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Building Sustainable

Building Sustainable

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Published by Joshua Irelan

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Published by: Joshua Irelan on Dec 12, 2011
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Helping landowners and operators restore and protect grassland, including rangeland,
pastureland, and certain other lands, while maintaining the areas as grazing lands

Easement payments for this option are determined by
an appraisal done to USPAP standards.

Cooperating entities may be State, Tribal, or local gov-
ernments or non-governments that meet eligibility cri-
teria. The cooperating entities must administer the ac-
quisition process and provide half of the purchase price

of the easement. The purchase price is defned as the

fair market value of the easement minus the landowner

Rental contract. Participants can choose a 10-, 15-, or
20--year easement. FSA will provide annual payments
in an amount that is not more than 75 percent of the

grazing value of the land covered by the agreement for

the life of the agreement. Payments will be disbursed
on the agreement anniversary date each year. There is a
$50,000 annual payment limitation for rental contracts.

Restoration agreement. If restoration is determined
necessary by NRCS, a restoration agreement will be in-
corporated within the rental contract or easement. The
Commodity Credit Corporation (CCC) will provide up
to 50 percent of the restoration costs. Participants will
be paid upon certifcation of the completion of the ap-
proved practice(s) by NRCS or an approved third party.
Participants may contribute to the application of a cost-
share practice through in-kind contributions. There is
a $50,000 annual payment limitation for restoration

Funding comes from the CCC and the program is au-

thorized to enroll 1,220,000 acres through 2012. The

funds to enroll those acres will be appropriated annu-
ally. The 2008 Farm Bill stipulates that 40 percent of
the funding must be used to enroll rental agreements
and 60 percent of the funding must be used to enroll
easements. Either CCC or the cooperating entity holds
the easement.

Applicants will be selected at the state level by the
NRCS State Conservationist and the FSA State Ex-
ecutive Director. Selection criteria for each state will
be made available upon request to the public before

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Building Sustainable Places Guide

signup. Each state’s application selection criteria will
be available on the state’s NRCS Website.

Eligibility, Uses, and Restrictions

Either easement option is available for application from

landowners who can provide clear title. Landowners

and others who have general control of the acreage may
apply for a rental contract.

The Adjusted Gross Income provision of the 2008 Farm
Bill affects eligibility for GRP and several other 2008

Farm Bill programs. Individuals or entities that are not

eligible to receive program benefts or payments if they
have an average adjusted gross income exceeding $1.0
million for the 3 tax years immediately preceding the

year the contract is approved.

However, an exemption is provided in cases where

two-thirds of the adjusted gross income is derived from
farming, ranching, or forestry operations.

Eligible land includes:

• Grassland or land that contains forbs or shrubs (in-
cluding improved rangeland and pastureland) for

which grazing is the predominant use

• Land that is located in an area that historically has

been dominated by grassland, forbs, and shrubs and
has potential to provide habitat for animal or plant

populations of signifcant ecological value if the

land is retained in its current use or restored to a
natural condition.

• Land that contains historical or archaeological re-

• Land that would address issues raised by State, re-
gional, or national conservation priorities; or

• Land that is incidental to land described in para-
graph (1) or (2), if the incidental land is determined
by the Secretary to be necessary for the effcient ad-
ministration of a rental contract or easement under
the program.

Participants in GRP must meet Wetland and the High-
ly Erodible Land Compliance provisions of the 2008

Farm Bill.

Participants are required to follow a grazing manage-
ment plan developed by NRCS (or a designated third
party) and the participant to preserve the integrity of
the grassland.




Elizabeth Crane, NRCS

Phone: (202) 720-0242
E-mail: Elizabeth.Crane@wdc.usda.gov

Jim Williams, FSA
Phone: (202) 720-9562
E-mail: jim.williams@wdc.usda.gov

Page 53

Building Sustainable Places Guide

Program Basics

The purpose of the Farm Service Agency’s (FSA) guar-
anteed farm ownership (FO) and guaranteed operating

loan (OL) programs is to help family farmers obtain

commercial credit to establish or maintain a family
farm or ranch. FSA guarantees against potential loss of
the commercial loan at 90 percent of the loss of princi-
pal and interest. A 95 percent guarantee is provided in

the case of loans to refnance an existing direct FO or
OL or for loans made in conjunction with a beginning

farmer down payment loan.

Farmers may also use FSA guaranteed loans to buy
stock in a member-owned cooperative. The cooperative
can be engaged in production, processing, packaging,
and/or marketing of agricultural and forest products.

In some instances, a special interest rate assistance pro-
gram may be used in which FSA provides assistance
to the lender to lower the interest rate. The interest as-
sistance is intended to assist farmers with low produc-
tion or who suffered the effects of a natural disaster

or adverse economic conditions get through a diffcult
period and become fnancially viable.

Project Examples

A beginning farmer working with a bank in Iowa ob-
tained a 95-percent loan guarantee for an ownership
loan and operating loan made in conjunction with an
FSA down payment loan, enabling the bank to make a
loan it would not have without the federal guarantee.

A rancher in California used an FSA guaranteed loan
to buy stock in a newly formed marketing cooperative
that processes and sells specially raised beef to Japan.

A commercial lender in Ohio obtained an FSA guaran-
tee on an operating loan to a farmer who will use inte-
grated pest management (IPM)
on a new agricultural
enterprise. The guarantee was important to the lender,
who was unfamiliar with IPM.

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