Nobody enjoys paperwork, but for programs such as the Conservation Reserve Program, it’s a necessary part of the process. After all, CRP doesn’t just pay farmers and landowners a flat rental fee per acre; the program also reimburses them for expenses associated with establishing CRP such as seed, planting and herbicide.
This is where first-time CRP enrollees run into confusion and frustration.
CRP has strict guidelines for how costs are documented. The rules and regulations can vary not only from state to state, but between the different CRP practices as well. Failure to properly document costs and categorize expenses can lead to a lot of troubles when it’s time to be reimbursed.
For those unfamiliar with the process, here is a general overview of what documenting cost-share expense can look like.
Calculating CRP Establishment Expenses and Cost-Share
CRP cost–share is component based, requiring you to itemize expenses into separate categories. Some components are percentage-based cost-share, while others operate on a flat rate. Additionally, each component is capped off with a Not-To-Exceed amount (NTE).
Planting costs in some states are a component that operates on a flat-rate. Let’s say your state has an NTE of $14 per acre for planting. If planting costs you $14 or less per acre, you will be reimbursed for the full cost. If it exceeds the NTE, you will have to pay the difference.
Typically, farmers find that their planting costs exceed the NTE, resulting in a personal expense. Experienced CRP contractors know how to allocate these costs so this doesn’t happen. Doing so, however, requires advanced knowledge of CRP regulations.
Other components include seed purchasing, mowing, herbicide application, seedbed preparation, and more, each of which have to be separately accounted for.
Seed cost–share can be especially complicated since each conservation practice has separate rates depending on the complexity of the seed mix. Seed cost-share is percentage–based, up until the NTE has been reached. After that, additional expenses once again fall to the contract holder.
Depending on the practice, the State, the condition of the land, and other variables, further reimbursement for seed cost may be available with Practice Incentive Payments (PIP).
When filed and categorized correctly, CRP expenses can be almost entirely covered. Doing so, however, takes time, proper calculations, flawless record keeping, and up-to-date CRP knowledge. With CRP contracts lasting 10-15 years, the regulations and rates will likely change drastically by the time a landowner re-enrolls, requiring them to learn everything all over again.
Bad Reporting Costs Time and Money
The CRP reporting process takes significant time not just to file the paperwork, but to understand it in the first place. This leads to many errors, as well as continuous back and forth communication with FSA, resulting in frustration on both sides.
Improper filing, missing receipts, and incorrect itemizing costs time and money. Reimbursement can be delayed, and you may have to completely redo the paperwork before you receive any money back.
That’s why the best solution to the complexities of CRP reporting is to have experienced professionals handle it for you from start to finish.
A Better Solution for Both Sides of CRP
FDCE has established over 350,000 acres of CRP across the country. We are well versed with the different rates and requirements of different states and practices. In addition to buying CRP seed mixes, supplying the necessary equipment, and performing the actual planting, our turn-key CRP services include documenting and providing all of the necessary cost-share documents for both the contract holder and FSA.
Our knowledge and experience ensure both sides receive easy-to-read, accurate information and the contract holders receive their maximum cost-share reimbursement. Due to the efficiency of our paperwork, it gets processed quicker, so you get reimbursed faster.
Thanks to CRP’s cost-share, our services essentially pay for themselves. For more information on our CRP services, contact FDCE today.
And make sure to come back next week when we’ll be posting a more detailed breakdown of our reporting services, including accounting, production, herbicide, GPS mapping, and more.