Debbie says: This is a press release from American Corn Growers Association. This is in responce to the Farm Bureau recently voting to support eliminating sign ups for CRP. You can look at the last line of the article to see who supported this report. Elimination of Conservation Reserve Program Would Increase Farm Program Costs by $33 Billion WASHINGTON, Sept.7, 2006 - "While it seems logical to assume that eliminating a government program would save money, such is not the case with the Conservation Reserve Program (CRP)," said Dr. Daniel De La Torre Ugarte, Associate Director of The University of Tennessee's Agriculture Policy Analysis Center (APAC) and Associate Professor. According to De La Torre Ugarte, "The full elimination of the CRP program would save the government over $12 billion in CRP payments across the period, 2007-2015. However, increased production and lower prices caused by former CRP acreage returning to production causes an increase in government payments of $45 billion over the same nine year period. The net additional cost to the government of eliminating the CRP is $33 billion." These conclusions come from a new APAC research study titled, "Analysis of the Economic Impacts on the Agricultural Sector of the Elimination of the Conservation Reserve Program." This study examines the impact of the non-renewal or non-extension of Conservation Reserve Payments (CRP) contracts, as they expire, on crop prices, net farm income and government payments. The study, co-authored by De La Torre Ugarte and Chad Hellwinckel, also estimates that in 2015, corn prices would be 31 cents per bushel below USDA's current projected baseline price of $2.60. "With additional CRP acres coming into production, wheat prices would be 63 cents per bushel below current expectations and soybean prices would suffer from a 90-cent per bushel drop" said De La Torre Ugarte. "These lower prices are the trigger that brings about the $33 billion increase in farm program spending," De La Torre Ugarte continued. According to De La Torre Ugarte, "As of April 1, 2006, 34.7 million acres of farmland had been converted from crop production to soil, water and wildlife conservation uses under the Conservation Reserve Program. In addition to protecting highly erodible watersheds, protecting and providing new habitat, and reducing pollution, the CRP has reduced supplies of crops that would have been produced on that land if it had not been placed in the CRP. APAC simulations indicate that significant reductions in CRP acreage will have major impacts on crop production crop prices, net market income for producers, and government payments." The APAC study estimates that if CRP contracts are eliminated as they expire, 37 percent of today's 34.7 million CRP acres, or 12.6 million acres, will return to crop production by 2015. Seventy-one percent of returning acres, or 9 million, will grow corn, soybeans and wheat. Professor Daryll E. Ray, Blasingame Chair of Excellence in Agricultural Policy and APAC Director said "The study estimates the three major crops will lose at least $6 billion in net market returns in 2015 if CRP acres flow back into crop production." On the other hand, the APAC model predicts that increasing the CRP program will have significant positive effects on net farm income and reduce government farm payments. The analysis reveals that increasing the CRP to 39.2 million acres (statutory limit) by 2015 raises net farm income by $600 million, and if the CRP were increased to 45 million acres by 2015, net farm income would be increased by $1.7 billion. Gross revenue and net farm income for the CRP expansion scenarios include significantly more market revenue and fewer government payments. "These CRP expansions would result in net savings to the federal treasury over the 2006-2015 study period of $6.3 billion and $12.7 billion, respectively, in farm program spending," said De La Torre Ugarte at a formal presentation of APAC's findings at the National Press Club in Washington, D.C. The study time frame for the elimination of the CRP was 2006-2015. The authors believe that while recent extensions and renewals would change the time frame, the general magnitude of the results and the nature of the conclusions would remain the same if the CRP were to be eliminated at some future date. The CRP was established in 1985 as a voluntary program that allowed farmers to retire highly erodible land from production and also ensure a secure income during times of low commodity pricing. As the program grew farmers were able to retire land to reduce degradation of other environmentally sensitive areas of their land. Some of these environmental aspects include wetland acreage, runoff into waterways, and wildlife habitat. Currently the USDA pays $1.6 billion in annual CRP rental payments to land owners and operators. During their 5-10 year contracts, CRP participants practice a number of conservation methods including grass and tree planting and wildlife cover. The continuation of the CRP program is at risk due to budgetary pressures. Joining De La Torre Ugarte and Ray were organizations supporting and/or contributing to the study, including the American Corn Growers Association, Pheasants Forever, the National Farmers Organization, the American Agriculture Movement, the Environmental and Energy Study Institute, the Association of Fish and Wildlife Agencies, the Theodore Roosevelt Conservation Partnership, and the Wildlife Management Institute. 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