USDA's Conservation and Environment Theme Paper
Posted by: Phillip Fraas
October 03, 2006

USDA's Conservation and the Environment theme paper is its second in a series of five papers on key issues that likely will be at the forefront when Congress drafts a new Farm Bill next year.

This theme paper serves a valuable purpose simply by explaining the existing patchwork of conservation programs USDA administers. For anyone trying learn about USDA's conservation programs and stymied by the blizzard of acronyms involved and the numerous instances of program overlap, this theme paper's user-friendly description of the programs is a godsend.

Beyond that, the theme paper also offers some interesting suggestions about what might go into the conservation title of the 2007 Farm Bill. For a glimpse at the theme paper, released last June, you can find it posted at the USDA Farm Bill web site: www.usda.gov/farmbill.

Conservation is a serious, well-funded part of USDA's Farm Bill programs   

USDA got into the conservation program business in a big way during the Great Depression, when there was a clear need to address the soil erosion problems generated by years of over-farming fragile soils (think "Dust Bowl").

 In more modern times, conservation's status at USDA was elevated considerably in the 1985 Farm Bill, which instituted the Highly-Erodible Land Conservation Program ("sodbuster") and Wetland Conservation Program ("swampbuster"), both designed discourage crop production on environmentally-sensitive lands, and the Conservation Reserve Program ("CRP"), which has spent billions of dollars since 1985 to take millions of acres of highly-erodible lands out of production. All these programs have been successful, and unquestionably will be continued in the 2007 Farm Bill.

 Then, in the 2002 Farm Bill, the USDA commitment to conservation programs was strengthened even more--primarily by authorizations of substantially increased funding for farm and ranch conservation efforts. To give you a sense of the magnitude of conservation program funding under the 2002 Farm Bill, table 3 in the appendix to the theme paper lists conservation program payments by state in calendar 2005. It shows the total amount of conservation payments for the entire country in that year was $2,832,975,000. And looking at payments to individual farms, of commercial farms with less than $250,000 in annual receipts, 16% received conservation payments in 2004, averaging $6,497 per farm. For larger commercial farms ($250,000 or more in annual receipts), 24% received conservation payments, averaging $6,904 per farm. See pages 10 and 11 of the theme paper.  

The theme paper discusses four conservation alternatives for the new Farm Bill

Alternative 1: Improve existing programs. Since the theme paper notes (on page 23) that stakeholders generally are satisfied with existing conservation programs, look for Congress to extend current programs with as much funding as a tighter budget than in 2002 will allow.

 Alternative 2: Provide "green payments".  This approach would provide farmers with income support through conservation payments rather than the traditional price and production support mechanisms. Along with Alternative 3, this should be considered a bold new approach that more likely Congress will be unwilling to endorse fully in the 2007 Farm BIll. But, one might see a little movement toward both alternatives as a way of Congress dipping its toe in the water.

Alternative 3: Foster private sector markets for environmental services. Many might like this new approach because it uses market forces to generate conservation benefits--by allowing the private sale of environmental credits produced by USDA's conservation programs, and by reshaping the USDA programs to give farmers incentives to market the credit. To the extent farmers are paid by the market for their conservation efforts, less USDA outlays are needed.

 Alternative 4: Toughen conservation compliance requirement. This alternative would be considered the son of sodbuster/swampbuster, and would be considered for the 2007 Farm Bill if, but (in my view) only if, a persuasive case were made that more regulation is needed.

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