The pressure on farmers and rural landowners to turn wetlands and grasslands into production, or productive farm and ranchland into commercial and residential developments, has been increasing for decades. In order to combat development pressures and incentivize conservation over elimination of ecologically valuable lands, the U.S. Department of Agriculture (USDA) offers the Agriculture Conservation Easement Program (ACEP), one of the four major farm bill conservation programs. ACEP helps private landowners, land trusts, and other entities preserve working farms and ranches and restore, protect, and enhance wetlands and grasslands through long-term easements.

On Tuesday, October 18, USDA published its final rule for ACEP, dividing it into the two tracks established by the farm bill – a Wetland Reserve Easement (WRE) component and an Agricultural Land Easement (ALE) component. Under WRE, reserve easement funds go directly to landowners and the focus is on restoring wetlands on farmland. In the ALE, easement funds are provided to non-profits, state and local agencies, and Indian tribes to purchase easements from farmers and landowners to retain and protect farmland and grasslands.

Last year, the National Sustainable Agriculture Coalition (NSAC) submitted detailed comments on the interim rule, which USDA first published in February 2015. Our recommendations, some of which USDA adopted in the final rule, focused primarily on enhancing natural resource conservation and increasing land access for beginning farmers and ranchers. See below for a detailed breakdown of the changes.

Conservation

The ACEP final rule requires ALE agreements to conserve or enhance a diversity of natural resources, and allows USDA’s Natural Resources Conservation Service (NRCS) to waive a portion of the cash contribution requirement if the landowner agrees to implement a comprehensive conservation plan according to NRCS conservation practice standards. In NSAC’s comments on the interim rule, we recommended that NRCS make comprehensive conservation planning a core component of ALE easements. Allowing a reduction in the eligible entity’s cash contribution is certainly a step in the right direction by creating new options for farmers to conserve natural resources on easement land. However, it is our opinion that by neglecting to include specific language and directives, the rule leaves too many of ALE’s conservation goals up to chance.

For example, the rule:

• “encourage[s] the development of a robust and comprehensive agricultural land easement plan, such as a plan at the NRCS Resource Management System (RMS) planning level,” but doesn’t require such a plan;
• explains that ALE plans may improve natural resources, but don’t have to;
• notes that eligible entities (e.g., land trusts) may work with NRCS to develop and implement a conservation plan, but don’t have to work with NRCS;
• gives states authority to limit the amount of ALE funding that goes to easements that protect Concentrated Animal Feeding Operations (CAFOs) by modifying state ranking criteria, but doesn’t encourage or direct them to do so; and
• allows states to consider climate benefits (carbon sequestration and climate resiliency) when ranking ALE applications, but doesn’t encourage or require them to do so.

NRCS has, however, added a new national ranking criterion to prioritize easements that protect permanent grassland against development or conversion to cropland; a move NSAC wholeheartedly applauds. The addition of this criterion means that when ranking ALE applications, NRCS will consider whether or not there has been a “decrease in the percentage of acreage of permanent grassland, pasture and rangeland, other than cropland and woodland pasture in the county in which the parcel is located between the last two USDA Censuses of Agriculture.” This change will help to stem the ongoing loss of prime grasslands.

Beginning and Socially Disadvantaged Farmers and Ranchers

In our comments on the ACEP interim rule, we urged NRCS to make it easier for beginning and socially disadvantaged farmers and ranchers to access land through ACEP. We focused in part on a tool known as an “Option to Purchase at Agricultural Value” (OPAV), which allows land trusts and other entities to sell easement land at the agricultural value rather than the non-agricultural market value, reducing land costs and increasing the likelihood that farmers can purchase the land and that beginning farmers may have a better chance of gaining access and taking over in the future.

NRCS adopted our recommendation that an OPAV should qualify as a succession plan, though the agency only made the change in the ACEP policy manual, not in the rule itself.

The final rule also incentivizes land transfer to beginning, socially disadvantaged, and veteran farmers and ranchers. If the covered parcel is part of a comprehensive plan to facilitate transfers to new and beginning farmers, or if a beginning, veteran or socially disadvantaged farmer or rancher has a purchase and sale agreement to acquire the property, the rule now allows for a reduction in the eligible entity’s cash contribution.

Funding Limitations

The preface to the final rule helps explain why more federal funding is necessary to achieve ACEP’s goals. The 2014 Farm Bill cut funding for conservation easements dramatically. ACEP’s predecessor programs – the Wetlands Reserve Program (WRP), Grassland Reserve Program (GRP), and Farm and Ranch Land Protection Program (FRPP) – received an average of $780 million per year annually under the 2008 Farm Bill. When these programs were amalgamated into ACEP in the 2014 Farm Bill funding was slashed 47 percent, to approximately $368 million annually.

At this funding level, NRCS is able to fund only 30 percent of the eligible applications that it receives. While reduced funding resulted in reduced enrollments across ACEP compared to prior years, the reduction in ACEP-WRE enrollments has been disproportionately larger than ACEP-ALE.

Looking toward the 2018 Farm Bill, NSAC will work to increase the amount of funding dedicated to ACEP and improve funding for both halves of the program. We will, however, oppose any effort to move funding from its wetland easement component to the agricultural land easement component. Currently, NRCS bases the allocation of funding between WRE and ALE on the level of demand, an approach supported by NSAC. According to the final rule, “demand under ACEP [in terms of both number of applications and funding requested] has been approximately 65 to 70 percent demand for WRE and 30 to 35 percent demand for ALE.”

As the 2018 Farm Bill discussions get underway, we look forward to working with our partner organizations to increase funding for ACEP and help USDA more effectively protect and conserve agricultural working lands and wetlands.