The Conservation Reserve Enhancement Program known as CREP continues to be popular among farmers and farm owners.

The objectives of CREP are to provide additional income on marginal farmland, provide wildlife habitat for ground nesting birds and improve water quality. CREP is available on eligible farms for 10 or 15 year contracts.

CREP is so popular because of the financial aspects associated with the program. Annual rental rates average about $85 per acre. However, no harvesting or grazing is permitted.

There are several conservation practices that fall under the CREP umbrella.

Some of these practices are: stream crossings; spring development; stream bank fencing; lime; fertilizer and seed on highly erodible land; tree planting; drain tile; and wildlife habitat planting to name a few.

Some practices are reimbursed at 50 percent, while others are 100 percent reimbursement, plus a 40 percent incentive payment.

CREP participants sometimes overlook an important provision: that landlord/tenant rules do apply. This means a farm owner can't remove a tenant farmer just for the purpose of CREP enrollment.

We are finding that some farm owners do not like this aspect and feel it is their land and they can do what they want. Wrong!

The county Farm Service Agency will not approve CREP contracts where the landlord/tenant provisions have not been met.

In many cases, the land is only eligible because the tenant has been producing crops on the farm. Tenants must either be a participant on the CREP contract or sign a statement that they are leaving the farm voluntarily.

In some cases, part of the farm is enrolled in CREP and part remains to be farmed by the tenant. The key is for good communication between both parties.

Enrollment in CREP continues through December 2007. Specific questions can be directed to the county FSA office at 724-482-4800.

Commodity loans

Commodity loans provide one option for producers to consider when obtaining operating capital.

Commodity loans are simple to process and are normally completed within five working days of the request.

Commodity loans are popular for a variety of reasons: to provide capital; provide better opportunity for timely grain marketing; and capitalize on discounts for inputs offered in the winter.

The interest rate is low — currently 6.125 percent. The following information is only a brief overview and specific questions should be directed to the FSA staff.

• Eligibility — Wheat, oats, barley, corn and soybean production on any farm. Conservation compliance rules apply.

• Terms — Matures in nine months and proceeds are to be deposited directly into your account.

• Repayment — Payments can be made at any time during the loan period. Repayment rates could very well be below the loan rate, which means no interest payment.

• Collateral — The grain pledged for loan is the collateral, it may not be fed or sold without first repaying a specific quantity or obtaining a marketing authorization.

• Storage — Grain must be stored in an approved structure for on-farm storage. Warehouse stored grains are also eligible if stored at an approved warehouse.

To summarize, commodity loans offer some advantages to assist producers in their obtaining capital for their farm operations.