April 30, 2012
Note to Readers — This is the fourth in a series of posts on the 2012 Farm Bill reported out of the Senate Agriculture Committee on April 26. With respect to conservation issues, previous posts have covered the Conservation Stewardship Program and sodsaver/highly erodible land and wetland conservation. This post covers other conservation title programs.
Conservation Reserve Program
The Senate Agriculture Committee’s version of the farm bill cuts the Conservation Title by $6.37 billion over ten years. Roughly 60 percent of the cut to conservation ($3.8 billion) comes from the Conservation Reserve Program (CRP). The program’s total acreage cap is ratcheted down over five years from its current level of 32 million acres to 25 million acres. To a significant degree, this reduction tracks changes in CRP enrollment expected as a result of market forces, though with the declining cap the opportunity for new general sign-ups would be relatively small.
Beyond reducing the acreage cap, the Senate bill makes a number of substantive changes to the program.
We are happy to report that funding for the CRP-Transition Incentives Program (CRP-TIP) for beginning farmers was doubled from $25 million in the underlying draft bill to $50 million over five years. The increase came by way of an amendment by Sen. Mike Johanns (R-NE) that was accepted as part of the revised bill issued by Chairwoman Debbie Stabenow (D-MI) and Ranking Member Pat Roberts (R-KS) on April 25. The program ran out of funds this year due to high demand and would have likely done so again in less than two years had funding been kept level at $25 million. The push by Sen. Johanns brought it closer to what is needed over the five-year farm bill.
CRP-TIP offers a special incentive of two years of extra CRP rental payments to owners of land that is currently in the CRP but returning to production, who rent or sell to beginning or socially disadvantaged farmers and ranchers who will use sustainable grazing practices, resource-conserving cropping systems, or transition to organic production. Unfortunately, the new Committee bill does not include measures to further strengthen the program that had been proposed in the Beginning Farmer and Rancher Opportunity Act (BFROA).
The Committee-approved bill adds grassland to the list of lands eligible for CRP enrollment, so long as the land is located in an area historically dominated by grass, is made up predominantly of plants suitable for grazing, and can provide habitat for ecologically significant animal and plant populations. It reserves 1.5 million acres within the program for enrollment of such grasslands, and gives a priority for enrolling land with expiring CRP contracts. NSAC advocated for a provision to encourage expired CRP acres to remain in grass-based agriculture under a long term or permanent grassland easement. While the change in the bill does not accomplish this, it is a decent second best alternative to conserve environmentally sensitive CRP grasslands.
The Senate Committee bill also waives the 25 percent rental rate reduction for grazing livestock on CRP acres when the livestock are owned by beginning producers. This provision was originally filed as an amendment by Senators Amy Klobuchar (D-MN), Mike Johanns (R-NE), and Max Baucus (D-MT) and was subsequently included in the revised draft bill issued by the Chair and Ranking Member on April 25. NSAC does not have a position on this provision, though we do worry some about possible abuse.
Environmental Quality Incentives Program and Wildlife Habitat Incentives Program
The bill combines the Environmental Quality Incentives Program (EQIP) and the Wildlife Habitat Incentives Program (WHIP) into a single program and cuts total funding by $1.605 billion, or approximately 8.7 percent. This cut is significantly smaller than the 10 percent cut included in the draft farm bill from last year.
As has always been the case for EQIP, 60 percent of the consolidated program’s funding goes to livestock operations, including but not limited to infrastructure expenditures for concentrated animal feeding operations (CAFOs). The new merged program also includes a 5 percent set aside for wildlife in lieu of WHIP.
The statutory language that led to creation of the EQIP Organic Initiative did not change. Attempts to improve program operation and coordination were turned back, as were efforts to equalize the payment limits applied to organic and non-organic producers. Organic farmers are limited to $80,000 in EQIP payments over a five-year period, whereas all other farmers are entitled to up to $300,000 in the same time period.
Both the Beginning Farmer and Rancher and Socially Disadvantaged Farmer and Rancher set asides within EQIP and CSP are retained at five percent. Efforts to increase the percentage to 10 percent were turned away, despite evidence that the set-asides have succeeding in helping to level the playing field for underserved segments of agriculture.
Senators Max Baucus (D-MT) and Mike Johanns (R-NE) championed an amendment that adds a new preference for veteran farmers and ranchers within the existing 5 percent set-asides for beginning and socially disadvantaged farmers and ranchers. The amendment also adds veteran farmers to the list of eligible applicants (along with beginning and socially disadvantaged farmers) who can receive an increased cost-share rate. While NSAC has championed several other veteran farmer issues that are included in the Beginning Farmer and Rancher Opportunity Act, we did not specifically advocate for the Baucus-Johanns provisions to be included in the mark.
The advanced EQIP cost share for Beginning, Socially Disadvantaged, and Limited Resource Farmers and Ranchers is also retained at 30 percent, as opposed to 50 percent proposed by the Beginning Farmer and Rancher Opportunity Act. Having the cash on hand to make the full expenditure in advance of receipt of the cost share is a significant barrier to participation by farmers with limited ability to pay.
The Senate bill makes two significant changes to the EQIP Conservation Innovation Grants (CIG) program. First, the bill eliminates a special carve out for projects that address air quality concerns on agricultural operations. Second, it establishes a new requirement that directs USDA to report to Congress on CIG project funding and results, and on efforts to integrate project findings into USDA’s conservation efforts. This was an NSAC proposal, and we applaud Chairwoman Stabenow and Ranking Member Roberts for including it in the Senate bill.
Regional Conservation Partnership Initiative
Like the draft farm bill prepared for the super committee last year, the Senate bill combines the Cooperative Conservation Partnership Initiative (CCPI), Agricultural Water Enhancement Program (AWEP), Chesapeake Bay Watershed Initiative (CBWI), and Great Lakes Restoration Initiative (GLRI) to create a single regional partnership program. The CCPI and its predecessor Partnerships and Cooperation Initiative were originally moved forward into the farm bill arena by NSAC.
While the CBWI and AWEP had a combined baseline of $1.1 billion through 2012, the new regional partnership program has a $1 billion baseline, equating to a $100 million or slightly less than 10 percent cut. Like the current CCPI, 6 percent of EQIP and CSP funds are reserved for the regional partnership program. However, unlike the current CCPI statute, which splits funding authority between the states (90 percent) and national (10 percent), the new bill splits the authority between national (50 percent), states (25 percent), and “critical areas” (25 percent).
Whereas the super committee draft specifically identified these critical areas, the new Senate Committee bill directs the Secretary to identify not more than eight such areas. According to the legislative language, a critical area will: (1) include multiple states with significant agricultural production; (2) be covered by an existing regional, state, binational, or multistate agreement; (3) have water quality concerns; (4) have water quantity concerns; and, (5) be subject to regulatory requirements that could reduce the economic scope of agricultural operations within the area.
Unlike current law and the earlier draft of the farm bill, the Senate version of the bill explicitly lists nutrient management as an eligible activity under the program. The language was filed as part of an amendment to be offered by Senator Sherrod Brown (D-OH) and was subsequently included in the April 25 revised draft bill. This is an important, albeit relatively small, step toward more comprehensive nutrient management policy in the farm bill. The regional partnership program also has an easement option through the Agricultural Conservation Easement Program, which is described below.
The new bill makes a significant step forward by strengthening the 2008 Farm Bill provision to allow for program rule flexibility with respect to local partnership programs. The new provision, including by the Chair and Ranking Member, clarifies that only basic rules regarding appeals, payment limits, and conservation compliance are not able to be waived. Other program rules can be modified if NRCS determines such changes would help fulfill the purposes of the partnership project.
Less clear is the status of funding for technical assistance under the program. While it is clear NRCS may provide technical assistance to farmers under special partnership projects, in the case where the partners provide the assistance, it is not entirely clear whether any portion of the funding for such assistant may come from NRCS. This issue if perhaps the key remaining issue for state and local farm and conservation organizations hoping to participate in this innovative program delivery mechanism.
Combined Easement Program
On the easement side of the Title, three programs – the Wetlands Reserve Program (WRP), Grasslands Reserve Program (GRP), and Farm and Ranch Lands Protection Program (FRPP) – are combined into a single easement program with two branches. The first branch combines FRPP and GRP into an ‘agricultural lands easement program.’ The second branch consists of a wetlands easement program very similar to the WRP.
Nationally, no less than 40 percent of the program funding can go to the agricultural lands easement program. While this does leave some room for USDA to increase that proportion, the split between wetland easements and agricultural land easements is expected to be 60/40, respectively, when the program is implemented. Each state conservationist, though, can request an adjustment to better reflect the needs of their state.
The funding for the new combined easement program will now all be denominated in dollars rather than acres per year. The program is provided with $3.2 billion over the next ten years and unlike the current WRP and GRP, the new funding is permanent funding rather than temporary. This is a significant improvement, though the flip side is that the overall funding levels for all three underlying programs will be signficantly less than what it has been per year in the last farm bill cycle.
Within the agricultural land easement program, we are very happy to report that the purpose of the program now includes the promotion of agricultural viability for future generations. This change was part of the Beginning Farmer and Rancher Opportunity Act and was pressed forward last week on an amendment by Sen. Pat Leahy (D-VT) that was accepted and included in the revised draft bill presented by the Chair and Ranking Member on April 25.
This is a big step forward toward ensuring that beginning farmers and ranchers are able to participate in the program and that the program itself aims to keep working farms in business over the long term. We will continue to explore opportunities to include additional provisions to advance this important concept that were part of the Beginning Farmer and Rancher Opportunity Act as the farm bill process moves forward.
Other Changes to the Conservation Title
The bill does, however, decrease funding for the Voluntary Public Access (VPA) program by 20 percent to $40 million over five years. While funding for VPA was reduced relative to the last farm bill, it was actually increased relative to the draft bill released on April 20.
The Senate bill includes a new provision that requires USDA to promulgate a single initial application for participation in all USDA conservation programs. This change was first proposed in an amendment filed by Senator Dick Lugar (R-IN) and is intended to help alleviate paperwork and redundancy for farmers and USDA.
Finally, the Senate bill creates a program to provide grants to states to purchase “terminal lakes” that are located on agricultural land and that are ineligible for enrollment in the Wetlands Reserve Program. The new language includes eligibility restrictions relating to flooding depth, access for agricultural use, and cropping and grazing history. The program includes a 50 percent state cost share. The language authorizes Congress to appropriate $25 million to remain available until expended for land purchase grants. It also provides $150 million in mandatory funding for the Department of the Interior’s Bureau of Reclamation to transfer water into some terminal lakes under certain conditions.