EDITOR’S NOTE: On October 9, 2024, NSAC released “Stewarding Success: CSP Under the 2018 Farm Bill”, a comprehensive analysis of the Conservation Stewardship Program (CSP) over the course of the Agriculture Improvement Act of 2018 (2018 Farm Bill). The report offers an in-depth analysis of CSP’s enrollment trends, conservation practices supported, and funding impacts, including the effects of the Inflation Reduction Act (IRA) of 2022. This is the fourth post in a series of five blog posts highlighting the key findings of the report and offers a detailed look at contract renewals during the 2018 Farm Bill cycle.

Contract Renewals are Vital to Long-Term Conservation

The Conservation Stewardship Program (CSP) is a voluntary program run by the US Department of Agriculture (USDA) through its Natural Resources Conservation Service (NRCS). CSP aims to enhance natural resources while maintaining profitable agricultural production. It does this by providing financial and technical assistance to farmers actively managing and expanding conservation activities even while they work their lands for production. 

The 2018 Farm Bill made several changes to CSP, particularly the process of renewing contracts. Most significant was the transition from automatic renewals of qualified contracts to a competitive renewal process, leading to a dramatic drop in renewal rates. Previous farm bills allowed farmers to extend their CSP contracts for another five years automatically, provided they complied with their original contracts and agreed to adopt additional conservation practices. 

CSP contract renewals are vital to the durability of conservation practices and to support lasting conservation adoption. CSP stands alone among USDA working-lands conservation programs in its longer-term focus, offering producers five year, renewable contracts. In contrast, while EQIP (Environmental Quality Incentives Program) contracts can last up to ten years, the majority are one year, short-term contracts. Addressing priority resource concerns related to soil, water, air, plants, or animals requires long-term adoption of conservation behaviors. For example, most watershed improvements related to conservation tillage require several years to yield results and can easily revert if practices are stopped. CSP contract renewal provides the opportunity to ensure long-term conservation practices and measurable environmental outcomes. 

A Rocky Transition to the New Renewal Process

As NRCS transitioned to the 2018 Farm Bill’s newly mandated competitive renewal process, contract renewals were paused between fiscal year (FY) 2018 and FY2019, as shown in Figure 1 below. During this transition year, expiring contracts were extended for an additional year and producers were able to apply for renewals again in FY2020. However, it is clear that the pause in FY2019 and the subsequent transition led to a lasting impact on CSP enrollment.

Figure 1: No Renewals in 2019 Had a Lasting Effect

To estimate the lasting effect of the FY2018-2019 renewal pause, NSAC developed a hypothetical scenario in which states had FY2019 renewals equal to the average of their renewals in FYs 2018, 2020, 2021, 2022, and 2023. If this average renewal had occurred in FY2019, there would have been more than 3 million additional cumulative acres under CSP contracts at the end of FY2023. The difficult transition to the new competitive contract renewal process and the renewal pause in FY2019 had a lasting negative impact on CSP’s footprint.

Renewals Lagged in the 2018 Farm Bill 

During the 2018 Farm Bill (FY2019-FY2023), there were 36,799 new CSP contracts, covering 49 million new acres, but only approximately 20% of expiring contracts were renewed. This is a significant drop compared to the nearly 60% annual renewal rate under previous farm bills.

The renewal rate in FY2020 was alarmingly low, especially considering that more producers should have been eligible to renew because of the FY2019 renewal extension. With fewer funds allocated to the program that year and the introduction of a competitive renewal process, only 10% of contracts were renewed. This was the lowest renewal rate in the entire 2018 farm bill period, which suggests potential issues with the new renewal process or lower interest in contract renewal due to uncertainties surrounding the changes. 

Figure 2: CSP Contract Renewals Were Low During the 2018 Farm Bill Period

The new competitive renewal process mandated by Congress in the 2018 Farm Bill is likely responsible for this decline. Under the competitive renewal process, CSP contract holders who reach the end of their five year contract are not guaranteed to be able to renew their contracts even if they meet all terms of the previous contract and agree to adopt or improve conservation activities. Instead, renewals are ranked competitively using NRCS’s Conservation Assessment Ranking Tool (CART). This new competitive renewal process, combined with an overall reduction in CSP funding in the 2018 Farm Bill, led to a decline in overall renewals. Additionally, the transition blurred the distinction between new contracts and unsuccessful renewal applications, as many farmers who were unsuccessful in renewal may have re-enrolled as new applicants. 

Some States Maintained Strong CSP Renewals 

Although the new competitive process posed challenges, it is clear that some states managed to maintain high renewal rates, while others struggled.

As shown in Figure 3 below, Wisconsin led the nation in total contract renewals, with 946 renewals between FY2020 and FY2023, followed by Missouri (624 contracts) and Illinois (557 contracts). In terms of acreage, New Mexico saw the highest number of acres renewed (1.45 million acres), followed by Utah (1.02 million acres) and Montana (just under 1 million acres).

Figure 3: Five State Leaders in CSP Contract and Acreage Renewals

It is also important to examine CSP renewal rates, or the proportion of CSP contracts that are renewed in each state, especially to account for differences between large and small states. Figure 4 below shows the five states with the highest CSP contract renewal rates and the five with the lowest renewal rates.

Comparing renewal rates, Vermont had the highest renewal rate by percentage, with 79% of its total CSP contracts renewed between FY2020 and FY2023. Wyoming, by contrast, had the lowest renewal rate, with only 5% of its contracts renewed. This disparity suggests that certain states were better positioned to navigate the transition to competitive renewals, while others struggled significantly. 

Figure 4: Some States Had Strong Renewal Rates and Some Suffered

Conclusions

The transition to a competitive CSP renewal process during the 2018 Farm Bill period significantly impacted contract renewals, resulting in a stark decline in renewal rates compared to previous farm bills. The FY2019 pause and the introduction of competitive renewals led to the exclusion of many farmers who were previously able to renew their contracts automatically. The impact of these changes was felt unevenly across states, with some managing to retain high renewal rates and others experiencing significant declines.

The loss of continuity in conservation practices due to the decreased renewal rate will have long-term implications for conservation efforts across the country. In the next farm bill, Congress should mandate a return to automatic renewals for CSP contracts to ensure that more producers, especially those with the highest-impact perennial practices, can benefit from continued participation in the CSP and prioritize long-term conservation on their farms.

This is the third post in a series of five blog posts that analyzes the findings of the report in greater detail. Forthcoming posts in the series examine:

• a national overview of CSP
• a detailed examination of the impact of the IRA on CSP,
• the engagement of historically underserved farmers,
• the impact of changing CSP contract renewal policies, and 
• a detailed state-by-state deep dive

The full report can be found here.