Some farming practices (excess fertilization and manure,
for example) can degrade our Nation's natural resources
while others (such as land reservation for wildlife)
can enhance our natural heritage. Policymakers have
been devoting more attention and funding to agri-environmental
policies and programs that support environmental enhancement
and reduce the potential for environmental harm. Until
2002, the bulk of conservation funds went toward land
retirement: paying farmers to remove environmentally
sensitive land from crop production for a specified
time. With the 2002
Farm Security and Rural Investment Act,
policymakers substantially increased conservation funding,
especially on lands used for crop production and grazing.
The Food,
Conservation, and Energy Act of 2008 (2008 Farm Act) continued
this trend by expanding programs that funded working
land conservation and environmental practices. The
2008 Farm Act also expands support for wetland restoration
and farmland preservation. Overall acreage in land retirement
programs will fall as the Conservation Reserve Program
(CRP) acreage cap decreases from 39.2 million to 32 million
acres beginning October 1, 2009. Enrollment as of September
2008 was 34.7 million acres.
The conservation programs in the 2008 Farm Act also
offer assistance to farmers making the transition to
organic production and promote
access to conservation programs for limited resource,
beginning, and socially disadvantaged producers.
d
USDA Conservation Programs in Relation to All
Environmental Expenditures
Agricultural conservation programs are part of a larger
Federal effort to protect and preserve natural resources.
Conservation and land management efforts include agriculture,
but also encompass programs of the Forest Service, Bureau
of Land Management, Fish and Wildlife Service, and other Federal agencies.
Funding for water resource programs, recreational services, and pollution control/abatement
activities also come under the general rubric of natural resources. Agricultural
conservation spending was about 16 percent of the $33.8 billion in Federal
spending for natural resources in fiscal year 2007.
Federal natural resources expenditures
(budget authority), FY 2007 |
Subfunction and agency/activity |
Discretionary
programs |
Mandatory programs |
Total |
|
$ million |
Water
resources |
|
Corps of Engineers |
6,852 |
|
6,852 |
|
Bureau of Reclamation |
1,004 |
|
1,004 |
|
Watershed, flood prevention, and other |
139 |
|
139 |
Conservation
and land management
|
|
Forest Service |
4,708 |
|
4,708 |
|
Management of public lands (Bureau of Land Management) |
1,025 |
|
1,025 |
|
Conservation of agricultural lands |
820 |
4,508 |
5,328 |
|
Fish and Wildlife Service |
1,222 |
|
1,222 |
|
Other conservation and land management programs |
1,585 |
|
1,585 |
Recreational
services
|
|
Operation of recreational resources |
2,335 |
1,187 |
3,522 |
|
Other recreational resource activities |
20 |
|
20 |
Pollution
control and abatement
|
|
Regulatory, enforcement, and research programs |
3,210 |
|
3,188 |
|
State and tribal assistance programs |
3,214 |
|
3,214 |
|
Hazardous substances superfund |
1,255 |
|
1,255 |
|
Other pollution control and abatement activities |
147 |
|
147 |
Other
natural resources
|
|
National Oceanic and Atmospheric Administration |
4,145 |
|
4,145 |
|
United States Geological Survey and other |
1,199 |
288 |
1,487 |
Total
gross budget authority |
32,880 |
5,983 |
38,863 |
Offsetting
receipts |
-13 |
-5,066 |
-5,079 |
Net
budget authority |
32,867 |
917 |
33,784 |
Source: Office of
Management and Budget (OMB). |
USDA Conservation Programs: A Portfolio Approach
USDA
conservation programs have traditionally used voluntary
approaches to agricultural resource problems. These
approaches can avoid the inherent difficulties in regulating
nonpoint sources of pollution and can minimize economic
harm to farmers by educating them and providing them
with incentives to willingly improve production practices.
In passing the 2008 Farm Act, Congress reaffirmed a
preference for addressing natural resource problems
caused by agriculture through a consolidated set of
financial assistance programs supported by research
and education. In a notable exception, Conservation
Compliance, which has successfully reduced soil
erosion and protected wetlands, was continued.
USDA programs offer producers
a range of options for assistance with conservation
efforts, among them:
- Working-land programs provide technical
and financial assistance to farmers who install or
maintain conservation practices on land in production.
- Land retirement programs generally remove land
from agricultural production for a long period (at
least 10 years) or, in some cases, permanently.
- Agricultural land preservation
programs purchase rights to certain land uses, such
as development, in order to maintain land in agricultural
use.
Funding
for major USDA conservation programs,
FY 2002-07 |
Program
focus/program |
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
|
$ million |
Land
retirement programs |
2,069 |
2,074 |
2,135 |
2,129 |
2,122 |
2,196 |
|
Conservation Reserve Program |
1,785 |
1,789 |
1,850 |
1,862 |
1,931 |
1,948 |
|
Wetlands Reserve Program |
284 |
285 |
285 |
267 |
191 |
248 |
Working
land programs
|
430 |
765 |
1,047 |
1,263 |
1,362 |
1,477 |
|
Environmental Quality Incentives Program |
390 |
691 |
903 |
950 |
992 |
993 |
|
Agricultural Water Enhancement Program* |
25 |
45 |
65 |
65 |
70 |
60 |
|
Conservation Security Program** |
0 |
0 |
41 |
202 |
257 |
382 |
|
Wildlife Habitat Incentives Program |
15 |
29 |
38 |
46 |
43 |
42 |
Agricultural
land preservation
|
51 |
152 |
148 |
183 |
109 |
86 |
|
Farm and Ranch Land Protection Program |
51 |
98 |
91 |
112 |
74 |
73 |
|
Grassland Reserve Program |
0 |
54 |
57 |
71 |
35 |
13 |
Conservation
Technical Assistance |
679 |
712 |
742 |
696 |
687 |
627 |
Total,
major conservation programs |
3,229 |
3,703 |
4,072 |
4,271 |
4,280 |
4,386 |
*Previously the Ground
and Surface Water Program.
**Replaced by the
Conservation Stewardship Program in the 2008 Farm
Act.
Source:
ERS analysis of Office of Budget and Program
Analysis data. |
This "portfolio" approach to conservation
policy provides the flexibility needed to address agri-environmental
issues. Most producersregardless of their agri-environmental
problems, resource settings, and the size and management
structure of their operationhave options for receiving
Federal assistance for conservation.
With the exception of Conservation Technical Assistance
(funded through annual appropriations), all major USDA
conservation programs are funded through the Commodity
Credit Corporation (CCC). CCC funding is often referred
to as "mandatory;" CCC-funded
programs do not require annual appropriations. Nonetheless,
funding for these programs can be changed by Congress
at any time. Over the course of the 2002 Farm Act (2002-07),
actual spending in major conservation programs was
about 90 percent of the CCC authorized funding.
Conservation on Working Lands
Continuing a trend begun in the 2002 Farm Act, working
land programs will grow. Spending in
the four largest working land programs in the 2008 Act
is projected to be $11.7 billion for FYs 2008-2012, up
from $6.3 billion.
CCC Funding for Working Land Conservation Programs |
Program |
2002-07 |
2008-12 |
2002-07 to
2008-12
change |
|
$ million |
Percent |
Environmental Quality Incentives Program |
4,919 |
7,230 |
47 |
Agricultural Water Enhancement Program* |
330 |
280 |
-15 |
Conservation Security Program / Conservation Stewardship
Program** |
882 |
3,792 |
330 |
Wildlife Habitat Incentives Program |
213 |
425 |
100 |
Total, major conservation programs |
6,344 |
11,727 |
85 |
*Previously the Ground and Surface
Water Program.
**Conservation Stewardship
Program replaced the Conservation Security Program
in the 2008 Farm Act.
Source: Office of Budget and Policy Analysis budget summary data (2002-07)
and Congressional Budget Office (2008-12). |
If Congressional Budget Office projections for conservation
spending are realized for fiscal years 2008-12, combined
funding for the Environmental Quality Incentives Program
(EQIP) and the Conservation Stewardship Program (CStP)
will exceed spending in the Conservation Reserve Program
(CRP)reflecting a major change in U.S. agricultural
policy once dominated by the CRP.
d
If proposed funding is fully realized, spending in the
Environmental
Quality Incentives Program (EQIP), the major working-lands
program, will increase nearly 50 percent with the 2008
Farm Act, to about $7.2 billion for 2008-12. Average
annual authorized funding increased even more, as the
2008 Farm Act covers one less year than the 2002 Farm
Act.
Through EQIP, crop and livestock producers can get information
and technical and financial assistance in designing and
implementing conservation practices (structural or land
management) on their land. Sixty percent of the program's
funding continues to be targeted
for livestock producers.
The 2008 Farm Act targets 5 percent of funds for beginning
farmers and another 5 percent for socially disadvantaged
producers.
The 2008 Farm Act replaced the Conservation
Security Program (CSP) with the Conservation
Stewardship Program (CStP). Existing contracts, entered into under
the old CSP will continue in force. Beginning in 2009,
USDA will begin entering into contracts under the new
CStP. To the extent that it can be done, the 2008 Farm
Act directs USDA to enroll 12.77 million acres per
year in CStP at an average cost of $18 per acre per
year.
Program acreage is to be allocated to States based primarily on each
State's proportion of total national eligible acres, but also taking into account
conservation needs, the degree to which CStP can help address these needs , and
equity in the distribution of funds. Five percent of acres are to be made available
to beginning farmers, and another 5
percent to socially disadvantaged producers.
The Wildlife
Habitat Incentives Program (WHIP) provides technical
assistance and cost-sharing to landowners and producers
to develop and improve wildlife habitat. WHIP funding
was just over $213 million during 2002-2007 but is
slated to be $425 million over FY 2008-2012. The funding
cap on long-term agreements (15 years or more), providing
higher levels of cost-share assistance for priority
habitat land, was increased to 25 percent.
Land Retirement
Land
retirement programs pay producers to remove land
from crop production. In exchange for retiring land,
producers receive rental or easement payments, plus
cost sharing and technical assistance to aid in the
establishment and maintenance of permanent cover.
Economic use of the land is limited.
Land retirement dominated Federal agricultural conservation
spending between 1985 and 2002, and continues to be the
largest single component of agricultural conservation
spending. In FY 2000, 90 percent of cash conservation
payments made directly to producers was associated with
land retirement. Between 1985 and 2000, roughly 50 percent
of all USDA conservation spending was for land
retirement. (USDA conservation spending also includes
cost sharing and technical assistance for non-land retirement
activities, public works, and a range of other administrative,
data collection, and research activities.)
The 2008
Farm Act decreased the Conservation Reserve Program
(CRP) acreage cap from 39.2 million acres to 32 million
acres, beginning October 1, 2009.
Acreage-limited programs |
Program |
Previous acreage cap |
New acreage cap |
Enrolled (through FY 2008) |
|
Million acres |
Conservation
Reserve Program* |
39.2 |
32 |
34.7 |
Wetlands
Reserve Program |
2.275 |
3.041 |
1.9 |
*New acreage cap for CRP becomes
effective on October 1, 2009.
Source:
ERS analysis of NRCS and Farm Services Agency (FSA)
data. |
The Wetland
Reserve Program (WRP) acreage cap was raised from
2.275 million acres to 3.041 million, through 2012.
At the end of FY 2007 total CRP enrollment stood at
34.7 million acres, while WRP enrollment totaled nearly
2 million acres.
Agricultural Land Preservation
The Farmland
Protection Program (FPP, formerly the Farm
and Ranchland Protection Program) provides
funds to State, Tribal, or local governments and private
organizations to help purchase development rights and keep
productive farmland in agricultural use. The 2008 Farm
Act authorized funding of $743 million over FY 2008-12,
an increase of nearly 50 percent of what was actually spent
over 2002-07. The focus of the program was changed from
protecting topsoil to protecting agricultural use and
conversion values of land. Eligibility was expanded to
forest land and other land that contributes to economic
viability of the agricultural operation, or that serves
as a buffer from development.
The Grassland
Reserve Program (GRP) is
designed to improve and conserve grazing lands through
long-term rental agreements (10, 15, and 20 years) and
permanent easements (or longterm easements subject to
maximum term permitted by States). Cost-sharing is provided
for up to 50 percent of approved restoration and maintenance
costs. During FY 2003-2006, $217 million in financial
assistance was made available to producers through
GRP. The 2008 Farm Act expanded the enrollment limit by
1.22 million acres, to 3.22 million acres.
Other Conservation Programs
The Emergency
Conservation Program (ECP)
helps farmers to rehabilitate farmland damaged by natural
disasters. In particular, it addresses problems that,
if left untreated, would: (1) impair or endanger the
land, (2) reduce the productive capacity of the land,
(3) be so costly to rehabilitate that Federal assistance
would be required to return the land to productive agricultural
use, or (4) represent damage that is unlikely to recur
in the same area. The program is funded on an as-needed
basis, depending on the number and severity of natural
disasters that damage farmland. Through ECP, USDA spent
$330 million for FY 2003-2007.
Watershed Protection and RC&D
A final group of USDA programs provides conservation
protection for watersheds and includes Resource Conservation
& Development (RC&D). The watershed
protection programs generally assist local communities
with flood protection, water supply, and water quality.
RC&D encourages
and improves the capability of volunteer local elected
and civic leaders in designated RC&D
areas to plan and carry out projects for resource conservation
and community development.
Watershed
programs and RC&D,
FY 2003-07 |
Program |
2003 |
2004 |
2005 |
2006 |
2007 |
|
$ million |
Watershed
and flood prevention operations |
121 |
86 |
75 |
74 |
9 |
Watershed
surveys and planning |
11 |
10 |
7 |
6 |
6 |
Watershed
Rehabilitation Program |
29 |
30 |
27 |
31 |
31 |
Emergency Watershed Protection |
63 |
149 |
355 |
351 |
11 |
Resource
Conservation & Development |
50 |
52 |
51 |
50 |
51 |
Total |
274 |
327 |
515 |
512 |
108 |
Compliance Mechanisms
To improve consistency between commodity and conservation
programs, compliance
provisions require farmers to meet some minimum standard
of environmental protection on environmentally sensitive
land as a condition of eligibility for many Federal farm
program benefitsincluding farm commodity program
payments. Compliance mechanisms can also leverage farm
program payments for environmental gainwithout
additional paymentsto the extent that producers
adopt conservation practices to retain farm program eligibility.
Evidence suggests that compliance mechanisms have played
a role in leveraging reduction in overall soil erosion
and wetland conversion for agriculture.
|