Nixon’s Secretary of Agriculture Earl Butz famously advised farmers: “Get big or get out.” For some 40 years, people trying to make a living in agriculture faced that stark choice: Buy more land and machinery or make way for more motivated farmers.
For Havre, Mont., farmers Mike Velk and his father Richard, they found a third option: the Conservation Reserve Program (CRP) run by that very same USDA.
CRP is a federal program that pays farmers annually for setting aside a portion of their land for conservation. Contracts can last for up to 15 years and require a minimal amount of work by the farmer. For Mike Velk, the choice was simple.
“My father was thinking of retirement,” he said. “Getting an annual check is a secure thing compared to farming, because farming is so up and down.”
The reality the Velk family faced was far from unique in the Rocky Mountain West. The expansion of mechanization and use of chemicals had reduced the number of people needed to farm, but also increased the costs of production. Add to this the fact that commodity prices for wheat and grain were at an all-time low and many parts of Montana, Wyoming and Colorado have been in long-term droughts.
“These events had dramatically impacted rural communities,” said Mike Zook of the Farm Service Agency’s Hill County (Mont.) office. “There was a lot of pressure put on farmers by money lenders.”
Veltz faced the choice in taking over for his dad: Take out a loan to buy his father’s land and machinery or take the family business into a new direction.
“The costs of production for farming far outweighed the return,” Velk said. “CRP seemed like the smarter choice.”
The program began in the mid-1980s as an effort to stave off widespread soil erosion. In the 1990s, it expanded and now allows farmers to submit a proposal on what they will be conserving and how they will be doing it. This can include protecting natural resources such as groundwater, lakes, rivers and streams as well as wildlife habitats and populations.
“The program has morphed over time,” Zook said. “In the latest signup one of the main focuses was providing habitat for bees due to the recent colony collapse disorder.”
Velk’s choice offered the steady government check, but it also meant largely leaving the farming business, or at least greatly scaling it back.
In many ways, the Velks had already been moving away from farming. Mike Velk is now 57 years old and a driver for Coca Cola in Havre. He owns 320 acres he purchased from his grandfather and invested it all into CRP.
The government pays the landowner some $40 to $50 per acre, a sum that is not enough for Velk to live off of, but still supplies him a steady cash flow that will help him through to retirement.
Velk’s father, Richard, decided to sell off all his equipment and a small portion of the farm to get out of debt. He then filed the rest of the farm – some 3200 acres – under the CRP. The older Velk relies on CRP as a retirement plan of sorts and is his main source of income.
According to Zook, both Velkses’ situations are very common in the Hill County region.
“For some it [CRP] has turned into a retirement program,” Zook said. “They could continue to receive fairly large payments for inputs that were marginal in terms of labor.”
The program also extends its contract from generation to generation, meaning that if a family member who has a farm under a CRP contract passes away, the contract is handed down to the next of kin.
Its effect on farming has proven dramatic in eastern Montana, in particular. Montana has one of the largest concentrations of the program, although it operates in nearly every state in the country.
According to Zook, 25 percent of the arable land of the Hill County region, a wide swath of land from Cut Bank north to the Canadian border, was under the CRP.
“That number has now shrunk back,” Zook said. “We have approximately 265,000 (23 percent) acres involved in CRP now.”
The reduction of CRP land has been attributed to several changes: an increase in commodity prices, a drop in the cost of land and an easing of the drought conditions. These conditions have actually encouraged more farmers to sow crops, but some young farmers are struggling to find ideal land, since so much is tied up in the CRP and set aside.
Recognizing this problem, the federal government introduced a new program, the Transitions Incentive Program (TIV), to keep good land in cultivation. It’s designed so that if a farmer is planning to retire within the next five years, he can receive two additional years of payments beyond the CRP contract, as long as he sells that property to a new or beginning farmer.
While some are concerned that this initiative is a sign the government is moving away from conservation efforts, FSA Hill County agent Lisa Toth argues what is happening is not a scaling-back, but a changing of priorities.
“In the past, it was land (the government wanted to conserve), now they want it more for wildlife,” she says.
That shift in focus and a need to reign in the cost of CRP has prompted the agency to narrow its scope.
“They want small acreages for wildlife to cut the dollars down,” Toth says. “They are also going to re-evaluate rental rates, which have dropped.”
That may mean less money for future CRP contracts and a reduced focus on renting swaths of open prairie. It may also mean big changes as Congress hashes out the farm bill renewal in 2012.
ABOUT THIS SERIES: This week, New West is proud to run stories reported and written by University of Montana School of Journalism students who, with the help of American Public Media’s Public Insight Network, looked into the local food movement and agricultural shifts shaping the West. Journalism student Heidi Groover served as lead editor for this series. The project originated as part of the Green Thread initiative at UM.