NSAC's Blog

Path to the 2018 Farm Bill: Conservation

March 14, 2017

Cover crop at Rogers Farm Forage and Crop Research Facility, Louisville, KY. Photo credit: NSAC. 

Editor’s Note: As a lead up to the 2018 Farm Bill, around which discussions and debate in Congress have already begun, the National Sustainable Agriculture Coalition is previewing some of the major programs and policies advocates need to know in order to effectively engage. The second post in our series, “Path to the 2018 Farm Bill,” covers the conservation title, focusing in on working lands conservation, easement and land retirement programs, and the linkage between conservation and crop insurance. Our first blog in the series covered the nutrition title, and future blogs will address farm commodity and crop insurance programs, programs for value-added and organic agriculture, local and regional food systems, and beginning and underserved farmers and ranchers.

The farm bill is a comprehensive, multi-year piece of legislation that covers of diverse array of federal farm, food, forestry, and rural policies and programs. The last farm bill, in 2014, contained 12 titles and was estimated at the time to have a five-year cost of $489 billion. Of this total, approximately $26.1 billion, or 5 percent of total funding (27 percent excluding the nutrition title), was estimated to go toward conservation programs.

Conservation funding provides critical tools, training, and financial support that helps farmers and ranchers to protect and improve natural resources on their land. Between 1933 and 1985, there was no farm bill funding for conservation at all. The first funding for these crucial programs and practices came as part of the 1985 Farm Bill, which added a Conservation Title and the first ever direct farm bill conservation funding.[1]

While there was a growing investment in conservation for the 30 years that followed the 1985 bill, the most recent (2014) farm bill cut conservation spending for the first time since 1985. The 2014 bill cut the Conservation Title by $4 billion over ten years; that number increases to $6 billion when an across-the-board budget cut mechanism known as sequestration is factored in. Since the 2014 Farm Bill passed, the bill has been repeatedly opened through a peculiar congressional action known as “changes in mandatory program spending” or CHIMPs, which congressional appropriators have used as a backdoor avenue to target and cut funding for conservation programs.

Funding for all major farm bill conservation programs is now permanent, which means that they will be funded based on current law until any changes are made, and will continue operating at their current funding levels even if the farm bill is not reauthorized before its expiration date (September 30, 2018). That being said, there’s still a whole lot at stake for conservation in the next farm bill, including: protecting funding for key programs, increasing access to conservation assistance for farmers and ranchers, and protecting and strengthening the linkage between conservation requirements and eligibility for other USDA programs.

The CRP Acreage Cap

A conservation issue that has been receiving significant attention early in the 2018 Farm Bill discussions and hearings is whether or not to increase the size of the Conservation Reserve Program (CRP). CRP provides cost share and rental payment for farmers to remove environmentally sensitive land from production and plant resource-conserving cover to protect soil, water, and wildlife habitat. The program is administered by the Farm Service Agency, the same agency that manages commodity subsidy programs.

The CRP acreage cap is a hot button issue this year because when commodity prices are low (as is currently the case), interest in CRP spikes. Likewise, when prices are better, interest in taking land out of production through CRP wanes. The 2014 Farm Bill was written in years when prices were high, and thus reduced the maximum acreage cap for CRP to 24 million acres. CRP is the most expensive of the conservation programs on a per acre basis; therefore any attempt to raise the acreage cap will have to also figure out how to reconcile a hefty new price tag.

Unless there is increase in overall conservation funding, which currently appears unlikely, any increases on CRP spending will necessitate cuts elsewhere in the bill, either for commodity or crop insurance subsidies or for working lands conservation programs, such as the Conservation Stewardship Program (CSP) and the Environmental Quality Incentives Program (EQIP). What’s at stake for the working lands programs is described in more detail in the section that follows.

Nearly one third of acres currently enrolled in CRP are enrolled through Continuous CRP (CCRP) enrollments. A sub-issue in the debate around CRP expansion, therefore, will be whether and how to make space for more continuous enrollments. CCRP enrollments are targeted to establish specific conservation practices that produce high environmental payoffs (e.g., conservation buffer strips). In fiscal year (FY) 2016, the continuous sign-up was the largest on record, with more than 1.3 million acres enrolled in targeted, partial field conservation practices on the most environmentally sensitive lands. Practices eligible under CCRP include stream buffers, wetland restoration, contour grass strips, wildlife habitat restoration, pollinator habitat, field borders for organic farms, and more.

What’s at Stake for Conservation On Lands in Agricultural Production?

CSP and EQIP, which are both administered by USDA’s Natural Resources Conservation Service (NRCS), provide financial and technical assistance that helps farmers and ranchers to adopt conservation practices on profitable and productive lands. As a result of continued producer demand and limited available funding, NRCS has been forced to turn away up to three-quarters of eligible applicants to both CSP and EQIP in recent years.

CSP rewards farmers who go above and beyond in their stewardship activities, ensuring that proper incentives and benefits are provided for conservation-based farming and grazing systems that confer significant benefits to soil health, water quality, and wildlife habitat. The 2014 Farm Bill cut nearly one-quarter of the available CSP acreage (from 12.8 million down to 10 million acres). While the bill did not make major programmatic changes to CSP through the legislative process, NRCS recently completed a “reinvention” of CSP administratively. In the reinvention, CSP was more closely aligned with EQIP, making EQIP’s conservation practices a logical stepping stone to the more advanced conservation activities available through CSP. NRCS has taken first steps in strengthening the CSP-EQIP linkage; the next farm bill provides an opportunity to build upon these revisions.

In contrast to the comprehensive cost share assistance provided by CSP, EQIP offers targeted funding to partially reimburse farmers for the adoption of conservation practices. In exchange for installing or implementing structural, vegetative, and management practices on their land, EQIP participants may have up to 75 percent of the costs for conservation practices covered by the program. EQIP may cover an even higher percentage, up to 90 percent of project costs, for socially disadvantaged, limited-resource, beginning, and veteran farmers and ranchers.

A significant portion of EQIP funding goes toward projects that support critical management practices such as crop rotations, cover cropping, conservation tillage, integrated pest management, and prescribed grazing. However, NRCS has also continued to dedicate large amounts of funding to irrigation infrastructure and to Concentrated Animal Feeding Operations (CAFOs). Awards granted to these projects are used to pay for structural practices such as waste lagoons, animal mortality facilities, and waste treatment facilities. Because the 2014 Farm Bill increased the maximum amount of funding an EQIP participant can receive (from $3000,000 to $450,000 per contract), large CAFOs and farms expanding irrigated acres have been able to access more of total EQIP funding.

The 2014 Farm Bill did not include any limits on how or when payments are made to CAFOs or irrigation expansion. It did, however, leave in place the lower payment limit of $80,000 per contract for the EQIP Organic Initiative, which is targeted specifically at supporting transitioning to organic and certified organic operations. As a result of this and other access and implementation barriers, there has been an ongoing decline in participation in the EQIP Organic Initiative in recent years. The next farm bill presents an opportunity to remove barriers to accessing transition support and fully recognize the unique conservation challenges and opportunities of organic production.

Opportunities for Increased Wetland, Grassland, and Farmland Protection

The 2014 Farm Bill combined three different easement programs (wetlands, grasslands, and farm and ranch land), into the Agricultural Conservation Easement Program (ACEP). While the 2014 Farm Bill made easement funding permanent (no need to find new funding in future years), the overall funding level for the three underlying programs was significantly decreased.

Within the new coordinated program, the limited funding has had a particularly significant impact on wetland easements, which have received less than half of the annual funding previously available under the 2008 and earlier farm bills. Wetlands enhance farmland ecosystems and the surrounding environment by providing habitat for at-risk species on and around working lands, reducing the impacts of flooding, and protecting water quality.

The agricultural land easement component of ACEP is critical both to ensuring farm viability for future generations, and to preserving threatened grasslands. Grassland easements within ACEP are one of USDA’s primary tools for protecting grazing lands, including those made up of diverse, native grasses. Moreover, the farmland preservation component of ACEP can play a critical role in ensuring new and beginning farmers access to land through the next farm bill.

A major issue for the upcoming farm bill will be whether funding for ACEP, the smallest of the farm bill conservation programs by funding level, can be brought back in line with earlier farm bill totals. An increase of funding for ACEP would expand critical wetland restoration efforts and the long-term protection of grasslands and agricultural lands at risk of conversion.

Leveraging Private Dollars Through Partnerships

The 2014 Farm Bill also established the Regional Conservation Partnership Program (RCPP), through which NRCS, state agencies, and non-governmental organizations work together to provide financial and technical assistance to farmers and ranchers, helping them tackle priority natural resource concerns in a state or region. RCPP pulls portions of its funding from CSP, EQIP, and ACEP. RCPP is a slight variation on an earlier set of farm bill programs previously known as Cooperative Conservation Partnership Initiative and Partnerships and Cooperation.

While partner organizations play a critical role in coordinating and financing these RCPP projects, in recent years they have been limited in their ability to apply for technical assistance funding. This has severely reduced partner organizations’ ability to provide on the ground support for regional projects, especially for high-capacity, small-budget organizations. This issue is likely to receive increased attention in the upcoming farm bill reauthorization.

We can expect the discussions leading up to the next farm bill to also include a careful analysis of how RCPP projects across the country are working. How can they best leverage partnerships and private dollars to achieve regional, comprehensive conservation outcomes? Is there enough farm bill conservation program funding available now, or should the targeted amount of CSP, EQIP, and ACEP funding for RCPP projects be increased? Should CRP be added to the mix of programs that support RCPP? What type of monitoring and evaluation should be required? All of these issues will likely receive some attention as the 2018 bill gets drafted.

The Relationship Between Conservation and Crop Insurance

The 2014 Farm Bill reestablished a link between soil and wetland conservation requirements (e.g., “conservation compliance”) and crop insurance premium subsidies. Under conservation compliance, farmers who plant an annually tilled crop on land subject to high rates of erosion must develop and implement a conservation plan on those acres. Additionally, farmers cannot drain or fill wetlands on their land for the purpose of producing an annually tilled crop. Conservation compliance requirements have existed for commodity, loan, and other USDA programs since 1985, and the 2014 Farm Bill expanded compliance to re-include crop insurance subsidies (which had been unlinked from conservation compliance between 1996 and 2014).

Reestablishing the link to crop insurance subsidies was important for soil and wetland protection, however, there is still insufficient funding for the implementation and enforcement of compliance requirements. This shortfall can be seen in a low rate of spot checks in many states, as well as vast regional disparity in enforcement. An Office of the Inspector General (OIG) report published in June 2016 illustrated troublingly low rates of enforcement in many states, and also found that gully erosion (major surface water runoff that moves soil along drainage lines) is not effectively treated through conservation compliance.

In addition to expanding conservation compliance, the 2014 Farm Bill also established a Sodsaver provision to limit crop insurance subsidies on native grasslands that are converted to crop production. The Sodsaver provision only applies to six Midwestern and plains states, however – Montana, North Dakota, South Dakota, Minnesota, Iowa, and Nebraska. While this was an important step forward in protecting our remaining native grasslands, Sodsaver should be expanded to apply to the entire country, including key prairie states. As with the re-linkage of conservation compliance and crop insurance, the Sodsaver provision in the 2014 Farm Bill was a major step in the right direction, but still leaves plenty of work to be done to improve these requirements in the next farm bill.

Key Players and Points in the Process

The Agriculture Committees in both the House and Senate have jurisdiction over authorizing the next farm bill. Within those committees, the Conservation and Forestry Subcommittee in the House, and the Subcommittee on Conservation, Forestry, and Natural Resources in the Senate will play a significant role in crafting the conservation title in the next farm bill.

The House subcommittee has already held several farm bill hearings in DC, and the Senate Agriculture Committee has held its first hearing “in the field,” in Senate Agriculture Chairman Pat Roberts’ (R-KS) home district. As has been the case in several of these initial hearings, we anticipate that future hearings will continue to demonstrate bipartisan support for voluntary conservation efforts.

The Future of Conservation and the 2018 Farm Bill

The future of conservation programs, as well as commodity, crop insurance, nutrition, and sustainable agriculture programs, rely on the timely passage of the 2018 Farm Bill. Right now there are still many unanswered questions regarding the fate of the CRP acreage cap, working lands conservation programs, and the enforcement of conservation requirements. Our ability to improve upon the conservation wins and recover from the conservation losses included in the 2014 Farm Bill will depend upon a coordinated grassroots and policy effort that engages stakeholders across the agricultural, conservation, and wildlife communities.

[1] The Soil Bank of the late 1950s was funded as part of the commodity program and through annual appropriations, and other earlier conservation programs, such as the Agricultural Conservation Program or ACP, were discretionary programs and funded by annual appropriations.

Categories: Commodity, Crop Insurance & Credit Programs, Conservation, Energy & Environment, Farm Bill, Organic

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