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Conservation Reserve Program reaches 25 years

WILLMAR -- When the 1985 farm bill was signed into law on Dec. 23, 1985, our nation's farm economy was in the midst of a severe crisis. Farmland values were plummeting; burdensome supplies of grain, much of it owned by the government, were depressing grain prices; interest rates were at historic highs; and net worth values were in rapid decline.

Officially titled the Food Security Act, the 1985 farm bill was considered a historic piece of legislation developed to address some of the more severe problems that farmers were facing at that time.

Some of the programs initially authorized by the 1985 farm bill have been reauthorized by each subsequent farm bill, and remain in effect today. One such example is the Conservation Reserve Program.

Initially intended as a long-term acreage reduction or "set-aside" program, the primary purpose of the Conservation Reserve Program was to address two major problems at the time -- an oversupply of grain and an alarming rate of soil erosion, which then exceeded 3 billion tons per year.

By offering to enter into long-term rental agreements with farmers and landowners, the U.S. Department of Agriculture hoped to reduce the supply of grain, thereby boosting prices to a level where the government would no longer be forced to take possession or forfeiture of the farmer's grain in lieu of repayment of a price support loan.

But in addition, by targeting the most highly erodible soils and cropland, USDA could address the severe consequences of soil erosion by requiring that a long-term permanent cover crop be planted on the fields accepted for program enrollment.

At the time, very few would have anticipated that 25 years later the Conservation Reserve Program would still be in existence, or that it would become the most popular and successful voluntary conservation program in USDA's history.

Since its inception, the program has helped reduce soil erosion by 622 million tons, provided natural habitats for wildlife, restored more than 2 million acres of wetlands, and removed millions of tons of carbon dioxide from the air.

Nationally, there are 31.3 million acres currently enrolled in the Conservation Reserve Program, involving nearly 738,000 contracts. By participating, contract holders receive an annual rental payment and cost-share assistance to establish long-term conservation practices on eligible farmland.

Wool and mohair program deadline is Jan. 31

The 2008 farm bill authorizes marketing assistance loans and loan deficiency payments for wool and mohair producers who shear wool or mohair from live sheep and goats, or who sell unshorn lambs for slaughter.

Producers have the option of either placing their wool and mohair under a nine-month commodity loan, or requesting a loan deficiency payment. Unshorn pelts only qualify for a loan deficiency payment.

For producers who wish to put their wool under loan, the loan rate for graded wool is $1.15 per pound and $0.40 per pound for ungraded wool. The loan rate for mohair is $4.20 per pound.

The deadline to request a loan or loan deficiency payment on 2010 wool or mohair is Jan. 31.

If producers previously signed a form for 2010 production, the deadline to submit all sales receipts for sheared wool, mohair or unshorn pelts is also Jan. 31.

January interest rates steady to higher

The interest rate on commodity loans disbursed during the month of January will be 1.250 percent, unchanged from December's rate.

Farmers who received a commodity loan during calendar year 2010 will have the interest rate on their loans adjusted to 1.250 percent, effective Jan. 1. This rate will remain in effect for the remainder of the loan period.

The interest rate on farm storage facility loans approved during the month of January will be 2.5 percent for a 7-year loan term; 3.125 percent for a 10-year loan term; and 3.375 percent for a 12-year loan term.

USDA Service Centers closed Monday for holiday

The Martin Luther King Jr. holiday will be observed on Jan. 17. All USDA Service Centers will be closed for business Monday in observance of the federal holiday.

Wes Nelson is executive director of the USDA Farm Service Agency in Kandiyohi County.