USDA Will Allow Transfer of Certain CRP Land to New Farmers, Facilitating Farm Transition Planning

On Dec. 29, 2016, the U.S. Department of Agriculture (“USDA”) announced that beginning in January 2017 it will offer an opportunity for early termination of certain Conservation Reserve Program (“CRP”) contracts. Technical teams at USDA will determine which properties can terminate from the program with little impact on the overall conservation efforts. Detail of the new program are expected to be available in January 2017.

In 2015, USDA formed a Land Tenure Advisory Committee, which was asked to identify ways USDA could modify its programs and regulations to help new farmers with access to land, capital and technical assistance. This early termination program was implemented based on recommendations from that committee.  According to USDA, access to land remains the biggest barrier for beginning farmers. 

Normally if a landowner terminates a CRP contract early, he or she is required to repay all previous payments plus interest. However, the new policy waives this repayment if the land is transferred to a beginning farmer. This should facilitate farm transition planning by making it easier for farmers to transfer land to the next generation of farmers.

CRP enrollment is now close to the cap of 24 million acres. Therefore, the early termination program will also allow USDA to replace land that is now ready to be productive with other land that has a higher conservation value. Eligible land coming out of CRP will also have priority enrollment opportunities with CRP Grasslands, the Conservation Stewardship Program or Environmental Quality Incentives Program.