Enrolling in the Conservation Reserve Program is an excellent way to improve the environment while also obtaining an additional source of income for your farm or agricultural center. With a variety of payment options, many of the costs of enacting environmental conservation practices can be mitigated or covered entirely.
Our lenders have experience in CRP payments and other lending options, so we’ve assembled a brief overview of the most important parts of the CRP. First Western Federal Savings Bank is proud to offer you cash payouts on your CRP payments.
What’s the Goal of the CRP?
First established in 1985, the Conservation Reserve Program was a way to care for highly sensitive agricultural lands and land resources in danger. In exchange for financial payments and incentives, land managers are expected to remove these sensitive lands from agricultural production and practice land conservation methods for a period of 10 to 15 years.
The success of the CRP is evident, as it has achieved many of its original goals. On average, 24 million acres of sensitive land is removed from production, which helps to prevent soil erosion and degradation, improves the quality of water near wetlands, limits the use of fertilizers, and expands wildlife habitats near agricultural centers.
How Do You Enroll in the CRP?
Enrolling in the CRP is easier than it looks. There are two ways to enroll. The first way is through a competitive process called the CRP General Sign-up. The Secretary of Agriculture announces these sign-up periods on an irregular basis. In the competitive sign-up process, your application will be ranked against other applications from across the country. The rank you’re assigned is based on the environmental benefits that will result from your work. Each application is assigned an EBI, or Environmental Benefits Index, which takes the environmental sensitivity of the land and the proposed conservation practices into consideration.
The second way to enroll in the CRP is through the CRP Continuous Sign-up process. This allows you to sign up for CRP payments whenever you’re ready to. This sign-up offers additional financial resources to those who qualify. In both cases, these sign-ups are managed by your local Farm Service Agency office. You can connect with them to find out more about these processes.
What is the Environmental Benefits Index?
From 1990 on, the CRP began taking the environmental benefits that an enrollee had to offer. This lead to the development of the EBI. This is the USDA’s objective way to measure the value of the conservation efforts that were proposed. It also served as a way to distinguish who would be offered CRP payments and who would not.
To create an EBI score, the FSA considers a variety of factors. These are then weighted and scored in relation to the land’s ability to achieve the environmental effects. The factors that the FSA considers include:
- Erosion: Will the land erode from wind or water if it is not managed using conservation practices?
- Air quality: By limiting the amount of particulates and carbon released in these lands, will the air quality in the area improve?
- Water quality: Will ground and surface water quality improve through conservation?
- Wildlife: Will native species benefit from removing agricultural lands out of production?
- Enduring benefits: Will the region as a whole benefit from these conservation practices, and how many of those practices will stay in place past the 10- to 15-year agreement?
- Cost: How much environmental benefit be gained for every dollar spent?
Who is Eligible for CRP Payments?
More land managers and owners are eligible to receive CRP payments than they realize. To be considered eligible, a producer must be the owner, operator, or tenant of the land for at least the 12 months prior to their application for CRP. Additionally, they must sow control of the land for the duration of the contract.
In some cases, you may be eligible for the CRP even if you did not have control of the land in the 12 months leading to the application. Exemptions are made if the land was acquired as the result of the previous owner’s death, if the ownership changed due to foreclosure, or if the new owner can prove that the land was not acquired solely for it to be placed on the CRP.
What Land is Eligible?
The USDA considers a range of land types during the sign-up periods. In particular, the USDA is interested in helping to conserve specific types of sensitive land areas. These lands include:
- Land enrolled as a riparian buffer.
- Glass lands that are predominantly used for grazing, are located in a region that has historically been dominated by grasslands, or in an area that could support animal and plant populations if it is restored.
- Croplands that are highly erodible. Specifically, untreated land could affect the land’s ability to be agriculturally useful in the future, or land that cannot be farmed without a conservation plan of some kind. Additionally, the land must have been planted for four of the last six years leading up to the application.
- Marginal pastures that are devoted to vegetation to maintain water quality.
- Cropland that would be considered ineligible otherwise if it is determined that keeping the land in production would negatively impact the soil, air, and water quality of the region. Additionally, if the land is newly created, it will be devoted to buffers for trees and shrubs, is considered an off-farm environmental threat, or the enrollment of the land would result in a savings in ground and surface water, it can be enrolled in the CRP.
What Kind of CRP Payment Options are Available?
CRP payments are designed to offset the costs associated with taking a section of land out of agricultural production. The USDA offers six forms of payment, the amount of each payment being determined by the number of acres that are enrolled in the program in a given contract. Annually, the CRP distributes up to $2 billion in payments to farmers across the country. The majority of these payments come from rental payments and average about $64 per acre.
Payment options include:
- Rental Payments: This is an annual payment that’s based on soil productivity. There is a $50,000 annual limit for this type of payment. This can be obtained through both kinds of sign-up.
- Cost Share Payments: This payment is for a percentage of installing or establishing a conservation practice. This payment can cover no more than 50% of the actual or average cost of the practice. This can be obtained through both kinds of sign-up.
- Maintenance Incentive Payments: This reimburses farmers for the average annual costs of certain maintenance practices. There is a $5 annual limit per acre. This can only be obtained through certain continuous sign-ups.
- One Time Sign-Up Incentive Payments: This is a one-time payment to encourage farmers to embrace certain conservation efforts. There is a limit of $10 per acre per year enrolled and cannot exceed 10 years. This can only be obtained through certain continuous sign-ups.
- One-time Practice Incentive Payment: This one-time payment is to help cover installation costs for certain conservation practices. The limit goes up to 40% of the cost of the installation. This can only be obtained through certain continuous sign-ups.
- Other Financial Incentive: These payments might be part of a rental payment, to go toward projects like windbreaks, waterways, or other conservation efforts. The limit is up to 20% of the annual rental payment. This can only be obtained through certain continuous sign-ups.
Cash Out Your CRP Subsidies with First Western Federal Savings Bank
When you receive your CRP payments, you can make that money go further by cashing them out. First Western Federal Savings Bank offers quotes and cash payments through our CRP Purchase Program. We offer a free, no-obligation quote, and then we provide you with an offer. Once you’ve accepted the offer, we’ll provide you with your cash payment in just days.
Get started today and contact our lenders now!