High crop prices a threat to nature?

ZUMBROTA, MIN. -- The Indian grass that Larry Thomforde planted 15 years ago is up to his chin now -- tall gold spikes that sway in the sun as his dog, Gwynie, crashes through the field.

A year from now it might all be gold of another kind.

Thomforde, like thousands of other Minnesota farmers, is looking a painful decision square in the eye: cleaner water or the irresistible temptation of corn at stratospheric prices of $6 to $8 a bushel.

Next fall, Thomforde's 50 acres of native grassland, idled under the federal Conservation Reserve Program (CRP), could go under the plow. Renting it out or planting corn would pay him much more than the government pays him to keep it in grasses.

"I don't necessarily need the money," said Thomforde, 75, who farms 240 acres near Zumbrota. "But my personality is such that I am not going to leave it in CRP if I am losing $200 per acre."

Experts say 2012 is likely to be a tipping point for conservation across the Upper Midwest. Some 300,000 acres in Minnesota -- one fifth of the land now set aside through the CRP -- will be up for grabs as federal contracts come up for renewal.

In the following years, millions more acres in Minnesota, North and South Dakota -- critical prairie and wetland habitat for a fourth of the nation's migratory birds -- may also fall to the plow as farmers choose between leaving it to nature or converting it to cash crops. Many predict that nature will be the loser.

And yet all the financial incentives for farmers -- who control half of Minnesota's land -- are poised to move in the opposite direction.

CRP is a case in point. The 25-year-old program pays farmers a nominal amount per acre to idle environmentally sensitive land -- hilly slopes that erode quickly, stream banks, wildlife habitat. It's by far the state's leading land conservation program, paying farmers $100 million per year.

Keeping those acres out of production has reaped enormous environmental benefits. CRP has increased the number of ducks in the Prairie Pothole Region of Minnesota and the Dakotas by 2 million a year, according to the U.S. Department of Agriculture. Nationally, between 2004 and 2007, CRP lands retained 1.86 billion pounds of nitrogen, 420 million pounds of phosphorus and 1.8 billion tons of soil -- much of which would have found its way into the Mississippi River and the so-called dead zone in the Gulf of Mexico. It also reduced carbon dioxide emissions by 200 million tons. And that was just four years.

But today, with soaring grain prices, most CRP payments don't come close to competing with cash crops.

Yet even if corn prices fall again, the squeeze is likely to get worse. Facing intense pressure to trim the federal deficit, Congress is wrestling with a new farm bill that could reduce spending by $23 billion over the next decade. Every federal program designed to promote rural conservation is likely to take a hit. Just last week, leaders of the House and Senate Agriculture committees proposed reducing CRP from its current level of 32 million acres nationally to 25 million. Just a few years ago, it was 40 million.

Steve Taff, an economist at the University of Minnesota, said the financial equation is stark: As global demand for food, meat and energy rises, society increasingly values corn and other crops over clean water.

"We are not willing to pay for reduced water pollution, not that much," he said. "Or reduced carbon. Or habitat."

Stewardship grows costly

The Conservation Reserve Program was created in 1985, when corn prices were low. In fact, it was created partly to persuade farmers to cut production to reduce grain surpluses. Over time, it evolved more toward environmental goals. Each year the Agriculture Department sets a goal for land that meets certain environmental benchmarks; payments to farmers are tied to environmental benefits and local land rental rates.

In 2007, Minnesota had 1.8 million acres enrolled in CRP, among the most of any state, plus a few hundred thousand in other state and federal conservation programs -- or about 8.6 percent of the state's total agricultural land.

But advances in farming practices, new federal policies and -- most importantly -- rising demand around the world have changed the equation. Agricultural experts say that even marginal land can now be profitable with the expansion of federal insurance programs that protect farmers from low yields and low prices. Add high commodity prices to the mix and, Thomforde said, the cost of environmental stewardship starts to look pretty steep.

On Thomforde's rolling land near the Zumbro River, the acres devoted to CRP are planted in native grasses. Some are in grass strips that break the flow of water across bare soil, another chunk is along the side of a steeply sloping hill and yet another protects a creek.

"Without this grass, the soil would end up in Lake Pepin," he said one recent morning.

A former biology teacher, Thomforde knows the native plants by name -- wild indigo, compass plant, little bluestem. It's home to bobolinks, coyotes and deer. When his grandkids come to visit, they pick wildflowers and picnic in the tall grasses. "My kids would be mad," he said. "We enjoy the wildlife a lot."

The government pays him about $90 per acre to keep it that way. But today, Thomforde said, he could rent the land for about $200 per acre. If he farms it himself, he can clear $300 per acre at current prices.

Slow decline

Some say the outcome is still an open question. Warren Formo, executive director of the Minnesota Agricultural Water Resource Center, an industry group, said the economics cut both ways. For many farmers, the cost of farming CRP land outweighs the potential profit, he said.

"Farmers will look at the same set of economics and make a different choice because it fits their farm," he said. And many farmers have always chosen the environment over economics, said Dave Mulla, an agricultural economist at the U.

Still, the downward creep in conserved land has already begun. Since 2007, the number of acres in CRP has declined to about 1.5 million in Minnesota. That's partly because farmers chose to do something else with the land and partly because of changes in program rules.

Minnesota has managed to shift some of the most sensitive land to other conservation programs. As a result, the total amount of protected farmland in the state has remained at about 8 percent, said Tabor Hoek, private lands coordinator for the state Board of Water and Soil Resources.

"No statewide program will fill that gap," he said.

Many say the farm bill now wending its way through Congress will undercut conservation in ways beyond CRP. Leading lawmakers have proposed expanding subsidized crop insurance programs that protect farmers from low yields and falling commodity prices. But, said Bobby King of the Land Stewardship Project, that will only increase the incentives to put environmentally sensitive land into crops.

"We need to pay farmers for producing environmental and habitat benefits," he said.

From the top of his hilly farm near Zumbrota, Thomforde has a pretty clear-eyed view of the world. Global demand and population growth drive his decisions, he said, and the people around Lake Pepin and on down the Mississippi will pay the environmental price. But it's up to everyone, urban and rural, to decide what kind of landscape they want in the next 100 years, he said.

"We need to decide whether or not CRP is worth keeping," he said.