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Discussion Starter · #1 ·
I was hoping if someone is or has participated in this program they could clarify something for me. The question arose tonight and I can't call the FSA until Monday. I am just slightly impatient - sorry.

We were planning to move to our Grandmother's wheat farm next spring in Reno County, Kansas. Part of the property is in the CRP and we were going to pull it out at the end of the contract which is Dec 31, 2008 so we could build a home and put livestock on the property.

My Grandmother was talking to some USDA agent today (in a different county) and he informed her that if she pulled it out, she would have to pay back 10 years worth of fees. (Note: She is not the one who handles this type of business. It is a tenent farmer who I can't get a hold of either.)

Is this true? Can the property never be released from the program? We just don't have that type of money. Heck, we would stay here in Virginia if we did.

Thanks for any help you can give.

Sarah
 

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As I understand the program, you do have to pay back the land you pull out of the program.

However you do not need to pull out all the land out of the program.

Make sure you do contact the FSA office, as things may have changed with the new farm bill that was passed.
 

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Discussion Starter · #3 ·
do you know about any payback once the contract ends? They keep extending the program on her. The original program was to expire in '07 but now it has been extended until 2010. Also has voiced that once she pulls some or all of the property out of the CRP it would be almost impossible to put it back in.
 

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What travlnusa said sounds correct. You shouldn't have to pay back the money UNLESS you take the land out early according to the contract in place OR a new contract that might have been made by renewal of the old contract. There's a fee for taking the land out, regardless of number of acres. My fee was something like $56 for just 4.3 acres. The previous owner had renewed their contract so I was stuck with it too. So here's what I did:
1. Within 60 days of expiration of the original contract, I wrote a letter to the county FSA committee asking to terminate the RENEWAL contract that was to start October 1, 2008. The letter was to be reviewed by that county committee.
2. After the county committee meeting, FSA did not reply in writing so I called FSA to be sure it was OK to work up the land; they said OK.
3. In early October I started farming the land.
 

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You would have to renew the contract for it to continue. If the contract is up then you would not be liable for any back payments. I would suggest contacting them just in case though just to cover your bases.

Here is where it can get "sticky", the tenant. When you say "they" keep extending the contract on her it sends warning bells off my way. I do not know the tenant and can only speculate.

The contract does NOT renew automatically, someone MUST sign a paper. Did your Grandma sign papers to this effect? If not I would suspect that there is a power of attorney or some special paperwork signed so that the tenant can handle this kind of paperwork. It is common to have a tenant handle SOME usda paperwork for general farm program payments. That can be where a "miscommunication" occured between the 3 parties.

Long story short it is not particularly common practice for a tenant farmer to have rental "control" over crp acres. I do not know your Grandmothers lease agreement or what it entails BUT her tenant should not be collecting payments for her crp acres since he is not farming them. I hope it is simply a case of him helping her with paperwork and her getting the payments vs. her being taken advantage of.

Sounds to me like you may have a treasure hunt for paperwork at the usda office to sort out how everything has been handled and by whom.
 

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You need to repay some money - perhaps 10 year's worth - if you 'pull out' of the program early.

If the contract expires, then it is done & over - no longer under CRP, nothing to repay or 'pull out of'.

If a contract is renewed, then you need to live up to the new contract as you did with the old one.

I think you have several conflicting terminology going on here - if you asked the agent what happens when you 'pull out' of CRP - sure you will be told you need to repay. But if the contract runs out, then the program is done & the land is yours (grandma's I guess in this case) to use as she wants.

Be sure you understand where things stand before you go ahead & do something with the land.

--->Paul
 

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Discussion Starter · #8 ·
Thanks everyone! I had a feeling she misunderstood what the agent told her. She basically made it sound like the CRP could never end without us paying a penalty. I love my Grandmother, but she is sort of clueless as to what is going on with the property. Hopefully the tenent is not taking advantage of her.

I am having her fax me the paperwork to go through and I will be there for two weeks around Thanksgiving to hopefully get this all figured out. Zoning regulations have changed here in Virginia that have forced us to close our farm so we are anxious to move.

Thank you so much. I knew this group would have answers! Now I don't have to spend my weekend worrying.

Sarah

PS I will be back soon with questions about wheat! I run a dairy herd of goats so this grain stuff is all new to me!
 

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Sarah, in addition to the CRP you will probably want to learn what the rental agreement is to the tennent on the rental ground that is not in CRP if you are not already aware of it. I believe Farm Services Agency will have a record of what kind of an agreement is on file since it affects payments.
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Wheat--as you probably know most of Kansas is planted with hard red winter wheat. Most if not all of Reno County has now been planted. Reno County is most generally 1st or 2nd in wheat production for the state of Kansas.

As you probably know from looking at maps Reno County is one of the larger counties in Kansas. Do you mind my asking what part of the county you will be living in? I live in Hutchinson and know much of it from having worked at the county noxious weed department for 3 years.

Welcome to Kansas when the time comes. There are a lot of Kansas folk on the forums. You are welcome to send me a PM if you would like for me to start sending you Web links pertaining to the area or other information.

Again, welcome neighbor. Windy in Kansas
 

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is to go directly to the FSA office, take a lot of patience, and wade through the paperwork, etc. There are a couple other programs that could be involved, CSP for one that the tenant and probably your grandma get a payment for doing the right thing on the land. Some states have programs that exempt property tax on the ag land, in Mich it is called PA119. That is an ongoing program and you do have to pay back some of the taxes you have saved if you remove ag land from the contract. If it is in fact in CRP and the contract is expiring you can remove all or an amount of acreage from the program before you offer it up for another 10 years. The programs can be confusing to the layman, just go there in person and ask lots of questions.

Warning, some of the people who work in FSA offices can be really rude and condesending, especially when you don't know what your asking. I'd say also get ahold of the renter, now, and ask some questions. Sometimes they have control over the land they work, depending on what your grandma agreed to, I'm sure your going to want your new neighbors to welcome you, jerking the land out from under the renter can cause lots of problems. Remember, if the renter thinks he will be in control of the land he will be making plans for next year now. Years ago when the CRP program was first put into effect the tenant of the property could make decisions about it and received a percentage of the payment. If grandma signed the papers with this in place you will need to notify the tenant of your plans.
 

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The tenant more than likely has the land rented for next year if he was not notified by now.In Iowa you have to end a land rent deal by September first by letter or the land is the tenants for the next year.I would talk to the tenant and get the information on this arrangement.You will have to get the information on this property from the FSA office.I would go to the FSA web-site in the meantime and see what some of the programs are.You have a lot of things you will have to learn here to save yourself money and trouble.
 

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Discussion Starter · #12 ·
Thanks for all of the advise. I will definitely look into it all. I grew up with the other side of the family who were dairy farmers in NY so first, wheat is completely new and second, Kansas is completely foreign to me. I have only been there once and it was for a funeral.

Windy - the farm is in Loda Township barely over the Kingman border. I would be extremely greatful for any info you could send my way. I will pm you with my e-mail address.

I didn't explain the situation too well. My fault. Two-thirds of the property is in wheat and we are not touching that. The tenent isn't really a tenent from my understanding. He is plants and harvests the wheat and gets a percentage of what my grandmother sells it for. Almost like a sharecropper, but again, something I will deal with in two weeks. My father has been pestering us to use the 1/3 in grass for the past year so I am pretty sure it won't interfer with the tenent's agreement.

It has been difficult getting the info over the phone. My family were homesteaders in Kansas during the landrush and this property was inherited from my great-grandfather. My grandmother just keeps saying well that is what my grandfather and father did. Ugh! For such an intelligent woman, I am not sure why she has never educated herself on this.

My uncles are mystified that I have gotten this much info from her. Since my grandfather's death when she took over the operation, she hasn't shared any info with them. So I am much further along, but she is getting up there in years and thinking about passing the farm on. I should add that she and my great aunt are excited about us "coming home" since none of their children even live in the state of Kansas. We are not forcing anything on her. We are not intruding. It was her idea. I don't want anyone thinking we are wrestling an elderly lady out of her property. :)

Thank you again, Sarah
 

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You'll have to take your grandmother with you to the FSA office to find anything out due to the new privacy laws. If she has the contracts to look at that would help you get some idea of whats going on. It will jkust depend on the office how much trouble it is to deal with them.

This is for anybody dealing with the FSA power of attorney isn't any good with them unless their paper work is filled out. Found that out when a landlord was injured and in the nursing home. The son had to get two or three docters to sign off that he wasn't able to make decissions for himself. The son is an estate attorney so everything was done right.
 

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The CRP (Conservation Reserve PROGRAM) was intended to divert row cropping (ie annual planted crops) from HEL( highly erodable land) or from wetlands.

I believe (I've been out of the gooberment loop for a while) that CRP land had to be planted to a "permanent" crop (ie alfafa or such).

If you keep it as such, there should be no problem.
 

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Yep you are going to need Grandma or her power of attourny to get any specific info from the county USDA office AND they are the only ones that can tell you what they will do because frankly they tend to be their own little kingdoms.
DO NOT GET IN A WAR WITH THEM!
They can make your life misreable, ask them for favors and thank them for every tiny thing they do. Acknowlage thier power without seeming to do so and you will get along fine and realise some day they realy are your friends.
 

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CRP acres need to have the weeds controled, and be planted to a native type of plants - not alfalfa. The govt is renting the land for wildlife, rather than for crops. They have encouraged trees, in the hope that once the contracts end, it will not be worthwhile returning this land to crop production - free crp land for the govt this way.

Most CRP land is marginal - wet, steep, sandy, etc. and is not highly productive land. Typically would make a good pasture or so, only makes poorer crop land. Be aware of what you are starting with - this will not be prime ag land.

Many states have companion programs that work with CRP. Here in MN, RIM is one - this had an option to place the land in perminent native grasses forever, for a lump sum payment. There is no farming or grazing it.

Equip is another program.

CSR is yet another.

Some of these programs intertwine with each other, & are dependent on each other. It is remotely possible that the farmer renting the land is dependent on the CRP land to qualify for some of the other programs. This could make hard feelings if you were to comew in & take the land out of the program. However, if it is set to expire at the end of the year, then this should not be an issue.

Agreed, you want to tread carefully & always smile when in that FSA office. Those (typically here) ladies get hammered pretty hard from above - the govt keeps changing the rules - and from below - the farmers who don't know what the program is like this week. Typically there is one battle-axe, and one friendly, and a couple in the middle folks working in each office. Pry you don't get hooked up with the battle axe.

One year was very hectic with new programs, govt changed the program after putting it out, that office was just a mess, different rules depending what day you showed up. I vented my feelingss there one day - but I really chewed out the upper administration of how the programs were run, not how that office worked. The lady actually about started crying, and said how tough it is to deal with the rules changes, and who i could contact to help with their problems.

I've had a much better time in that office since that day years ago. Othr neighbors blew up _at_ the gals, and they still have a hard time getting appointments, etc.

Politics is very alive in the FSA. Play the game.

About 3 years ago, the upper administration got very, very nit-picky on power of atterny, disclousure, etc. You really need to run through the legal channels, and have paperwork in order. As the others say.

You also will need to work with the USDA office if you are dealing with wetlands. Everything from above applies, only much worse. The FSA is there to help farmers - kinda. The USDA office is there to help wildlife & ream farmers. imho

--->Paul
 

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I had 40 acres in CRP but let it expire. Went in to see if I could sign it up again and they said no. They said there isn't any current CRP program.

I'd have liked to have kept it in CRP for the sake of wildlife on my place but for me 40 acres is a lot and I can't let the ground lay fallow if I'm not making anything from it. If they would have increased the amount of the contract I would have signed it up for another 10 years but there wasn't anything available. Oh well. It'll go back in the corn and bean rotation and make more money than the CRP was paying anyway. I just hate to see the wildlife habitat going away. Really sad part is that I'd just got the area nicely established in native grasses. Breaks my heart to see it plowed under in the spring but I have to make money from that land somehow.
 

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The tenent isn't really a tenent from my understanding. He is plants and harvests the wheat and gets a percentage of what my grandmother sells it for. Almost like a sharecropper, but again, something I will deal with in two weeks. My father has been pestering us to use the 1/3 in grass for the past year so I am pretty sure it won't interfer with the tenent's agreement.

The 1/3 2/3 split of the crops is very old school and I LOVE IT ! It worked well for a long time until retiring farmers decided to change up and go for cash rent per acre. (in my area at least) Cash rent can vary based on what a guys friend at the barber shop gets. Then the guy with what can be inferior ground expects to get the same and ends up raking a tenant over the coals for ground that can barely cover it's own expenses and not make much of a profit. Cash rent is pushing a lot of young up and coming guys out. (around these parts) Retired farmers rent to guys who lease the newest model combines (huge operators) so they can ride along.

We rent on shares and this year our landlord stands to make a handsome profit, well above what cash rent would have gotten him. I admire your Grandma for sticking with it old school. She sounds like an awesome lady.


BTW, more than likely next springs wheat crop is already planted by the tenant.
 
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