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Key changes
The 2002 Farm Act increases funding
for almost every existing agri-environmental program. Overall
spending for conservation and environmental programs will rise
by 80 percent to a projected 10-year total of $38.6 billion,
according to Congressional Budget Office (CBO) estimates
(based on the April 2002 baseline). While continuing and
expanding the programs that retire environmentally sensitive
land from crop production, the 2002 Act emphasizes programs
that support conservation on land in production, including
livestock operations. New programs, including the Conservation
Security Program (CSP) and the Grassland Reserve Program,
further expand the objectives and role of agri-environmental
policy.
Summary of provisions
Under the 2002 Farm Act,
producers can choose from a wide range of voluntary
conservation and environmental programs designed to protect a
wide range of resources. Like the three previous farm acts,
the 2002 Act continues the trend of increasing the size and
scope of agri-environmental programs. While programs that
support better conservation and environmental management on
working land have accounted for less than 15 percent of
Federal conservation expenditures over the past 15 years, they
receive more than 60 percent of the $17.1-billion increase in
conservation spending.
These existing programs get acreage or funding
increases:
- The Conservation
Reserve Program (CRP) offers annual payments and
cost sharing to establish long-term, resource-conserving
cover on environmentally sensitive land. The acreage cap is
increased from 36.4 million acres to 39.2 million acres.
Funding is through the Commodity
Credit Corporation (CCC). CBO estimates increased
spending of $1.5 billion over 10 years.
- The Wetlands
Reserve Program (WRP) provides cost
sharing and/or long-term or permanent easements for
restoration of wetland on agricultural land. The acreage cap
is increased from 1.075 million acres to 2.275 million
acres. The Secretary of Agriculture is required (to the
greatest extent practicable) to enroll 250,000 acres per
year. Funding is through the CCC. CBO estimates increased
spending of $1.5 billion over 10 years.
- The Environmental
Quality Incentives Program (EQIP) provides technical
assistance, cost sharing, and incentive
payments to assist livestock and crop producers with
conservation and environmental improvements. EQIP is slated
to receive $5.8 billion in CCC funding for fiscal years (FY)
2002-07 and a total of $9 billion over 10 years. Funding is
phased up to $1.3 billion annually by FY 2007, compared with
annual funding of roughly $200 million per year under the
1996 Farm Act. Additional CCC funding of $250 million over
FY 2002-07 is provided for ground and surface water
conservation. An additional $50 million (to be made
available as soon as practical) is allocated to water
conservation activities in the Klamath Basin.
- The Wildlife
Habitat Incentives Program provides cost sharing to
landowners and producers to develop and improve wildlife
habitat. Total CCC funding of $360 million is mandated over
FY 2002-07, ranging from $15 million in FY 2002 to $85
million in FY 2005-07, and a total of $700 million over 10
years.
- The Farmland
Protection Program (FPP) provides funds to State,
tribal, or local governments and private organizations to
help purchase development rights and keep productive
farmland in agricultural use. Total CCC funding of $597
million is mandated over FY 2002-07, ranging from $50
million in FY 2002 to $125 million in FY 2004-05, and
totaling $985 million over 10 years.
New programs will also receive significant funding while
expanding the overall scope of USDA conservation programs:
- The Conservation Security Program will provide
payments to producers for maintaining or adopting a wide
range of structural and/or land management practices that
address a variety of local and/or national resource
concerns. CSP will be funded through the CCC. CBO estimates
spending of $369 million for FY 2003-07 and $2 billion over
10 years.
- The Grassland Reserve Program will protect up to
2 million acres of grassland. CCC funding of up to $254
million is available.
Economic implications
Funding shifted
toward working land—The increase in funding for
conservation on working agricultural land is large relative to
the increase in funding for land retirement. Past conservation
funding had been skewed toward land retirement and the funding
shift is a major change in conservation program emphasis. EQIP
and the new Conservation Security Program are slated to
receive new funding of $11 billion over 10 years, compared
with a combined increase of $3 billion for CRP and WRP over
the same period. This change may lead to a broader array of
options and greater flexibility for producers to develop
conservation strategies that deliver agri-environmental gains
at the lowest possible cost. Greater overall funding should
increase the overall level of conservation effort on farms,
providing higher benefits from increased environmental quality
to consumers.
Increase in land retirement to emphasize
wetlands—Land retirement programs, principally CRP and
WRP, are also expanded. The 2002 Act expands authority for
land retirement by a total of 4 million acres, an increase of
nearly 11 percent over current authority. A significant share
of the increase will be devoted to wetland restoration as the
WRP enrollment cap more than doubles, increasing from 1.075
million acres to 2.275 million, an increase of 1.2 million
acres. In the CRP, 500,000 acres of the 2.8-million-acre
increase in the acreage cap could be used to enroll farmed
wetlands and associated buffer acreage. Increased land
retirement could affect commodity production and prices.
Because these programs are voluntary and not
commodity-specific, the subsequent commodity output, price,
and environmental effects will depend on which producers bid
and how bids are selected for CRP or WRP enrollment.
Farmland Protection will receive a major funding
increase—FPP will receive 10-year funding of $985
million, which represents a nearly twenty-fold increase over
the $53.4 million provided since 1996. The cap on enrolled
acreage is removed. How much land is ultimately preserved, and
the location of that land, depends on a number of factors. FPP
money is expended through States, local governments, and
private organizations that pay at least 50 percent of the cost
of purchasing development rights, so it will protect farmland
where those programs or organizations exist. Like CRP and WRP,
FPP is a voluntary program, so the location and extent of
enrollment—and ensuing environmental benefits—will depend on
who submits bids and how these bids are selected for
enrollment.
For more information...
For program agency information...
- Farm
Service Agency—Administers the Conservation Reserve
Program, the Conservation Reserve Enhancement Program and
other conservation programs.
- Natural
Resources Conservation Service—Administers the
Environmental Quality Improvement Program, Wetland Reserve
Program, Wildlife Habitat Improvement Program, Farmland
Protection Program, and other conservation programs.
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