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October 16, 2008

If You Have A Conservation Problem, USDA May Have The Funds To Help Fix It.

As you work through your fields with a combine and the yield monitor seemingly falls asleep, you know that you have entered one of those floodprone areas of the field that never grew a crop in 2008. The lack of production may cause you to wonder about the availability of conservation program funding in the Farm Bill for projects that would restore productivity. This was one of those years that identified the trouble spots.

The current electronic issue of Choices Magazine says the current era of conservation programs began with the CRP in 1985, but it did not really address environmental issues very well on non-productive land, and did nothing to help with land that was in production. Those were the focal points of the latest legislation. Following look at the historical trends of conservation funding, the Virginia Tech, Michigan State, and Colorado State ag economists who authored the article note that funding for conservation increases by $4 billion over the life of the new legislation, increasing it up to $7 billion annually.

Land retirement programs, such as the CRP, will play a diminishing role with fewer acres and fewer dollars allocated. For example in the coming five years, contracts will expire on 10% of the CRP acres per year leaving their continuation in question, and total acreage will drop from 34.7 million to 32 million. Some CRP contract holders will have options to utilize the land for biofuel production, wind turbines, and grazing. At the same time the Farmable Wetland Program will increase to 1 million acres; and the maximum for the Wetlands Reserve will increase 30% to more than 3 million acres.

Working lands programs get the most attention in the new legislation, and funding for that will increase 61% over the life of the Farm Bill, and will be 45% of the program funding by the time it expires. EQIP funding increases by 74% in the next five years and will pay up to 75% of cost share for adoption or maintenance of eligible practices. The EQIP funds can be used for conservation related issues in organic production, forest management, water conservation, or irrigation practices. There is a six year maximum benefit of $300,000 for EQIP. The new Conservation Stewardship Program will see its funding rise 200% from the levels of its predecessor the Conservation Security Program. The new CSP will enroll nearly 13 million acres per year, but payments will average $18 per year per acre, and rules will be simpler than in the prior Farm Bill.

The Agricultural Land Preservation Program uses funds to prevent the sale of development rights in the future. Funding will triple in the program that protected 533,000 acres in the last Farm Bill. The Grasslands Reserve Program, designed to protect grasslands, will expand ten fold and enroll 1.22 million acres over the next five years. Up to 10% of the enrollment can come from expiring CRP contracts.

Despite the expansion, there are some program restrictions. Payment limitations will be in effect for land owners. Additionally, the funding for NRCS staff comes from annual USDA appropriations, and expansion of staff for technical assistance is doubtful in future years.

The ag economists writing the article indicate the program funding is designed for widespread distribution, instead of being targeted to the most serious problem areas. Additionally, spending for conservation programs did not keep pace with appropriations for commodity programs, and implementing conservation projects will be unlikely if a choice has to be made that sacrifices commodity program payments. Another concern is the lack of manpower to help implement the practices and monitor the programs. They also note the potential policy conflict that will occur between the need for conservation and the need for acreage to produce biofuels.

Summary:
The new Farm Bill provides added funding for conservation programs, much of it to help landowners with soil and water issues on land that is in production, and may have been either damaged from 2008 flooding or was prone to declines in crop production as a result of ponding. While funding for cost share projects may be available, there will be some staff limitations that will restrict the use of the funds. USDA will have a significant amount of funds to provide assistance to more landowners in the next five years, compared to the past Farm Bills.

Stu Ellis

Posted by Stu Ellis at October 16, 2008 12:26 AM | Permalink

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