TABLE IV.-1956 and 1957 conservation reserve program, extent of conservation practices performed

TABLE V.-Conservation reserve program-Payments under contracts with producers through Nov. 30, 1957

$342, 561.68

34, 553. 11

102, 727. 35
380, 204.93

400.00
13, 230. 41
379, 869. 94

501, 928. 66

690, 083.06

171, 018. 12

74, 482. 86

105, 507.20

5. Forestry phases.-Nursery forest tree production agreements were executed with 37 States. Technical forestry-assistance agreements were also entered into with 39 States.

State forestry organizations started production of approximately 558 million trees, of which about 378 million will be ready for distribution to farmers in fiscal year 1958. In fiscal year 1957 nursery stock from other State programs was diverted to the conservation reserve program and some stock was also obtained from commercial and other nurseries.

Nearly 500,000 acres had been signed up by farmers for tree planting through April 15, 1957. Increased signup interest in fiscal year 1958 is anticipated. 1958 conservation reserve program

On August 30, 1957, the Secretary announced the changes in requirements for participation in the 1958 conservation reserve program. The necessary forms and instructions were available to the county offices to enable producers to apply for contracts about October 1, 1957, and the signup period will extend until April 15, 1958.

1. Changes in 1958 conservation reserve program.-Greater encouragement of participation by whole farm units and increased emphasis on forestry and wildlife practices are among the major changes that have been made in the 1958 conservation reservé program.

The changes that have been made in the 1958 conservation reserve should result in an increased diversion of currently used cropland to conservation uses. Based on experiences during the first full year of operation of the program, they will provide a more equitable opportunity for more farmers to participate.

(a) Increase in annual payment.-Among the additional incentives being offered farmers to divert more land to conservation uses, is an authorization under the 1958 program for agricultural stabilization and conservation (ASC) county committees to increase annual payment rates, for acreage above that representing a diversion from soil bank base crops where such increases can be justified, for land to be planted to forest trees and for whole farms retired from production. It has been found that the diversion of whole farm units usually results in a larger average reduction in crop production than is accomplished where only a part of the cropland on a farm is put in the soil bank. Land going into forest trees is land going out of production almost permanently.

Other important changes in the 1958 program are designed to make it more attractive in areas where summer fallowing of land is practiced and to farmers devoting a large portion of their cropland to tame hay.

(b) Shorter contracts for shelterbelts and wildlife.—Beginning in 1958, 5- or 10-year contracts, at the option of the producer, will be offered for land devoted to trees or shrub plantings for shelterbelt, windbreak, or wildlife habitat purposes. Previously, all tree and shrub plantings were under 10-year contracts only. The 10-year requirement will remain in effect for tree plantings for forestry purposes.

(c) Higher nondiversion rates.-Under the 1956 and 1957 conservation reserve programs, in addition to the land diverted out of soil-depleting crops at the full annual payment rate, other eligible land, such as hay land, may be put in the reserve at a nondiversion rate-30 percent of the regular annual payment rate. Farmers with a soil bank base over 30 acres had to put all eligible cropland in the program before they could put in additional land at the nondiversion rate. Farmers with a base of 30 acres or less could put any part of their eligible cropland in the program up to the soil bank base at the full rate and any part of their remaining eligible land in at the nondiversion rate.

These provisions have been changed under the 1958 program to encourage farmers to put whole farms in the reserve and to increase forest tree plantings. ASC county committees are authorized to raise the nondiversion rate up to 50 percent of the regular rate when all eligible land on a farm is placed in the conservation reserve or when any land placed in the program is to be planted to forest trees. County committees also are authorized to raise the nondiversion rate up to 100 percent of the regular rate when the entire eligible acreage on a farm is placed in the conservation reserve and all the land is planted to forest trees.

Where these higher nondiversion rates are granted, the ASC county committee must determine that the land value, rental rate, or productivity of the farm justifiies such a higher rate.

Farmers with soil bank bases over 30 acres also will be permitted to put land in the conservation reserve at the nondiversion rate up to the number of acres

they put in the program at the regular rate. This change will permit a farmer who normally summer fallows land to put in the conservation reserve an acreage of land which he would normally summer fallow equal to his acres taken out of production. It also will benefit those farms which have a large part of their cropland continuously devoted to the production of hay.

(d) "Bid" on conservation reserve acre rate on trial basis.-Producers in Illinois, Maine, Nebraska, and Tennessee were given an opportunity on a trial basis to set the dollars per acre rate they are willing to accept for putting all of their eligible cropland in the conservation reserve program. Only bids in which the producer agrees to put all of his cropland into the program were accepted. Acceptance of the offers are on the basis of the lowest acceptable offers. The Department reserves the right to reject the bids.

Under the bid procedure, contracts are not accepted for less than 5 years, and for land planted to trees, the contract must be for a 10-year period. Annual payments are made at a rate at which the land was offered and accepted. The maximum annual payment for any one farmer has been increased from $5,000 for the regular conservation reserve program to $10,000 under the bid procedure. Cost-sharing payments for carrying out conservation practices are paid in the year the practice is completed. These payments are designed to maintain net income on the farm as the land is shifted from cultivation to conservation uses. Producers who already have part of their eligible land in the program may submit offers to put the remainder in the conservation reserve program. Any land which a producer may have in the 1958 acreage reserve program will remain in the program until the end of the calendar year 1958, and then will become part of the conservation reserve acreage if the producer puts his farm under the program through the bid procedure.

After the offers are made by the producers in the four trial States, the Department will evaluate the bid procedure to determine whether it is effective in helping more producers to shift all of their cropland to conservation uses.

(e) Other changes.-The same farm soil bank base is used for both the conservation reserve and the acreage reserve the average amount of land devoted to soil bank base crops on the farm in 1956 and 1957. A base already established for the farm for either the acreage reserve or the conservation reserve, will be used for the other program.

Beginning with payments for 1957, annual payments are made only after October 1 of the calendar year for which they are due. This not only provides uniformity in the time of making such payments, but also should reduce any inclination to noncompliance after payments have been made.

Provision has been made to prevent a producer from breaking out noncropland on a farm covered by a conservation reserve contract, unless the ASC county committee approves and an equal amount of cropland on the farm is retired to noncrop use.

Regulations protecting the rights of tenants and sharecroppers on participating farms have been further strengthened under the 1958 program. In case of a change in ownership of a farm, the land on the farm is not eligible for the first year of ownership unless the county committee determines the farm would normally be operated by the new owner. If the farm has previously been operated by a tenant, the land on such farm is not eligible for the first year of ownership unless the new owner continues to operate the farm with a tenant or the county committee determines that the farm would normally be operated by the new

owner.

ACREAGE RESERVE PROGRAM

PURPOSE STATEMENT

The acreage reserve program is authorized for 4 crop years from 1956 through 1959. Producers are compensated for reducing their acreages for basic commodities below farm acreage allotments.

Commodities covered in the 1958 program are the same as in 1957. The compensation paid producers with respect to the 1958 crops may not exceed $500 million, and not more than $3,000 in the acreage reserve payments can be paid to any one producer with respect to a farming unit.

Producers are compensated, based on the normal yield of the land designated, for participating in the program through the issuance of negotiable certificates which the Commodity Credit Corporation redeems in cash or, in the case of certificates issued with respect to grains, in grains (at the option of the farmer) at a price that will not materially impair the market price for such grain and will encourage acceptance of grains in lieu of cash.

The budget proposes to terminate the acreage reserve program after the 1958 crop year.

The following table outlines the estimated financial requirements for the 1956, 1957, and 1958 acreage reserve programs, and shows the distribution of these requirements by fiscal years.

Estimated requirements, acreage reserve program, 1956, 1957, and 1958

1. Objective. The purpose of the acreage reserve program is to assist producers to divert a portion of their cropland from the production of excessive supplies of agricultural commodities by compensating them for reducing their acreages below their basic crop allotments.

2. Eligible commodities.-The program applies to wheat, cotton, corn produced in th commercial corn-producing area, peanuts, rice, and most types of tobacco. 3. Participation.-A producer who wishes to participate in the program must enter into a contract with the Secretary in which he agrees, among other things, (a) to reduce acreage of the commodity below the farm acreage allotment, (b) to specifically designate acreage withdrawn from production, which is placed in the acreage reserve, and not to harvest any crop from, or graze, the acreage reserve unless the Secretary determines grazing is necessary, and (c) to restrict harvesting to acres that are not more than the number included in the soil bank base, less any acreage placed in the soil bank programs. The soil bank base is described below under the 1958 acreage reserve program.

4. Manner and amount of compensation.-Producers are compensated through the issuance of negotiable certificates which the Commodity Credit Corporation must redeem in cash, or at the option of the producer with respect to certificates issued for grains, in grains in lieu of cash. Compensation is determined by the Secretary at a rate which will provide producers with a fair and reasonable return for reducing their acreages, taking into consideration the loss of production, any savings in cost resulting from not planting the acreage reserve, and the incentive necessary to achieve the reserve goal.

5. Other provisions.—Among other things, (a) producers must be in compliance with all their acreage allotments and soil bank base, except that if the wheat allotment is less than 15 acres the farm may not have more than 15 acres of wheat, (b) tenants and sharecroppers have full right to share in benefits, and (c) a farmer's historical acreage for allotment purposes will be protected.

6. Limitation on compensation. Under the Soil Bank Act, the total compensation paid producers for participating in the acreage reserve program with respect to any year's crops shall not exceed $750 million, and with respect to any commodity for any year shall not exceed for wheat, $375 million; for cotton, $300 million; for corn in the commercial corn-producing area, $300 million; for peanuts, $7 million; for rice, $23 million; and for tobacco, $45 million. The Congress established a maximum program of $500 million for the acreage reserve program for 1958 crops.

7. Duration. The Soil Bank Act makes the program applicable to 1956, 1957, 1958 and 1959 crops, but it is proposed that the program be terminated after the 1958 crop year.

1956 acreage reserve program

The final report of participation in this program (table I) indicates that 547,924 agreements covering 12,211,834 acres and providing maximum compensation of $260,362,982, were signed. Participation by commodities is shown in table II. Through November 30, 1957, negotiable certificates in the amount of $248,409,417 were issued. The balance of unpaid agreements represents $11,953,565, or about 5 percent of the maximum compensation. This latter amount represents (1) violation of agreement cases and cases where less than full performance was rendered, for which an undetermined amount will not have to be paid, and (2) unsettled appeals cases. It is expected that by December 1957, payments will have been made or all cases resolved.

1957 acreage reserve program

Due to a favorable supply and marketing situation for peanuts and for extralong-staple cotton, these commodities were excluded from the 1957 program. The final report of participation (table I) indicates that 914,396 agreements covering 21,354,018 acres and providing maximum compensation of $613,838,570, were signed. As of November 30, 1957, negotiable certificates in the amount of $603,728,298 were issued. The balance of payments for all cases except those that are in dispute were made by December 1957. Participation by commodities is shown in table II.

21494-58-pt. 4-5