiveness. It was noted that more than 10% of all acreage devoted to field crops in the United States currently is idled in the CRP.

The testimony was presented during the second of two hearings on conservation-related issues conducted by the House Agriculture Committee's Subcommittee on Conservation, Credit, Rural Development and Research. The NGFA is the U.S.-based nonprofit trade association of about 1,000 grain, feed, processing and grain-related firms comprising 5,000 facilities that handle more than two-thirds of all U.S. grains and oilseeds.

The testimony also was presented on behalf of the following state and regional associations: Colorado Grain and Feed Association, Grain and Feed Association of Illinois, Kansas Grain and Feed Association, Indiana Grain and Feed Association, Minnesota Grain and Feed Association, Michigan AgriBusiness Association, Montana Grain Elevator Association, Nebraska Grain and Feed Association, North Dakota Grain Dealers Association, Northwest Agri-Dealers Association, Ohio AgriBusiness Association, Pacific Northwest Grain and Feed Association, PennAg Industries Association, South Dakota Grain and Feed Association, Southeastern Grain and Feed Association, Texas Grain and Feed Association, and Wisconsin Agri-Services Association Inc.

The associations also recommended that future enrollments in the existing CRP, which currently consists of 33 million acres, should be targeted at buffer strips, filter strips and other partial-field techniques because of the benefits such enrollments have in mitigating the adverse impacts of agricultural runoff on waterways. Such partial-field enrollments also would allow environmentally sound farmland to remain in production, thereby reducing the adverse economic impact on rural communities.

NGFA and affiliated state and regional associations urged the Bush administration to impose a strict limit on the maximum 25% of farmland in individual counties that is allowed by current law to be enrolled in the CRP. And they said the practice of enrolling entire farms in the CRP should be ended.

"We would urge that government continue to provide farm income support, in particular as U.S. farmers continue to compete against subsidized competition from abroad," said Joe Neal Hampton, president of the Oklahoma Grain and Feed Association, who presented the joint testimony. "But that income support should be delivered in ways that minimize distortions in plantings and prices for the long-term health of U.S. agriculture. That is a sound strategy to grow marketplace farm income over the long term."

The NGFA and affiliated associations emphasized the "futility" of the U.S. government attempting to boost farm income through acreage idling, marketing restrictions or subsidized grain storage programs. During the 1980s, they noted, the United States implemented acreage set-aside programs that idled about 40 million acres. But other countries responded by increasing their plantings by about 32 million acres. "Not only did the production of grain shift out of the United States, we also saw U.S. wheat export markets literally decline by 50 percent from 1980-85," the associations said.

By contrast, the associations said, the erosion in U.S. world market competitiveness has been "substantially less" since the use of acreage-idling programs was reduced during the 1990s. During the period 1990-99, U.S. acreage increased 1 million hectares while foreign plantings declined by a comparable amount. The decrease in foreign acreage in the last two years has been more extensive than at any time in the last three decades, they noted.

The grain and feed groups said that the CRP has been particularly damaging to the U.S. wheat sector, which has experienced a 20% decline in acreage since 1996, as well as on rural communities in counties that have met or exceeded the maximum 25 % of tillable acres allowed to be enrolled. The top 10 wheat-producing states, which typically produce about 70% of the U.S. wheat crop, now comprise 56.5% of the acreage idled in the CRP acreage, which, when coupled with lower wheat prices, has reduced U.S. wheat plantings to their lowest levels since the late 1980s.

And the groups cited examples of counties in Oklahoma, Kansas and North Dakota where CRP enrollments have idled as much as 50% of the acreage, closing dozens of rural businesses and grain elevators. "Absentee landlords receiving CRP payments do nothing to improve the economic life of rural communities," the groups said.

The NGFA and the affiliates also said that CRP rental rates place the U.S. government in a role of competing with tenant farmers for the rights to use previously farmed land. "Rural America needs an influx of young farmers if it is to remain vibrant," the organizations said. "But acreage idling erects an entry barrier of increasing proportions."

Other Conservation Measures: The NGFA and the affiliates supported increased federal funding and a streamlined approval process for the USDA's Environmental Quality Incentives Program (EQIP), a cost-share program that provides federal support and technical assistance to address livestock manure management issues.

Specifically, the groups recommended that EQIP be amended to:

· direct the secretary of agriculture to allocate EQIP funds directly to livestock producers, rather than being vetted through a state and local priority-setting and bidding process;

· permit all livestock producers, regardless of size, to qualify for participation so as not to exclude certain classes of livestock producers and to avoid creating an imbalance in the cost structures of various sizes of livestock enterprises; and

· provide payments to producers during the year the contract is signed, rather than waiting until the year following contract signing, which can impede investment in necessary environmental technologies and unnecessarily delay the resultant environmental benefits.