The 1985 Farm Bill includes a Conservation Reserve Program (CRP) expected to retire up to 45 million acres nationwide of highly erodible, marginal cropland over the next 5 years. Landowners may retire cropland to trees, permanent wildlife habitat, permanent introduced grasses and legumes, permanent native grasses and legumes or combinations of permanent covers. Consolidated Farm Service Agency (CFSA) will reimburse up to 50% of the cost of establishing permanent covers and will pay an annual rental fee over a ten year period to participating landowners. Retired acreage may not be grazed, harvested or used in any commercial manner other than for wildlife lease.

A minimum of 10 acres or a whole field less than 10 acres may be retired if:

  1. The cropland has been cropped (or considered to have been cropped under 1981-85 CFSA land retirement programs) in two of the 1981-85 crop years and is still available for crop production and;
  2. The cropland is in Natural Resources Conservation Service (NRCS) land capability Classes II-V and eroding at 3 times the tolerable rate for the soil or is in capability Classes VI or higher or combination of the preceding factors. (2 times the tolerable rate may be acceptable where serios gulley erosion exists)

SCS will use soil maps, serial photographs, and on-site visits to determine land eligibility.

Qualifying land may be owned by corporations, partnerships, state or local governments or individuals. Leased land may qualify if the lessee can prove absolute control over cropping over the ten year retirement period and meets the criteria above.

Contact the county CFSA office for more details on eligibility for the CRP.

Why Trees?

Timber is a proven income producer. Even without the benefit of CRP cost sharing or annual rental payments, timber management can be proven to be a sound investment. If a landowner had reforested an average old field site 40 years ago, it could now be worth $1700 per acre or more at today's market prices. Trees planted under the CRP are likely to perform as well or better.

In addition, trees can be easily combined with the establishment of permanent wildlife cover under the CRP. The two practices may be cost-shared on the same acre. Wildlife leasing income combined with expected timber income makes an attractive investment option.

Costs of Establishment

A Planting trees on most old field sites is a low risk and relatively low cost operation. Many sites will require no site preparation or additional cost. On these sites, the total cost of seedlings and planting will average $65 per acre. Site preparation with herbicides or the establishment of cover crop or permanent wildlife cover on some sites combined with trees will increase this average cost to perhaps over $100 per acre total cost. By comparison, the average cost of establishing fescue as a permanent cover crop is $114 per acre, much higher than average tree planting cost.

CRP Cost-Sharing and Rental Payments

CRP will reimburse up to 50% of the cost of establishing trees or the other approved permanent cover types and also pay an annual rental payment over the 10 year contract period. Landowners set the amount of the annual rental by submitting a "bid" to the county ASCS office.

A relatively low amount would cover the costs of establishing and maintaining trees or other permanent covers over the 10 year period. Table 1 gives the amount necessary to cover a range of net establishment costs depending on the value a landowner places on money (interest rate). A $2 per acre per year maintenance cost (reflecting the approximate annual cost of maintaining a tree planting) is built into the table. If additional annual maintenance costs are anticipated to maintain cover crops or permanent wildlife habitat in combination with trees, simply add the additional cost to the table amount.

Table 1. Minimum annual amount to cover net cost of establishing and maintaining permanent cover for 10 year CRP contract period.
Net Establishment Cost Interest Rate
3% 6% 9% 12%
25 $4.93 $5.40 $5.90 $6.42
50 $7.85 $8.79 $9.79 $10.85
65 $9.62 $10.83 $12.13 $13.50
100 $13.72 $15.59 $17.58 $19.70
200 $25.45 $29.17 $33.16 $37.40

The appropriate amount in Table 1 should be considered in determining the bid. Add to that any lost production income from retired acres, and the cost of base reduction which applies to the retired acreage and farm (placing land into the conservation reserve reduces the crop base by the same proportion as the retirement is to total cropland). Anticipated future incomes from timber and wildlife leases could offset a portion of these costs and lost production income. NOTE: Acres already planted to trees or other approved permanent cover crops may still qualify for annual rental payments if they meet CRP cropping history and land class criteria.

Value of CRP Tree Plantings

After the 10-year CRP contract expires, landowners will own a valuable income-producing timber stand. Cost-share and annual rentals should have covered all costs of establishment and maintenance through the 10-year period. Table 2 estimates the per-acre value of old-field pine plantations at age 10 and the projected annual equivalent income that the stand will produce if the landowner maintains, manages and harvests the stand at the recommended age. Relative site qualities are given and an annual management cost of $2 per acre per year is incorporated into the table. Other assumptions include:

  1. Future incomes and costs discounted at a 5% discount rate;
  2. Average current standing loblolly pine timber prices of $121/MBF (increased at 2% per year) and $9.25 per cord (both currently and projected). White pine sawtimber is priced at $95/MBF increased at 2% per year.
  3. All figures are pre-tax.
Table 2. Value of 10-year-old pine plantations
Pine Species Region Site Quality Value At Age 10 Net Value of Future Income and Management Costs Expressed as Annual Equivalent Income
Loblolly Piedmont and Coastal Plain Good $1338.19 $89.82
Loblolly Piedmont and Coastal Plain Fair $923.80 $57.05
Loblolly Piedmont and Coastal Plain Poor $421.60 $26.35
White Mountains Good $1064.15 $75.51
White Mountains Poor $673.12 $47.76

Include Wildlife in CRP Tree Plantings

It is practical to integrate wildlife practices with other conservation practices to provide optimum habitat conditions for wildlife. This is the best way to use the CRP wildlife practices on eligible lands, since it is impractical and unnecessary to plant large acreages of wildlife food and cover.

There are two ways to integrate wildlife habitat with tree planting. One is through the use of a temporary cover crop of annual lespedeza while the trees are becoming established. While this is not a permanent cover, it will provide food for quail, rabbits, and other wildlife for several years. The second method is to include permanent food and cover plantings of shrub lespedeza, partridge pea, and sericea lespedeza in the tree plantation. Tree spacing should be no closer than 10 feet by 10 feet, where permanent wildlife cover is located (either along the edges of tree plantations or adjacent to native cover). Wildlife cover plantings should be 1/8 to 1/4 acre in size and rectangular in shape with shrub lespedeza and/or partridge pea in strips adjacent to sericea lespedeza. One wildlife planting per 5 acres is the minimum recommended. In addition, strips may be planted throughout the tree plantation at 20-25 row intervals. Strips should be 10 feet wide straddling the tree row with sericea on one side of the tree row and/or shrub lespedeza or partridge pea on the other side. Trees could be omitted from these strips to maximize wildlife benefit. One strip per 5 acres is the minimum recommended.

Leasing or selling of hunting rights is the one income-producing opportunity permitted during the 10-year contract period under the conservation reserve program, and this is a strong incentive for combining wildlife with forestry and other practices. Lease rates vary considerably depending on local demand for hunting opportunity offered. Deer hunting leases are now bringing $2 per acre per year in many places, and quail and dove hunting generally bring a higher price. Daily fees up to $5 or even $10 are not unusual in some locations. Some local inquiries concerning prevailing rates in your locality are advised when attempting to evaluate income opportunities. It is expected that both demand and compensation rates for hunting will increase in the future. In most situations, incorporating wildlife practices along with trees or other cover crops enhances wildlife populations and income opportunities at little additional cost, and may permit the landowner to submit a more attractive bid on his acreage.

The practices recommended here were prepared jointly with the N.C. Wildlife Resources Commission.

Summary

Trees are an excellent choice for permanent cover under the Conservation Reserve Program. Cost share payments and annual rental payments over the 10 year contract period can cover the costs of establishment and maintenance. At the end of the 10 year period, landowners will own a valuable stand which will continue to earn from $25 to over $90 annual equivalent income per acre if proper management and maintenance continues until the recommended harvest age. No other permanent cover provides this income potential under CRP.

Income from wildlife leasing is allowed under CRP. Combinations of tree planting and wildlife cover can be established and both may be cost-shared on the same acres. Combining wildlife and tree planting practices is an excellent investment on many acres retired under CRP.

Consult the local CFSA, NRCS, County Extension, NC Forest Service, or Wildlife Resources Commission office for more information on sign-up, cost-share, practice selection, and bidding for annual rental payments.

Written by

Published By

Published in October 1995

Learn More About…