Order Code RS21613
Updated February 14, 2007
Conservation Reserve Program:
Status and Current Issues
Tadlock Cowan
Analyst in Agriculture, Natural Resources, and Rural Development Policy
Resources, Science, and Industry Division
Summary
The Conservation Reserve Program (CRP), enacted in 1985, provides payments to
farmers to take highly erodible or environmentally sensitive cropland out of production
for ten years or more to conserve soil and water resources. It is the federal government’s
largest private land retirement program. The program is administered by the Farm
Service Agency of the U.S. Department of Agriculture (USDA), with technical
assistance provided by USDA’s Natural Resources Conservation Service. CRP has
several subprograms, the best-known of which is the Conservation Reserve
Enhancement Program (CREP).
Congress reauthorized and amended the CRP through FY2007 in the 2002 farm bill
and increased the CRP enrollment cap from 36.4 million acres to 39.2 million acres.
Congress also added wildlife resources as a CRP objective and allowed participants to
extend certain contracts up to 15 years. Along with a “general sign-up” in 2004 for
landowners to submit bids to enroll acreage, USDA also announced two CRP initiatives:
one to enroll 250,000 acres of bobwhite quail habitat and a second to enroll 250,000
acres of non-floodplain wetlands. Landowners may apply to enroll in these initiatives
any time through December 31, 2007, or until the enrollment caps are reached.
Between 2007 and 2010, 28 million acres under CRP contracts will expire, with
16 million acres in 2007 alone. In June 2006, USDA announced that contracts for
approximately 13 million acres were renewed. An additional 1 million acres were also
added under the latest general sign-up. Reenrollments for contracts expiring 2008-2010
were announced in late summer 2006. This report will be updated periodically.
Background
The Conservation Reserve Program (CRP) is the federal government’s largest land
retirement program for private land.1 It was first enacted by Congress in 1985 to help
1 This report is an updated and revised version of a report originally written by former CRS
(continued...)

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control soil erosion, stabilize land prices and control excessive agricultural production.
Since then, program purposes have been expanded to include environmental goals. The
program is administered by USDA’s Farm Services Agency (FSA), with technical
assistance from USDA’s Natural Resources Conservation Service (NRCS) and funding
from USDA’s Commodity Credit Corporation (CCC). The FSA makes annual rental
payments based on the agriculture rental value of the land, and provides cost-share
assistance for up to 50% of the participant’s costs in establishing various approved
conservation practices (e.g., planting a cover crop on the land to reduce erosion).
Participants enroll in CRP contracts for 10 to 15 years. The 2002 farm bill authorized
CRP to enroll 39.2 million acres at any one time through 2007.
Participants bid to retire land from production for 10-15 years. Contracts are
awarded by FSA based on their assessment of the land’s environmental value using an
Environmental Benefits Index (EBI). If the land is accepted, the landowner may enroll
the land, receive annual rental payments for it, and maintain the land under an approved
conservation plan. According to FSA data, the CRP had 36.7 million acres enrolled as
of December 2006, including the various subprograms (e.g., Conservation Reserve
Enhancement Program, Farmable Wetlands).2 Up to 25% of a county’s cropland may be
enrolled in CRP. Over 80 counties have reached this limit.
Figure 1. CRP Acreage, FY2005 (cumulative)
(1 dot = 1,000 acres)
Source: Farm Service Agency
After a CRP contract expires, federal payments cease. If the land in question is
“highly erodible” (about 75% of the land enrolled in the CRP meets this definition) and
participants decide to return the land to production, they must manage this land under an
1 (...continued)
analyst Barbara Johnson.
2 States with the most enrolled acres are Texas (4.1 million acres), Montana (3.5 million acres),
North Dakota (3.4 million acres), Kansas (3.3 million acres), and Colorado (2.5 million acres).

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approved conservation system if they wish to be eligible for some federal farm programs
(including commodity payments).
Enrolling in CRP
There are four types of sign-ups for enrolling land in the CRP: general, continuous,
Conservation Reserve Enhancement Program (CREP), and Farmable Wetlands Program
(FWP). As of January 2007, there were 427,742 CRP contracts on 276,066 farms.
General Sign-up. General sign-ups are specified enrollment periods during which
landowners compete nationally to enroll land in CRP. Nearly 90% of CRP acreage (33.0
million of 36.8 million) is enrolled through general sign-ups. Applicants must meet
certain eligibility criteria, evaluate their land according to FSA’s Environmental Benefits
Index, and submit bids to FSA for enrollment. FSA accepts applications that show the
highest environmental benefits. These sign-ups are always competitive. For CRP’s most
recent general sign-up (Number 33), which ran from March 27 to April 28, 2006, USDA
selected 1 million acres of the 1.4 million acres offered. The most recently accepted
acreage includes about 673,000 acres of land located within conservation priority areas,
about 629,000 acres with an erodibility index of eight or greater (highly erodible), and
about 265,000 acres to be restored to rare and declining habitats.
Environmental Benefits Index (EBI). As CRP has been expanded to include
broader environmental goals, FSA has adjusted the categories and points awarded under
the EBI. For example, FSA announced in June 2003 that, for the first time, it may award
points to projects which have the potential to sequester carbon (reducing greenhouse gas
emissions). Other factors include wildlife habitat benefits from planted cover crops, water
quality benefits from reduced erosion, and whether benefits will endure beyond the
contract period. Offers that included a willingness to accept less than the maximum rental
rate for acreage (thereby reducing the cost to the government), as well as offers to reenroll
land, may have received additional points. FSA ranks all applications nationally, and then
sets an EBI score cutoff above which applications will be accepted.
Continuous Sign-up (includes Bobwhite Quail and Non-Floodplain
Wetlands). Environmentally desirable land devoted to specific conservation practices
with high environmental benefits may be enrolled in CRP at any time for 10-15 years
under continuous sign-up.3 Offers are automatically accepted (provided the land and
producer meet certain eligibility requirements) and are not subject to competitive bidding.
Contracts usually include additional incentive payments. The 2002 farm bill reserved 4
million acres (of the 39.2 million enrollment limit authorized) for land to be enrolled
under continuous sign-up or CREP sign-up (see below). Within the continuous sign-up
program there are some options tailored to certain conservation needs, such as restoring
floodplain wetlands and native hardwood trees in wetlands. On August 4, 2004, the
Administration announced two more initiatives: a 250,000-acre initiative to restore
bobwhite quail habitat in the Midwest and the Southeast, and a 250,000-acre initiative to
restore wetlands located outside floodplains (including Great Plains playa lakes). These
3 Specific conservation practices include filter strips, riparian buffers, grass waterways,
shelterbelts, field windbreaks, living snow fences, salt-tolerant vegetation, shallow water areas
for wildlife, wetland restoration, and wellhead protection areas.

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two initiatives begin October 1, 2004 and continue through December 31, 2007. There
are currently 2.6 million acres enrolled under continuous sign-ups (excluding CREP
acreage).
Conservation Reserve Enhancement Program (CREP). This is a joint
federal-state continuous sign-up program available in parts of 28 states. CREP targets
geographic areas with agriculture-related environmental problems, such as Maryland’s
Chesapeake Bay and Florida’s Everglades. Some states (including New York and Ohio)
have multiple CREPs, each targeting a different area of the state. USDA provides 80%
of the funding, and a non-federal entity (typically the state) contributes the remainder.
States may automatically enroll up to 100,000 acres, thereby avoiding the need for
landowners to compete in the general sign-up. Unlike the general sign-up, CREP both
encourages landscape-scale conservation efforts and offers the flexibility to address
locally identified needs. Generally, CREP rental payments are higher to attract
participation. Landowners may bid to enroll in CREP at any time. As of January 2007,
917,480 acres were enrolled in CREP (70,000 acres added in 2006).
Farmable Wetlands Program (FWP). As authorized under the 2002 farm bill,
this allows farmable wetlands — those that have been partially drained, or are naturally
dry enough to allow crop production in some years, but otherwise meet the definition of
a wetland — to be enrolled in CRP on a continuous basis. Up to 100,000 acres may be
enrolled from any state (this may be increased to 150,000 acres after three years). The
farm bill reserved 1 million acres for farmable wetlands enrollment. Currently, there are
161,451 acres enrolled (14,000 added in 2006).
Program Costs and Benefits
Acreage enrolled in CREP, continuous enrollment, or the farmable wetlands
programs is generally eligible for higher payments than acres enrolled under general sign-
ups because of their higher environmental benefits, location and prevailing rental rates,
and additional financial incentives for participation. However, such contracts involve
much smaller acreage on average. CREP payments average $121 per acre and the FWP
$119, versus an average per acre payment of $44 for the general sign-up acreage under
CRP.4
Total outlays for CRP in FY2006 were $1.80 billion. The Congressional Budget
Office estimates CRP contract obligations will cost $1.92 billion in FY2007.5 NRCS
estimated that, prior to 2003, monetized CRP benefits (such as increased wildlife habitat
and small game hunting) totaled about $1.4 billion per year. This figure does not include
non-monetized benefits such as improved groundwater quality and wetland restoration.
Critics allege that CRP is an expensive program, and that its benefits can be temporary
since participants are under no obligation to continue conservation practices after
contracts end. Proponents counter that the estimated benefits document CRP’s worth, and
that not all of CRP’s benefits have been or can be monetized. Moreover, proponents
argue that it provides an incentive (especially for small farmers) to carry out land and
4 Approximates FY2008 payments, before adjustments for haying/grazing, non-compliance,
terminations, part-year contracts, and contracts not yet recorded.
5 Congressional Budget Office, January 2007 Baseline.

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water conservation practices they otherwise might not be able to afford, and that these
practices have public benefits.
Rental Rates for CRP Acreage. The average rental rate for all CRP land was
$49 as of January 2007. Rental rates ranged from an average of $44 for general sign-up
acreage to $121 for CREP acreage. CRP rental rates are based on the three-year average
of local dry-land cash rental rates. Certain monetary incentives, such as an incentive to
perform particular maintenance obligations, may also apply. Producers can offer land at
that market rate or may offer a lower rental rate to increase the likelihood that their offer
will be accepted. CRP cost-sharing assistance is available to eligible participants for up
to 50% of the eligible costs of establishing the approved practice.
CRP Environmental Results. FSA estimates that, compared with 1982 erosion
rates, CRP has reduced erosion by over 454 million tons per year on the 36.7 million acres
enrolled in the program. Other conservation benefits NRCS has documented on these
lands include the sequestration of over 48 million metric tons of carbon annually; over 3.2
million acres of wildlife habitat established; and a reduction in the application of nitrogen
(by 681,000 tons) and phosphorus (by 104,000 tons). Also, participants have planted
about 2.7 million acres to trees, making it the largest federal tree-planting program in
history.6 Through April 2006, CRP has restored 2 million acres of wetlands and 2.5
million acres of buffers. Some observers have noted that the benefits are unevenly
distributed. CRP lands are scattered across the nation, which can make it more difficult
to restore wildlife populations and improve water quality in important watersheds. Some
enrolled lands may be planted to less appropriate cover types which may provide more
limited wildlife benefits.
Current Issues
With the upcoming farm bill reauthorization in 2007, the 110th Congress may follow
several CRP issues, including long-term direction of the program, effects of the program
on rural economies, and the implications current CRP regulations may have for bioenergy
production.
Expiring CRP Contracts and Reenrollment Policy. An immediate issue for
CRP is the scheduled expiration of more than 28 million acres between 2007 and 2010.
Nearly 16 million of these will expire in 2007 alone. In June 2006, 13 million acres of
the 15.5 million acres set to expire September 2007 were reenrolled or extended based on
EBI scores and the land’s location within national priority areas.7 FSA ranked individual
contracts into one of five tiers based on the environmental benefits of the original EBI
score. Eligible participants ranking in the first tier (81%-100%of the EBI) could reenroll
their land in new 10-year contracts. Farmers and ranchers in this top tier with wetlands
enrolled, were eligible for 15-year contracts.
6 CRP Benefit-Cost Assessment, February 2003, and FY2005 CRP annual summary.
7 National Priority Areas named in CRP authorizing legislation are the Chesapeake Bay, Long
Island Sound, and the Great Lakes Region. USDA established two other national priority areas:
Prairie Pothole Region in the Northern Great Plains, and Longleaf Pine Region in the southeast.

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Eligible participants ranking in the second tier (61%-80% of the EBI) could extend
their contracts for five years. Third tier participants (21%-40% of the EBI) could receive
three-year extensions. Eligible participants in the bottom tier could extend their expiring
contracts by two years. Participants with contracts expiring between 2008 and 2010 were
also notified by FSA that they could choose to reenroll. These 160,000 participants had
a deadline of June 30, 2006, to decide whether to apply for reenrollment. The
reenrollment data for these expiring contracts, covering 12 million acres, will be
announced in late summer 2006.
Some observers of conservation policy believe that reenrollments could offer an
opportunity to refine CRP in ways that enhance the program’s capacities for preserving
natural resources and improving environmental benefits from agricultural lands. With
current high commodity prices, however, renewing CRP contracts may be less attractive
for some producers.
Administration’s 2007 Farm Bill Proposal. The Administration proposes
reauthorizing CRP to focus on environmentally sensitive lands. The criteria for
continuous enrollment acreage would be revised. The Administration also proposes
prioritizing farmlands planted in a biomass reserve of perennial crops used for cellulosic
energy production. Secretary Johanns also announced (February 2007) that there would
be no new CRP enrollments in 2007 and 2008, and that the Administration might permit
farmers to cancel existing CRP contract to plant corn for ethanol production.
Effects of CRP on Local Economies. Retiring land in rural, largely
agricultural economies could result in fewer farmers and fewer farm supply businesses
in those areas. Section 2101(b) of the 2002 farm bill directed ERS to study the impact of
CRP enrollment on rural economies and population levels. USDA’s Economic Research
Service (ERS) issued this report in February 2004. The report found that population
trends were largely unaffected by high CRP enrollment. It also found that high CRP
enrollment was associated with some job loss in rural areas between 1986 and 1992 —
the years CRP was first underway — but that this was generally not the case during the
1990s. However, the report noted that national trends may mask regional adjustments,
and that “local economic adjustments might be sizeable.”8 Loss of existing CRP acreage
or halting of new enrollments may also have effects on local economies where hunting
and fishing are important activities.
Commercial Activity on CRP Lands. The authorizing legislation for CRP
prohibited any commercial activity on CRP-enrolled land. The 2002 farm bill, however,
made amendments allowing for managed haying and grazing, including the harvesting of
biomass.9 Currently, managed haying means that once every three years after CRP
vegetative cover has been established, participants can harvest the cover, subject to an
approved CRP conservation plan and consistent with the conservation of soil, water
quality and wildlife habitat. This CRP provision could be the subject of some attention
in the 2007 farm bill where certain CRP-approved ground cover is also a desirable
feedstock for bioenergy development.
8 US Department of Agriculture, Economic Research Service Report to Congress. The
Conservation Reserve Program: Economic Implications for Rural America. September 2004.
9 See 7 CFR 1410.63

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