CRP General Signup

[UGUIDE]

I am looking to get educated on how the General Signup process has worked in the past and how it might compare in attractiveness to FWP, CP-37 and CP-38 as far as payments and eligibility goes.

It wasn't until they added the same bonus features to CP-37/38 that FWP had that real interest and signup happened.

Anybody chime in but Landman, I suspect you have either used it before or know of others that have. I am wondering how a landowner comes to determine what to offer the rental rate at???

I know I do not have high hopes of a General happening but I can't rule it out of my options either.

Any info is greatly appreciated.

 

[landman]

I am looking to get educated on how the General Signup process has worked in the past and how it might compare in attractiveness to FWP, CP-37 and CP-38 as far as payments and eligibility goes.

It wasn't until they added the same bonus features to CP-37/38 that FWP had that real interest and signup happened.

Anybody chime in but Landman, I suspect you have either used it before or know of others that have. I am wondering how a landowner comes to determine what to offer the rental rate at???

I know I do not have high hopes of a General happening but I can't rule it out of my options either.

Any info is greatly appreciated.

Here is how it usually works. The USDA will announce a General Signup enrollment period. Along with the announcement will be a goal of enrolling so many acres or a limit of funding. Usually all land meeting current cropping history rules are eligible.

A worksheet will be developed by the USDA to apply points for each CRP application. This process varies but in the past points were awarded for location, soil types, wetlands, highly erodible land and so forth. Additional points can be awarded by agreeing to do certain things such as seed selection, 10 or 15 enrollment length or reducing the offered rental rate or offering to give up cost share. Once this is all done they will add it all up and assign a total point value to your application.

The rental rates are usually the stated soil rates for each county and the cost share is 50%. There are usually no other incentives.

After the sign up period ends the USDA will rank all the applications by their point value and then go down the list until the funds are exhaused and/or the desired acres are enrolled. If your application is above the break line you are in and if its below the break line you are out. You will probably have no clue where you stand until you get the acceptance or rejection letter.

I've applied for 11 Generals and was accepted on four of them. On two of them I reduced the rental rate significantly and gave up cost share to get more points. In the past the point value on my applications were between 125 and 175 and I missed once by only one point and another time by just two points. Sometimes they don't disclose the break point so you won't know how close you came to being accepted or rejected.

The General is a little frustrating in that one must make decisions on how to increase the point value without knowing for sure if it will be necessary. For example you may decide to reduce your rental rate by $10 to get 10 more points and maybe 15 more points by forgoing the cost share. Then later you learn that your application would have made it in without those extra points. Or maybe you missed by 2 points and you could have made it in by reducing your rental rate a little more.

If you miss you have to wait for the next General sign-up to try again.

Back in the early 90's I did not have any CRP so was anxious to enroll some but the first year I applied I missed and then the following year I missed again. Feeling frustrated I gave up cost share for 15 points and $10 in rental rate for 10 points the 3rd time around and got in. Seed costs were very high that year and it cost me around $5000 to buy the seed and establish the grass with no cost share. Also my rental rate was only $37 per acre per year. I accepted an extension a couple of years ago at the same rental rate so today it only has a couple of years remaining on the contract. I will be sad to see it go but happy to get a better return on the land by cropping it or re-enrolling it in CRP if given the opportunity.

That is my experience from past General Sign-ups, which may be a clue as to how future Generals will work.

LM

 

[UGUIDE]

Landman, thanks for all the great details. Compared to these latest continuous practices the General signup would probably not be something I could make work. With this last batch of FWP I have removed all my marginal acres from production. The rest is good well drained soil which is good for cropping.

I would be interested in more CP-37/38 as I have 1 80 that has pretty good slope and is highly erodible.

15 years ago they tell me the Generals were going in at twice the rental rate as cash rent. I don't see that the country has budget to do that now, even in SD. So if we assume that CRP rents will be at par with county soil rental rates then what does that say for General signup effectiveness and participation.

Like you said, the auction/bid component is not liked by many but maybe that just means it is good for seller (USDA-public).

 

[landman]

15 years ago they tell me the Generals were going in at twice the rental rate as cash rent. QUOTE]


They weren't going at twice the rental rates when I was applying in the mid to late 90's. But remember these are 10 year contracts so one should expect the rates to be a little higher than the current cash rent rate. Ideally it would match the same rate one would get on a 10 year cash rent for crop. For example if the current cash rent is $100 per acre for crop you might rent your land for exactly that - $100 per acre. However I doubt if anyone would rent it for $100 per acre for 10 years. There would have to be a premium for the length of the contract so maybe the cash rent would be acceptable at $125 per acre. The same reasoning would apply to the 10 year contracts for CRP. The rental rate for a ten year contract, if trying to match cash rent on crop land, should be the expected average cash rental rate over 10 years (the length of the contract) discounted for the time value of money.

Consider this. When I enrolled my CRP in 1998 the current rental rates for crop was around $40 per acre. My CRP contract would have been $47 per acre had I not given up $10 for points. So the first year I would have received about $7 more per acre than cash rent. But now its 12 years later and cash rents are around $95 per acre but my CRP is still only paying $47 per acre. On top of that the property tax on the land has gone up substantially. That is why there is a premium for the length of the contract.

LM

 

[UGUIDE]

Here is PF's priority items from it's latest action alert email:

We have reached the most critical juncture in the history of the federal Conservation Reserve Program (CRP), undoubtedly the most successful conservation program in modern times. Since 2005, over 4.2 million acres have expired, and over the next five years, another 21 million more acres are slated to expire. That makes participating in the public comment period and public meetings about CRP in September and October the most significant action you can take as a Pheasants Forever and Quail Forever supporter this autumn.

The U.S. Department of Agriculture's Farm Service Agency (FSA) has asked the public for comments on the Conservation Reserve Program and scheduled nine public meetings from September 15 through October 8 to solicit comments on the program. Pheasants Forever and Quail Forever have identified a platform of three action items to communicate during the public comment period and at the public meetings.

Immediate Need for a New CRP General Signup
Currently, the U.S. Department of Agriculture (USDA) has no plans for a new CRP general signup to re-enroll or replace expiring acres. "The stated intent of this public comment period is to find ways to make the Conservation Reserve Program more effective for producers, and increase the environmental and wildlife benefits of the program," said Dave Nomsen, Pheasants Forever and Quail Forever's Vice President of Government Affairs, "Those goals are unachievable without a new CRP general signup."

1 Million SAFE Acres
Conservation Practice 38, better known as the State Acres For wildlife Enhancement (SAFE) program, allows states to cater CRP to specifically address key wildlife and habitat needs within a state. Currently, there are over 200,000 acres enrolled in SAFE nationally, and the USDA has established a goal of 500,000 acres for the program. But demand for SAFE acres in states such as South Dakota, Minnesota, and Nebraska has been so strong that they are at or near their initial SAFE acreage guideline. Pheasants Forever and Quail Forever are pushing for an additional 500,000 acres nationwide for the program based upon strong interest and demand for SAFE in multiple states. "A 1-million-acre SAFE program is the progressive step needed to maintain the strength of CRP and create critical habitat for wildlife," Nomsen said.

Double Bobwhite Quail Buffers Program
Conservation Practice 33, or "Bobwhite Buffers," establishes the edge habitat along fields, streams and woods that bobwhite quail need. Currently, there are over 200,000 acres enrolled nationally, and USDA has established a goal of 250,000 acres for the program. "This program has been a resounding success and has proven to increase bobwhite quail populations where acres exist. But to realistically push the bobwhite beyond its current near-threatened status, the USDA needs to allocate additional acres for this important quail program," added Nomsen.

Public Comments on CRP Due by October 19, 2009
Email comments to CRPcomments@tecinc.com
Submit comments online at the Federal eRulemaking Portal at www.regulations.gov
Mail comments to: CRP SEIS, c/o TEC Inc., 8 San Jose Dr., Suite 3-B, Newport News, VA 23606
Fax comments to: (757) 594-1469

 

[LandDr]

I can possibly give a little thought to that question since I work with landowners a lot in regards to what to sign up for...what pays the best, costs the least, provides the best cover and what has the least restrictions.

General CRP would be low on the list of options to consider. Look at all of the Cont. options first...and then if there is anything left...keep it in crop and/or food plots. Unless you want a little more grass cover, then consider the general CRP option.

General CRP does not pay nearly as well, no bonus payment and the cost share is only 50% up to the FSA flate rates.

Landowners really need to know about all of their options...whether they have new land they are considering for programs or have old CRP expiring and looking at options.

In fact...there are over 350 different programs for landowners to consider!

LandDr