Buying South Dakota Land With CRP Acres? Read the Contract

What does CRP mean for an acreage you want to buy?

It means part of the land is under a federal Conservation Reserve Program contract, run by the Farm Service Agency (FSA). The program’s Big Sioux River watershed fact sheet describes CRP as contracting with producers so that environmentally sensitive farmland is used for conservation instead of being farmed or ranched, with FSA providing rental payments and cost-share assistance. FSA’s program page says participants receive annual rental payments based on soil productivity and the average cash rental rates in the county.

For a buyer, the catch is that the contract is tied to the land, not just to the seller. The federal rules spell out what happens when CRP land changes hands, and the outcome depends on a choice the buyer makes. So the CRP acres on a listing come with obligations you would be signing up for, and a deadline, along with any payment.

This matters on South Dakota acreages because the land you want for a house site, horses or a few cattle may include CRP ground. If you plan to graze it, hay it, break it up or build on it, the contract decides what you can do and when. Ask early whether any of the acres are enrolled, and how many. If you are shopping from out of state, ask the seller to show you where the enrolled acres sit on the property, so you can see the CRP ground relative to the building site, the driveway and any fence lines.

What happens to the CRP contract when the land sells?

You decide whether to step into it. Under 7 CFR 1410.51, a new owner who buys land under a CRP contract may be approved as a participant to a contract for that land, and 7 CFR 1410.32 refers to that new owner as a successor to the contract. FSA’s public questions and answers from a February 2020 CRP webinar describe the same path: the buyer has the option to continue the contract or not, and if the buyer decides to succeed, FSA completes a contract revision that removes the previous owner and adds the new one.

If you do not take it over, the contract ends for that land. The federal rule says that if the new owner does not become a successor within 60 days, or another period the program sets, the contract is terminated for the affected land. The original participant then must refund all previous payments, plus interest and liquidated damages, unless the program agrees otherwise. FSA’s answer says the same thing in plainer words: if the new owner does not succeed to the contract, it is terminated and the previous owner must refund the annual rental and cost-share payments for the years in the contract.

The rules also cover the seller’s side. Under 7 CFR 1410.32, if the new owner becomes a successor within 60 days, or another time the program sets, the seller is not required to refund previous payments.

Here is the decision in one view:

This table restates 7 CFR 1410.32 and 1410.51 and FSA’s February 2020 published answer. Your county FSA office applies them to a specific contract.

The seller has a lot riding on your answer, so ask your attorney how the purchase agreement should address it.

Think about which way you lean before you make the offer. If you want to keep the CRP acres enrolled, ask FSA what succeeding would require of you for the rest of the term. If you’re buying the place to run cattle, build or put in a big garden, ask FSA how the contract would limit those plans, and raise it with the seller early so both of you can plan around the refund question.

What do you take on if you succeed to the CRP contract?

You step into the existing contract. FSA’s February 2020 answer says that when a new owner succeeds, FSA revises the contract to add the new owner and the contract continues with the new owner, and the federal rules call that new owner a successor to the contract. Ask FSA for the contract and conservation plan so you know what the terms require of you.

That has real consequences for how you can use the land. Under 7 CFR 1410.52 and 1410.32, if a participant does not comply with the contract, the program may terminate it, and the participant has to refund payments with interest and pay liquidated damages. Before you plan to fence the CRP acres for horses, cut hay or put a building on them, read the conservation plan with FSA and ask what the contract allows.

Ending CRP early on some of the acres has a cost too. Under 7 CFR 1410.32, a participant whose contract is terminated in whole or in part must refund all or part of the payments received, plus interest, and pay liquidated damages if the program directs. The violations rule, 7 CFR 1410.52, carries the same kind of refund, interest and liquidated damages when a contract is terminated for not following it. So if you need part of the land for a house site or a pasture, ask FSA before you buy whether that is possible and what it would cost.

Does CREP land in South Dakota come with public hunting?

On CREP acres, public access is part of the deal. South Dakota Game, Fish and Parks describes the Conservation Reserve Enhancement Program (CREP) as a state-sponsored Conservation Reserve Program, run with FSA, focused on the James River and Big Sioux River watersheds, and its hunting access page says every acre enrolled in CREP is open to public hunting and fishing. Both watershed fact sheets list opening blocks of land to public hunting and fishing among the program’s goals.

The program’s Big Sioux River watershed fact sheet says all land enrolled in that CREP is open to public hunting and fishing access. GFP’s James River fact sheet lists opening blocks of private land to public hunting and fishing access among that program’s goals.

For a buyer looking at land in either watershed, that is a practical question. Ask the seller directly whether any enrolled acres are CRP or CREP. Then walk the property and look at where the enrolled acres sit relative to the house, the yard and the driveway, since public hunting access would apply to the enrolled acres. If you take over a CREP contract, ask FSA and GFP whether the public access goes with it and for how long. If you want a quiet place to live, that answer may change which tract you choose.

What should you check before an offer on land with CRP acres?

Get the CRP answers while you can still shape the deal. Here is the order to work through:

1. Ask for the contract. Ask the seller for the CRP contract and conservation plan, the acres enrolled, the contract number and the end date.
2. Find out if it is CRP or CREP. If the land is in the James River or Big Sioux River watershed, ask whether the acres are in CREP and what public access comes with them.
3. Call the FSA county office. Ask what succeeding to this contract would require of you, and what time period would apply after your closing.
4. Settle the succession question before you sign. Ask a South Dakota real estate attorney how the purchase agreement should handle whether you will succeed to the contract and who handles the FSA paperwork.
5. Ask about the payment split. Ask how the CRP payment for the fiscal year of the transfer would be divided, and get the answer in writing.
6. Match your plans to the contract. If you want those acres for horses, hay, a shop or a house site, confirm with FSA what the contract allows before you rely on it.

CRP is one of several things that change what an acreage is worth to you. Our guide to buying an acreage in southeast South Dakota covers the wider checklist, and the posts on covenants on a South Dakota acreage and private road access cover two other limits worth checking. If horses or livestock are part of the plan, read what to verify before buying an acreage for livestock next.