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Secretary Ed Schafer of the U.S. Department of Agriculture (USDA) has announced that farmers will not be released from their Conservation Reserve Program (CRP) contracts without penalty, due to favorable crop and weather forecasts, upward pricing trends in grain markets, and other factors. The USDA has been under pressure to allow farmers to opt-out of the CRP program without penalty in response to losses caused by recent flooding in the Midwest.
According to Schafer, the amount of land enrolled in the program is already on its way to being reduced, thanks to a provision in the 2008 farm bill that lowers the cap on the total number of acres allowed in the program. More than 2 million acres must be removed, and over a million acres are protected in contracts set to expire on September 30. Another 3 million acres will be up for grabs in 2009, and over 4 million acres in 2010. Re-enrollment is unlikely with the soaring demand for corn.