scooter
04-28-2008, 01:45 PM
PUBLICATION: National Post
DATE: 2008.04.10
EDITION: National
SECTION: Financial Post
PAGE: FP8
BYLINE: David Streitfeld
SOURCE: The New York Times
WORD COUNT: 563
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Conservation no longer profitable; Spike in food prices puts value back in cropland
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Out on the farm, the ducks and pheasants are losing ground.
Thousands of farmers are pulling their fields out of the government's biggest conservation program, spurning guaranteed annual payments for a chance to cash in on the boom in wheat, soybeans, corn and other crops. Last fall, they took back as many acres as are in Rhode Island and Delaware combined.
Environmental and hunting groups are warning that years of progress could soon be lost, particularly with the native prairie in the Upper Midwest. But a broad coalition of baking, poultry, snack food, ethanol and livestock groups say bigger harvests are a more important priority than waterfowl and other wildlife habitats.
They want the government to ease restrictions on the preserved land, which would encourage many more farmers to think beyond conservation.
Kerry Dockter, a rancher in Denhoff, N.D., has about 450 acres of grassland in the program. "When this program first came about, it was a pretty good thing," he said. "But times have definitely changed."
The government payments, Mr. Dockter said, "aren't even comparable any more" to what he could make by working the land. He plans to devote some of his conservation acres to growing feed for his cows and some to grazing. He might also lease some land to neighbours.
For years, the problem with cropland was that there was too much of it, which kept food prices low to the benefit of consumers and the detriment of farmers.
Now, because of a growing global middle class as well as federal mandates to turn large amounts of corn into ethanol-based fuel, food prices are beginning to jump. Cropland is suddenly in heavy demand, a situation that is fraying old alliances, inspiring new ones, and putting pressure on the Agriculture Department, which is being lobbied by all sides without managing to satisfy any of them.
Born nearly 25 years ago in an era of abundance, the Conservation Reserve Program is having a rough transition to the age of scarcity. Its 35 million acres -- about 8% of the cropland in the country -- is the big prize in this brawl.
Groups like Ducks Unlimited and Pheasants Forever want the government to raise rental rates to keep the same amount of land in the program or even increase it. Jim Ringelman of Ducks Unlimited said, "There are overriding environmental issues here."
The bakers and their allies have a different set of overriding issues: high commodity prices. The rising cost of feed is hurting ranchers, the rising cost of corn is hurting ethanol producers and the rising cost of wheat is hurting bread makers.
"We're in a crisis here. Do we want to eat, or do we want to worry about the birds?" asked J.R. Paterakis, a Baltimore baker.
The bakery owned by Mr. Paterakis, H&S Bakery, produces a million loaves of rye bread a week. The baker said he could not find the rye flour he needed at any price. That gives him two unwelcome options: close down half of his operations starting in July, or experiment with a blended flour that will yield something different, and possibly less-than-authentic rye bread.
Such problems were never contemplated when the Conservation Reserve was conceived as part of the 1985 Farm Bill. Participants bid to put their land in the program during special sign-ups, with the government selecting the acres most at risk environmentally. Average annual payments are US$50 an acre. Contracts run for at least a decade and are nearly impossible to break -- not that anyone wanted to, until recently.
DATE: 2008.04.10
EDITION: National
SECTION: Financial Post
PAGE: FP8
BYLINE: David Streitfeld
SOURCE: The New York Times
WORD COUNT: 563
--------------------------------------------------------------------------------
Conservation no longer profitable; Spike in food prices puts value back in cropland
--------------------------------------------------------------------------------
Out on the farm, the ducks and pheasants are losing ground.
Thousands of farmers are pulling their fields out of the government's biggest conservation program, spurning guaranteed annual payments for a chance to cash in on the boom in wheat, soybeans, corn and other crops. Last fall, they took back as many acres as are in Rhode Island and Delaware combined.
Environmental and hunting groups are warning that years of progress could soon be lost, particularly with the native prairie in the Upper Midwest. But a broad coalition of baking, poultry, snack food, ethanol and livestock groups say bigger harvests are a more important priority than waterfowl and other wildlife habitats.
They want the government to ease restrictions on the preserved land, which would encourage many more farmers to think beyond conservation.
Kerry Dockter, a rancher in Denhoff, N.D., has about 450 acres of grassland in the program. "When this program first came about, it was a pretty good thing," he said. "But times have definitely changed."
The government payments, Mr. Dockter said, "aren't even comparable any more" to what he could make by working the land. He plans to devote some of his conservation acres to growing feed for his cows and some to grazing. He might also lease some land to neighbours.
For years, the problem with cropland was that there was too much of it, which kept food prices low to the benefit of consumers and the detriment of farmers.
Now, because of a growing global middle class as well as federal mandates to turn large amounts of corn into ethanol-based fuel, food prices are beginning to jump. Cropland is suddenly in heavy demand, a situation that is fraying old alliances, inspiring new ones, and putting pressure on the Agriculture Department, which is being lobbied by all sides without managing to satisfy any of them.
Born nearly 25 years ago in an era of abundance, the Conservation Reserve Program is having a rough transition to the age of scarcity. Its 35 million acres -- about 8% of the cropland in the country -- is the big prize in this brawl.
Groups like Ducks Unlimited and Pheasants Forever want the government to raise rental rates to keep the same amount of land in the program or even increase it. Jim Ringelman of Ducks Unlimited said, "There are overriding environmental issues here."
The bakers and their allies have a different set of overriding issues: high commodity prices. The rising cost of feed is hurting ranchers, the rising cost of corn is hurting ethanol producers and the rising cost of wheat is hurting bread makers.
"We're in a crisis here. Do we want to eat, or do we want to worry about the birds?" asked J.R. Paterakis, a Baltimore baker.
The bakery owned by Mr. Paterakis, H&S Bakery, produces a million loaves of rye bread a week. The baker said he could not find the rye flour he needed at any price. That gives him two unwelcome options: close down half of his operations starting in July, or experiment with a blended flour that will yield something different, and possibly less-than-authentic rye bread.
Such problems were never contemplated when the Conservation Reserve was conceived as part of the 1985 Farm Bill. Participants bid to put their land in the program during special sign-ups, with the government selecting the acres most at risk environmentally. Average annual payments are US$50 an acre. Contracts run for at least a decade and are nearly impossible to break -- not that anyone wanted to, until recently.