NSAC's Blog

2014 Farm Bill Drill Down: Conservation – Easements, CRP, and Energy

February 10, 2014

With the 2014 Farm Bill recently signed into law, NSAC is doing a blog series that delves into the details of the bill for sustainable food and farming systems.  Our coverage of the conservation title is divided into three parts: working lands conservation programs; the linkage between conservation and crop insurance; and this one on easement, land retirement, and energy programs.

Privately owned crop, pasture, and rangeland together account for roughly half of the landmass of the lower 48 states, with private forestlands making up another 20 percent.  In addition to providing food and fiber, farmers and ranchers are in a unique position to help provide healthy soils, clean water, habitat for native wildlife, renewable energy sources, and other conservation benefits.

Since 1985, the farm bill has represented our nation’s commitment to helping farmers conserve natural resources through public investments in conservation programs on agricultural and forested lands.  The 2014 Farm Bill Conservation Title in large part renews this commitment, but for the first time since 1985 the new farm bill takes a step backward by reducing overall funding for conservation programs.

The final bill cuts Conservation Title funding by roughly $4 billion over ten years directly, and that number increases to $6.1 billion under the upcoming automatic cuts to conservation under the sequestration process that was not changed or modified by the farm bill.

On the plus side, the new bill for the first time ever makes wetland and grassland easement funding permanent, meaning there will not be a need to find new funding for it when the next farm bill is taken up.  In addition, conservation funding “no-year” money, meaning that any mandatory funds not used in a particular year will remain within the Title for later use, rather than being sent back to the Treasury.  The bill also reduces the eligibility limit for farm bill conservation programs to $900,000 ($1.8 million for married couples filing separately) while removing both the previous distinctions between farm and non-farm sources of income and the possibility of a waiver.

Unlike the Conservation Title, the Energy Title stayed out of the red, and will receive $879 million in new money over ten years to invest in renewable energy and energy efficiency programs on farms and in rural communities.  This sum almost exactly matches the amount for the energy title in the 2008 Farm Bill.

This post provides further details on how specific conservation easement programs fared.

Agricultural Conservation Easement Program

In 2011, NSAC proposed that the farm bill should establish a coordinated easement program that combines the Wetlands Reserve Program (WRP), Grassland Reserve Program (GRP), and Farm and Ranch Land Protection Program (FRPP).  Our platform stated:

The program should include a transitioning-land conservation component that ensures continued conservation on expiring CRP acres.  Focus should be on creating long-term and permanent easements. The coordinated easement program should use a single administrative structure, including application, contract, payment, and enforcement components.  The new coordinated program should be not only adequately funded, but should receive a permanent program baseline to ensure its ongoing operation and success.

In addition to the recommendations relating the structure of the program, we urged Congress to reduce the enrollment waiting period that applies to recently purchase land.

One of the most persistent problems with WRP has been a shortfall in the technical assistance (TA) dollars needed to restore wetlands.  Over the years, the Office of Management and Budget (OMB) has consistently shortchanged NRCS in the amount of TA funding that OMB apportions for WRP.  As a result, a substantial wetland restoration backlog has developed.  The NSAC farm bill platform in 2011 called on Congress to establish a minimum TA apportionment to ensure that NRCS is able to conduct wetland restorations in future years.

Finally, our platform included a set of recommendations aimed at making the program work better for beginning farmers and ranchers.  For more on our proposal and the outcomes of our work, see our earlier post on what the 2014 Farm Bill means for beginning and socially disadvantaged producers.

Wins — We are pleased to report that the final farm bill combines WRP, GRP, and FRPP into the new Agricultural Conservation Easement Program (ACEP).  The bill authorizes USDA to give priority to land that is expiring from CRP, and perhaps most importantly, establishes a permanent funding baseline for the new combined program.  This means that, should Congress fail to pass a new farm bill five years from now, wetland and grassland conservation efforts will not once again be stranded without funding to enroll new acres.  In addition, the final farm bill reduces the waiting period to become eligible for wetland easements from seven years to two years.

The final farm bill does not establish a minimum apportionment for technical assistance through OMB.  Instead, however, it transfers the authority to apportion TA from OMB to USDA.  In other words, rather than OMB making decisions about how much TA funding is adequate for wetland restorations, that decision will be left to the Secretary, almost certainly in consultation with the Chief of NRCS.  This could be a major game changer, though it remains to be seen how the Secretary will choose to implement the change.

Losses — While the final farm bill does establish a permanent funding baseline for ACEP, the tradeoff is that the overall funding level for the three underlying programs is significantly less than what it has been per year in the last farm bill cycle.  As such, it will be especially important for the Agriculture Committees to defend against attempts to cut ACEP funding in the annual appropriations bills.

Conservation Reserve Program

NSAC has long fought to place greater emphasis on continuous CRP enrollments.  The continuous sign-up CRP targets the enrollment of acreage to establish specific high priority conservation practices, including conservation buffer strips, which do not require the setting aside of whole farms or fields to deliver important environmental benefits.  Similarly, the Conservation Reserve Enhancement Program allows USDA to enter into an agreement with a state, and sometimes a non-governmental partner, to focus CRP resources on specific geographic areas or resources issues the state has identified.

NSAC urged Congress to create an acreage reservation for continuous sign up acres within CRP in order to protect those acres in the context of overall CRP enrollment shifts.  We also recommended that the farm bill expand the list of continuous conservation practices for which producers can receive special incentives through continuous CRP.  Previous farm bills excluded contour strips, riparian buffers, wildlife habitat buffers, shallow water areas for wildlife, windbreaks, shelterbelts, and wetland buffers from that list.

NSAC also advocated for three transition options to help retain conservation on land expiring from CRP.  First, we argued for increased funding for the CRP Transition Incentive Program (CRP-TIP).  For more on our proposal and the outcome of CRP-TIP in the final bill, see our earlier post on what the 2014 Farm Bill means for beginning and socially disadvantaged producers.  Second, we urged Congress to allow producers with expiring CRP land to enroll in CSP in the final year of their CRP contract, so long as no double payments are made.  Lastly, we actively supported the House bill’s reservation of 2 million acres for grassland enrollments, with a focus on expiring contracts.

Wins — The final farm bill builds upon the 2008 Farm Bill’s investment into CRP-TIP; it establishes a 2 million acre reservation for grassland acres, with a focus on expiring CRP; and it allows for a seamless transition from CRP to CSP in the final year of a producer’s CRP contract.

In a small very partial win, the farm bill also adds riparian buffers to the list of conservation practices for which producers may receive incentive payments; however, it unfortunately does not add contour strips, wildlife habitat buffers, shallow water areas for wildlife, windbreaks, shelterbelts, or wetland buffers.

Losses — The 2014 Farm Bill ratchets down CRP’s total acreage cap over five years from its current statutory level of 32 million acres to 24 million acres, though this in and of itself is not a major loss.  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.  The current enrollment, for example, is roughly 26 million acres.  The savings from reducing CRP acreage was re-invested into new permanent funding for the new easement program (ACEP), which is a positive.

Unfortunately, however, the final farm bill does not include an acreage reservation to protect the particularly sensitive CRP acres that are enrolled through the continuous CRP.  USDA currently enrolls roughly 20.5 percent of CRP acres through the continuous sign up.  Moving forward into farm bill implementation, NSAC will work with USDA to maintain and improve this ratio.  The final bill also makes none of the needed and long overdue movement toward creating a long-term easement option within CRP.

Renewable Energy

Our farm bill platform included proposals regarding two renewable energy programs—the Rural Energy for America Program (REAP) and the Biomass Crop Assistance Program (BCAP).  Over the course of two and a half years of the new farm bill’s evolution, our focus turned to three primary goals.  First, we sought to secure long-term mandatory funding for REAP; second, we worked to exclude subsidies for gas station blender pumps from the list of eligible REAP practices, a use that has received USDA support despite being inconsistent with the purpose of the program; and third, we sought to protect REAP funding for feasibility studies for renewable energy systems.

In addition to our work on REAP, we advocated to eliminate or limit subsidies for the Collection, Harvest, Storage and Transportation (CHST) of biomass through BCAP.  During the fist several years of BCAP’s existence, USDA dolled out hundreds of millions of dollars in taxpayer subsidies through CHST for the removal of wood waste and corn stover and other commodity crop residues with inadequate protections against program abuse and conservation damage.

Wins — At the very end of a long farm bill process, REAP emerged with a permanent funding baseline, meaning that even if Congress fails to reauthorize the farm bill again in five years, REAP will continue with $50 million in mandatory funding per year.  The final farm bill does not include ethanol blender pumps as a renewable energy system within REAP, and the final conference report further clarifies that energy delivery through blender pumps is not consistent with the purpose of the program.

Losses — Unfortunately, the final bill repeals REAP support for renewable energy feasibility studies.  It also includes $125 million over the next five years for BCAP and dictates that not less than 10 percent or more than 50 percent of BCAP funding each fiscal year can be used for CHST payments.  The bill not only retains CHST but also expressly expands its scope to include the removal of Title 1 commodity crop residues from farms.  The initial promise of BCAP in 2008 to spur the use of perennials for energy production could easily be subverted again, and we hope USDA will choose to return the program to its roots by making appropriate implementation choices that maximize conservation and sustainability.

Categories: Conservation, Energy & Environment, Farm Bill

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