USDA and its partners will contribute almost $32 million to the projects to restore and preserve about 11,400 acres of wetlands.  Conservation activities will include converting cropland back to hardwoods and other permanent vegetation and modifying the hydrology to restore wetland functions.

The projects and their funding levels include:

• Arkansas:  Boeuf River Watershed  – NRCS and Partner (Arkansas Game and Fish Commission) Funding:  $2,178,316
• Arkansas:  Cache/L’Anguille – NRCS and Partner (Craighead County Conservation District) Funding:  $214,748
• Arkansas:  Cache River and Lower Whit-Bayou Des Arc wetlands restoration – NRCS and Partner (The Nature Conservancy) Funding:  $3,030,000
• Arkansas, Kentucky, Louisiana, Missouri, Mississippi, Tennessee:  Lower Mississippi River Batture hardwood forest and wetlands restoration ( Batture wetlands are found in the alluvial plains between the Mississippi River levees and the low water line of the River) – NRCS and Partner (Mississippi River Trust) Funding: $20,231,933
• Iowa: North Raccoon River Wetland Initiative (IA Prairie Pothole Region)- NRCS and Partner (Iowa Department of Natural Resources) Funding:  $6,183,000.

Landowners interested in funding to implement project activities should contact their local NRCS Office.  Cut-off dates for landowner applications vary with the project.

The first hearing was held on Wednesday May 16 and included two panels, an economist panel and a farm and commodity group panel.  The second hearing was held on Thursday, May 17 and also heard from two panels that included additional producer groups and representatives from the crop insurance industry.

Producer groups invited to testify over these two days of hearing included representatives from American Farm Bureau, National Farmers Union, National Corn Growers Association, American Soybean Association, National Association of Wheat Growers, National Barley Growers Association, USA Dry Pea and Lentil Council, USA Rice Producer’s Group, Southwest Council of Agribusiness, National Cotton Council, Southern Peanut Farmers Federation, and National Sorghum Producers.

To see a complete list of witnesses from the four panels, please click here for day one or here for day two.

Members who participated over these two days of hearings include Subcommittee Chairman Conaway (R-TX-11), Ranking Member Boswell (D-IA-3), Committee Chairman Lucas (R-OK-3), Committee Ranking Member Peterson (D-MN-7), and at one point or another most of the members of the Subcommittee.

Target Prices Versus Revenue Coverage

The overarching theme that resonated throughout these hearings was that federal farm safety net programs need to be equitable across all regions of the country and need to recognize the diversity in American agriculture.  Not surprisingly, witnesses who testified on behalf of peanuts, sorghum, and rice expressed the most opposition to the new revenue-based “shallow loss” farm program established in the farm bill approved by the Senate Agriculture Committee.

The Senate Committee-passed bill replaces the current direct and counter-cyclical payment programs with a “shallow loss” program known as Agriculture Risk Coverage (ARC).  In contrast, rice, sorghum, and peanut associations and many of the Members of the House Subcommittee prefer to retain a much-modified version of the current counter-cyclical price-based program.  Like today’s counter-cyclical program, their preferred commodity program would pay farmers when prices are low, but with significantly higher government-set price protection levels and with the program re-coupled to actual production of the price-protected commodity.  This combination of revisions makes the program more trade-distorting, less market-oriented, and far more expensive than today’s counter-cyclical program.

Several Members and witnesses referred to the Senate approach pejoratively as a “one size fits all” proposal that provides a safety net only so long as commodity prices remain relatively high over a long period of time.  The concern is that if prices come down and stay down for a period of years, there will not be enough price and income protection in the more market-oriented Senate ARC approach.

The debate over the direction of the commodity subsidy system is likely to result in two different approaches in the House and Senate farm bills that will then have to be negotiated and compromised in a House-Senate conference committee later in the farm bill process.  While it is quite possible to include both programs and make them separate options  for producers to choose between, doing both within the farm bill budget constraints will necessarily mean both programs would offer less protection than would be afforded if there were a single, unified program.  Assuming the House Committee bill includes both options and assuming they stick with the same budget constraint as the Senate Committee did, the emerging House bill will present a preview of what such a dual program would look like.

Revenue Coverage Versus Crop Insurance

There was also concern among some Members and witnesses representing the crop insurance industry that the ARC proposal included in the Senate bill competes with the federal crop insurance program by offering similar coverage levels but at no cost to producers, which some contend might influence a producer’s decision in whether they purchase crop insurance, rely soley on the free Title I revenue-based program, or do both but choose lower insurance coverage options.

At least one economist testifying said in his view it was more likely that producers would do both – take the free revenue protection provided by ARC in the commodity title but also continue to choose high levels of revenue insurance protection, at highly subsidized rates, in the crop insurance title.

There is not yet a final budget scoring on the Senate Committee-passed bill, but when it does finally emerge it is expected to show at least a couple of billion dollar savings over the course of ten years based on farmers choosing somewhat lower revenue insurance coverage levels given the existence of the ARC shallow loss protection.  Given the over $90 billion the crop and revenue insurance program subsidies are expected to cost the taxpayers over the next ten years, however, a few billion dollars actually represents a fairly small displacement rate.

Payment Limits

Payment limits was a topic of much discussion throughout much of the hearing testimony and Member statements.  The Senate Committee-passed bill caps ARC payments at no more than $50,000 per farm per year, and also includes important new “actively engaged in farming” requirements that close existing loopholes that currently allow mega farms to collect many multiple times the legal payment limit.

When questioned specifically on the issue of placing payment limits on federally subsidized crop insurance premiums, it was unsurprising that the majority of farm and commodity groups, wanting to ensure continued access to unlimited subsidies for mega farms, testified in these hearings opposed to the Senate bill’s payment limits and requirements that recipients be actively engaged in farming to be eligible for the program.

Most of the witnesses also testified in opposition to any limits on crop and revenue insurance subsidies.  The Senate Committee bill, while adopting reform provisions on the commodity title side of the ledger, leaves the crop and revenue insurance side of the subsidy ledger wide open with no caps and no requirements as to who can receive the subsidies.  That inconsistency – putting caps on the smaller of the two subsides while leaving the larger subsidy wide open for abuse – will be the topic of a Senate floor amendment, and likely a House floor amendment as well.  As we have previously reported, Senators Coburn (R-OK) and Durbin (D-IL) have been vocal in their support for placing a limit on the amount of taxpayer subsidies that any one producer can receive.

Roger Johnson, head of the National Farmers Union, was the lone witness testifying in support of strict commodity and crop insurance payment limits.

Conservation Compliance

Another issue raised in the House hearings was whether or not conservation requirements should be tied to federally subsidized crop insurance premium subsidies.  To receive commodity subsidies or farm bill conservation payments, producers must comply with soil erosion prevention plans if they farm highly erodible land and must promise not to drain any wetlands on their property.  Under the original conservation provision passed by Congress as part of the 1985 Farm Bill these very basic requirements applied to the receipt of crop insurance subsidies as well, but that requirement was later removed as part of the 1996 Farm Bill.

When the panelists on the producer panel during both days of hearings were asked about this, the overwhelming response was in line with what we’ve been hearing from these groups throughout the farm bill debate – the fact that taxpayers pay for most of the farmers insurance premiums, to the tune of over $7 billion a year, does not entitle taxpayers to expect any quid pro quo with respect to conserving the natural resources.

Again, NFU was the exception, stating their sensible position in support of the “the reestablishment of compliance requirements for federal crop insurance eligibility so that all existing or new crop and revenue insurance or other risk management programs are subject to all conservation compliance provisions.”

Beginning Farmers

When talking about any farm program, it is easy to leave out how young and beginning farmers experience these programs differently than more established producers, and crop insurance and revenue-based commodity programs are certainly no exception.  Representative Walz (D-MN-1), who is one of the two lead sponsors of the Beginning Farmer and Rancher Opportunity Act, was one of the only members on the committee to press the panel specifically on how to address the barriers that new producers face when trying to access farm safety net programs.  A challenge with revenue-based programs is how to make it worthwhile for new producers to participate, since they lack an established production history, and therefore are protected at a lower rate than producers with an established revenue history.  Compounding the increased risk that new producers take on in the first few years when they are establishing their farming operation, most lenders either require that borrowers have crop insurance or if not still use this as an essential component in evaluating the risk of providing a loan to a new farmer.

Unfortunately, the panelists were generally unable to offer any suggestions or solutions for how to improve crop insurance programs for new producers, but did acknowledge that this continues to be an issue.

Provisions included in the Senate bill, based on an amendment by Senators Klobuchar (D-MN) and Baucus (D-MT), attempt to make it easier for beginners to be able to afford crop insurance by reducing the premiums charged for beginning farmers and improving their assigned yields.  NSAC is supportive of the intent of those Senate provisions but is encouraging Congress to further refine them as the farm bill process moves forward.

Diversified Operations

Although specialty crops are generally not included in most discussions on farm commodity programs, there were several points during these hearings where farm safety net issues related to diversified operations did come up.  Rep. Walz asked a pointed question of the producer panelists of whether or not there was room in this farm bill for planting flexibility and whole farm revenue insurance (which was included the Senate bill).  Although the specialty crop industry has been generally opposed to planting flexibility, Walz argued that it allows producers who want to diversify to respond to market signals and move some of their acres from commodities to fruits and vegetables.  Whole farm revenue insurance is another option that allows diversified producers of both commodity and non-commodity crops to participate in farm safety net program by providing revenue protection for a wide diversity of crops at the whole farm scale.

Roger Johnson was the only panelist to immediately respond on these issues, stating that whole farm revenue insurance is generally underappreciated in agriculture because we tend to think crop by crop.  In many parts of the country though, farmers plant a lot of different crops, and we need to allow farmers to plant what they think makes sense.

The NFU testimony also included another very sensible recommendation: “Crop insurance should be improved for organic producers, including ending the existing surcharge on organic policies and the full implementation of coverage levels based on organic prices.  Additionally, crop insurance products and risk management tools should be developed for specialty crop producers.”

Planting flexibility, whole farm revenue insurance, and improvements to organic crop insurance are included in the Local Farms, Food and Jobs Act.

To see a video of the hearings, or read witnesses written testimony, click here.

The funding is intended to complement, rather than duplicate, funding available under the NRCS Mississippi River Basin Initiative and Chesapeake Bay Watershed Initiative and the multi-agency Great Lakes Restoration Initiative.

NRCS State Conservationists, in consultation with State Technical Committees and state environmental agencies, were authorized to choose from one to seven watersheds within their state for inclusion within the Initiative.  The Initiative focuses on watersheds categorized as 12-digit hydrological units under the U.S. Geological Survey’s hydrological unit code (HUC) system.  Generally, these 12-digit watersheds range from 10,000 acres to 40,000 acres.

NRCS has posted a map  and a list of the selected watersheds on its website.  In addition, many of the NRCS State Conservationists have posted announcements with details on the Initiative and state maps of the watersheds on their websites.

Farmers and ranchers in the selected watersheds can begin submitting applications for Initiative funding on May 18 with their NRCS State Conservationist or at a USDA service center.  The application period closes on June 15.   NRCS will select applications through a competitive process and began awarding contracts this summer.

Additional funding for on-farm conservation work may be available in some states from state environmental agencies through the EPA Section 319 grant program or other sources and from conservation organizations.

NRCS Chief Dave White also indicated during a teleconference for the announcement that NRCS would work with federal and state agencies, including among others the U.S. Geological Survey and the U.S. Environmental Protection Agency, to monitor the environmental outcomes of the Initiative.

In 1985, Congress wisely decided that basic soil and wetland protections should be a requirement for any farm receiving any type of farm subsidies.  In 1996, crop insurance subsidies were delinked from conservation requirements intended to protect highly erodible land and conserve wetlands.

The argument at the time was that crop insurance was a small program in need of much greater participation, hence the fewer requirements the better.  Since then, however, the premium subsidy has grown from less than $900 million in 1995 to a $7.3 billion subsidy in 2011 that covers over 260 million acres of farmland, with a participation rate of 80 percent for the major commodity crops.  Clearly the arguments used in 1996 to delink the programs no longer hold.

The issue for the 2012 Farm Bill is quite simple – will taxpayers be told to shell out close to $100 billion in insurance subsidies over the next decade and not even have the assurance that environmental harm and harm to our future food security will be minimized in the process?  And will farmers, who in polls and surveys overwhelmingly support the highly erodible land and wetlands conservation provisions, be denied a level playing field in which a few bad actors can destroy wetlands or allow excessive soil erosion while still taking public subsidies?

So far, the answer of the Senate Agriculture Committee sadly has been yes.  They approved a farm bill that does not even contain minimal basic conservation requirements in return for massive insurance subsidies.  But this need not be the final answer.  The full Senate will take up the bill soon, quite possibly in June, and could vote to relink conservation with crop insurance subsidies.

In our 2012 Farm Bill platform, Farming for the Future, NSAC urges Congress to reestablish this crop insurance conservation compact, thus preserving our natural resources while improving the farm safety net.  NSAC has also proposed legislation to accomplish this common sense objective.

Over the past few weeks a spate of editorials in leading farm state newspapers have decried the Senate Committee’s approval of a Farm Bill that fails to relink crop insurance to conservation compliance:

• A Des Moines Register editorial is headlined “US Aid to Farms Should Have Strings.”  The editorial finds that the Senate bill contains a potential “environmental land mine” with the shift from direct cash subsidies to crop insurance delinked from conservation compliance.  It concludes that “ . . . it is not too much to ask that all farmers who benefit [from crop insurance subsidies] should be good stewards of the land.”

• A Minnesota Star Tribune editorial agreed, criticizing the Senate Committee bill for not requiring land stewardship practices as a condition for the premium subsidy.  The Star Tribune went a step further, opining that the crop insurance subsidy itself goes over the top, because the subsidy is available without regard to income and is not capped with a payment limit.  The editorial noted this arrangement artificially increases land values and raises barriers to beginning farmers and small farmers looking to buy or rent land.

• An editorial in the Lincoln, Nebraska Star Journal applauded the state’s Senators Mike Johanns and Ben Nelson for supporting a “Sodsaver” provision to help preserve native grasslands.  But it also criticized the Senate bill for falling to include requirements and enforcement measure to discourage farming on highly erodible land.  Without these restrictions, the editorial concludes that “ . . . the crop insurance program has the potential to turn into a boondoggle for taxpayers and a disaster for conservation.”

• The Sioux City Iowa Journal ran a guest editorial written by Brad Redlin, National Agricultural Program Director with the Izaak Walton League of America, and Jerry Peckumn, an Iowa farmer who is also board chairman of Iowa Rivers Revival.  They call for reestablishment of the existing and logical covenant between taxpayers and producers that is represented by the conservation compliance linkage to crop subsidies, including crop insurance.  This linkage can save taxpayer dollars, protect natural resources, and improve conservation outcomes.

Many others also support the position of these editorials that crop insurance subsidies should be relinked to highly erodible land and wetland conservation compliance requirements.  Earlier this year, four letters were delivered to the Agriculture Committees in support of relinking crop insurance to conservation — one from two former U.S. Secretaries of Agriculture, one from four former Chiefs of the Natural Resources Conservation Service, a third from 15 national conservation organizations including NSAC, and a fourth from 90 water groups including the American Water Works Association, National Association of Clean Water Agencies, Association of State Drinking Water Administrators, National Association of Water Companies.

For more information on this issue, see the NSAC fact sheet on conservation compliance and our summary of the Senate Farm Bill’s conservation and commodity and crop insurance provisions. 

Overall, the bill that was reported out of Committee last Thursday supports key pieces of the suite of unique programs that serve the organic sector.  Most of the organic provisions included in the draft bill presented by Chairwoman Debbie Stabenow (D-MI and Ranking Member Pat Roberts (R-KS) we reported on early last week remained unchanged in the package that the Committee approved.  Several organic amendments were filed before the markup, and two of them were included in the bill passed out of Committee.

Overview of Organic Provisions

The bill reported out of Committee maintains the mandatory funding levels included in the Chairwoman’s mark for organic programs.  Funding for national organic certification cost-share remained at $11.5 million per year, for the Organic Agriculture Research and Extension Initiative (OREI) at $16 million per year, and for the Organic Production and Market Data Initiatives (ODI) at $5 million over the life of the bill.  The bill also provided $5 million in mandatory funding for technology upgrades at the National Organic Program (NOP).

The modifications to OREI priorities and to ODI that we reported on last week remained in the bill, and the no-cost policy changes to the Environmental Quality Incentives Program organic provision that NSAC supported sadly were not made.

Organic Crop Insurance

The mark did not include changes to make crop insurance more appropriate for organic farmers, and Sen. Casey (D-PA) filed an amendment to make these changes.  Sen. Casey’s amendment would have eliminated for all crops the unjustified premium surcharge that organic farmers pay for coverage of all but a dozen organic crops, and would have directed the Risk Management Agency to develop and publish a complete organic price series.

Although the amendment was filed, and these changes were included in the Senate’s version of the 2008 Farm Bill, the Committee did not vote on the amendment and it was not included in the approved bill.

National Organic Program Enforcement

Sen. Leahy (D-VT) championed an amendment to improve NOP’s enforcement authority that was included in the revised bill provided to the Committee by the Chair and Ranking Member on April 25 and remained in the bill reported out of Committee.  With an increased focus on enforcement of organic standards at the U.S. Department of Agriculture, NOP has identified areas of needed authority to improve organic enforcement.  Sen. Leahy’s amendment grants NOP stronger enforcement authority.

Specifically, Sen. Leahy’s amendment requires organic producers, handlers, and certifying agents to submit records – that will be kept confidential – associated with organic certification at the Secretary’s request, and requires those records to be kept for 5 years for most people participating in organic, and 10 years for certifiers.  The amendment allows the Secretary to carry out an investigation to verify the accuracy of the information provided, and provides USDA with authority to subpoena the records.  Through the amendment, the Secretary can also issue an order to stop the sale of a product misrepresented as organic, and suspend and revoke organic certification.  The amendment also outlines an appeals process, and provides a penalty for a person that violates an order or revocation.

Organic Research and Promotion Program

Sen. Casey also championed an organic check-off amendment.  The amendment would have provided USDA with the authority to issue an organic commodity promotion order; would have allowed organic producers that currently participate in conventional check-off programs the ability to choose whether to participate in the conventional commodity check-off or an organic check-off if one is created; and would have clarified that an organic-only producer can choose to be exempt from a conventional check-off.  The Organic Trade Association is the lead stakeholder advocating for these changes.

A much modified version of the amendment was included in the revised draft bill issued April 25 and in the bill reported out of Committee.  The bill requires USDA to submit a report to Congress that describes what the Secretary is doing to ensure that check-off activities reflect the priorities of all members in a check-off, and assesses the feasibility of creating an organic check-off.

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.

Within the 5 percent set-asides for socially disadvantaged farmers and ranchers, the Senate bill creates a new preference for farmers and ranchers who are veterans.  It 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.  NSAC worked for the inclusion of the veteran farmer provisions and we applaud Senators Max Baucus (D-MT) and Mike Johanns (R-NE) for successfully spearheading the effort.

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.

With much of the rhetoric and substance of the new, in-the-making 2012 Farm Bill revolving around the rapidly growing and expensive crop insurance title, major corresponding attention has been given by the conservation community to the relationship between insurance subsidies and conservation.  Two campaigns have been launched, one to restore highly erodible land and wetland conservation requirements in return for the taxpayer paying the majority of farmers’ insurance premiums and one to prevent subsidizing the destruction of prime grasslands.

Sodsaver

We are thrilled to report that the Senate Agriculture Committee’s version of the Farm Bill, as passed out of Committee on April 26, includes a nationwide Sodsaver provision to protect native prairie across the country.  The Sodsaver provision was originally filed as an amendment on April 23 by Republican Senators John Thune (R-SD), Mike Johanns (R-NE) and Democratic Senator Sherrod Brown (D-OH) and subsequently was accepted into the revised draft bill presented by Chairwoman Debbie Stabenow (D-MI) and Ranking Member Pat Roberts (R-KS) on April 25.  NSAC commends these Senators for their commitment to conserving our most valuable natural resources.

While the Sodsaver provision in the Senate bill does not, as we had proposed, deny all crop insurance subsidies on newly broken out land, it does provide for a 50 percent point reduction in the subsidy.  It also includes two important provisions that prevent people from gaming the system to increase their revenue insurance coverage at the expense of taxpayers and the environment.  One keeps the newly broken out land isolated from other crop acres the producer may have when calculating insurable yields. The other requires the operator to take a percentage of the county average yield until being able to show a multi-year yield history.

The Thune amendment to the Senate bill also prohibits commodity program benefits from being earned on newly broken out land.

Bringing native lands into production reduces available grazing land, increases long-term costs due to erosion and nutrient loss, and ultimately leads to lower water quality, reduced flood mitigation capacity and lost outdoor recreation activities.

This is not the first time that a national Sodsaver provision was included in the Senate Agriculture Committee’s version of the farm bill.  A full-fledged Sodsaver provision to prohibit crop insurance subsidies, disaster assistance, and other farm program payments on land that is broken from native sod was successfully included with broad support in both the House and Senate versions of the 2008 Farm Bill, but was dismantled in conference and became a voluntary project that never got off the ground.  NSAC strongly supports the new provision and will work to see it is included in the final 2012 Farm Bill.

Highly Erodible Land and Wetland Conservation

While the Senate bill does reattach attach highly erodible land and wetland conservation requirements to Title 1 commodity payments, conservation program payments, and federal loan programs, we are disappointed to report that it does not do so for the largest of all farm payment categories, federal crop insurance subsidies.

This is an increasingly important piece of the conservation toolbox, as federal crop insurance subsidies continue to grow, soil continues to erode on 100 million acres at unsustainable levels, and wetlands continue to be lost.  Federal crop insurance, which incentivizes agricultural production on marginal lands, is perfectly suited for highly erodible land and wetland conservation measures.  Reattaching conservation requirements to insurance subsidies is a commonsense move that we intend to pursue on the Senate floor and in the House.

To read more about highly erodible land and wetland conservation compliance, visit our blog posts on three recent letters, one from former U.S. Secretaries of Agriculture, one from former Chiefs of the Natural Resources Conservation Service, and one from 15 national organizations, all delivered to the Senate Agriculture Committee.

Step Forward, Two Steps Backward for Conservation Stewardship Program

First the good news: the Conservation Stewardship Program (CSP) remains part of the revised conservation title for the 2012 Farm Bill approved by the Senate Agriculture Committee on April 26.  The program emerges from Senate Committee markup continuing as an ongoing, permanent program with substantial funding on a par with the other large working lands program, the Environmental Quality Incentives Program.

The CSP provides comprehensive conservation assistance to farmers and ranchers to resolve particular priority resource concerns in a given location and address the full range of conservation issues, including soil quality, soil erosion, water quality and quantity, wildlife and biodiversity, air quality, and energy conservation.  It offers farmers the opportunity to augment the foundation of their good current conservation efforts by earning payments for actively managing and maintaining them, expanding and improving them, and adding new conservation activities—even while they work their lands for production.  CSP is for working farms and ranches, built on the belief that we must enhance natural resource and environmental protection at the same time we produce profitable food, fiber and energy.

Unlike EQIP, which provides “once and done” cost share assistance for implementing new conservation activities, primarily for structures and equipment, CSP provides support for ongoing advanced conservation management of farming operations on a long-term, continual improvement basis.

NSAC has a very extensive platform for improvements in the conservation title of the 2012 Farm Bill, but none more important than retaining and improving CSP.

In light of that priority status, we are unhappy to report that the good news from last week comes with two major setbacks, one expected, one less so.

Funding

As has been clear since a draft farm bill was put together by the chairs and ranking members of the House and Senate Agriculture Committee last year for the ill-fated congressional super committee, the conservation title has been slated to be cut by 10 percent, or about $6.4 billion over the next decade, in the 2012 Farm Bill.  As part of that overall slashing of the conservation budget, the Conservation Stewardship Program has also been on deck for a 10 percent or $2 billion cut, wiping out the $1 billion increase it received in the 2008 Farm Bill with another $1 billion cut added on top of that.

Rather than enrolling 12.769 million acres a year, as was the case under the 2008 Farm Bill, if the new conservation title becomes law, the annual amount will decrease to 10.34 million acres a year.  The national average payment rate per acre, including both financial and technical assistance and administrative costs will remain at $18 an acre.  (That is an average rate; the rate for individual farms can vary widely, depending on land use and conservation benefits).

The NSAC farm bill platform called for a decrease in the number of acres enrolled each year but an increase in the average per acre payment rate, with no change in net funding for the program.  That recommendation was based on a program analysis that suggested farmers would tend to choose conservation activities with higher conservation and environmental impact if payments were not such a small percentage of their costs as is currently the case.

Policy

While the large 10 percent cut had long been anticipated, the second big step backward for the CSP was more unexpected.  When the draft farm bill presented to the Senate Agriculture Committee by Chair Debbie Stabenow (D-MI) and Ranking Member Pat Roberts (R-KS) on April 20, it became clear there were serious policy setbacks for the program as well.

In the place of a comprehensive conservation program that both targeted conservation priorities by watershed and encouraged farmers to meet or exceed environmental thresholds for these priorities while also taking steps to improve other resource concerns such as soil quality and energy conservation, the proposal laid before the Committee scaled back the program to one that would focus only on a small handful of priority concerns and limit supported conservation activities to a narrow subset.  Thankfully, this was corrected in the revised bill presented to the Committee on April 25 based on amendments pursued by Sen. Harkin (D-IA) and accepted by Chairwoman Stabenow and Ranking Member Roberts.  This is an incredibly important revision and is now part of the bill reported out of Committee.

Another critical improvement made in the bill last week is on the issue of contract renewals.  Under the draft bill presented on April 20, CSP contract renewals were based in part on the farmer agreeing to address two additional priority resource concerns.  This would not be possible for farmers who already are addressing all priority resource concerns at levels exceeding the good stewardship threshold levels.  Additional language pursued by Sen. Harkin and accepted by the Chair and Ranking Member clarifies that the test is whether a farmer has met or exceeded or will meet or exceed those levels.

On other issues, though, there are still major setbacks in the bill as reported:

• Rather than ranking CSP applications solely by their projected environmental benefits based on the totality of the conservation activity on the farm, the new Senate farm bill proposal maintains a more complicated ranking system that has had the effect of NRCS providing greater points to those who enter the program with less conservation on the ground and fewer points to those with the highest level of conservation, keeping the best stewards out of the program.

• Rather than clarifying how the 2008 Farm Bill encouraged farmers to undertake comprehensive conservation planning, the new bill moved in the opposite direction, narrowing the scope of conservation planning.

• Rather than clarifying the law to provide for CSP payments for farmers with the strongest commitment to highly diversified resource-conserving crop rotations, the new proposal continues to single out those who will adopt diversification strategies in the future.

• Rather than add language to allow landowners to make a smooth transition from a Conservation Reserve Program contract to a CSP contract, the new bill would keep the current one year lag, but then give former CRP contract holders additional ranking points, providing them with an unfair advantage over all other producers.

• Rather than making the program work more fairly for New England, Appalachia and other areas with a predominance of small acreage farms, the new bill continues to base payments on size of farm, with no allowance for a minimum contract rate.

• Rather than clarifying the 2008 Farm Bill provision encouraging farmers to voluntarily undertake on-farm conservation research, the new proposal eliminated it as an option altogether.

• Rather than improve the Conservation Measurement Tool – the engine that drives CSP enrollment – and increase its transparency, the new bill eliminates all references to environmental benefit measurement tools, leaving the future direction of the program and its basic operating system a bit of an in-limbo mystery.

• Rather than adding organic farmers to a USDA coordination provision, the new bill continues to direct special interagency coordination with respect to transitioning farmers only.

• Rather than increasing the successful beginning farmer set-aside from five percent to ten percent (which would still be less than half the beginning farmer fair share, the bill maintains the status quo.

Other changes to CSP include a switch from each watershed selecting between three and five priority resource concerns to each watershed choosing at least five.  It is unclear from the bill language whether this is intended to apply to the eight major resource concerns or to a much longer list of more specific resource concerns.  We believe this provision must be clarified as the farm bill proceeds.

The new bill eliminates the existing 10 percent set-aside for forested land.  The bill also eliminates the current prohibition against enrolling the same land in CSP and what is today the Grassland Reserve Program and will become the Agricultural Land Easement program in the new bill.

NSAC will continue to work for CSP improvements as the farm bill process moves forward.

We are thrilled to report the bill approved by the Appropriations Committee endorsed the Administration’s proposal to fund for the first time the Sustainable Agriculture Federal-State Matching Grant Program as a new component of the Sustainable Agriculture Research and Education (SARE) program.  Combined, the Committee bill provides for $22.7 million for SARE, including $3.5 million for the matching grant initiative.  The latter was authorized by Congress, along with the rest of SARE, back in 1990, but to date it has never received an appropriation.  The Committee’s proposed funding level represents a long overdue 18 percent increase in funding.

We are also glad the Committee endorsed the Administration’s proposal to increase spending for the Value-Added Producer Grants program by $1 million to $15 million.  This is still $5 million less than the long-term funding level for the program and $25 million less than the 2002 Farm Bill provided for the program, but at least a modest step back in the right direction.

In the conservation part of the bill, we are delighted the Committee chose to reject the Administration’s proposal to cut a portion of farm bill mandatory funding for the Conservation Stewardship Program (CSP).  We strongly oppose backdoor efforts in the appropriations bill to reduce mandatory farm bill funding for conservation and applaud the Committee for keeping CSP funding intact.

The Committee bill also steered clear of cuts to the Farmland Protection Program, the Wetlands Reserve Program, and several other conservation programs.  However, they did propose to cut $350 million out of the farm bill mandatory funding level of $1.75 billion for the Environmental Quality Incentives Program, the same amount as in FY 11 and FY 12.  Also cut was farm bill funding for the Wildlife Habitat Incentives Program, down $12 million from the farm bill level of $85 million, a smaller cut than made in the FY 12 appropriations act.

We are also pleased to report the Senate Committee did not include the legislative rider from the FY 12 appropriations act that acts to prevent USDA from doing its job to ensure fair competition in the livestock and poultry marketplace.

The Committee also:

• includes a big bump up for the Agriculture and Food Research Initiative, a quasi-competitive research, education and extension grants program, from $264 million currently to $298 million, a 13 percent increase;
• keeps direct and guaranteed farm ownership and operating loan funds constant at FY 12 levels; NSAC has requested an increase for direct farm ownership loans targeted to beginning farmers and ranchers;
• allows $3 million in remaining 2008 Farm Bill funding for the Rural Microentrepreneur Assistance Program to be spent in 2013; we had advocated for additional discretionary funding but none was granted; and
• maintains level funding or very modest increases for a variety of other programs we follow closely including ATTRA, Organic Transitions Research, IPM Regional Centers, Office of Advocacy and Outreach, Local and Regional Food Enterprise Loan Guarantees, State Mediation Grants, Conservation Operations including Technical Assistance, and others.

For more details, see the NSAC Appropriations Chart on our website, which is now up-to-date with Senate Committee action.

For general details on the bill refer to the Committee’s summary.

To read about the big conflict between House and Senate spending levels for 2013, read our earlier post.

The Senate Agriculture Committee voted the Agriculture Reform, Food and Jobs Act — the proposed name for the 2012 Farm Bill — out of Committee on Thursday, April 26.  The markup and negotiations that immediately preceded the markup resulted in some significant improvements in the bill for beginning farmers, though the bill still needs to do more in this area in our view.

Last year, Sen. Tom Harkin (D-IA) along with Agriculture Committee members Sens. Leahy (D-VT), Kloubhar (D-MN), Casey (D-PA), Brown (D-OH) and nine off-Committee sponsors introduced the Beginning Farmer and Rancher Opportunity Act (S. 1850) as a template for provisions that should be included in the new Farm Bill.  An identical bill (H.R. 3236) was introduced at the same time in the House by Reps. Walz (D-MN) and Fortenberry (R-NE).

Here’s a title by title breakdown of what beginning farmer related provisions were (and were not) included in the Farm Bill that emerged out of the Senate Committee markup.  This post focuses on changes adopted since a week ago when the the draft farm bill bill was first presented by Chairwoman Stabenow (D-MI) and Ranking Member Roberts (R-KS).  A previous blog post on beginning farmers summarizes the provisions as presented in the original draft bill.

Conservation

The popular Transitions Incentive Program (see previous blog post for more details) was championed by Sen. Johanns (R-NE) and included in the manager’s amendment that was presented during committee markup with increased funding of $50 million over the life of the farm bill, rather than just the $25 million included in the bill presented for Committee conservation.  NSAC applauds the Senator for his leadership on this issue which addresses the common challenge of accessing land that many beginning farmers and rancher face when looking to farm.  It is not clear if $50 million will prove to be sufficient for the program over the next five years and it may well be a bit short, but the amendment definitely made it closer to the mark.

Another win for beginning farmers in the conservation title was Sen. Leahy’s addition of “promoting agricultural viability for future generations” to the purpose of the newly created Agricultural Land Easements Program, which consolidates the existing Farm and Ranch Land Protection Program (FRPP) with other conservation easement programs.  The farm viability provision is an important improvement to what is today the FRPP.  The amendment did not cover the full breadth of the proposal in the Beginning Farmer and Rancher Opportunity Act, but is an important step in the right direction.

The existing set-asides, higher cost-share rates, and the advance payment option within the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) were left intact, however the proposed increases in these provisions that were included in the Beginning Farmer and Rancher Opportunity Act, were not included.

Two other amendments that were included in the final bill were one that adds veteran farmers to the list of eligible applicants (along with beginning and socially disadvantaged farmers) who can receive an increased cost-share rate under EQIP and one that creates an exemption to allow beginning farmers and ranchers to graze on land enrolled in the Conservation Reserve Program.

Credit

There were no huge changes in the credit title from what was included in the bill prior to markup and the bill that was voted out of committee this week.  Of note, the Down Payment Loan Program maintained the higher value of land that can be financed that was included in the draft bill, as proposed and championed by Sen. Harkin.  This change will increase the utility of the down payment program in areas with high land costs.

The Beginning Farmer Individual Development Accounts program, for which NSAC has been advocating for funding since it creation in the last farm bill, was maintained but unfortunately still not funded.

One minor change included in the final committee bill changed loan eligibility criteria to require a farmer to have “participated in a farm operation” in order to receive a direct farm ownership loan, rather than having “operated” a farm to qualify.

Sadly, language included in the original draft bill presented to the Committee that restricted conservation loans to family-sized farms was stripped out of the final bill that is now headed to the Senate floor.

Finally, we were disappointed to see that despite efforts of key champions on the Committee, an authorization for a microloan program was not included in the final package.  On the bright side, USDA is currently in the process of creating a microloan program, although it is not specifically targeted at beginning farmers nor does it include any special features for young or beginning farmers, as is proposed in the Beginning Farmer and Rancher Opportunity Act.  NSAC will continue to work for an authorization in the farm bill, and also plans to comment on USDA’s forthcoming proposed rule for the new program.

For an overview of other credit programs that were included in the bill prior to mark-up, see our previous blog post.

Rural Development

On the rural development front, Sen. Casey won an amendment that clarifies the priority for beginning farmers within the Value-Added Producer Grant (VAPG) program into the final package.  The new provision requires that at least a quarter of the beneficiaries of a VAPG grant be beginning or socially disadvantaged producers in order to qualify for this priority.  This is a program implementation issue that NSAC has been working on for the past few years, and which has not been sufficiently addressed in the rulemaking process.  Hopefully, if this provision becomes law, more projects will be given priority and funded that benefit and create value-added entrepreneurial opportunities for beginning and socially disadvantaged farmers.

Unfortunately, the funding issue for VAPG has yet to be resolved as the farm bill makes its way to the Senate floor.  Sen. Brown commented during markup that without a strong investment in rural development programs, this bill cannot truly be considered a “jobs bill.”  While there is currently no funding for any rural development programs (other than energy title programs) in the bill as reported by Committee, Sen. Brown did offer and subsequently withdraw an amendment that would have provided some funding for VAPG as well as the Rural Microentrepreneur Assistance Program (RMAP).  There may well be an opportunity for the Brown amendment to be offered and accepted on the Senate floor.

Sen. Casey offered, spoke to the importance of, and then withdrew in light of opposition his amendment to give USDA clear guidance and flexibility to use rural development loan and grant programs to spur new agricultural enterprises that benefit beginning farmers.  This provision is included in the Beginning Farmer and Rancher Opportunity Act, but did not make it into the final package voted on by the Committee.

Research, Education, Extension

Perhaps the most disappointing outcome for beginning farmers of the current bill as it stands is the insufficient funding providing to fund new farmer training and education programs under the Beginning Farmer and Rancher Development Program (BFRDP).  In the bill as reported by the Committee, this program receives $50 million over the course of the farm bill (compared with $75 million included in the last farm bill), which cuts annual program funding almost in half – from $19 million to $10 million per year.  This will severely impact the number of grants that will be able to made under this program, and will decrease the number of new farmer training programs established, and ultimately the number of new farmers successfully entering farming each year.

Despite efforts to introduce an amendment that would create the offsets needed to provide adequate funding for this program, we were unable to secure additional funding for this program during markup.  NSAC will continue to press for $25 million a year for this program as the farm bill process moves forward.

Miscellaneous Title – Minority Farmers and Veterans

There were a few bright spots specifically for veteran beginning farmers hidden in the Miscellaneous Title.  Sen. Nelson (D-NE) championed a new provision that creates a veterans agricultural liaison position within USDA, who would be responsible for assisting returning military veterans in accessing federal programs, specifically new farming training and agricultural rehabilitation programs.  Additionally, this position would advocate on behalf of veterans within the Department.  This was part of the Beginning Farmer and Rancher Opportunity Act.

Sens. Baucus (D-MT) and Johanns pushed to include an emphasis on veterans within the Office of Advocacy and Outreach, and the 2501 Outreach and Technical Assistance for Socially Disadvantaged Farmer and Ranchers program.

NSAC was also pleased to see that $5 million a year in mandatory funding was provided in the final bill for the 2501 Outreach program, compared with zero dollars contained in the draft bill released before committee mark up.  Sen. Harkin, with support from Sens. Baucus and Johanns and others, was instrumental in pushing for this funding and we commend all who helped make it happen.

NSAC collaborated with several other groups that work on minority farmer issues on a letter addressed to the Senate Agriculture Committee urging $25 million a year in funding for both the 2501 program and the Beginning Farmer and Rancher Development Program.  As the farm bill progress proceeds in the Senate, NSAC will continue to work with beginning, minority, and veteran farmer champions in the Senate to renew critical funding for these two programs.

NSAC commends Chair Stabenow and Ranking Member Roberts for including some of the Beginning Farmer and Rancher Opportunity Act provisions in their mark and for working with the various members of the Committee who offered further amendments this week to assist beginning, socially disadvantaged, and veteran farmers and ranchers.

For more information on which provisions were included in the draft farm bill, see our previous blog post on beginning farmers.