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Have Conservation Compliance Incentives Reduced Soil
Erosion?
Tim McCabe, USDA/NRCS
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Since its inception in the 1930s, U.S. agricultural policy
has been designed to support farmers’ incomes while promoting
soil conservation practices. By the 1970s, however, policymakers
recognized that existing farm price and income support programs
were not always consistent with soil conservation efforts. An unintended
effect of these programs was to encourage producers to maintain
or expand production of relatively erosive crops, such as row crops
(corn, cotton, soybeans), sometimes on highly erosion-prone soils.
At the same time, the Government was helping farmers reduce soil
erosion and related damages through conservation cost-sharing programs.
Policymakers further recognized—aside from concerns about
consistency—that farm program payments could be used as incentives
to encourage better conservation behavior.
Highly
Erodible Land
Highly erodible land has an erodibility index (EI)
of 8 or larger. The erodibility index is the ratio
of inherent erodibility to the soil loss tolerance.
Inherent erodibility for a given soil is the rate
of erosion (tons per acre per year) that would occur
on land that was continuously clean tilled throughout
the year. The soil loss tolerance, or T value, is
an estimate of the rate of soil erosion that can occur
on a given soil without significant long-term productivity
loss. Thus, the erodibility index captures both the
propensity of a soil to erode and the potential for
damage from erosion. Land can be highly erodible based
on potential for water-borne erosion, wind erosion,
or both. Just over 100 million acres of U.S. cropland
are highly erodible, about 25 percent of all cropland.
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In the 1985 Food Security Act, policymakers required
farmers to engage in conservation activities in order to receive
government payments, in an effort to improve consistency among policy
objectives while reducing soil erosion. These mechanisms apply to
the just over 100 million acres of U.S. cropland—about 25
percent of all cropland—that are considered highly erodible
land (HEL, see “Highly Erodible Land”).
“Conservation compliance” requires producers to apply
and maintain conservation systems on HEL cropland that was already
in crop production in 1985 or risk losing farm income support, price
support, and conservation payments from voluntary programs. “Sodbuster”
requires similar (albeit more stringent) plans on HEL brought into
crop production after 1985. (The 1985 Act also introduced a mechanism
to preserve wetlands. See “Conservation
of Wetlands.”) This article focuses primarily on the effect
of conservation compliance.
Following implementation of conservation compliance
and other conservation policy changes, soil erosion on U.S. cropland
was significantly reduced. Between 1982 and 1997, annual cropland
soil erosion fell by almost 40 percent. Of course, farmers respond
to a range of economic and policy stimuli, making it difficult to
determine how much of the decline is the result of conservation
compliance alone. Some reductions cannot be attributed to the compliance
policy because they occurred on land not subject to conservation
compliance. Even for land that is subject to compliance, there are
questions about the role of conservation compliance in helping to
achieve erosion reductions. Critics charge that weak conservation
standards and inadequate enforcement have undermined conservation
compliance. Moreover, other factors, such as changing technology,
may also have played a role in achieving the observed reductions.
Given the range of economic and policy forces influencing
farmers’ production decisions, how much erosion reduction
can be reasonably attributed to the national policy of conservation
compliance? A careful analysis of relationships among erosion reduction
data, compliance requirements, production trends and other factors
that influence farmer behavior yields useful insights into possible
answers.
Conservation Compliance: A Brief Primer
Conservation compliance requires the application of approved conservation
systems on HEL cropland as a condition of eligibility for most farm
commodity and conservation programs. A conservation system is a
collection of conservation practices applied together. For example,
a producer may adopt conservation tillage, shift to less erosive
crops (also called “conservation cropping”), and install
grass waterways to move water off fields. The effectiveness of conservation
compliance in reducing soil erosion depends largely on three factors:
(1) conservation system design requirements, which determine conservation
costs, (2) the strength of the compliance incentive, and (3) the
level of enforcement effort.
Conservation
of Wetlands
In addition to conservation
compliance and sodbuster, another mechanism was introduced
in the Food Security Act of 1985 to encourage preservation
of wetlands. Under “swampbuster,” as this
mechanism is known, producers who drain wetlands to
produce crops can also lose farm program payments.
Together, the mechanisms created in 1985 help ensure
that U.S. farm support and farm conservation policies
work together.
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Initially, USDA considered requiring that conservation
systems reduce erosion to the soil loss tolerance (“T”)
level, an estimate of the rate of soil erosion that can occur on
a given soil without significant long-term productivity loss. Before
conservation compliance plans could be devised or implemented, however,
USDA dropped the strict T standard. Unresolved questions about the
scientific validity of the T value as well as increasing recognition
of the importance of the damage that sediment from soil erosion
can bring to adjacent water bodies prompted questions about the
appropriateness of T as a basis for compliance requirements. USDA
also determined that reducing erosion to T (or even twice the level
of T, a higher rate of erosion) might be so costly that crop production
would no longer be profitable on a great deal of highly erodible
land.
Ultimately, conservation compliance was implemented
for all HEL land using a flexible approach that accounted for both
soil erosion and the cost of erosion reduction, without imposing
a fixed erosion standard. Where erosion can be reduced to the T
level without making crop production unprofitable, producers are
required to develop “basic” conservation plans, designed
to reduce erosion to T. Where reducing erosion to T is more costly,
producers are allowed to develop “alternative” conservation
systems. Alternative conservation systems require the application
of technically and economically feasible practices that result in
“significant” erosion reduction. Under alternative systems,
producers are not required to reduce erosion to any specific level.
Three conservation
practices make up conservation systems used on more
than 50 percent of highly erodible cropland, 1997
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Conservation system
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Highly erodible cropland subject to compliance
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Conservation cropping/crop residue use
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Conservation cropping/conservation tillage
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Conservation cropping only
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Crop residue use only
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Total
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Source:
ERS analysis of USDA compliance review data. |
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In the end, most producers have been able to meet
conservation compliance requirements by adopting relatively inexpensive
management practices. Because HEL cropland varies widely in terms
of soils, topography, climate, and cropping patterns, more than
1,600 conservation systems have been approved for use. However,
more than 50 percent of acres with conservation systems in place
have systems that are made up of one or more of just three conservation
practices: conservation cropping, conservation tillage, and crop
residue use.
The incentive for producers to meet conservation compliance requirements
depends on the level of program benefits that can be withheld. Producers
who fail to meet compliance requirements on HEL cropland may be
denied benefits from most Federal agricultural programs on their
whole farm—even if it includes non-HEL cropland. Ongoing commodity
and disaster relief programs make up most of the direct payments
subject to compliance. Conservation payments are also significant,
including those provided under land retirement programs, such as
the Conservation Reserve Program (CRP) and the Wetland Reserve Program
(WRP), and conservation programs for working lands, such as the
Environmental Quality Incentives Program (EQIP). Annual spending
on these programs has ranged from about $8 billion to more than
$27 billion in recent years.
Eligibility for Federal agriculture-related loans
or loan guarantees (such as price support loans and farm credit
loans) can also be denied, though this analysis does not address
these particular incentives. Subsidized crop insurance, which could
be withheld under the original compliance provisions enacted in
1985, was removed from the list of programs subject to compliance
in the 1996 Federal Agricultural Investment and Reform (FAIR) Act.
The effectiveness of conservation compliance depends critically
on the geographic distribution of payments that could be denied,
relative to the environmental problems addressed through compliance
mechanisms. A comparison of 1998 commodity program payments—the
lion’s share of payments received by producers—with
the geographic distribution of HEL cropland shows that most areas
of the U.S. that have HEL cropland are receiving government payments.
Although the overall level of commodity program payments fluctuates
over time, the geographic distribution of these payments has been
stable from year to year because the distribution of payments depends
largely on the geographic distribution of program-eligible base
acres, which depends, in turn, on historical plantings, not current
crop acres.
In addition to financial incentives, enforcement also plays a role
in the effectiveness of the compliance mechanisms. USDA’s
primary enforcement mechanism is the annual Compliance Status Review
(CSR). Each year, compliance status is assessed on a sample of “tracts”
subject to conservation compliance requirements (and other compliance
mechanisms). In 2001, for example, 17,723 tracts were reviewed,
including about 4.9 million acres. The CSR summary prepared by USDA’s
Natural Resources Conservation Service (NRCS) shows that 98.0 percent
of reviewed tracts and 98.9 percent of reviewed acres were meeting
compliance requirements.
A recent General Accounting Office (GAO) report, however, identified
a variety of deficiencies in the CSR that, in their view, “make
questionable USDA’s claim that 98 percent of the Nation’s
cropland tracts subject to the conservation provisions are in compliance.”
GAO criticized the CSR on a number of issues, including methods
used to select the sample for review, consistency and clarity of
guidance provided to local offices, data handling and analysis,
failure to cite producers for significant deficiencies, and inadequate
justification for waiver of penalties.
A Systematic Estimation Is Needed
Because of the concerns raised by the GAO, we used other data and
information on soil erosion, farm program payments, and program
requirements to estimate the contribution of compliance to overall
erosion reduction.
According to data from the National Resources Inventory (NRI), maintained
by NRCS, overall (HEL and non-HEL) annual cropland erosion fell
from 3.07 billion tons in 1982 to about 1.90 billion tons in 1997,
a reduction of 1.17 billion tons, or about 40 percent. Because conservation
compliance was enacted in 1985 and producers were required to have
conservation systems fully operational by 1995, the NRI provides
estimates of cropland erosion “before” (1982) and “after”
(1997) implementation of conservation compliance. Using this estimate
of erosion reduction as a starting point, we systematically determined
how much of that erosion is attributable to conservation compliance
by examining several factors:
- To what extent did erosion reduction occur on HEL
land?
- Did these erosion reductions result from specific
actions that could have reasonably been required by or prompted
by conservation compliance? Or could they have resulted from actions,
such as changes in land use, that are not typically associated
with conservation compliance?
- Did erosion decline on farms that received program
payments and were subject to conservation compliance?
Of the 1.17-billion-ton drop in annual cropland
soil erosion, 442 millions tons occurred on non-HEL cropland that
was not subject to conservation compliance. (Some non-HEL erosion
reduction could be indirectly attributed to compliance if conservation
systems were also adopted on non-HEL cropland within the complying
farm. For example, conservation tillage may have reduced costs for
some producers, prompting its use on non-HEL cropland as well.)
The balance of the reduction, 732 million tons, occurred on HEL
cropland. But not all of this reduction can be attributed to conservation
compliance, either. About 365 million tons—about 50 percent—of
erosion reduction on HEL cropland occurred on land that was cropped
in 1982 but not in 1997. This land use change, and its associated
erosion reduction, was not likely to be the result of conservation
compliance, as compliance focuses on implementing conservation systems
that allow HEL cropland to stay in production.
HEL cropland that was cropped in both 1982 and
1997 accounts for 367 million tons of erosion reduction. For this
cropland, conservation compliance applied only to “excess”
erosion, or erosion in excess of the T level. “Nonexcess”
erosion, or erosion reduction below the T level, cannot generally
be attributed to compliance, though some conservation compliance
systems may result in reduction of erosion to rates less than T.
Of the 367 million tons, 36 million tons represent reductions that
were less than the T level, and, therefore, cannot be directly attributed
to conservation compliance. Excluding the 36 million tons of nonexcess
erosion leaves 331 million tons of reduction in excess erosion that
could be attributed directly to conservation compliance if reductions
occurred on the farm of a producer who participates in government
programs subject to compliance and reductions would not have been
realized without compliance.
Data from USDA’s Agricultural Resource Management Survey (ARMS)
indicate that 86 percent of all U.S. cropland is located on farms
that receive government payments, indicating that a large proportion
of HEL cropland is likely to be included in farms with government
payments. NRI data on erodibility and soil erosion, along with ARMS
data on farm operator participation in government programs, indicate
that roughly 83 percent of HEL cropland, about 92 million acres,
is located on farms that receive at least some commodity program,
disaster, or conservation payments.
While excess erosion has declined both on farms that receive government
payments and on those that do not, erosion reductions appear to
have been larger on farms that receive farm program payments. For
wind erosion, the difference is large. Excess wind erosion declined
by 30.7 percent on farms receiving payments, but by only 14.2 percent
on farms not receiving payments. For water erosion, the difference
is somewhat smaller. Excess water erosion dropped by 46.7 percent
on farms receiving payments and by 40.5 percent on farms not receiving
payments.
Estimating
HEL and Erosion on Farms Receiving Payments
Data on erodibility and soil
erosion from the National Resources Inventory (NRI),
maintained by USDA’s Natural Resources Conservation
Service, were combined with ARMS data on crop acreage
and government payments received to estimate the extent
of HEL cropland and related erosion on farms receiving
government payments and subject to conservation compliance.
For the purpose of the analysis, government payments
were defined as farm commodity program payments, disaster
payments, and conservation payments from the Conservation
Reserve Program (CRP), Wetlands Reserve Program (WRP),
and the Environmental Quality Incen-tives Program
(EQIP). Payments from these commodity and conservation
programs account for roughly 98 percent of direct
payments subject to compliance mechanisms.
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Overall, an estimated 295 million tons of erosion
reduction per year could be directly attributed to implementation
of conservation compliance policy. This amount is roughly 89 percent
of the 331 million tons of excess erosion reduction on HEL cropped
in 1982 and 1997 and 25 percent of all erosion reduction. (See “Estimating
HEL and Erosion on Farms Receiving Payments.”)
Finally, some erosion reduction that could be directly
attributed to compliance may have occurred even without the compliance
requirements. For example, conservation tillage can preserve soil
moisture where rainfall is limited and can also reduce machinery,
fuel, and labor costs, making it profitable for some producers,
regardless of its effect of soil erosion. Tillage and planting machinery
needed to practice conservation tillage became widely available
only in the mid- to late 1970s. Because widespread adoption of new
practices often occurs over a long period of time, producers who
included conservation tillage in compliance plans may have eventually
adopted the practice for economic reasons even without the compliance
requirement. Unfortunately, existing data provide little insight
on this possibility.
Are Farmers Responding to Conservation
Compliance Incentives?
We find considerable evidence to suggest that that the
answer is “yes.” Highly erodible land is likely to be
located on farms that receive Federal farm program payments. Between
1982 and 1997, excess erosion dropped sharply on these farms, and
the reduction in erosion appears to have been larger on farms receiving
payments than on farms not receiving payments, particularly on farms
with wind-erodible soils. Overall, a significant share of erosion
reduction between 1982 and 1997 is likely to have occurred on land
directly subject to conservation compliance requirements.
On the other hand, NRI data show that soil erosion was sharply reduced
on all types of land, including land not subject to compliance requirements.
Moreover, the difference in reduction of water-caused erosion between
farms receiving payments and farms not receiving payments is small.
These results are consistent with more than one hypothesis about
the role of conservation compliance in reducing soil erosion. Compliance
could have led farmers to apply inexpensive practices on HEL that
quickly spread to other land types once their value was demonstrated.
Such could be the case with practices like conservation tillage
or crop residue use, to the extent that these practices reduce costs
or conserve moisture in areas that receive limited rainfall. Changes
in cropping practices on HEL cropland may have subsequently prompted
changes in production practices on non-HEL cropping in the same
farm.
One could also argue that practices like conservation tillage would
eventually have been adopted where they are cost effective regardless
of conservation compliance. In other words, the compliance requirement
happened to coincide with a period during which better equipment
became available, making conservation tillage practices much easier
to implement. Even if these practices eventually would have been
adopted, however, it is not clear that the same level of erosion
reduction would have occurred between 1982 and 1997. The compliance
requirement, structured to focus on inexpensive practices, may have
accelerated the adoption process on all types of land.
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