Market lures farmers from conservation

Development offers and Bush's ethanol initiative entice owners to leave a land protection program. 

By Tim Reiterman
Times Staff Writer

April 1, 2007

WOODLAND , CALIF. — Over the last two decades, the federal government has built the nation's largest conservation program for private lands by spending billions of dollars to encourage farmers to protect land that is prone to erosion and important to wildlife.

Now the Conservation Reserve Program is about to shrink by millions of acres as part of the Bush administration's plans for stimulating corn production for ethanol to reduce dependence on foreign oil.

Federal agricultural officials recently suspended enrollment in the program for at least a year. They also have been considering releasing farmers and ranchers from existing contracts that protect land already in the program, although it is unlikely they will do that this year.

The enrollment suspension comes as many California landowners feel increasing pressure to leave the conservation program and convert their property to more lucrative crops or home building.

The $2-billion-per-year federal program pays owners not to cultivate land that is prone to erosion, marginal for farming or significant for wildlife habitat.

Since its inception in 1985, the voluntary program has protected 2 million acres of wetlands, planted 1.7 million acres of grass and trees along streams and other waterways, reduced soil erosion by 450 million tons per year and increased the duck population by millions through improved habitat.

About 37 million acres of private land are enrolled — more than the total acreage of the national wildlife refuge system in the lower 48 states. But U.S. Department of Agriculture officials expect the program to decline by several million acres within the next few years as existing contracts expire.

Conservation groups say the administration's strategy is counterproductive. "Most of this land was enrolled because it is highly erodible or very environmentally sensitive," said Terry Riley, vice president of policy at the Theodore Roosevelt Conservation Partnership. "So why on Earth would we be encouraging people to get out of the program and put it into production, which encourages more runoff, fertilizer and pesticides?"

Moreover, conservationists argue that opening protected lands for corn production does not make sense because much of it is not suited for that crop. "What are we trying to accomplish here?" asked Jennifer Mock Schaeffer, farm bill coordinator for the Assn. of Fish and Wildlife Agencies.

In its proposed alternative-fuel rules, the Environmental Protection Agency said in September that raising corn on conservation lands that are erosion-prone, steep, or near lakes and streams posed risks to water quality.

Federal officials in California say most of the 150,000 acres of the state's enrolled land is steep, unirrigated and unsuited for corn.

USDA officials acknowledge that not all land in the program will be appropriate for corn production — and they say they will take steps to protect the most environmentally sensitive places.

"There is a very difficult balancing act that has to be played out over the next couple of years to adjust to this biofuels boom," said Keith Collins, USDA's chief economist. "If thought of as a seesaw, one seat would be historically tight crop markets, with ethanol driving tightness in corn…. On the other seat would be the environmental benefits of the [program], which are considerable."

Based on the contracts expiring in the next few years, agency officials project that about 11 million acres will leave the program by 2010 and potentially be available for crop production, development or other uses. However, they say some of that reduction would be offset when new general enrollments resume in either in 2008 or 2009.

The administration was hoping that plans for corn plantings would increase, and on Friday put the number at 90.5 million acres—the largest total since 1944.

Agriculture Secretary Mike Johanns on Friday said he did not anticipate releasing owners from conservation contracts this year, but said he would not hesitate to make future adjustments to USDA programs.

"There will be another decision point next year [on conservation contracts] because of the increase in ethanol demand," said USDA senior economist Larry Salathe.

In February, many agribusiness groups, including beef, pork and poultry producers, called on the USDA to permit withdrawal of conservation lands without penalty.

On Friday, some organizations expressed disappointment in Johanns' decision and said it was premature because weather and market forces could cut into corn production. "There is land in the CRP that can be farmed in a sustainable way," said Randall Gordon, vice president of the National Grain and Feed Assn. "We believe producers should have the option to bring that land out of the program."

Although California conservation lands are not expected to yield much corn, some owners may be tempted to withdraw land to grow wheat or other grains that are rising in price along with corn. And others may see money-making opportunities in growing products such as wheat straw, if scientists find a commercially viable way to make ethanol from them.

Ethanol demand has soared as California and other states have banned the gasoline additive MTBE, which boosts octane but pollutes water.

Hundred-car trains haul corn from the Midwest to two major ethanol plants in the Central Valley, but they produce only about 70 million gallons a year — a small fraction of the nearly 1 billion gallons Californians consume.

"California has not grown a great deal of feed corn over the years for any purposes, but that is going to change because of the price," said former state elections chief Bill Jones, chairman of Pacific Ethanol Inc.

Most of California's conservation acreage is on farms and ranches of San Luis Obispo, Siskiyou and Yolo counties. Much of that land historically produced wheat, barley, oats or other crops raised without irrigation. And hundreds of millions of dollars are now being poured into cellolosic technology that could turn the stems of such crops into ethanol.

Larry Gross, chief executive of Los Angeles-based Altra Inc., which has an ethanol plant in Tulare County, said conservation lands in California "would be a great place" to raise raw material for plants using new ethanol production techniques.

At the same time, the state's expanding real estate market is another powerful inducement for farmers in some areas to take land out of the federal conservation program.

In rural Yolo County, where rolling grasslands and oak woodlands are within commuting distance of Sacramento and the Bay Area, there is growing pressure both to build homes and plant vineyards, which can bring in more money than conservation payments that average about $30 per acre annually.

Four developers have approached Yolo County farmer Dave Long, who has almost half of his 250-acre farm in the program. "I think this will be covered with houses or commercial buildings, maybe in 15 or 20 years," said Long, who lives near a major freeway interchange.

This past year, owners of half the land eligible for contract renewals or extensions in the county opted to withdraw from the program — among the highest rates in the state. Federal district conservationist Phil Hogan estimated that acreage will drop from about 18,000 to half that in the next few years.

The family of former state Agriculture Secretary Richard Rominger has 250 acres of land enrolled in the program. On part of it, the Romingers have planted oaks and native grasses, and built a pond where geese flock.

"The importance of the program is the reduction of soil erosion," said Rominger, who also served as deputy Agriculture secretary in the Clinton administration.

Nevertheless, the Romingers may convert some of their protected acreage to vineyards, although with erosion controls. "There is a distinct possibility we would take some land out [of the program] and put grapes on it," said Rominger's son Bruce.

Growers are caught in a vise, said Yolo County agriculture commissioner Rick Landon. "They have development pressure driving up the cost of their land — and that is an incentive to not stay in farming, or to not stay in the program," he said.

tim.reiterman@latimes.com

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