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As Prices Rise, Farmers Spurn Conservation Program - New York Times

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Business

The Food Chain

As Prices Rise, Farmers Spurn Conservation Program

Will Kincaid for The New York Times

A field that has been in the Conservation Reserve Program in Sterling, N.D., for the last decade is plowed and ready to be put into production again.

By DAVID STREITFELD Published: April 9, 2008

Out on the farm, the ducks and pheasants are losing ground.

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A Struggle for Land

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Melissa Lyttle for The New York Times

Paul Devlin works at a bakery in Tampa, Fla. The bakery’s owner said the price he paid for flour had doubled since October.

Thousands of farmers are taking their fields out of the government’s biggest conservation program, which pays them not to cultivate. They are 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 habitats for waterfowl and other wildlife. 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 anymore” 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 neighbors.

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 directly 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 percent of the cropland in the country — are 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. While offering more money to farmers might be a difficult sell in a year of record farm profits, 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 JR Paterakis, a Baltimore baker who said he was so distressed at a meeting last month with Edward T. Schafer, the agriculture secretary, that he stood up and started speaking “vehemently.”

The Paterakis bakery, H&S, 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 half of his operations starting in July, or experiment with a blended flour that will yield a 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 $51 an acre. Contracts run for at least a decade and are nearly impossible to break — not that anyone wanted to until recently.

“Older farmers put their land in the program rather than renting to a younger farmer or selling,” said Dale Schuler, who grows wheat in Fort Benton, Mont. That made it difficult for farmers who wanted to expand as well as farm equipment dealers, supply co-ops and other services, which suffered declines in business.

“It’s certainly been a polarizing issue,” Mr. Schuler said. “Half the people love it and half the people hate it.”

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