Tinkering with CRP could be costly

When Farm Journal’s late staff economist John Marten explained the-then new Conservation Reserve Program (CRP) in the mid-1980s, he did so with a clever memory tool.

“CRP isn’t complicated,” Marten once told a large crowd (which included me) back then, “if you remember the ‘Four Ws’: West, Wheat, Wet and Windy.”

CRP will be called many things, he noted, “But, in the end, it is a set-aside program mostly for western wheat growers and some Midwestern farmers cursed with either wet or windblown farms.”

Sure enough

Marten was spot on. By 1990, CRP held 29.2 million acres; much of it his “Four W” land. In 2007, the 22nd year of what was to have been a 10-year program, 60 percent of CRP’s acres, or 21.7 million of its 36.7 million, was in nine mostly wheat, western states.

That background and those numbers are crucial elements in the Bush administration’s recent decision to allow “emergency” CRP haying and grazing this summer and its current handwringing on whether to allow farmers and ranchers early, no-penalty withdrawals from CRP next year.

That latter idea is pushed by livestock producers being swiftly bled by record feed prices. Neither choice, however, addresses the Renewable Fuel Standard (RFS) and its lead-footed driver, ethanol, a massively bigger force behind today’s high grain prices than the idled 37 million acres snoozing in CRP.

Projections

Current projections show ethanol needing 4 billion bu. of corn to fuel American cars and trucks in 2008. That’s two times our projected exports and nearly as much as will be fed to livestock.

This incredible, unforeseen demand, backstopped by $140 crude oil and federal RFS mandates, is the elephant in today’s CRP debate that everyone sees and no one talks about.

Why? Mostly politics.

“The Bush administration is absolutely committed to ethanol,” said one Capitol Hill watcher. As such, he explains, the White House will look at any tool — other than cutting the RFS — to lower grain prices, including CRP, to keep the biofuel rocket roaring while, hopefully, lowering food prices.

Little relief

Given where the bulk of the CRP land now lies, any scheme to push 8 to 10 million acres (the number USDA is kicking around) of CRP back into production promises little, if any, relief from today’s tall corn and soybean prices.

Almost all is Four W land; it simply can’t grow the grain necessary to address the shortfall.
There are legal hurdles, too. If the White House orders early, no-penalty “outs” of CRP for 2009, it probably faces a court test like its late-May announcement for “emergency” CRP grazing and haying.

That move was blocked in July when the National Wildlife Fund sued USDA over claims that USDA failed to follow CRP rules. Those rules permit emergency haying and grazing due, mostly, to natural disasters. They do not, however, permit opening CRP for man-made disasters — like ethanol-bloated feed prices clobbering livestock producers.

At least not before an environmental impact study is completed, claim the Wildlifers.

Worth noting

Before grousing that greenie weenies are partially responsible for the $17 million-per-day losses hog producers are eating and $13 million-per-day losses cattle producers are enduring, remember it was President Bush who promised the hook and bullet boys, CRP’s staunchest defenders, that he’d never touch CRP in 2004.

But this debate is not about broken campaign promises, lawsuits or even CRP. It’s about ethanol, the elephant in the room that is turning all the furniture — as well as lives of most American livestock producers — into kindling.

Mistake

Tinkering with CRP instead debating the RFS is a foolish, costly mistake. Livestock producers are paying for it now; everyone will pay for it later.

© 2008 ag comm