CSP Final Rule Released; Deadline Extended
June 3rd, 2010
USDA published the final rule for the Conservation Stewardship Program (CSP) in the June 3 Federal Register.
At the same time, USDA extended the cut-off date for farmers and ranchers to submit CSP applications at their local USDA office from June 11 to June 25.
Read the USDA release here. NSAC issued a press release today.
Those who apply by June 25 will then have about a month to get back to the local USDA office and complete the CSP Conservation Measurement Tool (CMT), a set of questions and program choices that determine how a proposal ranks and what the CSP payment levels would be. The CMT was created especially for CSP and measures conservation and environmental performance over a wide range of resource concerns, land use types, and conservation activities.
Once the CMTs have been completed, USDA will rank the proposals based on environmental performance and select the highest ranked farms for field visit verifications, followed by finalizing and signing contracts. Payments would begin after October 1.
Several major breakthroughs are included in the final rule. In two cases, the original rule written during the Bush Administration for the old Conservation Security Program was better than the interim rule that guided the 2009 sign-up.
In the interim rule, the Obama Administration abandoned a definition for resource-conserving crop rotations that required environmentally beneficial forages and perennials, and instead expanded the concept to include rotations comprised solely of commodity program crops like corn, soybeans, and cotton. The final rule returns to the status quo ante. Adoption of resource-conserving crop rotations is the only activity within CSP that makes on eligible for special supplemental payments.
The Bush-era rule for the old CSP program also provided for grass-based livestock grazing systems set up on cropland that is converted to grasses and legumes to be counted as “pastured cropland” eligible for a higher payment rate than regular pasture. The interim last year dropped that concept, with the result being the program would actually encourage plowing and row cropping over perennial bass-based systems. Today’s final rule returns to the pastured cropland concept, improving the environmental performance of the program.
The new rule also improves provisions regarding the interactions between CSP and other farm bill conservation programs.
The final rule moves away from an environmental performance or outcomes-based approach in one very critical respect. Rather than rewarding outcomes regardless of when a farmer starts to apply advanced conservation systems, the new final rule states an intention to pay more than performance-based ranking points otherwise indicate for newly adopted conservation activities and to pay less than performance ranking indicates for the active management of ongoing conservation activities.
This is a step backwards for the program, and is antithetical to the statutory requirements for CSP in the 2008 Farm Bill. It returns to the notion that late adopters should be incentivized and early adopters penalized, an idea that has been a mainstay of other conservation programs, but one that CSP was created in part to combat.
This issue was the first one highlighted in a large, multi-stakeholder letter to USDA Secretary Vilsack this past March.
Another change in the final rule was a one-step forward, one-step back proposition. The CSP payment formula results in very low payments to small acreage farms, regardless of the size of their gross sales or the environmental benefits provided. The final rule provides for a minimum contract payment rate for small acreage farms, but then limits the application of the minimum contract to beginning, minority, and limited resource farmers only. This unfortunate limitation will continue to make participation of small fruit and vegetable farms less likely, a seemingly contradictory proposal by the Obama Administration that otherwise has been touting the need to expand fresh, local food production.
In another surprise, the Administration rejected the recommendation that the final rule include a 2008 Farm Bill provision for CSP financial assistance to help the farmer prepare comprehensive conservation plans as part of CSP enrollment. In defending its decision not to implement the law, the preamble to the rule cites another CSP provision prohibiting payments for activities that do not have any cost to the producer. Evidently in USDA’s mind a farmer’s time and planning efforts and the costs involved in obtaining professional help are simply freebies. Perhaps the same rule of thumb should apply to government employees in that case!
In recognition of farms with joint tenancies, the final rule increases the standard per contact limitation of $200,000 over the life of the 5-year contract to $400,000 for joint operations. This is not problematic in and of itself – it is a useful fix of a possible problem in the interim rule. But joined with the Obama Administration’s rejection of our recommendation that participants be limited to those actively engaged in farming, it becomes a major loophole. Barring additional restrictions beyond what is provided in the rule, the per contract increase in the absence of actively engaged in farming rules will allow absentee non-farmer investors to collect CSP payments and will open the door to the creation of general partners whose primary purpose is to increase payments above statutory limitations. In other words, it invites abuse.
In combination with the Administration’s wholesale retreat from the President’s campaign promise to remove loopholes from actively engaged in farming rules with respect to commodity subsidies, it is becoming quite clear this Administration is simply not interested in payment reform as a practical matter.
More Information Coming
In the coming weeks, we will be issuing a short summary of the CSP program, rules, and sign-up information as well as a revised version of the Farmers Guide to the CSP. Stay tuned! In the meantime, help get the word out that the CSP application deadline to be considered for the 2010 enrollment has been extended until June 25.