America's grasslands vanishing amid agricultural boom

DE SMET, S.D. -- To the west of this small town, which helped inspire Laura Ingalls Wilder's classic book series that included Little House on the Prairie, the view opens to a vast, unbroken landscape that seems to roll on forever.

But this untamed vista is shrinking.

The USA's open plains and prairies are threatened by soaring grain prices that have increased their value as cropland. Grain prices have been driven up by a seemingly insatiable worldwide appetite for food and by federal energy policies promoting corn-based ethanol that are working at cross purposes with government programs designed to conserve open spaces.

As a result, landowners in South Dakota and across the USA's Farm Belt are converting to cropland marginally productive acres that for decades — in some cases, centuries — have remained uncultivated because farming them wouldn't have been profitable or because of their environmental value.

"We're kind of in an ag revolution," says Bill Wilkinson, a farmer-rancher near De Smet.

Leaving at least some land idle amid the increasingly industrialized business of farming is essential for a variety of reasons. It provides a cleansing buffer for the water that runs off chemically treated fields. Protection of fragile wetlands cuts soil erosion while providing wildlife habitat that, in South Dakota, is the basis of a multimillion-dollar hunting and tourism industry. Native grasslands sustain biological diversity that can't be replicated. Further, plowing untouched prairie releases carbon dioxide into the air, contributing to climate change.

Long-term benefits are being overtaken by short-term incentives, however. Farmers chasing near-record prices are coaxing higher yields from current acres and putting more land into crops.

Kevin Baloun, a farmer-rancher near Highmore, S.D., is among them. He's plowed up several pieces of virgin prairie in recent years to plant crops. Land values in his area have tripled in the past five years, which makes it harder for farmers to expand production by buying more cropland.

"The bottom line is what makes you go that direction," Baloun says of his conversion of prairie to cropland. "Wheat was $4 or $5 a bushel a couple of years ago, and now it's up to $10 or $12 a bushel."

Conservationists warn that the current commodity and ethanol frenzy could undo years of hard work and undercut the investment of taxpayer money that has bankrolled federal land- and water-protection programs.

"A generation of conservation accomplishments could be rolled back" if commodity prices remain near historic highs, warns Ken Cook, head of the non-profit Environmental Working Group.

Agricultural boom

The nation is in the midst of the biggest agricultural boom since the 1970s. U.S. net farm income is expected to hit a record $92.3 billion in 2008, more than 50% above the 10-year average. Grain prices have soared because of high demand in emerging economies such as China and India. In addition, Congress last year voted to double production of corn-based ethanol, a cleaner-burning fuel that can reduce greenhouse gas emissions.

The energy law is a boon to South Dakota, the nation's No. 4 ethanol refiner, but it means nearly a third of the U.S. corn crop could be dedicated to making fuel. Increased crop output places stress on land, air and water. Recent studies, including one by Timothy Searchinger of Princeton and others, suggest the negative effects of intensified crop production could offset environmental benefits of ethanol.

Craig Cox, executive director of the non-profit Soil and Water Conservation Society in Ankeny, Iowa, says the farm sector has the technology to manage many of the potential problems from increased crop production.

Growers can, for example, improve conservation through such practices as leaving more stubble in fields to reduce erosion. The question is whether doing so will be a priority. But even small changes in current farming practices, such as plowing closer to streambeds or increasing fertilizer use, add up to a lot stretched over the USA's nearly 90 million acres of corn.

"It's not like these high commodity prices and biofuels are causing the problem. There was already a significant problem," Cox says. "What this is doing is ramping up the risk." U.S. farmers this year will be able to plant on more than 2.5 million acres of environmentally sensitive land formerly held in the 35-million acre federal Conservation Reserve Program (CRP), the nation's largest farmland conservation program. That includes 300,000 acres in South Dakota.

On the principle that conservation benefits everyone, the government, through the CRP, offers landowners 10- to 15-year contracts to keep sensitive ground in grass cover or trees, for example, rather than crops. Since 1985, the program, which costs about $2 billion a year, has protected 170,000 miles of streams and restored 2 million acres of wetlands and buffer zones. A recent federal study found that without the CRP acres in the Prairie Potholes region of the Dakotas and northeastern Montana, there would be about 1.8 million fewer sedge wrens, grasshopper sparrows, dickcissels, bobolinks and western meadowlarks.

"CRP may not be the only thing, but it is by far the most important thing when it comes to wildlife in South Dakota," says George Vandel, assistant wildlife director at the South Dakota Department of Game, Fish & Parks. Pheasant hunting in 2006 had a $160 million direct economic impact as 98,000 out-of-state hunters spent money on everything from ammunition to hunting lodges and guides.

Financial sense

In past years, when grain prices were low, enrolling land in the CRP made environmental and financial sense. But now, the math has changed. A number of farmers chose not to re-enroll when contracts expired last year, bringing millions of acres into potential production for the 2008 growing season. More than 5 million acres now preserved by CRP are set to become available for planting in the next two years, and the numbers rise after that.

Frank James, who farms near Lily, S.D, chose not to re-enroll 400 acres when his contract expired last year. James, 63, weighed family considerations: It was an opportunity for his son Luke, 28, to farm. Luke has been around farming for years, helping out on the family farm when he could, his father said. He had been working for a farm service company, applying chemicals to fields. Now, his father said, he's able to devote more time to actual farming.

In the new economics of farming, converting the conservation land to soybeans often makes more sense than renting or buying farmland.

"You might have … from 10% to 25% yield reduction" compared with existing farmland because of the lower quality of the soil, he said.

Food processors, livestock producers and other businesses want even more CRP land released to blunt the huge price increases for corn, wheat, soybeans and other farm commodities. They are pushing the government to waive hefty penalties on farmers who opt out of CRP contracts early.

The American Bakers Association this month even held a march on Washington. Industry has "been warning government officials about the pending crisis for the past year. Any further delay could have extremely serious consequences," said Robb MacKie, American Bakers president.

The U.S. Department of Agriculture has said no to the early release of acreage from the CRP, but it has also decided not to allow new land into the CRP except for the most highly sensitive acres.

U.S. Agriculture Deputy Secretary Chuck Conner says that the situation remains under review but that his agency will proceed cautiously. "We don't see it (CRP) as something where you dial it up or dial it down," says Conner. "It's too important an environmental and conservation program."

Larry Janssen, a South Dakota State University economics professor, surveyed 750 state growers with CRP contracts. Of those, about a quarter don't plan to renew when contracts expire.

The Food and Agricultural Policy Research Institute, a joint effort of Iowa State University and the University of Missouri-Columbia, predicts the CRP will fall below 30 million acres in the next few years, and stay down.

Not everyone is jumping on the train. Bob Roe, a financial adviser in Brookings, S.D., invites friends to hunt on his 200 acres of CRP land in Beadle County, the heart of South Dakota pheasant country. He extended his CRP contract until 2014. "I bought it (land) for recreational purposes," Roe says. "But if I was an elderly couple living in town and on a fixed income and I could get another $40 an acre in cash rent, I'd be pretty hard-pressed not to."

At the same time that the CRP is declining, farmers such as Baloun have been plowing up native grasslands that are prime habitat for pheasants, ducks and other wildlife, as well as pasture for cattle.

U.S. native grasslands declined by 24 million acres from 1982 to 2002. In many areas, urban development was the main factor, but agriculture is the big reason in the Dakotas. Grassland conversion affects a wide array of interests, from local ranchers to hunters and birdwatchers as far away as Arkansas and Georgia, where the prairie birds migrate. "The conversion of grasslands is probably one of the biggest issues and threats … we've seen in several decades," says Scott McLeod, regional biologist for Ducks Unlimited.

Slowing the trend

The USDA and lawmakers, including Sen. John Thune, R-S.D., are trying to slow the trend by barring federal farm subsidies to growers who plant on virgin soil.

The USDA warns that grassland conversions could accelerate "greatly" as federal ethanol subsidies boost demand for corn and other crops. So far, the House, Senate and White House have been unable to agree on a final version of the huge pending farm bill that would, among many other things, address the issue.

Near De Smet, Wilkinson, the farmer-rancher, has decided to go against the current. While others convert prairie to crops, he's put about 400 acres into a special preservation reserve.

The U.S. Fish and Wildlife Department offers payments equal to about 35% of the land's value to farmers who agree to permanently idle their acreage. The goal is to set aside about 24,000 acres of untouched land in two South Dakota counties. Wilkinson must take certain precautions to protect the native grasses but is still able to use the prairie as grazing land for his cattle. "This is what the buffalo loved years ago," he says. "And the cattle love it."

Wilkinson, standing in a field of bluestem grass more than 4 feet high, says, "I'm one of those who intend to leave the ground better than when we got it."

Sue Kirchhoff reported from Washington, D.C. Jeff Martin, who writes for the Argus Leader in Sioux Falls, reported from South Dakota.