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Grasslands CRP Program

Posted: Thursday, May 04, 2023

Author: Joette Schalla, Ranch Broker | Licensed in CO

Land Agriculture

It was once said, “The best thing about the land is the landscape.” A good point, but what is also very rewarding is an additional return on your investment through special programs designed to protect and preserve that landscape.

Many landowners are unaware of ongoing incentives for maintaining or enhancing certain portions of their property, and the financial assistance which may be available. For years, the federal government and its various agencies have provided assistance and incentives to farmers and ranchers. The incentives I am referring to are for specified time frames and are not permanent easements with recorded deed restrictions.

These programs have served the interests of American society in several ways: Ensuring the food security of a hungry nation, providing financial protection for producers in times of drought or other natural disasters, offering attractive financing options for first-time agricultural operators, and providing other enticements to encourage people to participate in such crucial vocations as farming and ranching.

Opportunities to earn additional income from working lands continue to grow. A recent incentive option is the Grassland Conservation Reserve Program (CRP). This unique program focuses on conserving grasslands that currently have a grass cover used for grazing, hay production, or growing seed. It is very different from the well-known CRP program established in the Farm Bill of 1985.

Initially, the CRP was established to help improve and reestablish cover on highly erodible land. Over thirty-seven million acres were enrolled and enhanced through the original program, which emerged as an answer to ward off future events such as the Dust Bowl of the 1930s, which changed the ecology of the southern prairies. The Dust Bowl was caused by a combination of soil erosion and the depletion of cover plants, due to undereducated farming practices and poor stewardship of the land, combined with drought and windstorms.

The new Grassland CRP program is funded by the United States Department of Agriculture’s Farm Service Agency (FSA). The program was established by Congress in the 2014 Farm Bill but was formally recognized in the Federal Register in July 2015. The focus of the program is to maintain the current plant cover which protects soils. The intention is to help farmers and ranchers protect grasslands, which include rangeland and pastureland while continuing to utilize these areas for foraging. The program helps provide extra support for grazing operations, biodiversity of plants and animals, and select lands fostering forbs and shrubs with the highest threat of conversion.

The FSA will allot annual payments to participating landowners, who are approved through a ranking process that prioritizes specific land types and locations. The program is offered nationally, but there are some priority zones that earn an applicant a larger score in the ranking formula. The annual payment varies by county, but the national minimum was thirteen dollars per acre for the May 2022 sign-up. The annual rent payment is based on seventy-five percent of the grazing value of the land, which is determined by the FSA. In return for the annual rental payments, they aim to guide farmers and ranchers to enhance the sustainability of their operations while they continue production already in place. The FSA does this by establishing guidelines to graze and farm the land in a manner conducive to maintaining a healthy cover and providing habitat for plants and animals alike, benefiting wildlife along with livestock.

To enroll, contact your local FSA office to get set up in their system. You will have to file a few documents of ownership and will be assigned official farm and tract numbers for your acreage. You must have owned the land twelve months prior to applying for the program. The application to enroll in the Grassland CRP is concise. At the end of the application process, you receive your ranking number. There is a pre-established time frame for the sign-up; once that is complete and all applications have been filed, the Secretary of Agriculture makes the final determination for the minimum ranking score that will be accepted for that year’s offering.

The contracts are either ten or fifteen years in length. Bonus points are awarded if the landowner chooses the fifteen-year option during the application process. As an example, I was able to enroll some of my acreages in the 2021 sign-up. My application was approved, and my contract pays twenty dollars per acre, per year, for fifteen years. When my application was approved, my ranking score was 80.

THE FSA uses the following ranking factors:

Existence of expiring CRP
Existing small livestock operation
Existing grassland
Existing multi-species cover and predominance of native species
State Focus Area (land-based) determined in consultation with State Technical Committee
Applicant is an eligible beginning, Veteran, or socially disadvantaged farmer or rancher.
Cost

Cow and calf hills high desert colorado shutterstock 2019

The FSA recognizes that, historically, certain groups of people have been at a disadvantage for agricultural programs such as these. So, the current ranking format allows specific classifications of producers to receive ten additional points in the ranking process. Beginning farmers/ranchers, a specific designation assigned by the FSA, are encouraged to apply. Veterans receive the same ten points for applying, as do socially underprivileged groups. As a woman, I received ten additional points as a socially disadvantaged rancher when I enrolled. The FSA has set up opportunities in other programs for such groups, by waiving program enrollment fees and prioritizing loans for these producers.

What other factors are relevant to the eligibility for enrollment? Let’s spend a moment on national priority zones. The wildlife that inhabits our farms and ranches depend on landowners more than most people realize. To maintain strong numbers of healthy animals, the FSA is working with producers to educate and reward them for maintaining habitat, and for promoting biodiversity on their lands. Not only is protecting wildlife habitats a strong focus of the FSA, but they are also working to protect and stabilize migration corridors. The Greater Yellowstone Wildlife Corridor Priority Zone focuses on southwest Montana, northwest Wyoming, and a region in southeastern Idaho. This region is a national priority zone for the Grassland CRP program.

The Dust Bowl Priority Zone is also a focus of the program. This area is comprised of a large portion of eastern Colorado, most of the western third of Kansas, the panhandle of Oklahoma, the majority of the Texas panhandle, and the eastern edge of New Mexico. These locations have a priority due to their historical susceptibility to drought, wind, and highly erodible soils. The property that I have enrolled in the program is located in eastern Colorado. Several other producers in the area have also been approved and are benefiting from their participation.

Cows cattle mountains field colorado shutterstock 2015

If fifty percent of the land being enrolled in the Grassland CRP program is in a national priority zone, the landowner receives fifteen points in the sign-up ranking factors and, if approved, they will be awarded an extra five dollars per acre for their annual rent. A landowner can enroll as few or as many acres as they would like, but the maximum amount the FSA will pay out to a producer is fifty thousand dollars annually. If a property sells with a Grassland CRP contract in place, it is transferable to the new owner, just like the original CRP contracts are.

How often does this program become available? This unique opportunity will be limited to two million acres nationally, so the FSA announces each year if and when they will have new enrollments. The best thing for a producer to do would be to contact the local FSA and stay in the loop about any possible sign ups that may come available in 2023.

When a landowner decides to sell land that is enrolled in the Grassland CRP program, they can include the annual rental payments from the program in their production numbers. This helps generate added value to the sales price. Also, a buyer can use the payments as part of the projected income calculation when applying for a loan for the property. The benefits of the annual rental payments are a nice perk and supplement the annual agricultural income on a working property. Beyond being able to continue their agricultural operation, a property owner is still able to camp on their property and enjoy recreational benefits such as fishing and hunting.

As a property owner and investor, I can confirm that we are always looking for additional ways to help the land work harder for us. The FSA offers many more programs that are designed to assist producers. The Natural Resource Conservation Service also offers programs to build infrastructure on your working lands. They can offer guidance in establishing stocking rates and forage management. Hiring a broker with expertise in these programs is in your best interest. As a seller, look for an agent who understands these features, and can properly market the added benefits of your listing. If you’re buying land, a knowledgeable agent can help you find a property that has already been improved or land that can be enhanced through these programs to increase the value and productivity of your investment.

The grasslands CRP program sign-up for 2023 runs from April 17 - May 26. For more information on this government-implemented conservation program, visit fsa.usda.gov.

Meet the Author

Joette Schalla

Fay Ranches
Ranch Broker | Licensed in CO

(719) 469-8374

jschalla@fayranches.com

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Four Things You Need to Know About Landowner Tags in Montana