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CREP incentives increase, producers hesitant to enroll

Posted: Wednesday, Jul 10th, 2013

Courier staff writer

VALLEY — Incentives to take a portion of the Valley’s cropland out of production to restore the aquifer continue to grow, but to date only one Alamosa County producer has pursued a Rio Grande Basin Conservation Reserve Enhancement Program (RG CREP) contract.

RG CREP is an option under the Conservation Reserve Program (CRP) that agricultural producers can voluntarily use to establish conservation practices on their land, providing landowners and operators financial and technical assistance. Under CREP, participants receive annual irrigated rental payments, cost share and incentive payments for enrolling irrigated cropland into contracts and installing the approved conservation practices. RG CREP is asking Valley producers to voluntarily dry-up cropland permanently or for a 14 to 15 year period.

Last September, during the 2012 Colorado Water Conservation Board Statewide Drought Conference, U.S. Agriculture Secretary Tom Vilsack and Colorado Commissioner of Agriculture John Salazar announced the RG CREP to help conserve irrigation water and reduce ground water withdrawal from the Rio Grande Basin. The federal, state and the Rio Grande Water Conservation District (RGWCD) Subdistrict No. 1 (subdistrict) partnership is approved for the enrollment of up to 40,000 acres to insure there is “recovery and maintenance of groundwater storage in the unconfined aquifer at a historically sustainable level and assist in the effort to permanently maintain the Hydraulic Divide.”

Enrolling eligible cropland will reduce irrigation water consumption approximately 12 percent within the boundaries of the subdistrict, according to RG CREP documents. RG CREP will also decrease agricultural

chemicals and sediments entering the Rio Grande and its tributaries; conserve water and energy and reduce soil erosion, in addition to improving wildlife habitat through establishing native grasses and forbs and other permanent covers known as cover crops.

RG CREP has one of the highest USDA irrigated rental rates in the nation. Payments include $175/acre/year through the term of the contract plus a United States Department of Agriculture (USDA)/ Farm Service Agency (FSA) cost-share of 50 percent of the total cost of re-vegetating a cover crop on the retired acres, totaling about $100 an acre.

The estimated USDA/FSA costs, should all 40,000 subdistrict acres enroll, total $109,000,000, according to reports. The subdistrict will pay at least $27,345,565, and $4,000,000 will be spent on in-kind contributions. All costs combined, the program cost roughly $140,345,565.

The Subdistrict Board of Managers approved additional incentives in a close 5-4 vote earlier this month. The enriched incentives, which are funded through the CREP payments first and then variable fees if needed, include annual rental payments, bonuses for owners electing to permanently retire irrigation and wells and additional bonuses for lands located within the focus area, a three to four mile swath between Monte Vista and Del Norte north of the Rio Grande, where 80 to 85 percent of the river depletions are occurring.

See the sidebar for the subdistrict’s incentive packages.

Producers hesitant to enroll

Despite the money on the table, the FSA, the agency responsible for reviewing CREP contracts and compliancy, has not inked any concrete deals.

FSA County Executive Director Russell Valdez said in an email on Tuesday he has talked with a handful of individuals about enrolling for CREP without much follow up since the program officially opened in May.

“I think there are a variety of factors as to why producers are taking a ‘wait and see’ approach,” Valdez said. “Some people I have talked to feel the CREP rental rate (including the additional incentives from the subdistrict) are not high enough. People think they can make more money farming even with the subdistrict’s pumping fees.”

The subdistrict’s fees are as follows: $75 per acre-foot of water, a $5 per acre administration fee, and the CREP fee is $2 per acre.  

On Wednesday, Valley premium large alfalfa squares market price was between $230 and $240, according to the Colorado Hay Report. Since the beginning of the summer, some producers have seen upwards of $300 a large square, and a steady barley market is swaying producers to keep planting.

Having to enter into an agreement with the subdistrict for a minimum of 15 years also has producers concerned, he said, and the uncertainty of the surface water use credits during the terms of the contract. 

If producers continue to pump, however, these resources could dwindle. The subdistrict’s numbers continue to decline precipitously.

On March 15, Gov. John Hickenlooper signed Senate Bill 13-075 into law. It prohibits reductions in the amount of water allocated when a user has undertaken conservation measures like CREP. Sponsors, including the Valley’s Senator Larry Crowder, introduced the bill because they believed farmers are implementing better irrigation systems and techniques and they should not have their water allocations reduced as a consequence, particularly in drought situations.

“Under CREP, the subdistrict will continue to give surface water credit for the water producers bring into the subdistrict boundary,” said RGWCD General Manager Steve Vandiver in an interview on Tuesday. “The water must be recharged and not used for irrigation purposes.”

Valdez added there is also a fear that an adequate cover crop might be difficult to establish since supplemental irrigation water applications - a maximum of 18 inches total - is only applied during the first 36 months.   

“The area receives only seven inches of precipitation per year,” Valdez said. “The question I hear is this: What happens if my stand fails in the middle of the contract and I have no way to re-establish cover? Would I have to pay the money back?”

FSA County Executive Director Kevin Reeves said in an interview on Tuesday if a stand failed, the FSA county committees would consider each situation on an individual basis, and issue penalties only after considering if the failure was a case of neglect, an act of God or other factors.

“The county committees want to see everyone succeed, but there are what-ifs,” Reeves said in an interview on Tuesday. “The Valley is unique because of its desert conditions. No other CREP in the nation is an arid environment. We are plowing new ground. The folks that are thinking seriously about conservation have to step up.”

Ongoing native vegetation trials have been taking place for a number of years in the Valley. According to a September 2012 Natural Resources Conservation Services (NRCS) report, a Hooper-based, multi-agency project concluded vegetation might be established “with limited irrigation” if certain planting criteria are followed. The report suggests native vegetation should be planted into a weed-free seedbed; the mix should include forbs and shrubs for wildlife benefits and diversity; and both early and late successional plant species. Recommended forbs and shrubs include sage varieties, winterfat, alfalfa and sweet clover, and plant species include western wheatgrass, Indian ricegrass and blue grama.

On August 9, the San Luis Valley Soil Health Tour will visit the trials in Hooper, focusing on a two-year-old Indian ricegrass plot cultivated without irrigation and established CREP plots designed for the area.

For more information on subdistrict incentives payments, visit www.rgwcd.org or call (719) 589-6301.

For more information on landowner and CREP land eligibility, please call or visit a local FSA office.

For more information about the soil health tour in August, call 589-?6432 X137 or email Christina.Barnes@co.usda.gov.

Subdistrict incentives

* $22/acre/year for a 15 year water retirement commitment

* $33/acre/year for a 15-year water retirement commitment for land that is within the bonus zone.

* $44/acre/year for 15 years for a permanent water retirement commitment

* $66/acre/year for 15 years for a permanent water retirement commitment for land that is within the bonus zone

The subdistrict’s additional bonuses include:

* $10/acre/year for 15 years for land located in the bonus zone.

* $100/acre one-time payment for land within the bonus zone

* $200/acre one-time payment for permanent water retirement.

* $300 per acre for permanent well retirement, and $200 per acre for a 15-year well retirement for CREP contracts completed no later than close of business on October 1st, 2013

* $200/acre for permanent well retirement, and $100 for a 15-year well retirement for CREP contracts completed no later than close of business on January 1st, 2014

* $100/acre for a permanent well retirement for CREP contracts completed no later than close of business on April 1st, 2014.

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