Seeking Common Ground for Conservation
An Agricultural Conservation Policy Project
by the Soil and Water Conservation Society

The next farm bill must be about more than the price of corn--or wheat, or cotton, or rice, or any other agricultural commodity. It must be about caring for the land and keeping the people who work the land on the land. That, in brief, is what the Soil and Water Conservation Society (SWCS) heard in five workshops that brought members of the agricultural, water resource, and fish and wildlife communities together to develop conservation provisions for the 2002 farm bill.

Policymakers face fundamental choices as they begin reauthorizing the farm bill. Those choices go to the heart of what should be expected from conservation and farm policy. There is growing public skepticism about how well traditional commodity-based subsidies work to keep people on the land--and to care for it. Conservation could and should become the basis for a new vision of agricultural policy, a policy that is truly open to all of agriculture and built upon a solid foundation--the unique status and responsibility of farmers and ranchers as the caretakers of this nation�s land, water, and wildlife.

At a minimum, conservation policy and programs must be strengthened to continue their traditional service to agriculture and updated to address the environmental challenges that now confront farmers and ranchers. But settling for the minimum would be a mistake at this juncture. Instead, reforms to conservation policy and programs should be coupled with a new vision for farm policy itself. Traditional farm subsidies should be balanced with a new option based on land stewardship--an option that pays producers to invest their land, labor, and capital to produce a better environment.

Workshop participants mapped out a continuum of reforms to move conservation to the center of farm policy. SWCS took that map and developed specific recommendations that, in our best professional judgment, hold the most promise for addressing the hopes and concerns of the workshop participants.

Conservation has traditionally served agriculture by developing and managing soil and water resources as a means of enhancing production. Now, conservation needs to serve agriculture by managing and mitigating its effect on the environment. Environmental performance is already a key determinant of commercial viability for producers operating animal feeding operations or irrigating cropland or pasture. Most producers will face similar challenges in the future. At a minimum, legislative action in the next farm bill must strengthen U.S. Department of Agriculture (USDA) conservation policy and programs enough to ensure that commercial viability and environmental quality become compatible goals.

Funding for existing USDA conservation technical services and financial assistance programs should be doubled to about $5 billion annually--an increase, in percentage terms, comparable to what was accomplished in the 1985 farm bill. That investment produced dramatic reductions in soil erosion, protection of wetlands, and enhancement of fish and wildlife habitat. Since 1985, however, conservation funding has been flat in constant dollars. The farm bill must make a major new investment in conservation to meet the needs of agriculture and taxpayers in 2002.

There are three basic compartments in the conservation tool box: (1) technical services--research, education, and technical assistance; (2) financial assistance for conservation on working land--integrating conservation into the food and fiber production systems used by farmers and ranchers; and (3) financial assistance for land retirement and restoration--shifting the primary focus on working land from food and fiber production to habitat restoration or protection of critical natural resources. Today, the toolbox is unbalanced. In 2000, land retirement and restoration accounted for 85 cents of every financial assistance dollar spent by USDA and most of that assistance went to crop producers in the Great Plains. Most of the new investment in conservation should be used to reach those producers who want to keep working the land, rather than retire it. Funding for technical services should be doubled to about $1.75 billion a year and financial assistance for conservation on working land should be tripled to about $1 billion annually. The $5 billion conservation budget we recommend could thus strike a better balance and still leave room to increase funding for land retirement and restoration programs by about 30 percent.

Weakness in the nation�s technical services infrastructure is the single greatest impediment to meeting the conservation needs of producers and the public�s desire for environmental quality. Technical assistance and advice must be recognized as the most important conservation program in and of itself--not merely a cost of delivering conservation financial assistance to producers. Congress should reaffirm the central role of technical services in the conservation enterprise and ask the Secretary of Agriculture for a detailed plan of action and budget to ensure that all agricultural producers have access to timely and effective technical assistance and advice from the public and/or private sectors.

Conservation is a national interest, but like health care and education, it depends on local leadership. State and local taxpayers, in several states, invest more resources in conservation than USDA does. State and local leaders, whether they work in the private sector or in federal, state, or local government agencies, need greater authority over the way USDA programs operate in their states. The state agreement approach currently used to implement the Conservation Reserve Enhancement Program (CREP) and the Wildlife Habitat Incentive Program (WHIP) should be expanded to cover all USDA conservation financial assistance programs. States that put together a comprehensive conservation plan should have greater flexibility and more money to tailor USDA programs to their plans. Those additional dollars should come from a Conservation Partnership Fund created by pooling a portion of the funds appropriated each year for all USDA conservation financial assistance programs. Such an approach would provide much greater flexibility while maintaining the integrity and accountability of existing conservation programs.

Reform of conservation programs is not enough to realize the new vision of American agriculture workshop participants created. Room should be made in farm policy itself for a program that supports farmers and ranchers based upon their unique role as caretakers of most of the land in this nation, rather than upon the kind or amount of selected commodities they produce.

Congress should authorize a minimum of $3 billion dollars annually for a stewardship-based farm and ranch program that rewards producers for utilizing their land, labor, and capital to enhance the environment. This new program should reward good actors through technical services and maintenance fees to keep existing conservation systems and habitat in place on their farms and ranches. It should also pay farmers and ranchers who want to do more by installing new conservation systems. USDA state technical committees, local communities, and producers themselves should play a key role in seeing that this new stewardship program achieves key conservation objectives by determining which conservation systems and opportunities would make the greatest contribution to environmental enhancement at state and local levels.

Farm policy needs more balance and more options both for producers and taxpayers. Traditional farm subsidies have concentrated in fewer hands and on fewer acres as production of subsidized commodities has concentrated in fewer hands and on fewer acres. In 1999, for example, about 47 percent of farm subsidies went to the 8 percent of farms that produced 68 percent of crop sales while operating only 32 percent of farm acres. In 2000, about 20 percent of the value of agricultural sales was produced by sales of subsidized crops, and about 36 percent of all farms received government payments. As a result, serious questions have been raised about the equity and performance of traditional approaches to supporting commodity production and farm income.

A farm program based on stewardship rather than commodity production is ideally suited to bring more balance to farm programs. Conservation could legitimately reach those 92 percent of farms operating 68 percent of farm acres, but producing only 31 percent of the value of food and fiber products. Stewardship contracts should provide the same certainty of payments for land stewardship that production flexibility contracts currently provide for commodity production. Producers with production flexibility contracts could opt for a stewardship contract if that works better for them. More importantly, stewardship contracts would help keep those farmers and ranchers on the land who currently do not get much support from traditional farm subsidies.

The new vision stewardship program should be designed to take advantage of five key opportunities to complement existing conservation programs: First, it should be broadly available to all producers, based on their willingness to make a commitment to conservation, rather than on their location in a priority area, impaired watershed, or other eligibility requirements of existing conservation programs. Second, it should prevent conservation problems before they require more expensive treatment. Third, it should go beyond rehabilitation of the land to achieve widespread enhancement of the environment. Fourth, it should emphasize a transition to production systems that enhance, not just protect, the environment. Fifth, it should emphasize development, field-testing, and demonstration of innovative production systems that integrate conservation directly into food and fiber production systems.

Our recommendations map out a continuum of reform ranging for more funding for existing conservation programs to creating a new vision of farm policy based on land stewardship. Those recommendations are listed below.

They are listed under two main headings, following the organization of the report itself. Under the first heading, Conservation Program and Policy Reform, are our recommendations for funding and reform of existing conservation programs and policy. Under the second heading, Farm Program and Policy Reform, are our recommendation for reforming farm policy.

The recommendations listed here and discussed in more detail in the report, do not represent a consensus arrived at through the workshops or the deliberations of the policy advisory committee with whom we consulted. Throughout this process, SWCS staff sought advice, counsel, ideas, and understanding, rather than consensus. The recommendations represent our best judgment of the policy reforms that hold the most promise for addressing the hopes and concerns raised in our workshops.

Recommendation 1:
Double funding for USDA�s existing agricultural conservation programs to $5 billion annually, with most of the new money going to technical services and financial assistance to working land--double funding for technical services, triple funding for financial assistance on working land, increase funding for land retirement and restoration by 30 percent.

Recommendation 2:
Recognize and affirm technical assistance as the most important conservation program in and of Itself--not merely a cost of delivering conservation financial assistance to producers. Congress should ask the Secretary of Agriculture for an action plan and budget needed to ensure that all producers have access to timely and effective technical assistance from the public and/or private sectors.

Recommendation 3:
Fix the so-called Section-11 cap constraint that limits the use of Commodity Credit Corporation (CCC) funds for the delivery of technical services and mandate that CCC funds be provided for technical and educational assistance as part of every CCC-funded conservation financial assistance program.

Recommendation 4:
Offer comprehensive training and certification programs to build the capacity of for-profit and not-for-profit groups in the private sector to provide technical services. Allow farmers and ranchers themselves to use financial assistance provided through USDA conservation programs to participate in such training and certification programs.

Recommendation 5:
Expand the state agreement approach used in CREP and WHIP to cover all USDA conservation financial assistance programs. Provide states that complete an approved comprehensive state conservation plan greater flexibility and more money to tailor USDA programs to their plans. Fund implementation of state plans in part by pooling a portion of the funds appropriated each year for all USDA conservation financial assistance programs into a Conservation Partnership Fund administered by USDA.

Recommendation 6:
Recognize good actors by giving them credit for existing conservation practices when determining their eligibility or priority for participation in USDA conservation programs and by cost-sharing maintenance of existing or newly installed conservation systems or habitat.

Recommendation 7:
Expand the producers and agricultural land benefiting from CRP by permitting enrollment of environmentally sensitive acres of rangeland, pasture, or other land without a cropping history, at appropriate rental rates, and modify or eliminate all cropping history requirements for all practices eligible for the continuous CRP sign-up and all practices and habitat types specified in comprehensive state conservation plans.

Recommendation 8:
Mandate at least a 5-million-acre goal for conservation buffers within the CRP and encourage participation through higher financial incentives and greater flexibility in practice requirements.

Recommendation 9:
Direct the Secretary of Agriculture to provide to Congress a plan and budget for implementing the National Conservation Plan and appraisal process as the nation�s primary vehicle for directing conservation on nonfederal working land.

Recommendation 10:
Strengthen and reform state technical committees and expand their authority to recommend modifications to rules, funding allocations, and priorities for all USDA conservation programs.

Recommendation 11:
Encourage producers to create their own priority areas by offering bonus points or higher financial incentives in USDA conservation programs to producers who work collectively along or around a water body, within a watershed, or within an important habitat type.

Recommendation 12:
Integrate economic use more fully into land retirement and restoration programs--offer the option of converting CRP contracts to grassland easements as part of a transition to grazing-based production systems; allow managed haying, grazing, or other compatible economic uses at reduced rental or easement payment rates; integrate land management and conservation measures into the Farmland Protection Program.

Recommendation 13:
Emphasize conservation-driven farm or ranch planning rather than program-driven planning, and make farmers and ranchers who complete an approved comprehensive farm or ranch plan automatically eligible for financial assistance simultaneously under multiple USDA conservation programs for appropriate practices included in their plan.

Recommendation 14:
Create unified sign-up, application, and contract processes by (a) providing for a continuous sign-up for all USDA conservation financial assistance programs under terms of a comprehensive state conservation plan or (b) coordinating sign-up periods for all programs, for example, during an annual conservation fair.

Recommendation 15:
Streamline EQIP by eliminating the bid process and substituting a ranking process that bases program participation on a conservation index and providing blanket eligibility for producers participating in the continuous CRP sign-up, proposing to implement conservation systems or practices designated as high priority, and/or operating within designated geographic priority areas.

Recommendation 16:
Encourage states to develop and implement a "one-plan" approach to conservation on farms and Ranches--make the one-plan approach an optional element of the comprehensive state conservation plan and make additional technical and financial assistance available from the USDA Conservation Partner Fund to states using the one-plan approach.

Recommendation 17:
Reaffirm and strengthen conservation compliance, sodbuster, and swampbuster laws by reinstating the super sodbuster provision; extending compliance provisions to all commodity and risk management programs, including crop insurance; and extending the soil erosion control provisions to non-highly erodible cropland eroding above T.

Recommendation 18:
Authorize a minimum of $3 billion annually for a stewardship-based farm and ranch program that rewards producers for using their land, labor, and capital to enhance the environment.

Recommendation 19:
State technical committees and conservation districts or other appropriate local institutions should determine which conservation practices/systems should receive priority for funding based on their relative contribution to environmental enhancement.

Recommendation 20:
Establish initial payment rates on "level of effort" as measured by the cost and comprehensiveness of practices--pay a "maintenance fee" for existing and newly installed practices and habitat and pay an "installation fee" for new practices and restoration of new habitat.

Recommendation 21:
Create a minimum "bar" of generally accepted conservation practices acknowledged by local producers and citizens as an elemental expectation for land stewardship, and require those practices as a condition of eligibility for the new vision stewardship program.

Recommendation 22:
Design the new vision stewardship program to complement existing conservation programs in five key ways--be available to all producers based on their willingness to make a commitment to conservation; prevent conservation problems before they require more expensive treatment; spur widespread enhancement of the environment rather than damage control; emphasize a transition to production systems that enhance, not just protect, the environment; and emphasize development, field-testing, and demonstration of innovative production systems that integrate conservation directly into food and fiber production.

In early 2000, the Soil and Water Conservation Society (SWCS) undertook a two-year project to help policymakers and stakeholders shape the conservation provisions of the 2002 farm bill. Five regional workshops were held at the outset of the project. These workshops involved a similar number of representatives from the agricultural, fish and wildlife, and water resources communities. Participants were asked to develop specific recommendations for reform of conservation and farm policy that would help get conservation on the ground. They also were asked to vote their preferences for the ideas developed at the workshops.

Two previous documents from SWCS--"Seeking Common Ground for Conservation, Preliminary Findings"¹ and "Seeking Common Ground for Conservation, Reforming the Farm Bill: Ideas from the Grassroots"²--summarized what we heard at the workshops. This document takes the next step in the project by formulating specific recommendations for reform of conservation and farm programs to address the concerns and hopes expressed by workshop participants. These recommendations were developed through staff analysis of relevant research, consultation with a policy advisory committee, and input from a wide variety of agricultural and conservation organizations.

The recommendations presented in this report cannot be considered a consensus arrived at through the workshops or the deliberations of the policy advisory committee. The SWCS project staff sought advice, counsel, ideas, and understanding rather than consensus throughout this process. Workshop participants and members of the policy advisory committee have reviewed and commented on the recommendations, but they have not been asked to endorse the recommendations. The recommendations represent our best judgment of the policy reforms that hold the most promise for addressing the hopes and concerns raised in our workshops.

Workshop participants told us--often with a real sense of urgency--that agriculture faces a dramatically expanded conservation and environmental agenda. They all agreed that--at current levels of funding--U.S. Department of Agriculture (USDA) conservation programs cannot meet producers� or the public�s demands for conservation and environmental quality. Many more producers ask for conservation assistance each year than can be accommodated, and local, state, and federal conservation initiatives--voluntary and regulatory--are multiplying. Most participants expected the gap between demand for conservation assistance and its supply to widen over the next few years unless action is taken soon.

This conservation assistance gap, we were told, causes environmental as well as political problems. Pressing conservation needs go unmet, which increases the risk of environmental degradation. The gap also drives wedges between people at state and local levels as they compete for funds and technical services to address legitimate but differing conservation priorities.

The conservation gap means missed opportunities as well as lingering problems (see box). Farmers and ranchers manage most of the privately owned land in this country. Conservation on this working land is the nation�s best opportunity for widespread environmental enhancement. Yet many producers are struggling to stay on the land. Participants strongly believed that conservation could and should create economic opportunities for agriculture and a better quality of life for the public. Today, however, that opportunity is largely being lost.

These missed opportunities are even more distressing given the proven track record of technical and financial assistance programs. Substantial and, in many cases, historic progress has been made in controlling erosion and improving wildlife habitat since 1985. Each state boasts at least one compelling example of a water quality or water conservation project that is enhancing drinking water supplies, improving aquatic resources, or preventing floods. These and many more success stories are excellent indications of the kind of progress that could be made if these stories could be replicated across the nation�s agricultural landscape.

Workshop participants were asked, first, to suggest refinements in existing conservation programs that would improve program performance and, second, to propose an agenda for large-scale change that would dramatically accelerate progress toward improving the economic health and environmental performance of farms and ranches. In practice, however, their ideas did not fit neatly into each of these two boxes. Instead, their ideas traced a continuum of reform ranging from more funding for existing conservation programs to creating a new vision of farm policy based on land stewardship. Between the two ends of this continuum, participants discussed a number of minor and major reforms to existing conservation and farm programs.

This report strives to present the solutions developed by participants in a way that is relevant for policymakers. We have chosen to present these ideas in two sections. The first section lays out an agenda for reform of conservation policy and programs. The second section addresses a reform agenda for agricultural policy and programs. In each section we present a brief synopsis of what we heard at the workshops; what we know from research and experience about the issues raised; and, finally, what we think those issues mean for program and policy reform.

Conservation entered farm policy in the 1930s during a time of crisis--economic and ecologic. The role of conservation then was largely to serve agriculture by developing and managing soil and water resources as a means of enhancing agricultural production and rural development. Soil and water conservation proved spectacularly successful in that role. In the late 1930s, for example, experts concluded that only 160 million acres were capable of being safely cropped given conservation and farming know-how of the day.³ Today, we are safely cropping more than 270 million acres.⁴ We simply could not have achieved the miracles modern agriculture has wrought if conservation had not progressed hand-in-hand with agricultural technology.

This victory over widespread waste and degradation of soil and water resources is among the most significant, although now largely overlooked, accomplishments of modern conservation. Now, however, the challenge for agriculture and conservationists has changed. Environmental performance is becoming a key determinant of the commercial viability of agriculture. Producers operating animal feeding operations or irrigating cropland or pasture already are facing fundamental questions about the environmental sustainability of their operations.

Most producers will face that question in the future--and likely sooner than later, considering the following:

• Agriculture is considered the leading source of pollution in rivers, streams, and lakes assessed by states and tribes.⁵
• Agriculture is listed as a contributing factor for about 57 percent of the species listed as threatened and endangered in the contiguous states.⁶
• More than 60 percent of agricultural production, by value, is produced in metropolitan counties or counties adjacent to metropolitan counties.⁷

Agriculture cannot escape the consequences of its environmental effects anymore than agriculture could escape the effects of land degradation in the 1930s. That is not because agriculture is bad, but because agriculture is big and complex. More than half of the land area in the 48 contiguous states is agricultural land--cropland and grazing land.⁸ Almost 90 percent of all precipitation that falls in the continental United States falls on privately owned agricultural or forestland before it runs into streams, lakes, or underground water.⁹ About 70 percent of wildlife species depend upon private land for their habitat.¹⁰ About half of all endangered species rely on private land for much of their habitat.¹¹ The pressing question is whether we will organize ourselves to face this modern conservation challenge the same way we faced our historic challenge.

Existing conservation programs and policy can meet this new challenge just as the challenge of the 1930s was met. But they must be updated and dramatically strengthened. Workshop participants agreed, almost unanimously, that expanding the reach of existing USDA conservation programs was the first priority to overcome the conservation assistance gap and should be the minimum expected from legislative action in the next farm bill. A combination of increased funding and programmatic reforms were recommended to achieve this objective, with increased funding being the most important factor by far.

Participants universally agreed that increased funding is the only way to address multiple and legitimate conservation priorities while avoiding destructive competition for inadequate conservation funds among regions, priorities, and producers. In their view, lack of funding for existing technical and financial assistance programs is the single greatest barrier to progress in conservation and environmental management. Indeed, the program and policy reforms discussed below would have little effect unless accompanied by substantially increased funding (see table on next page).

Between 1985 and 2000, the federal investment in USDA�s conservation financial assistance programs increased 243 percent in nominal dollars and 123 percent in constant dollars, but these statistics belie some disturbing facts ¹² (see charts on page 17 and 18). The balance in financial assistance spending for land retirement and land treatment changed dramatically over this period. Financial assistance for land retirement increased 12,000 percent, from $13 million in 1985 to $1.76 billion in 2000, while financial assistance for land treatment during the same period declined 38 percent, from $509 million in 1985 to $317 million in 2000.

One program--the Conservation Reserve Program--that pays farmers and ranchers to take land out of production accounted for 80 percent of the increased spending for conservation financial assistance over the period. In 1985, 97 cents of every financial assistance dollar from USDA supported treatment of working land; 3 cents were spent on land retirement. In 2000, land retirement accounted for 85 cents of every financial assistance dollar from USDA, while 15 cents went for working land treatment measures. Over the same period, the federal investment in research, scientific and technical support, and direct technical assistance remained essentially flat, increasing 10 percent, 9 percent, and 8 percent, respectively, in constant dollars over 15 years, or less than 1 percent annually. This level of investment forced a reduction in the staff years devoted to conservation in USDA�s Agricultural Research Service and Natural Resources Conservation Service. The reduction within ARS amounted to 500 staff years, a decline of 6 percent. In NRCS the reduction was 2,201 staff years, a decline of 16 percent.

Today, the dollars available for conservation assistance within USDA also are spread across more programs. There were nearly twice as many conservation programs authorized in the 1996 farm bill as in the 1985 farm bill. This has complicated program administration within USDA and likely confused some landowners trying to understand and use multiple programs.

Moreover, USDA conservation programs remain dramatically oversubscribed. For example, the Wetlands Reserve Program (WRP) in 2000 recorded 3,171 offers on 567,000 acres that went unfunded.¹³ The unmet funding need, $524 million, was nearly four times the amount of money appropriated for the program that year. Likewise, only 30 percent of the 53,961 producers who applied for Environmental Quality Incentives Program (EQIP) funds in 2000 were awarded contracts.¹⁴ Funding needs were more than twice the $174 million available, and many producers reportedly did not apply for the program because of the limited number of contracts awarded in prior years.

New money is absolutely essential and must be the highest priority for policymakers and those who seek to shape policy to enhance the environmental sustainability of agriculture. Policy and program reform alone simply cannot close the conservation gap and serve the long-term interests of producers and taxpayers. Doing more with less is not a viable option.

But new money must be directed toward the most troubling gaps in our current conservation capability. Those gaps clearly are (1) the conservation technical services infrastructure and (2) financial assistance to producers and land that will continue to produce food and fiber, but in an environmentally sound way.

Conservation funding doubled in 1985--the last time the farm bill included a major departure in conservation policy. That investment produced substantial conservation gains, but as funding in subsequent year flattened out, so too did the conservation achievements. We think a doubling of conservation funding for existing programs in 2002 is justified by the facts presented above (see chart). Such an increase will require major new investments in both the discretionary and mandatory accounts. After 15 years, it is time to take another major step toward ensuring agriculture�s continued growth.

Recommendation 1:
Double funding for USDA�s existing agricultural conservation programs to $5 billion annually, with most of the new money going to technical services and financial assistance to working land--double funding for technical services, triple funding for financial assistance on working land, increase funding for land retirement and restoration by 30 percent.

Improving the infrastructure for technical services was a priority for workshop participants. They not only wanted more on-the-ground advisors to work one-on-one with producers, but also technical assistance that is multidisciplinary in nature. Improved monitoring and evaluation of program performance were essential, they said, as were up-to-date technical standards, more economically feasible conservation practice or system options from which producers might choose how to address particular conservation problems, the development and use of tools that support conservation work on a watershed or other geographic scale beyond a single farm or ranch; and more producer friendly, comprehensive solutions that work across multiple tracts, programs, and problems.

Weakness in this nation�s technical services infrastructure is the single greatest impediment to meeting the conservation needs of landowners and the public�s desire for environmental quality. Conservation at its heart is ecological and economic knowledge applied to the design and management of farm and ranch systems. Ultimately, farmers and ranchers do conservation; public programs do not. Timely, accurate, and appropriate advice and information from technically trained advisors in the public and/or private sectors is the key to successful conservation. Without it, financial aid is likely to be wasted or, worse, misdirected. In many cases, good technical advice alone is all that is needed to help producers implement conservation systems that promise economic as well as environmental returns. Substantial progress could be made, even with no new financial aid for producers, if the right information and knowledge were available to producers, along with some assurance that technical support would be there when they need it.

As debate began on the 1985 farm bill, the USDA agricultural conservation effort was comprised of one primary technical assistance program and one primary financial assistance program. At that time, the investment in technical assistance made up just over 60 percent of the conservation budget. Since 1985, more then 20 different financial assistance programs have been authorized in various farm bills, and the investment in technical assistance has shrunk to about 30 percent of the conservation budget.

The emphasis on financial assistance reflects the implicit and often explicit conclusion among policymakers that the primary barrier to implementation of conservation systems on farms and ranches is cost. Many studies, however, show that lack of knowledge, rather than cost, is the primary barrier to adoption of conservation systems by farmers and ranchers. USDA�s Economic Research Service, for example, recently conducted a detailed, field-level survey of farmers in 12 watersheds as part of the USDA Area Studies Project.¹⁵ The researchers found that a producer�s knowledge and understanding of conservation systems was the single most important factor with a positive effect on his or her adoption of conservation systems--particularly the information�intensive technologies that increasingly characterize modern conservation systems.

Dealing with the cost of conservation only makes sense after the producer understands what needs to be done and how the conservation system will work in tandem with his or her production systems and goals.

Recommendation 2:
Recognize and affirm technical assistance as the most important conservation program in and of itself--not merely a cost of delivering conservation financial assistance to producers. Congress should ask the Secretary of Agriculture for an action plan and funding needed to ensure that all producers have access to timely and effective technical assistance from the public and/or private sectors.

There are three ways to strengthen the technical infrastructure: (1) Increase federal technical staff at all levels, (2) provide federal funding to state and local governments, private commercial firms, and nonprofit organizations to develop technical capacity, and (3) facilitate the use of third-party vendors in the delivery of conservation programs, including conservation planning services, at the farm and ranch level. We think all three of these approaches should be used; there are important advantages to be gained by explicitly coordinating investment among the three approaches. The first priority should be to strengthen the scientific and technical support available to field staff and advisors. The core scientific and technical capability of NRCS at all levels of the agency needs major new investment, along with new money for related research and extension work.

The Conservation Partner Fund we propose later should be used to direct additional investment in technical infrastructure to the most promising opportunities at state and local levels among governmental, for-profit, and nonprofit organizations. State conservation agencies and conservation districts have, thankfully, built an impressive technical capacity that has helped fill the gap created by declining federal support. At the end of January 1999, state conservation agencies employed just over 1,110 professionals. Conservation districts employed just over 6,300 professionals.¹⁶ These investments by state and local government have added substantially to the technical capacity at the local level. But state investment has not been enough to fill the gap. State investments are uneven; thirteen states, for example, account for more than 50 percent of state and local staff. State and local governments need to be encouraged and helped to do more.

Most of the investment decisions in technical services infrastructure--research, education, and technical assistance--are made through annual appropriations (see box). The farm bill, unfortunately, has limits as a policy vehicle for addressing this single most compelling issue for conservation on farms and ranches. There are specific actions, however, that could be taken as part of a new farm bill that would make an important contribution to reinvesting in our conservation technical services infrastructure.

Recommendation 3:
Fix the so-called Section-11 cap constraint that limits the use of Commodity Credit Corporation (CCC) funds for the delivery of technical services, and mandate that CCC funds be provided for technical and educational assistance as part of every CCC-funded conservation financial assistance program.

Recommendation 4:
Offer comprehensive training and certification programs to build the capacity of for-profit and not-for-profit groups in the private sector to provide technical services. Allow farmers and ranchers themselves to use financial assistance provided through USDA conservation programs to participate in such training and certification programs.

Participants also developed a substantial agenda of reforms in existing programs to make them work better for agriculture and the environment. Those ideas clustered around five themes: (1) Making sure USDA conservation programs work across all regions of the country and for all producers, (2) improving the process used to set priorities for all conservation programs, (3) striking a better balance between financial assistance for land retirement and land treatment, (4) simplifying rules and regulations, and (5) providing regulatory assurance.

Fairness and flexibility. Making USDA conservation programs more fair and more flexible by ensuring that they work across all regions of the country and for all producers was an issue raised at all five workshops. Workshop participants recommended eliminating the bias in conservation and farm-support programs toward row-crop producers, suggesting that the ranching community in particular is not well-served by existing conservation programs. Greater flexibility at the state level to tailor USDA conservation programs to state and local needs was an important element of program reform as well.

Improving priority setting. The way priorities are set for conservation programs became a major point of discussion and contention at our workshops. Participants debated at length the proper role for federal, state, and local levels in setting priorities and allocating funds. There was general agreement that each level needed to play a role in setting priorities, but significant disagreements over which level should have the most influence.

Balance land retirement with conservation on working land. Workshop participants suggested that the nation must strike a better balance between land retirement programs and programs to improve the management of working land. While support for the Conservation Reserve Program and Wetlands Reserve Program was strong, many participants expressed concern that, relatively speaking, too little money is spent on keeping land in production in an environmentally sustainable way.

Simplify programs. Reform of existing programs should focus on simplified rules and regulations. Workshop participants strongly supported greater coordination of USDA program sign-up periods, more uniform planning and application procedures, and uniform technical standards across programmatic and geographic boundaries.

Regulatory assurance. Extending the reach of existing conservation programs also should provide some measure of regulatory assurance, workshop participants said. This suggestion encompassed the use of common technical standards, guidance, and requirements among local, state, and federal regulatory agencies and programs; one-stop shopping for landowners; and a degree of assurance that compliance with regulatory requirements would hold for a designated period of time.

Fairness--ensuring that all agricultural producers and all regions have access to conservation Assistance--was among the most important issues raised by workshop participants. Clearly, most participants perceived that equal access does not now exist.

The CRP dominates the conservation budget. Participation in that program has, for legitimate reasons, been concentrated in the Great Plains states. That concentration, however, means that most states have not benefited significantly from USDA�s most generously funded conservation program. Distribution of cost-share programs has been more widespread, but severe shortages in funding have diluted the effect cost-share programs have had on evening out the distribution of USDA conservation programs among geographic regions. Those facts undergird the strongly communicated message we received from workshop participants that most regions of the nation do not get their fair share of help from USDA conservation programs.

Rewarding good actors, or at least not rewarding bad actors, was the second element of fairness raised by workshop participants. This issue seemed important to workshop participants who told numerous stories about financial aid flowing to producers who "did the wrong thing," while producers who "did the right thing" found themselves ineligible for assistance. Participants cited the example of producers who did the right thing by keeping fragile land in pasture or rangeland and are, therefore, ineligible for help under the CRP, while their neighbors who had broken out fragile land were paid to put that land back into grass cover. Similarly, producers who invested in good manure or nutrient management systems at their own expense watched as neighbors received public subsidies to do the same thing.

Financial assistance programs that only reward installation of new conservation systems or restoration of new habitat will always disadvantage those producers who are already doing what those programs seek to encourage. This problem can be addressed in the design of conservation programs, but has largely been ignored because of concerns that a large share of limited funds would go to maintain the status quo rather than to put new systems on the ground. Feelings surrounding the issue, however, appear to have intensified. This increased intensity, at least in our workshops, reflected the increased importance of environmental performance in the commercial viability of their operations. It also reflected a greater sense of unfairness in the distribution of commodity and income subsidies to an increasingly limited number of producers.

Real authority and flexibility at the state level to influence funding allocations, eligibility criteria, and other fundamental elements of program implementation was the solution nearly all participants wanted. We agree that greater authority at the state level to influence fundamental elements of federal program implementation is a major opportunity to improve program performance.

State and local governments are increasingly important in their own right at getting conservation on the ground. Many states have increased their investment in conservation while federal investments have declined. Some state programs far exceed the investment made by USDA programs in those states. In 2000, state and local governments provided more than $1 billion in funds and in-kind services to support conservation work through soil and water conservation districts.¹⁷ This investment is almost half of the investment made by USDA in the same year. Providing states the flexibility to mesh federal programs with increasingly important state programs is a real opportunity to increase the effectiveness of the conservation effort. State investment alone, however, has not been sufficient to close the conservation gap. The level of investment varies dramatically among states. Just six states account for nearly half of the investment in funds and in-kind services to support work by conservation districts. Providing federal funds on a matching basis could spur other states to invest their funds in agricultural conservation.

We think there are current examples of enhancing state authority that should be built upon. The two most important examples are (1) implementation of federal programs under agreements with states, such as those used in the Wildlife Habitat Incentives Program (WHIP) and Conservation Reserve Enhancement Program (CREP), and (2) state technical committees as a means of tailoring program implementation to state circumstances.

We think the innovations in program implementation used in WHIP and CREP should be expanded to touch all USDA conservation programs. States, at their choice, could develop a single, comprehensive state conservation plan that would propose changes in implementation of any or all federal programs needed to meet state conservation objectives. These plans also would detail the means by which states would track progress toward their goals and account to federal taxpayers for the monies expended. Approved plans would provide much greater flexibility in program implementation and spark creative and innovative approaches to meshing local, state, federal, and private programs and initiatives.

States should be rewarded for undertaking such an endeavor, however, with more than flexibility and authority. They should also gain access to additional dollars. Some workshop participants recommended block granting new and existing funds for USDA conservation programs to states as a means of achieving this objective. Block grant proposals, however, raised serious concerns among many participants about accountability and potential redirection of funds from objectives that are extremely important to those programs� constituents.

We recommend an alternative approach that keeps the integrity of existing programs intact while producing many of the advantages of a grant program. We envision a USDA-administered Conservation Partner Fund, created by using a portion of the funds appropriated each year for all USDA conservation financial assistance programs. Funds annually made available for conservation financial assistance programs--above a designated funding threshold for each program--would be pooled and made available to states that develop a comprehensive state conservation plan as outlined above. The funds pooled to create the Conservation Partner Fund would be allocated much like a grant program. The remaining funds would be allocated according the rules, regulations, and policy guidance developed for each program. EQIP, for example, could be authorized at $1 billion annually. All funds made available above, perhaps, $500 million and up to the authorized level would be made available to states through the Conservation Partnership Fund. The same procedure would be used for all USDA conservation financial assistance programs.

States would be able to ask for the particular mix of financial assistance programs that would best meet the needs of producers and citizens in their state. States could propose to use Conservation Partner Funds for (a) providing technical services at state and local levels through government or through for-profit or not-for-profit entities and/or (b) financial assistance through USDA-authorized programs.

Higher levels of funding could be attained by states through the Conservation Partner Fund by going beyond plans that coordinate and leverage existing state programs at current levels of state funding by proposing plans that (a) match new funds received through the Conservation Partner Fund with additional state funding, (b) match new funds received through the Conservation Partner Fund with additional funding or other conservation incentives provided by agribusiness firms or other private-sector interests in the state, or (c) implement a "one-plan" approach that harmonizes voluntary and regulatory programs in a state.

Taken together, expanding the state plans and agreements pioneered in CREP and WHIP, with funding providing through a Conservation Partner Fund, could provide much of the flexibility proponents of block grants seek while maintaining the integrity and accountability of existing conservation programs.

Recommendation 5:
Expand the state agreement approach used in CREP and WHIP to cover all USDA conservation financial assistance programs. Provide states that complete an approved comprehensive state conservation plan greater flexibility and more money to tailor USDA programs to their plans. Fund implementation of state plans in part by pooling a portion of the funds appropriated each year for all USDA conservation financial assistance programs into a Conservation Partnership Fund administered by USDA.

The desire to reward good actors--producers who have installed and maintained conservation systems or habitat at their own expense--was a critical issue in all of our workshops. There are important conservation as well as ethical reasons to address this issue. Conservation systems need constant updating and maintenance to ensure they continue to work well for producers and the environment. Maintaining and adjusting conservation systems costs money and requires ongoing technical assistance and advice. Taxpayers have a real interest in ensuring and sharing the cost of maintaining conservation systems to protect the value of the investment they may have made to install the system. Taxpayers also have a real interest in preventing problems before they occur, rather than paying for what are often more expensive solutions once problems have emerged.

Rewarding good actors by paying for the conservation goods and services they already produce was the major reason workshop participants proposed the new vision of a farm program based on land stewardship that is discussed later in this report. This issue could be addressed, however, in the context of existing conservation programs in two ways: First, by explicitly giving credit for existing practices when determining eligibility or competing for assistance under any or all USDA conservation programs and, second, by sharing the cost of maintaining existing conservation systems and habitat in financial assistance programs. Both of these approaches are currently used in various ways and to differing extents in existing conservation programs.

Recommendation 6:
Recognize good actors by giving them credit for existing conservation practices when determining their eligibility or priority for participation in USDA conservation programs and by cost-sharing maintenance of existing or newly installed conservation systems or habitat.

Ensuring that all producers in all regions have access to CRP would be a major step forward in achieving greater fairness in conservation programming. CRP accounts for more than 80 percent of the nation�s current conservation financial aid spending.¹⁸ But one-third of that funding goes to five states, all in the Great Plains, and only land with a cropping history is eligible for enrollment (see charts). As a result, many workshop participants felt their states were excluded from participation in this most generously funded USDA conservation program. Substantial progress has been made in opening the CRP to additional states with implementation of the continuous sign-up and CREP initiatives. Currently, $143.2 million are spent on practices covered by the continuous sign-up--about 9 percent of total CRP expenditures.¹⁹ More could and should be done, however, particularly in regard to the limitations imposed by the cropping history requirement, to enroll land in the CRP. That cropping history requirement limits the application of CRP on rangeland, pasture, and other land that could provide substantial environmental benefits. That requirement also puts at a disadvantage those good actors who have already installed conservation practices otherwise eligible for the continuous CRP sign-up.

USDA has recently provided enhanced incentives for producers to enroll land in the continuous CRP sign-up. The positive response to these new incentives demonstrates that many more landowners will participate if the incentives are right. Several actions should be taken to increase incentives to enroll buffers including:

• Continuing the package of financial incentives now offered landowners willing to install conservation buffers.
• Extending that package of financial incentives to all buffer practices eligible for enrollment in the continuous sign-up.
• Allowing haying or grazing of buffers under an approved conservation plan for maintenance purposes, including weed control.
• Permitting greater flexibility in tree planting requirements within riparian buffers.
• Ensuring the eligibility of filter strips and riparian buffers along seasonal streams, surface drainage ditches, and irrigation canals and around all natural lakes and permanent wetlands.
• Adding wetland restoration or creation at the outlet of agricultural tile drainage lines as an eligible practice for water quality improvement and other purposes.

Recommendation 7:
Expand the producers and agricultural land benefiting from CRP by permitting enrollment of environmentally sensitive acres of rangeland, pasture, or other land without a cropping history, at appropriate rental rates, and modify or eliminate all cropping history requirements for all practices eligible for the continuous CRP sign-up and all practices and habitat types specified in comprehensive state conservation plans.

Recommendation 8:
Mandate at least a 5-million-acre goal for conservation buffers within the CRP and encourage participation through higher financial incentives and greater flexibility in practice requirements.

Who sets priorities for USDA conservation program and the process they use to set those priorities were major issues for workshop participants. The issues have taken on added importance and become a source of conflict because of the under funding of conservation programs. Legitimate priorities, good projects, and solid applications from producers go unfunded because there is not enough money to go around. In reality, a lack of money has reduced the benefits that should be achieved from targeting while driving up the negatives inherent in targeting. Enough money to address legitimate priorities, good projects, and solid applications should be the first step taken to improve priority setting in USDA conservation programs.

Even with more money, however, there are important issues about priority setting that need solutions. In most cases, those issues are posed as a conflict between local control and federal mandates. Vesting priority setting solely at the local level will not resolve a primary issue in the use of federal tax dollars--taxpayers footing the agricultural conservation bill are often far removed from the areas in which that conservation occurs. Federal policymakers legitimately need to ensure that those taxpayers are getting something for their tax dollars. On the other hand, tailoring priorities to local circumstances is absolutely essential for effective conservation to occur.

This tension between local control and federal accountability is an unavoidable and necessary part of the federal-state-local conservation partnership so important to getting conservation on the ground. A solution may be to make the priority setting process as transparent as possible without impinging on privacy concerns and to work toward a process that harmonizes bottom-up and top-down priorities at the state level.

Transparent, science-based, politically sound priority setting has to be based on facts. Local, state, and federal partners need good information about what programs are achieving, what problems are going unmet, and what opportunities are being missed. That information comes at a cost, however. Declining investment in the conservation technical services infrastructure makes it very difficult to provide this kind of information. Absent substantial increases in support for that infrastructure on the discretionary side of the budget, policymakers could improve priority setting by making a portion of CCC funding for financial assistance programs available to support monitoring, assessment, and evaluation of programs.

Federal policymakers could help ease the task of local, state, and federal officials and advocates by providing more guidance on national goals and priorities for conservation of working land. Fortunately, there is a process in place that, if properly used, could be the means to arrive at a more transparent, science-based, and politically sound priority setting process. That process is authorized in the Soil and Water Resources Conservation Act of 1977.

The Soil and Water Resources Conservation Act directs USDA, under the leadership of NRCS, to undertake periodic, science-based appraisals of the condition of soil, water, and related resources on the nation�s nonfederal land. That appraisal becomes the foundation for preparation of a National Conservation Plan (NCP) that outlines the action that needs to be taken to address the issues raised in the appraisal.

The NCP could and should be the nation�s primary vehicle for setting goals, formulating policy, and directing implementation of conservation programming for all nonfederal working land. The NCP could and should establish USDA as the lead cabinet department for policy formation and programming for conservation on nonfederal working land. The NCP will only achieve the role envisioned in the Soil and Water Resources Conservation Act if the Secretary of Agriculture accords it the importance and significance due a major national strategic document.

Recommendation 9:
Direct the Secretary of Agriculture to provide to Congress a plan and budget for implementing the National Conservation Plan and appraisal process as the nation�s primary vehicle for directing conservation on nonfederal working land.

In many states, USDA state technical committees already are serving as an effective tool for setting priorities and reaching consensus on implementation of USDA conservation programs. Many participants in our workshops praised the process and provided compelling examples of how a properly constituted and organized state technical committee can improve the process by which priorities are set within a state. Other participants, however, provided examples of state technical committees that were not living up to their promise. USDA should build on the experience of successful state technical committees and take action needed to ensure that state technical committees in every state are effective vehicles for tailoring priorities to state and local needs and implementing all USDA conservation programs at the state level.

Recommendation 10:
Strengthen and reform state technical committees and expand their authority to recommend modifications to rules, funding allocations, and priorities for all USDA conservation programs.

The most important reason for directing technical and financial assistance to geographically defined priority areas is to gain the benefits of collective action on the part of landowners. Most environmental benefits are realized at scales larger than a single farm or ranch operation. Helping multiple farmers and ranchers who live adjacent to one another implement sound conservation systems increases the effectiveness of the conservation effort. The value of a buffer strip along a stream flowing through one farm or ranch, for example, goes up if the next farmer or rancher upstream or downstream also creates a buffer. Taxpayers get more for their money when producers work together. In fact, on a landscape or watershed scale, the value of collective action may exceed the sum of the individual parts. Directing funds to geographically defined areas, therefore, is an essential tool. It has, however, proved contentious, particularly given the limited funding of conservation programs. We think providing incentives for producers to work together would provide a good complement to traditional approaches to targeting.

Recommendation 11:
Encourage producers to create their own priority areas by offering bonus points or higher financial incentives in USDA conservation programs to producers who work collectively along or around a water body, within a watershed, or within an important habitat type.

CRP and WRP are highly effective conservation programs. They demonstrate what can happen when a good conservation tool is adequately funded. These tools, as good as they are, are limited in the contribution they can make to conservation because they require taking land out of food and fiber production and devoting that land primarily to a conservation use. As a result, they are necessarily expensive on a per acre basis, meaning only a small percentage of the agricultural landscape can be affected. They also are limited in their ability to produce the huge conservation benefits that could be achieved by integrating conservation into the production systems used on land that remains in food and fiber production.

These effective land retirement tools should be continued and/or even expanded somewhat as part of the $5 billion dollar annual investment we recommended earlier for existing technical services and financial assistance programs (see box on next page). But they need to be balanced, as recommended, with much larger investments in technical services and financial aid for the conservation of working land.

Policymakers should take advantage of policy reforms--in addition to higher funding--that could help strike a better balance between land retirement and land treatment programs.

Recommendation 12:
Integrate economic use more fully into land retirement and restoration programs--offer the option of converting CRP contracts to grassland easements as part of a transition to grazing-based production systems; allow managed haying, grazing, or other compatible economic uses at reduced rental or easement payment rates; integrate land management and conservation measures into the Farmland Protection Program (FPP ).

Workshop participants told us that simplifying the process of applying for and enrolling in multiple USDA conservation programs would both increase the effectiveness of those programs and their accessibility to producers. Simplification would also, hopefully, reduce the administrative burden for administrative and technical field staff, freeing more time for conservation work with producers. Last year, USDA operated over 15 individual conservation financial assistance programs. Each program was operated under its own unique rules and regulations covering eligibility, planning, sign-up, and contracting procedures. Most of those programs spent less than $10 million in FY 2000.²⁰

We think the need for simplification has been created largely by the multiplication of stand-alone conservation programs. Each of those programs has its own unique value, but each also has its own unique planning, application, and eligibility requirements. We think the most straightforward step toward simplification would be to consolidate those individual authorities into two basic financial assistance programs. One program would provide financial assistance for taking land out of production to protect and/or restore environmentally sensitive land, with options ranging from 10-year contracts to permanent easements. The second program would provide financial assistance for improving conservation practices on land producing food and fiber, with options ranging from installation of a single practice to 15-year contracts for implementation of comprehensive farm and ranch conservation plans.

The notion of program consolidation, however, met with overwhelming opposition from workshop participants. Each program has developed a devoted constituency that strongly supports the individual priorities addressed by each program. Despite the fact that, on the merits, we think program consolidation is the best option, we are not recommending policymakers take that route. Consolidation of programs would likely become a serious distraction and divert attention from more important objectives.

Instead, we are recommending a number of other, less dramatic steps that would, if taken, result in major progress toward simplifying the process of implementing programs for producers and field staff.

The first step we recommend is to make the producer developed conservation plan the basic entry point for multiple conservation financial assistance programs. Instead of producing multiple, often fragmentary plans to secure participation in a particular conservation financial assistance program, we would like to see producers work with technical advisors to develop a more comprehensive plan that integrates conservation into the farm and ranch operation in a way that meets a producer�s economic and environmental objectives. That single producer driven plan should meet the planning requirements for all USDA conservation programs and open the door to eligibility under multiple financial assistance programs to implement the plan.

Recommendation 13:
Emphasize conservation-driven farm or ranch planning rather than program-driven planning, and make farmers and ranchers who complete an approved comprehensive farm or ranch plan automatically eligible for financial assistance simultaneously under multiple USDA conservation programs for appropriate practices included in their plan.

Currently, different USDA conservation programs have different sign-up processes and different sign-up periods, creating difficulties for producers and field staff. Recommendation 13 would eliminate that barrier for producers completing a comprehensive farm or ranch plan. Other steps could be taken to reduce that barrier for all farmers and ranchers interested in doing more for conservation.

Recommendation 14:
Create unified sign-up, application, and contract processes by (a) providing for a continuous sign-up for all USDA conservation financial assistance programs under terms of a comprehensive state conservation plan or (b) coordinating sign-up periods for all programs, for example, during an annual conservation fair.

Workshop participants singled out simplification of EQIP as a particularly important objective. They singled out EQIP for two reasons. First, EQIP currently is the only major source of financial assistance for conservation on land producing food and fiber, making it particularly important within the mix of conservation programs. Second, EQIP suffers from uniquely burdensome administrative requirements, particularly considering the small amount of money provided (see box on next page).

We think EQIP could be much improved by taking steps to move toward a continuous sign-up process and by reducing the upfront planning burden placed on producers and field staff. These two issues are closely related and need to be solved simultaneously. The single most important reform should be to eliminate the statutory bidding requirement that, as implemented, involves substantial upfront planning to apply for assistance. That upfront planning has been particularly frustrating for producers and staff, given limited funds--most producers producing plans do not end up receiving assistance. Instead, we recommend that a simple ranking process be used to estimate the projected environmental benefits from participation. Producers would be selected to participate based on that rank and available funds. The Columbia Scorecard System is an excellent example of the use of such a conservation index. Only those producers already approved for participation, then, would need more in-depth conservation planning. Producers and staff would have more certainty, and the environment would be better served. It would also help to allow cost-share payments to be made in the year the work is completed by a producer, altering the provision in the 1996 farm bill that was included as a cost-saving device, and to allow program funding to be carried over from one fiscal year to the next.

Producers operating in sensitive areas or proposing to implement key practices, could be made automatically eligible--reducing the planning and administrative burden for producers and staff. Blanket eligibility for producers enrolling land in the continuous CRP sign-up implementing designated high priority practices or operating within designated priority areas, would direct EQIP dollars toward critical opportunities for environmental enhancement while reducing administrative burdens.

Recommendation 15:
Streamline EQIP by eliminating the bid process and substituting a ranking process that bases program participation on a conservation index and providing blanket eligibility for producers participating in the continuous CRP sign-up, proposing to implement conservation systems or practices designated as high priority, and/or operating within designated geographic priority areas.

Environmental compliance and performance represent an increasingly important determinant of commercial viability for producers. Regulatory programs currently do not touch most producers, but most producers expect to be touched in the future. Indeed, much of the concern for expanding the reach of existing conservation programs arose from that expectation on the part of participants in our workshops. Some producers already work in an environment in which regulatory and voluntary programs operate simultaneously to achieve environmental objectives. We think this situation will become the norm for many more producers over the next 5 to 10 years.

Policymakers, then, will be faced with a new challenge--findings ways to make regulatory and voluntary approaches complementary rather than conflicting policy instruments. Increasingly, the choice will not be between regulation or incentive-based approaches. The choice will be how to use both approaches in a way that works for producers, taxpayers, and the environment.

The farm bill likely cannot address the central issues surrounding regulatory assurance. Such policy reform will have to involve the committees and agencies authorizing, overseeing, and implementing the Clean Water Act, Clean Air Act, and Endangered Species Act. Policymakers, however, could take some steps within the context of the farm bill. Encouragement of a "one-plan" approach, for example, would help facilitate one-stop shopping for producers (see box). The one-plan concept allows a producer to develop a single conservation plan that meets the regulatory and voluntary program requirements of all federal, state, and local government agencies. Congress could also encourage the Secretary of Agriculture, in partnership with the Administrator of the Environmental Protection Agency and the Secretary of Interior, to provide guidance to states on how best to achieve coordination under existing federal statutes.

Recommendation 16:
Encourage states to develop and implement a "one-plan" approach to conservation on farms and ranches--make the one-plan approach an optional element of the comprehensive state conservation plan and make additional technical and financial assistance available from the USDA Conservation Partner Fund to states using the one-plan approach.

Participants raised two issues about farm programs and policy. First, they wanted to ensure that existing or new programs do not exacerbate conservation problems. Conservation compliance provisions as well as farm program design were the policy options they brought forward to address this issue.

More time, however, was spent on proposals to make conservation or land stewardship the fundamental reason for public support of agriculture. Participants wanted to see conservation become the basis, or at least a primary basis, for economic assistance to farmers and ranchers.

Their goal was to create a farm program that rewarded producers, via green payments, for the environmental benefits they produce.

Workshop participants agreed that agricultural commodity and risk management programs should not exacerbate conservation problems by encouraging production on environmentally sensitive land or intensifying agricultural production systems. To achieve this objective, they suggested further decoupling support payments from agricultural production, providing all farms and ranches with equitable forms or levels of support, and strengthening conservation compliance laws.

Participants disagreed about the degree to which current commodity and risk management programs actually create incentives to break out sensitive land or intensify production. Some felt there was little effect. Others felt the impact of individual programs, such as loan deficiency payments or subsidized crop insurance, might be limited, but the cumulative effect across all such programs might be substantial. Many felt they lacked information to conclude one way or another, but they felt strongly that commodity and risk management programs, at a minimum, ought to be conservation neutral in their impact.

Support was nearly universal among workshop participants for continuing the current conservation compliance laws and making all commodity and risk management programs, including crop insurance, subject to those laws. Substantial support also existed for extending the soil conservation features of the compliance laws to all cropland, so long as conservation personnel would not be diverted from the task of providing technical assistance to farmers and ranchers.

Commodity and risk management programs that (1) increase the price of a commodity realized by a producer and/or (2) reduce the risk of producing that commodity almost certainly will work to increase both the acres planted to that commodity and the overall production of that commodity. Information is sketchy, however, about the magnitude of those effects on how land is used and managed and what the resulting environmental impacts might be. USDA�s Economic Research Service (ERS), for example, recently estimated that:

• The combined effect of crop insurance premium subsidies would add about 900,000 acres to aggregate plantings of eight major field crops.²¹
• Marketing loan benefits added 4 million to 5 million acres to the total U.S. acreage planted to eight major field crops.²²

Expectations of disaster assistance when commodity prices or production levels fall probably encourage producers to keep more fragile land in production. A recent North Carolina State University study, for example, suggests that disaster payments, crop insurance, and other income-support programs collectively have offset up to a third of the soil erosion control gains resulting from the CRP.²³ Anecdotal evidence also continues to accumulate about producers in some regions of the country who continue to plant crops with the expectation that they will harvest a disaster payment if not a crop.

Other studies have focused on the impact of subsidies on the intensity of production. One study, for example, indicated that programs that have an insurance effect--including counter-cyclical approaches--could have important effects on production levels even if the payments are not formally linked to current production. The wealth effect of direct payments not tied directly to production levels may still encourage additional investment in agricultural production and expansion of supply.

Finally, the acreage effects of these programs may be concentrated in particular regions. On a national scale, the acreage effect may be small. But concentrated in a few regions, even expansion onto a few million acres could have significant environmental effects.

The best way to address the environmental implications of commodity and risk management programs would be to design them explicitly to minimize any incentives they may create to break out or intensify production on risky land. In principle, the components of commodity and risk management programs that should be of most concern to conservationists are:

• Decouple payments as much as possible from the amount of a commodity produced.
• Minimize barriers to diversification of crops and livestock.

The so-called Freedom to Farm program passed in 1996 both decoupled payments from production and increased planting flexibility. Since 1996, however, loan deficiency payments have emerged as an important counter-cyclical price support program directly coupled to production levels. Premium subsidies for commodity-specific crop insurance policies also have increased, magnifying their effect on planting decisions. As the next farm bill debate approaches, the nation is confronted again with a mix of commodity and risk management programs and a mix of signals to producers that influence their planting decisions. Those mixed signals have muddied the waters for analysts attempting to quantify the effects of commodity and risk management programs. They also make it harder for conservationists to evaluate what is at stake in the design of commodity and risk management programs.

Conservation compliance measures, on the other hand, have clearly demonstrated their ability to spur conservation efforts on land used to produce subsidized commodities. USDA�s Economic Research Service, for example, estimates that the highly erodible land conservation provisions of the 1985 farm bill are producing $1.4 billion dollars a year in nonmarket benefits for taxpayers.²⁴ For conservationists, cross compliance measures provide a much more clear-cut mechanism to mitigate perverse incentives created by commodity or risk management programs.

More importantly, compliance provisions help level the playing field for conservation. The commodities this nation currently subsidizes accounted for about 20 percent of all cash receipts from farming in 2000.²⁵ A relatively small subset of producers benefits from current commodity and risk management programs, but all producers have a responsibility to care for their land. Setting a minimum standard for elemental conservation practices, while admittedly controversial, is an appropriate way to level the playing field among all agricultural producers.

The role for compliance measures in a new farm bill was a contentious issue for workshop participants and during our deliberation leading to the recommendations in this report. A fully funded, effective conservation program of the magnitude envisioned in this report would be the preferred way to jumpstart conservation and environmental enhancement on farms and ranches across the country. However, the history of funding since 1985 clearly shows that actual appropriations often lag well behind authorized levels, and many new and promising conservation financial assistance programs have floundered because of lack of funding.

We think it is appropriate to affirm and strengthen current conservation compliance measures to address the following key concerns. Workshop participants were nearly unanimous in their sense of injustice if producers were allowed to break out fragile land and subsequently be subsidized by taxpayers for enrolling those acres in CRP or another conservation program. Participants thought this was an affront to good stewards and a prime example of conservation programs rewarding the wrong behavior. The so-called "super sodbuster" provision had, in the past, addressed this issue by precluding the breaking out and cropping of highly erodible land if a producer had already enrolled land in the CRP.

Crop insurance, revenue insurance, and other often legitimate programs to help producers manage risk can create significant incentives to bring fragile and risky land into production. Crop insurance is currently exempted from compliance provisions--an exemption created to encourage participation and reduce reliance on annual disaster payments. Crop insurance reform with its increased subsidies, however, appears to have spurred participation in the program, and the potential for heavy reliance on revenue insurance as a mainstay of risk management and income support suggests to us that it is time to extend conservation compliance to crop insurance and any new insurance-based approaches to risk management and income support that may be authorized in the next farm bill.

Finally, the highly erodible land provisions of the 1985 farm bill, though highly effective, appear to have left unaddressed an important segment of the nation�s soil resources (see table). About 50 million acres of nonhighly erodible land is, according to the 1997 National Resources Inventory, eroding at rates greater than the soil loss tolerance.²⁶ Asking producers who receive subsidies to take action to achieve a significant reduction in erosion on the acres--less than 15 percent of total cropland--would go a long way toward finishing the historic task started in the 1985 farm bill.

Recommendation 17:
Reaffirm and strengthen conservation compliance, sodbuster, and swampbuster laws by reinstating the super sodbuster provision; extending compliance provisions to all commodity and risk management programs, including crop insurance; and extending the soil erosion control provisions to non-highly erodible cropland eroding above T.

Many highly effective, state-of-the-art conservation systems entail greater real or perceived risk for producers. Traditional cost-share or incentive payments often are not very efficient means to manage these kinds of risk. Insurance and similar risk management tools specifically designed to help producers manage these risks hold great promise for expediting the application of new conservation technologies. Risk management products, for example, could be developed to support the adoption of nutrient management and integrated pest management systems.

Nearly all workshop participants put their first priority on expanding the reach of existing conservation programs. But most workshop participants wanted to do much more than that. They created a vision of an agricultural policy in which land stewardship is at the center of, or at least coequal to, other policy objectives. Many envisioned a new farm program based on rewarding farmers with green payments for the environmental benefits they provide for taxpayers. This new farm program would complement, not replace, existing conservation programs.

Participants told us it was time "for a new vision for agriculture," as one participant put it. They wanted a new farm policy that supported--through conservation--all agricultural producers, producing all kinds of crops and livestock, on all kinds of land, in all regions of the country. Their goal was to keep people on the land, and they were skeptical about the effectiveness of traditional approaches to supply control, price support, and income subsidies. They recognized that producers who relied on production of subsidized commodities for a large share of income from their operations had become very dependent on government payments. But they worried that such dependence was unsustainable and not in the best interests of agriculture, taxpayers, or the environment.

They wanted to create a fundamentally new component in agricultural policy that would harness conservation directly to help keep people on the land. They wanted to find a way to reward farmers and ranchers for using their land, labor, and capital to enhance the environment--to base taxpayer support on conservation rather than on commodity production. They wanted that support made available to all agricultural producers, including those producers who were already investing in conservation and producing environmental benefits, often with no financial help from taxpayers.

Participants envisioned a program that was as much a farm program as a conservation program. Indeed, even the strongest advocates for this approach wanted to invest more in some or all of the existing conservation programs even as their new vision was put in place. They wanted to keep existing conservation programs to tackle lingering environmental problems and protect environmentally sensitive land. They saw their new vision as complementing existing conservation programs by keeping working land in production and enhancing the environment at the same time.

Participants outlined the following components of a new stewardship-based farm program: (1) Reward good actors, (2) help keep people on the land, (3) scale payments to reflect the level of conservation effort and environmental goods and services produced, (4) make all agricultural producers and all agricultural land eligible for participation, (5) address conservation needs comprehensively on farms and ranches, and (6) permit one-stop shopping for planning, administration, and regulatory assurance.

While most workshop participants agreed with the broad outlines of this agenda, differences of opinion existed over what priority to give each of the elements, how best to implement the agenda, and what conservation issues ought to be addressed in the process. These differences, they concluded, would have to be worked out at state and local levels. A great deal of flexibility would have to be built into the program to make it work, given the diversity of farms, ranches, landscapes, and environmental opportunities such a program would address.

What we know confirms many of the concerns and hopes expressed by workshop participants. The wisdom and effectiveness of traditional approaches to farm policy are seriously questioned. Abundant and cheap supplies of food and fiber, income support for struggling farmers, and economic support for rural communities are the three most often stated objectives of traditional farm policy. Those traditional policies are being challenged on their ability to address all three of those objectives.

Underlying all of the questions being raised is the fact that major structural changes have taken place in agriculture. In 1999, almost 70 percent of the value of all crops and livestock was produced by 8 percent of producers operating just 32 percent of all farm acres ²⁷ (see charts). From the standpoint of crop sales only, 8 percent of farmers accounted for 68 percent of crop sales from just 32 percent of all farm acres. The productive capacity of American agriculture is a miracle. In fact, American agriculture is so productive that it is questionable whether subsides are needed anymore to ensure an abundant and cheap supply of food and fiber.

The distribution of government subsidy payments has concentrated in fewer and fewer hands as production of subsidized commodities has concentrated on fewer and fewer farms (see charts). For example, about 47 percent of government payments in 1999 went to the 8 percent of farmers accounting for 68 percent of crop sales.²⁸ Ninety-two percent of producers operating 68 percent of farm acres and producing 32 percent of crop sales shared the remaining 53 percent of government payments. Subsidized commodities account for a relatively small share of agricultural sales, a fact that exacerbates the uneven distribution of income support to agriculture. ERS, for example, estimated that in 2000 about 20 percent of the value of all agricultural sales was produced by sales of subsidized crops and about 36 percent of all farms received government payments.²⁹ As a result, the distribution of government payments diverges from what most taxpayers would recognize as equitable or efficient income support.

A recent ERS study of alternatives to creating a safety net for agriculture provides a good example of this problem.³⁰ In a program designed to assure all farm households an income equal to that of the median nonfarm household in the region, for example, the larger farm operations that currently receive about 47 percent of direct government income support would receive about 2 percent of direct government income support. In a program designed to assure all farm households an income equal to the median hourly earning of the nonfarm self-employed ($10 per hour), the larger farm operations that currently receive about 47 percent of direct government income support would receive about 5 percent of direct government income support.

Fundamental changes in the nature of rural economies also have reduced the effectiveness of farm subsidies as economic development engines for rural communities. According to another ERS study, only about 37 percent of farm subsidies payments went to farmers in counties where those payments would be expected to play a significant role in the local economy.³¹

To add to the turmoil, these questions are being raised even as government subsidies have tripled since 1997, reaching $28 billion last year and totaling $204 billion since passage of the 1985 farm bill, $74 billion since passage of 1995-1996 farm bill (see chart). This means that farm spending is again competing with other popular objectives for public funds.³²

At the same time, recognition of the importance of farmers and ranchers as natural resource and environmental managers is growing. Working land--land used primarily to produce food and fiber--is, literally, the last frontier for environmental enhancement. The same facts presented earlier as a cause for concern are also a cause for hope:

• More than half of the contiguous U.S. land area is agricultural land--cropland and grazing land.³³
• Almost 90 percent of all precipitation that falls in the continental United States falls on privately owned agricultural or forestland before it runs into streams, lakes, or underground water.³⁴
• About 70 percent of wildlife species depend upon private land for their habitat.³⁵
• About half of all endangered species rely on private land for much of their habitat.³⁶

Just as the land use and management decisions made by producers can impair the environment, those decisions also can create fish and wildlife habitat, contribute to clean and abundant supplies of water, protect against the risks of climate change, and create recreational opportunities. Agriculture has a large ecological and environmental footprint. Workshop participants likely were right when they focused their attention on turning that footprint into an agent for widespread environmental enhancement.

The concerns about the performance and equity of traditional approaches to supporting commodity production and farm income are serious enough to merit a thorough revisiting of the purposes and approaches to farm policy. We think that conservation holds unique promise for contributing to a new approach to farm policy and support for farmers and ranchers. We think some of the traditional tools of farm support have their place in a new farm policy. Those tools will be particularly important for those producers who depend largely or exclusively on income from sales of undifferentiated commodities--the raw materials of the modern food and fiber production system. But we also think there is great advantage to agriculture and taxpayers by targeting those traditional tools to producers who really need them and bringing on line new tools that hold greater promise for all of agriculture, rural communities, and taxpayers. Those new tools should include research, marketing assistance, rural economic development, and conservation, among others. Most of those tools really are not new. What would be new is a farm policy that seeks to create a better balance in policy attention and funding among the tools--a balance based on clear recognition of the realities of the current structure of agriculture, the food and fiber system, a global economy, and the environment.

Conservation has unique advantages as a component of a more balanced farm policy. For taxpayers, conservation at the center of farm policy would allows us to go beyond damage control, and even pollution prevention, to widespread environmental enhancement. To go beyond meeting minimum standards required by regulation to release creativity and entrepreneurial spirit in the service of conservation and environmental quality. Working cooperatively with the nation�s farmers and ranchers as partners in environmental enhancement could become the third leg of this nation�s conservation stool--complementing land acquisition and regulation where needed--to create a balanced approach to environmental management.

For agriculture, such a policy change would create the opportunity to use conservation to help keep people on the land and to escape some of the contradictions created by current farm policy. The land and its management would drive conservation rather than the amount or kind of commodities produced. That means all farmers and ranchers, producing all kinds of commodities, in all regions of the country could participate in environmental enhancement.

Conservation could and should reach those 92 percent of farms operating 68 percent of the acres, but producing only 30 percent of the value of food and fiber products. Though many of these producers are not big players in the commodity market or international trade, those producers are, or could be, very big players in the conservation market. Producers in Canada, Mexico, Argentina, Brazil, and France can compete in corn, soybean, wheat, and beef markets; they cannot compete with this nation�s farmers in contributing to clean water or fish and wildlife habitat. The environment is a niche market, but one in which every farmer and rancher has a niche.

Using conservation as a basis for support programs would provide more options for policymakers and producers, instead of attempting to fit an increasingly diverse and complex agricultural sector into a one-size-fits-all subsidy program. This nation could diversify agricultural policy to reflect the needs and unique circumstances of different farming and ranching operations. It could design a policy that works for those handful of producers who dominate commodity markets and trade, and it could design a policy that works for all those other producers in whose hands the country entrusts the management and care of most of its land, water, and wildlife.

The nation could create an agricultural policy that is truly open to all of agriculture and built on a solid foundation--the unique status and responsibility of farmers and ranchers as the caretakers of its land, water, and wildlife.

To achieve those objectives, policymakers would have to step outside the current framework of conservation and farm policy and create something new, something along the lines our workshop participants articulated as their "new vision" of farm policy. Such a new vision program would complement the expanded reach of existing conservation programs recommended as our minimum goal.

On the conservation side, policymakers would have to create the capacity to deliver technical services and financial aid to producers on a scale not seen in this country since the 1930s. On the farm program side, they would have to create a new vision program that explicitly melds economic support for farmers and ranchers with conservation.

New vision farm and ranch program. If such a new vision program is to be an effective tool for enhancing the environment and creating economic opportunities for farmers and ranchers, then it will have to be substantial in size. Ideally, such a program would be structured in the same way as are current commodity-based programs--producers meeting the eligibility criteria for the program receive the benefit. Projecting the cost of a program structured in that manner is difficult, however, at least until the program is in place for a few years and participation levels are known.

It is critical, however, that funding for a new vision program is large enough that most farmers and ranchers really have access to it and receive benefits comparable to those provided by traditional commodity based subsidies. Funding for technical services and administrative costs will have to increase in tandem with stewardship payments to farmers. These costs should be covered by funds made available with the new program. If funding of that magnitude cannot be assured, at least in the out-years, then we think it would be better to invest in expanding the reach of existing technical services and financial assistance programs and in strengthening conservation compliance measures--beyond the measures recommended earlier--required for participation in existing or new commodity and risk management programs.

Recommendation 18:
Authorize a minimum of $3 billion annually for a stewardship-based farm and ranch program that rewards producers for using their land, labor, and capital to enhance the environment.

Four important questions were debated by workshop participants, our policy advisory committee, and our review of published work by researchers and policy analysts regarding the design of such a new vision program:

• How can or should the payment levels for environmental goods and services be calculated?
• Should taxpayers pay for all goods and services provided, or is there some level of conservation that should be expected as a basic responsibility of land ownership?
• How should such a program mesh with existing conservation programs?
• How should such a program mesh with commodity and risk management programs?

Calculating payments for environmental goods and services produced. Workshop participants had two goals for calculating payments: (1) Reward good actors by paying for environmental goods and services produced by conservation systems that producers have already installed and are maintaining and (2) pay producers more for greater production of environmental goods and services. The first goal raises serious issues about the amount taxpayers might spend to maintain the status quo supply of environmental goods and services. The second goal raises serious issues about the science underpinning the estimation of the effect of conservation systems on the environment.

There are no easy solutions to these issues. The nature and importance of these issues will, in large part, be determined by the scope and reach of a new vision program--something that is not determined at this point and may not be determined until a farm bill is completed. Narrowing the scope of the environmental goods and services paid for would reduce the challenge for policymakers and program managers, but would run counter to the vision created by workshop participants. As is always the case, there are multiple approaches to resolving these issues, all with their own pluses and minuses. We offer the following approach as a starting point for what will need to be a longer process of deliberation and experimentation.

Our recommended approach to calculating payments rates has the following elements:

• Relying on local input to establish the scope of the program by identifying the environmental goods and services of most value to the local community and relying on states to harmonize those values with state and national values.
• Calculating payments based on "level of effort" as estimated by cost of the practice, including any economic value forgone, until the technical capability to quantify benefits directly is strengthened.
• Distinguishing between "maintenance costs" and "installation costs" when valuing existing versus new investments in conservation.
• Tithing the funds made available to the new vision program to invest in the research and testing needed to develop tools to estimate environmental benefits reliably and consistently.

We think there is no real option to empowering local and state institutions with the task of setting priorities for conservation needs and practices for their communities. Putting conservation on the ground is a highly site-specific endeavor. Producers, citizens, and professional staff need to have a great deal to say about what will work and be supported in their communities.

This kind of locally led process is not new. Soil and water conservation districts, among other local institutions, have a long history of identifying priority conservation needs and practices for their communities. Local institutions routinely set priorities for the Agricultural Conservation Program and do now for its successor, the Environmental Quality Incentives Program. We envision a periodic process--perhaps every five years and ideally timed to coincide with the National Conservation Plan and appraisal process discussed earlier--that would identify those practices and conservation systems that would most effectively enhance the environment in the local community.

Local control, however, has to come with local accountability if the interests of taxpayers are to be protected. State technical committees, reformed and empowered, should play a critical role in ensuring locally set priorities contribute to state and national goals for environmental enhancement.

Recommendation 19:
State technical committees and conservation districts or other appropriate local institutions should determine which conservation practices/systems should receive priority for funding based on their relative contribution to environmental enhancement.

Clearly, the concept behind a farm and ranch stewardship program is to pay producers for the environmental goods and services they produce. There are tools available today that would allow making such estimates for a few of the environmental services that will be provided through such a program. But for most of the services there are gaps in both technical and economic understanding that will prevent direct estimation of the value of those goods and services. A critical component--and a unique advantage--of a new vision land stewardship program would be to make available a sufficient percentage of funds otherwise provided for the new vision program to support the research and testing needed to develop the capability to base payments on quantifiable environmental benefits.

In the meantime, however, there are sound procedures that could and should be used as proxies for direct estimation of the dollar value of environmental goods and services. Those procedures use cost as a measure of the level of effort required to implement conservation systems and professional judgment to determine which of those systems will be most effective in addressing the environmental priorities established by local communities.

This approach is, in fact, used on a daily basis to implement USDA conservation financial assistance programs. For that reason, much of the information needed to implement a farm and ranch land stewardship program is likely already in place. Practice cost estimates used in CRP, EQIP, WHIP, and other cost-share and incentive programs, for example, could be used to implement this new program, at least initially. Loss in net income that might be experienced by a producer moving to a more environmentally sound production system could also be estimated and used to refine payment rates.

Payment rates based on cost could and should be adjusted for the anticipated impacts of practices on environmental goods and services produced. These adjustments could be made, for example, on the basis of: (1) the relative effectiveness of a practice or system in achieving a specified conservation objective as determined by a local priority ranking of practices or on quantitative indices of practice performance, (2) the comprehensiveness of the conservation needs and opportunities addressed, (3) the percentage of a farm or ranch covered by a practice or system, and (4) the extent to which accountability and performance is documented through self-monitoring is undertaken by a farmer or rancher.

Recommendation 20:
Establish initial payment rates on "level of effort" as measured by the cost and comprehensiveness of practices--pay a "maintenance fee" for existing and newly installed practices and habitat and pay an "installation fee" for new practices and restoration of new habitat.

What taxpayers should pay for? We think the issue of what taxpayers should be expected to pay for and, alternatively, what farmers and ranchers should be expected to pay for themselves will loom large, especially if billions of dollars of taxpayers� money are invested as we recommend. The issue has already been raised, for example, in implementation of EQIP. Large, confined animal feeding operations have been declared ineligible for financial assistance for the design and implementation of manure management structures. In other instances, producers have become ineligible for financial assistance under the continuous CRP sign-up if the recommended practices are required under state law. These examples demonstrate that the determination of who gets paid and what they get paid for involves questions of justice, fairness, and social values, in addition to environmental goods and services. Failure to resolve such issues could and probably will create a serious stumbling block for implementation of a program that achieves the vision created by our workshop participants.

We think the best way to resolve these issues would be for local producers and citizens--with guidance from state technical committees and technical support from field staff--to define a "minimum bar" over which producers must pass to become eligible for payments under the new vision program. This minimum bar would represent a general agreement between producers themselves and local citizens on those conservation practices that are considered a minimum obligation of land ownership and those practices that go beyond that minimum and deserve taxpayers� support.

Allowing local producers and citizens to determine this minimum bar will cause difficulties. Neighboring producers in different communities may face a different minimum bar. The stronger conservation compliance measures recommended earlier could and should be applied to all land enrolled in the new vision program to create a national minimum standard that applies to all participants. But given the diversity of landscapes, environmental opportunities, and farming and ranching systems across the country, local producers and citizens, working through conservation districts or another local institution, and with help from technical specialists, will have to play a central role in constructing a minimum bar that has meaning and can be effectively applied in their local communities.

Recommendation 21:
Create a minimum "bar" of generally accepted conservation practices acknowledged by local producers and citizens as an elemental expectation for land stewardship, and require those practices as a condition of eligibility for the new vision stewardship program.

Meshing the new vision program with existing conservation programs. Workshop participants stressed that the new vision program should not replace existing conservation programs. Instead it should complement existing programs by bringing new options to the table for producers and for the national conservation effort. We think such a new vision program, if adequately funded, could substantially enhance the capabilities of existing conservation programs.

The new vision program could ensure farmers and ranchers interested in conservation have access to technical and financial help regardless of whether they are in a designated priority area or fit the eligibility profile of a particular conservation program. That would free existing conservation programs--strengthened as we recommend--targeting most or all of their resources on critical problems or problem areas. The result would be a conservation enterprise with a better balance between preventing or treating problems, and, between solving problems or seizing opportunities.

Recommendation 22:
Design the new vision stewardship program to complement existing conservation programs in five key ways--be available to all producers based on their willingness to make a commitment to conservation; prevent conservation problems before they require more expensive treatment; spur widespread enhancement of the environment rather than damage control; emphasize a transition to production systems that enhance, not just protect, the environment; and emphasize development, field-testing, and demonstration of innovative production systems that integrate conservation directly into food and fiber production.

Meshing the new vision program with commodity and risk management programs. Although workshop participants generally agreed that a new vision program should complement rather than replace existing conservation programs, there was less agreement on its relation to existing commodity and risk management programs. Many, although probably not a majority of participants, thought the new vision program should replace, at least in time, the traditional tools used to support commodity production and manage risk. Others thought the new vision stewardship program should complement rather than replace reformed and improved commodity and risk management programs. All agreed that the new vision program had two overarching economic objectives: First, to keep people who work the land on the land and, second, to provide that support to all agricultural producers, producing all kinds of crops and livestock, and operating in all regions of the country.

Many of the producers at the workshops were the strongest advocates for creating a new vision program. Those producers who do not produce subsidized commodities argued that a new vision program would be a credible and justifiable reason for taxpayers to provide economic support for their operations equivalent to the support provided producers of subsidized commodities. Even many of the producers of subsidized commodities thought a new vision program probably had more justification for taxpayer support than the traditional commodity subsidies. The fundamental issue was how to make the transition from a commodity-based program to a new vision program based largely on stewardship.

Our discussions in the workshops and with policy advisory committee members identified three options for defining the relationship of the new vision program to the nation�s traditional tools for supporting commodity production and farm income:

• Design the new vision program as an add-on to existing commodity and risk management programs.
• Design the new vision program as an optional farm program, which would allow producers to choose between participation in traditional farm programs or the new vision program.
• Design the new vision program to replace traditional commodity and risk management programs.

This decision is perhaps the most important one facing policymakers. It is made more difficult by uncertainties about the shape commodity and risk management programs will take in the next farm bill and the budget constraints under which the farm bill will be formed (see box). We think it is premature to make a recommendation now, given those uncertainties, but we do think it is imperative that we begin the process of evaluating the pluses and minuses of each option.

To facilitate that discussion, we would suggest that designing the new vision program as an option within farm programs has compelling advantages as a way to begin the transition toward a more balanced farm policy. Those advantages include:

• Those producers who depend largely or wholly on the sale of subsidized commodities and, therefore, find themselves very dependent on those subsidies today would face large risks if asked to make an immediate transition to a stewardship-based program. Moving immediately to a new vision program that replaces existing commodity and risk management tools does not seem practical or advisable, given the risks involved.
• Some of our traditional tools, particularly crop insurance and perhaps a minimal counter-cyclical safety net, address risk in ways that a stewardship-based program cannot. Those tools, if properly designed to minimize negative environmental effects, could and perhaps should remain part of a properly balanced farm policy.
• A new vision program, designed as an option, could target those producers who currently do not benefit substantially from traditional tools. In that way, the new vision program could have an immediate effect on helping keep those people on the land who are not helped significantly by current programs. Currently, farms that depend primarily on sales of subsidized crops receive 62 percent of farm program payments but about 25 percent of conservation program payments.³⁷ About 75 percent of conservation program payments, then, already go to producers who benefit less, proportionately, from traditional tools. A new vision program, designed as an option, would simply build on the opportunity these nonprogram crop producers already see in conservation programs.
• Farms that do not depend primarily on sales of subsidized crops for their income operate more than 72 percent of the agricultural land in this country.³⁸ Livestock producers--particularly ranchers managing grazing land--operate more than 50 percent of the agricultural land in the U.S.³⁹ That means a new vision program generous enough to attract participation from a large percentage of those producers could have a major effect on environmental quality.
• Creating another and very different option for economic support while allowing producers themselves the chance to evaluate what option works best for their operation would increase producer choice.

Stewardship contracts should provide the same certainty of payments for land stewardship that production flexibility contracts currently provide for commodity production. Producers with production flexibility contracts could opt for a stewardship contract if that works better for them. More importantly, stewardship contracts would help keep those farmers and ranchers on the land who currently do not get much support from traditional farm subsidies.

Policymakers face fundamental choices as they begin reauthorizing the farm bill. Those choices go to the heart of what should be expected from conservation and farm policy. They should force an answer to two questions: (1) What do we want from conservation, and (2) what do we want from agriculture?

At a minimum, conservation policy and programs need to be strengthened so they can continue their traditional service to agriculture--but updated to address the environmental challenges that now confront farmers and ranchers. That will require a doubling of the current investment in USDA conservation technical services and financial assistance programs. New investment should ensure that all three compartments in the conservation tool box--technical services, financial assistance for conservation on working land, and financial assistance for land retirement and restoration--are well stocked with effective tools that work for agriculture and the environment. The first priority for new investment should be a doubling of funding for technical services and a tripling of funding for conservation on working land.

New funding should be accompanied by a series of minor and major reforms of existing programs and policy. The most important of those reforms are reaffirming the central place of technical services in the conservation endeavor, providing real authority and flexibility to states to tailor federal programs to their unique circumstances, and simplifying the process of participating in federal conservation programs by basing that participation on producers� conservation plans rather than on the administrative requirements of individual conservation programs.

But settling for the minimum would be a mistake at this juncture. Instead, reforms to conservation policy and programs should be coupled with a new vision for farm policy itself. Traditional farm subsidies should be balanced with a new option based on land stewardship.

Congress should authorize a minimum of $3 billion dollars annually--in addition to the $5 billion recommended to expand the reach of existing conservation programs--for a stewardship-based farm and ranch program that rewards producers for using their land, labor, and capital to enhance the environment. This new farm and ranch program should reward good actors through technical services and maintenance fees to keep existing conservation systems and habitat in place on their operations. It should also pay farmers and ranchers more who want to do more by installing new conservation systems. USDA state technical committees, local communities, and producers themselves should play a key role in seeing that the new vision stewardship program achieves key conservation objectives by determining which conservation systems and opportunities would make the greatest contribution to environmental enhancement at local and state levels.

In combination, these two reform agendas would create an agricultural policy that is truly open to all of agriculture and built on a solid foundation--the unique status and responsibility of farmers and ranchers as the caretakers of this nation�s land, water, and wildlife.

1 Soil and Water Conservation Society. 2000. Seeking Common Ground for Conservation, Preliminary Findings.

2 Soil and Water Conservation Society. 2000. Seeking Common Ground for Conservation, Reforming the Farm Bill: Ideas from the Grassroots.

3 U.S. Department of Agriculture. 1938. Soils and Men, The Yearbook of Agriculture.

4 U.S. Department of Agriculture, Natural Resources Conservation Service. 2000. National Resources Inventory.

5 U.S. Environmental Protection Agency. 2000. National Water Quality Inventory: 1998 Report to Congress.

6 U.S. Department of Agriculture, Economic Research Service. 1997. Agricultural Resources and Environmental Indicators, 1996-97.

7 U.S. Department of Agriculture, Natural Resources Conservation Service. 1996. America�s Private Land, A Geography of Hope.

8 U.S. Department of Agriculture, Natural Resources Conservation Service. 2000. National Resources Inventory.

9 U.S. Department of Agriculture, Natural Resources Conservation Service. 1966. America�s Private Land, A Geography of Hope.

10 U.S. Department of Agriculture. 1999. Preserving the Health of the Land: America�s Conservation Challenge.

11 Environmental Defense. 2001. Losing Ground: Failing to Meet Farmer Demand for Conservation Assistance.

12 Soil and Water Conservation Society. 2000. Sharing the Cost of Conservation, Preliminary Findings.

13 U.S. Department of Agriculture, Natural Resources Conservation Service. 2001. Personal communication.

14 U.S. Department of Agriculture. Natural Resources Conservation Service. 2001. Personal communication.

15 U.S. Department of Agriculture, Economic Research Service. 2001. Adoption of Agricultural Production Practices: Lessons Learned from the U.S. Department of Agriculture Area Studies Project.

16 National Association of Conservation Districts. 2001. Personal communication.

17 National Association of Conservation Districts. 2001. Personal communication.

18 Soil and Water Conservation Society. 2000. Sharing the Cost of Conservation. Preliminary Findings.

19 U.S. Department of Agriculture, Farm Service Agency. 2001. Personal communication.

20 U.S. Department of Agriculture, Economic Research Service. 2000. Agricultural Resources and Environmental Indicators.

21 U.S. Department of Agriculture, Economic Research Service. 2000. U.S. Farm Program Benefits: Links to Planting Decisions and Agricultural Markets.

22 U.S. Department of Agriculture, Economic Research Service. 2000. U.S. Farm Program Benefits: Links to Planting Decisions and Agricultural Markets.

23 Goodwin, Barry K., Vincent H. Smith and Charles Hammond. 1999. En Ex-post Evaluation of the Conservation Reserve, Federal Crop Insurance, and Other Government Programs: Program Participation and Soil Erosion. Department of Agricultural and Resource Economics, North Carolina State University.

24 U.S. Department of Agriculture, Economic Research Service. 2001. Agri-Environmental Policy at the Crossroads.

25 U.S. Department of Agriculture, Economic Research Service. 2000. U.S. Farm Program Benefits: Links to Planting Decisions and Agricultural Markets.

26 U.S. Department of Agriculture, Natural Resources Conservation Service. 2000. National Resources Inventory.

27 U.S. Department of Agriculture, Economic Research Service. 1999. Agricultural Resources Management Study.

28 U.S. Department of Agriculture, Economic Research Service. 1999. Agricultural Resources Management Study.

29 U.S. Department of Agriculture, Economic Research Service. 2000. U.S. Farm Program Benefits: Links to Planting Decisions and Agricultural Markets.

30 U.S. Department of Agriculture, Economic Research Service. 2000. A Safety Net for Farm Households, AER-788.

31 U.S. Department of Agriculture, Economic Research Service. 2000. U.S. Farm Program Benefits: Links to Planting Decisions and Agricultural Markets.

32 Food and Agriculture Policy Research Institute, University of Missouri--Columbia. 2001. Personal communication.

33 U.S. Department of Agriculture, Natural Resources Conservation Service. 2000. National Resources Inventory.

34 U.S. Department of Agriculture, Natural Resources Conservation Service. 1966. America�s Private Land, A Geography of Hope.

35 U.S. Department of Agriculture. 1999. Preserving the Health of the Land: America�s Conservation Challenge.

36 Environmental Defense. 2001. Losing Ground: Failing to Meet Farmer Demand for Conservation Assistance.

37 U.S. Department of Agriculture, Economic Research Service. 1999. Agricultural Resources Management Study.

38 U.S. Department of Agriculture, Economic Research Service. 1999. Agricultural Resources Management Study.

39 U.S. Department of Agriculture, Economic Research Service. 1999. Agricultural Resources Management Study.

This project was funded by the W.K. Kellogg Foundation, with additional support from the Joyce Foundation, The Farm Foundation and the U.S. Department of Agriculture�s Natural Resources Conservation Service.

Copyright © 2001 by the Soil and Water Conservation Society
All rights reserved
Manufactured in the United States of America

The Soil and Water Conservation Society, a not-for-profit scientific and educational organization, serves as an advocate for the conservation profession and for science-based conservation policy.

The mission of SWCS is to foster the science and art of soil, water, and related natural resource management to achieve sustainability. Members promote and practice an ethic recognizing the interdependence of people and their environment.

A 13-member board of directors governs SWCS and its affairs.

SWCS has about 10,000 members throughout the world. Those members include researchers, administrators, technicians, educators, planners, legislators, farmers, ranchers, and students. These individuals represent nearly every academic discipline and institution concerned with the management of land and water resources.

Membership benefits include a magazine, the Journal of Soil and Water Conservation; networking opportunities; representation in policy circles; and discounts on books, annual meeting and conference registrations, and other products and services.

SWCS chapters, which exist throughout the United States, Canada, and the Caribbean, conduct activities at local, state, and provincial levels and on university campuses. These 75 chapters represent the grassroots element of the organization. Each chapter elects its own officers, sponsors conservation-related conferences and other activities, and formulates recommendations on local land and water conservation issues.