# Agricultural Conservation Issues in the 111th Congress

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/crs%3AR40692

## Record

- **Collection:** Congressional research report
- **Document type:** CRS Report
- **Published:** September 21, 2010
- **Citation:** R40692

## Text

Agricultural Conservation Issues in the
111th Congress
(name redacted)
Analyst in Agricultural Conservation and Natural Resources Policy
September 21, 2010

Congressional Research Service
7-....
www.crs.gov
R40692

CRS Report for Congress
Prepared for Members and Committees of Congress

Agricultural Conservation Issues in the 111th Congress

Summary
Agricultural conservation has been a public policy issue for more than 60 years. Congress has
repeatedly taken action on the issue through water and soil legislation, often as part of omnibus
farm bills. Early policy decisions were directed at addressing natural resource concerns on the
farm, primarily reducing high levels of soil erosion and providing water to agriculture in
quantities and quality that enhanced farm production. In more recent years, conservation policy
has shifted to concerns about the off-farm impacts of agricultural activities.
The latest farm bill, the Food, Conservation, and Energy Act of 2008 (P.L. 110-246), reauthorized
most existing conservation programs, modified several programs, and created a few new
programs. The U.S. Department of Agriculture’s (USDA’s) conservation efforts have centered on
implementing these conservation programs through working land conservation practices, retiring
land from production or establishing conservation easements, and providing technical assistance.
Program implementation controversies could lead to congressional oversight or action, especially
given the recent financial statement audit reports on conservation program payments at USDA.
Other emerging issues in the 111th Congress could have a significant impact on agricultural
conservation. The climate change debate and use of ecosystem services markets has brought
conservation to the forefront of discussion on the role of agriculture in reducing greenhouse gas
emissions. Also, the effect of ethanol production on natural resources and changes in land use is
an ongoing concern in the area of biofuels policy. Other environmental issues for agriculture such
as concentrated animal feeding operation regulations, greenhouse gas emission reporting for
livestock producers, and wetlands mitigation could lead to expanded opportunities and challenges
for many conservation efforts.
Appropriations and budget issues continue to influence conservation programs and policy.
Conservation programs with mandatory funding have been routinely reduced through annual
appropriation bills. In FY2009 and FY2010, the reductions were limited to a handful of programs,
with the Environmental Quality Incentives Program (EQIP) receiving the largest reductions,
including $270 million in FY2009 and FY2010. The watershed programs have experienced an
increase in congressionally directed projects through appropriations, with Watershed and Flood
Prevention Operations being 97% earmarked in FY2009 and 74% in FY2010. The ongoing issue
of funding for conservation technical assistance in mandatory programs will likely be raised again
due to an expiring authority.
Other issues of potential interest in the 111th Congress include implementation of conservation
program payment and income limitations, use of the Conservation Effects Assessment Project,
and recent financial audits and conservation contract administration concerns.

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Contents
Introduction ................................................................................................................................1
Current Major Activities........................................................................................................2
Overview of Conservation Programs .....................................................................................2
Working Lands................................................................................................................2
Land Retirement and Easement Programs .......................................................................3
Watershed Programs........................................................................................................4
Other Selected Programs .................................................................................................4
Agricultural Conservation Issues in the 111th Congress................................................................5
2008 Farm Bill Implementation.............................................................................................5
Conservation Reserve Program (CRP).............................................................................5
Environmental Quality Incentives Program (EQIP) .........................................................6
Conservation Stewardship Program (CSP).......................................................................7
Wildlife Habitat Incentives Program (WHIP) ..................................................................8
Wetlands Reserve Program (WRP)..................................................................................9
Farmland Protection Program (FPP)................................................................................9
New Programs ................................................................................................................9
Chesapeake Bay Watershed Program....................................................................... 10
Voluntary Public Access and Habitat Incentives Program ........................................ 10
Sodsaver Provision.................................................................................................. 10
Environmental Services Markets ............................................................................. 11
Payment and Income Limitations .................................................................................. 12
Payment Limits....................................................................................................... 12
Income Limits......................................................................................................... 13
Conservation Funding and Oversight................................................................................... 14
Spending Limits on Mandatory Funding........................................................................ 14
Congressionally Directed Projects ................................................................................. 15
Technical Assistance ..................................................................................................... 15
Financial Audit and Contract Administration ................................................................. 16
Conservation Effects Assessment Project (CEAP) ......................................................... 17
Emerging and Continuing Issues ......................................................................................... 18
Ecosystem Services Markets ......................................................................................... 18
Climate Change ............................................................................................................ 19
Energy Effects .............................................................................................................. 21

Figures
Figure 1. 2009 Estimated Funding for Conservation Programs.....................................................3
Figure 2. CSP FY2010 Sign-Up Period .......................................................................................8
Figure 3. Prairie Pothole National Priority Area......................................................................... 11

Tables
Table 1. EQIP Funded and Unfunded Applications and Funds Obligated .....................................6

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Table 2. Conservation Programs Affected by Payment and Income Limitation Changes in
the 2008 Farm Bill ................................................................................................................. 12
Table A-1. USDA Agricultural Conservation Program Funding Levels, FY2009 and
FY2010.................................................................................................................................. 24

Appendixes
Appendix. USDA Conservation Programs: Funding .................................................................. 24

Contacts
Author Contact Information ...................................................................................................... 25

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Introduction
Agricultural conservation has been a public policy issue for more than 60 years, an issue
repeatedly recast as new problems have emerged or old problems have resurfaced. Early
conservation efforts were focused on two themes—reducing high levels of soil erosion and
providing water to agriculture in quantities and quality that enhanced farm production.
Congress responded repeatedly to these themes by creating or revising programs designed to
reduce resource problems on the farm. By the early 1980s, however, concern was growing that
these programs were not adequately dealing with environmental problems resulting from
agricultural activities (especially off the farm). Publicized instances of significant problems,
especially high soil erosion rates said to rival the dust bowl era, increased awareness and
intensified the policy debate. In 1985, conservation policy took a new direction when Congress
enacted four major new conservation programs in the conservation title of the Food Security Act
of 1985 (P.L. 99-198): the Conservation Reserve Program (CRP), Sodbuster, Conservation
Compliance, and Swampbuster. These programs, all administered by the U.S. Department of
Agriculture (USDA), were the first conservation programs designed to deal with environmental
problems related to the off-farm impacts of agricultural activities.
Provisions enacted in subsequent farm bills, including in 1990, 1996, 2002, and 2008, reflect a
rapid evolution of the conservation agenda, including the growing influence of environmentalists
and other non-agricultural interests in the formulation of conservation policy, and a recognition
that agriculture was not treated like other business sectors in many environmental laws.1 Congress
also began funding many of these new programs through mandatory spending for the first time,
using the borrowing authority of USDA’s Commodity Credit Corporation (CCC)2 as the funding
mechanism instead of annual appropriations. In addition to the original soil erosion and water
quality and quantity issues, the conservation agenda has continued to expand to address other
natural resource concerns such as wildlife habitat, air quality, wetlands restoration and protection,
energy efficiency, and sustainable agriculture.
Many conservation programs receive continued support among producers and Congress, as
evidenced by the recent reauthorization and expansion of existing programs and creation of new
ones in the most recent farm bill (Food, Conservation, and Energy Act of 2008, P.L. 110-246).
The enacted bill addressed several emerging issues, such as payment structure, geographic
targeting, program complexity, the importance of large-scale conservation efforts, and
measurement of costs and effectiveness. Funding also played a large role in the 2008 farm bill
debate as a pronounced domestic budget constraint caused several conservation groups to
compete with other farming interests for the necessary resources to expand and continue many
conservation programs. Many of these general policy issues were central to outcomes in the
enacted conservation title of the farm bill.

1

Conservation and Trade Act of 1990 (P.L. 101-624), Federal Agricultural Improvement and Reform Act of 1996 (P.L.
104-127), Farm Security and Rural Investment Act of 2002 (P.L. 107-171), and Food, Conservation, and Energy Act of
2008 (P.L. 110-246).
2
The CCC is the funding mechanism for the mandatory payments that are administered by various agencies of USDA.

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Current Major Activities
USDA’s conservation efforts have centered in recent years on implementing conservation
programs that target working lands, remove land from production (also known as retiring land) or
create conservation easements, and provide technical assistance. Funding for the overall
conservation effort has grown significantly since the 2002 farm bill (P.L. 107-171) and many
reauthorized programs received increases in funding in the 2008 farm bill. Recent trends in policy
for the suite of conservation programs include less emphasis on land retirement and on land
producing row crops, and more attention to conservation on land in other agricultural uses and to
livestock producers. Congress in the 2008 farm bill expanded many program benefits to include
specialty crop producers, producers transitioning to organic production, forested and managed
lands, pollinator habitat and protection, and nutrient and pest management.
Lead agricultural conservation agencies within USDA are the Natural Resources Conservation
Service (NRCS), which provides technical assistance and administers most programs, and the
Farm Service Agency (FSA), which administers the largest program, CRP. These agencies are
supported by others in USDA that supply research and educational assistance, including the
Agricultural Research Service, the Forest Service, and the Economic Research Service. 3 In
addition, the conservation effort involves a very large array of partners, including other federal
agencies, state and local governments, and private organizations, among others, who provide
funds, expertise, and other forms of assistance to the conservation effort.

Overview of Conservation Programs
There are currently more than 20 USDA agricultural conservation programs that assist private
landowners with natural resource concerns. Conservation programs are grouped into working
land programs, land retirement and easement programs, watershed programs, and other programs.
For a brief description of the individual USDA agricultural conservation programs, see CRS
Report R40763, Agricultural Conservation: A Guide to Programs, and for program funding
levels, see the Appendix. 4 Figure 1 illustrates the estimated amount of funding in FY2009 for
each group of programs.

Working Lands
Working lands conservation programs are typically classified as programs that allow private land
to remain in production, while implementing various conservation practices to address natural
resource concerns specific to the area. The largest of these programs is the Environmental Quality
Incentives Program (EQIP), currently authorized at a total of $7.3 billion between FY2008 and
FY2012. Others, such as the Wildlife Habitat Incentives Program (WHIP), Agricultural
Management Assistance (AMA), and Agricultural Water Enhancement Program (AWEP), operate
similarly to EQIP; however, they target specific resource concerns or geographic areas. The new
Conservation Stewardship Program (CSP) replaces the Conservation Security Program and is
designed to encourage producers to address specific resource concerns in a comprehensive
manner.
3
For more information on ARS projects, see http://www.ars.usda.gov/Research/Research.htm; for ERS projects, see
http://www.ers.usda.gov/Browse/view.aspx?subject=NaturalResourcesEnvironment; and for FS projects, see
http://www.fs.fed.us/projects/.
4
For additional information on agricultural conservation programs, see CRS Report R40763, Agricultural
Conservation: A Guide to Programs.

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Figure 1. 2009 Estimated Funding for Conservation Programs

Land Retirement
and Easement
Programs
46%

Emergency
Programs
3%

Compliance and
Technical
Assistance
Programs
17%
Watershed
Programs
5%

Working Lands
Programs
29%

Source: CRS Funding estimates compiled from FY2009 Omnibus Appropriations Act (P.L. 111-8), American
Recovery and Reinvestment Act of 2009 (P.L. 111-5), and USDA, FSA, CCC Commodity Estimates Book, FY2010
Mid-Session Review, August 25, 2009, http://www.fsa.usda.gov/FSA/webapp?area=about&subject=landing&topic=
bap-bu-ce.
Notes: Technical assistance includes funding for compliance programs. Funding for extension and research is not
included. Total funding for conservation programs is approximately $5.3 billion.

Land Retirement and Easement Programs
Land retirement programs provide federal payments to private agricultural landowners for
temporary changes in land use or management to achieve environmental benefits. Conversely,
conservation easements impose a permanent land-use restriction that is voluntarily placed on the
land in exchange for a government payment. The largest land retirement program is the
Conservation Reserve Program (CRP), which removes land from production and is authorized to
enroll up to 32 million acres. Other programs such as the Wetlands Reserve Program (WRP) and
the Grasslands Reserve Program (GRP) use a combination of long-term or permanent easements
as well as restoration contracts to protect wetlands and grasslands from production. The Farmland
Protection Program (FPP) also uses easements; unlike the aforementioned programs, however, it
does not remove land from production, but rather restricts productive farmland from being
developed for non-farm purposes.

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USDA Agricultural Conservation Programs
Working Lands Programs—Environmental Quality Incentives Program (EQIP), Conservation Stewardship
Program (CSP)/Conservation Security Program, Wildlife Habitat Incentives Program (WHIP), Agricultural Water
Enhancement Program (AWEP), and Agricultural Management Assistance (AMA).
Land Retirement and Easement Programs—Conservation Reserve Program (CRP, including Conservation
Reserve Enhancement Program (CREP) and CRP Farmable Wetlands), Wetlands Reserve Program (WRP), Farmland
Protection Program (FPP), Grassland Reserve Program (GRP), and Healthy Forests Reserve Program (HFRP).
Watershed Programs—Watershed and Flood Prevention Operations (also referred to as the Small Watershed
Programs), Watershed Rehabilitation, and Watershed Surveys and Planning.
Emergency Programs—Emergency Conservation Program (ECP) and Emergency Watershed Program (EWP)
(includes floodplain easements).
Compliance—Conservation Compliance, Sodbuster, Swampbuster, and Sodsaver.
Technical Assistance Programs—Conservation Operations (includes Conservation Technical Assistance, Survey,
Soil Survey, Grazing Lands Conservation Initiative, Plant Materials Centers), Resource Conservation and
Development (RC&D) program.
Other Conservation Programs and Provisions—Chesapeake Bay Watershed Program, Cooperative
Conservation Partnership Initiative, Conservation Innovation Grants, Great Lakes Basin Program, Regional Equity,
State Technical Committees, Voluntary Public Access and Habitat Incentive Program, and Grassroots Source Water
Protection Program.

Watershed Programs
Watershed and Flood Prevention Operations (P.L. 83-566 and P.L. 78-534) are two separate
program authorities that have almost identical objectives and operations. These programs are
sometimes referred to as the Small Watershed Programs. Through these programs, NRCS partners
with local sponsors to carry out activities for soil conservation; flood prevention; conservation,
development, utilization and disposal of water; and conservation and proper utilization of land.
The Watershed Rehabilitation program was authorized in 2000 (P.L. 106-472) to rehabilitate
watershed structures created under the Watershed and Flood Prevention Operations programs that
have reached or exceeded their design life.

Other Selected Programs
USDA administers several other conservation programs. Technical assistance programs, such as
Conservation Operations (including Conservation Technical Assistance, Survey, Soil Survey,
Grazing Lands Conservation Initiative, and the Plant Materials Centers) provide landowners with
science-based conservation information and technical expertise (e.g., engineering and biological)
unique to the region and land-use type. USDA also administers compliance programs such as
Sodbuster, Swampbuster, conservation compliance, and Sodsaver, which halt a producer’s access
to many federal farm program benefits if they do not meet conservation program requirements for
highly erodible lands and wetlands. Programs such as the Emergency Conservation Program
(ECP) and the Emergency Watershed Program (EWP) provide disaster assistance for farmland
rehabilitation and impairments to watersheds, and are funded on an ad-hoc emergency basis.

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Agricultural Conservation Issues in the 111th
Congress
2008 Farm Bill Implementation
The Food, Conservation, and Energy Act of 2008 (P.L. 110-246), the 2008 farm bill, reauthorizes
almost all existing conservation programs, modifies several programs, and creates various new
conservation programs. The changes address eligibility requirements, program definitions,
enrollment and payment limits, contract terms, evaluation and application ranking criteria, among
other administrative issues.5 Following the passage of the 2008 farm bill, USDA has taken steps
toward implementation of many conservation programs. In the 111th Congress, lawmakers’
attention likely will be focused on USDA’s implementation of these provisions. The following
sections provide a brief description of implementation issues within some larger conservation
programs and provisions.

Conservation Reserve Program (CRP)
The 2008 farm bill reauthorized CRP and reduced the maximum acreage cap to 32 million acres,
down from a cap of 39.2 million acres established in the 2002 farm bill. There are two types of
sign-ups for enrolling land in the CRP: general and continuous. General sign-ups are specified
enrollment periods during which landowners compete nationally to enroll their land in the CRP.
Following the expiration of acres in 2009, which reduced the total enrolled acres below the 32
million acre cap, a general sign-up was expected to enroll additional acres. During a June 2010
hearing before the House Committee on Agriculture, USDA was questioned about the delay in
offering a CRP general sign-up. 6 In response, USDA indicated that an executive branch control on
mandatory program spending, often referred to as administrative PAYGO, resulted in delayed
implementation of CRP, including enrolling additional acres. While Congress may have the
understanding that it has given USDA statutory authority and access to mandatory funding to
enroll 32 million acres, as well as the expectation that the authority would be used, the process
outlined by the Office of Management and Budget (OMB) appears to have prevented USDA from
reaching that goal, at least for a time. 7
USDA eventually announced a new general sign-up in August 2010 (sign-up number 39). Unlike
continuous sign-up, general sign-up is always competitive. Approximately 85% of CRP acreage
(26.7 million of 31.3 million acres) is currently enrolled through general sign-up. 8 For this most
recent general sign-up, FSA enrolled 4.3 million acres of 4.8 million acres offered. Over half the
5

For additional information on conservation provisions in the farm bill, see CRS Report RL34557, Conservation
Provisions of the 2008 Farm Bill.
6
U.S. Congress, House Committee on Agriculture, “Hearing to Review U.S. Farm Safety Net Programs in Advance of
the 2012 Farm Bill,” June 17, 2010, at http://agriculture.house.gov/hearings/statements.html. Unofficial transcript of
testimony by James Miller, USDA Under Secretary for Farm and Foreign Agricultural Services, provided to CRS by
the committee on June 18, 2010.
7
For more information on administrative PAYGO and its role in CRP sign-up, see CRS Report R41375, OMB Controls
on Agency Mandatory Spending Programs: “Administrative PAYGO” and Related Issues for Congress.
8
USDA, FSA, Conservation Reserve Program Monthly Summary, Washington, DC, August 2010,
http://www.fsa.usda.gov/Internet/FSA_File/aug2010crpstat.pdf.

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acreage enrolled (over 2.7 million acres, or 57%) was set to expire on September 30, 2010, or had
expired in 2009.9 States with the most offers accepted during the 39th sign-up were Texas
(858,436 acres), Colorado (739,467 acres), and Kansas (618,905 acres).
As of August 2010, there is a total of 31.3 million acres enrolled in CRP. According to USDA, the
remaining acres below the 32 million-acre cap are reserved for continuous sign-up and other signup efforts. Approximately 4.4 million acres are set to expire on September 30, 2011, possibly
creating room for another general sign-up. Future general sign-ups, however, could be further
impacted by administrative PAYGO if no congressional action is taken and OMB continues to
enforce its current policies.

Environmental Quality Incentives Program (EQIP)
With the 111th Congress experiencing continued budget constraints, EQIP could face similar
challenges, with a potential reduction in mandatory funding levels and a continuing backlog of
unfunded applications.10 The 2008 farm bill continued an increase in authorized mandatory
funding that began with the 2002 farm bill. Mandatory funding for EQIP has grown substantially
from its FY2002 level of $200 million, to the authorized level of $1.75 billion in FY2012.
Despite this significant increase in authorized mandatory funding, annual appropriations acts have
reduced the actual funding levels by a total of nearly $1.16 billion from FY2005 through
FY2010.11 Some of this reduction has come at the request of both the current and previous
Administrations. The number of pending applications continues to exceed the amount of available
funding (Table 1). In 2009, 37% of eligible applications were funded. Many conservation groups
are concerned that this has deterred producers from applying and enrolling in the program. Others
point out that despite reductions from the authorized level, total funding continues to increase.
This issue will likely intensify if annual appropriations continue to reduce actual funding for
EQIP below authorized mandatory levels.
Table 1. EQIP Funded and Unfunded Applications and Funds Obligated
Fiscal
Year

Total Applications
Funded

Total Applications
Unfunded

Percentage of
Applications Funded

Funds Obligated (Financial
Assistance, in thousands)

2000

16,249

37,712

30%

$139,606

2001

17,648

29,777

37%

$160,123

2002

19,817

70,495

22%

$322,193

2003

30,251

174,062

15%

$483,484

2004

46,413

135,394

26%

$718,150

2005

49,406

32,708

60%

$794,261

2006

41,190

32,633

56%

$787,968

2007

41,700

40,535

51%

$784,186

9

“USDA Accepts Offers on 4.3 Mil. Acres into CRP,” Pro Farmer, vol. 38, no. 38 (2010), p. 3.

10

For additional information on reductions in mandatory program spending, see CRS Report R41245, Reductions in
Mandatory Agriculture Program Spending.
11
Annual appropriations reduce funding for several other agriculture mandatory programs as a means of meeting
overall budget targets. EQIP, however, has taken the largest reductions of all conservation programs.

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Fiscal
Year

Total Applications
Funded

Total Applications
Unfunded

Percentage of
Applications Funded

Funds Obligated (Financial
Assistance, in thousands)

2008

48,116

23,803

67%

$924,221

2009

31,960

54,329

37%

$976,196

Source: USDA, NRCS, EQIP Contract and Funding Information, http://www.nrcs.usda.gov/programs/eqip/.

Conservation Stewardship Program (CSP)
The original Conservation Security Program, established in the 2002 farm bill (P.L. 107-171),
faced numerous implementation challenges, drawing criticism by many in Congress.12 The 2008
farm bill established the new Conservation Stewardship Program (CSP) to restructure and replace
the old CSP. NRCS implements CSP through a final rule published in the Federal Register on
June 3, 2010.13 Applications for CSP are accepted on a continuous basis and ranked and funded
based on established cut-off dates. During the first sign-up period in FY2010, NRCS funded over
10,600 contracts enrolling approximately 12.7 million acres.14 States enrolling the most
applications were Missouri (1,007), Minnesota (906), and Iowa (729).15
One possible implementation issue with the new CSP could be similar to one faced by the old
CSP—cost restrictions. NRCS argued that because the 2002 farm bill placed a statutory 15%
limit on technical assistance cost to administer CSP, program implementation was constrained.
The new CSP could face similar implementation concerns owing to a 2008 farm bill requirement
that the program achieve a national average program cost of $18 per acre. This per-acre cost
includes all financial assistance paid to the producer, technical assistance, and any other expense
associated with enrollment or participation in the program. Depending on the cost of
implementing CSP, the total per-acre payment offer to producers during a sign-up could be
reduced in order to meet the average $18 per-acre cost requirement. This lower per-acre funding
level could also impact the type of acres enrolled if NRCS must enroll 12.7 million acres
annually. For example, following the FY2010 sign-up period, 62% of enrolled acres are range,
pasture, and non-industrial private forest land, which have a lower per-acre payment than
cropland (Figure 2).

12
Many of CSP’s implementation issues centered around additional eligibility and enrollment criteria added by USDA
but not specified in the 2002 farm bill. These issues included implementing CSP in certain watersheds on a rotating
basis; requiring producers to meet strict eligibility criteria; sorting producers’ applications into enrollment categories;
and reducing certain CSP payments. USDA justified the restrictive actions because congressional authorizers crafted an
entitlement program with unlimited funding, but congressional appropriators limited that funding. For additional
information on CSP, see CRS Report RS21740, Conservation Security Program: Implementation and Termination.
13
USDA, CCC, “Conservation Stewardship Program,” 75 Federal Register 31610, June 3, 2010.
14

NRCS is required to enroll, “to the maximum extent practicable,” 12,769,000 acres annually in CSP (16 U.S.C.
3838g).
15
NRCS, Conservation Stewardship Program Ranking Period One Results, June 30, 2010, http://www.nrcs.usda.gov/
programs/new_csp/2010rp-one-results.html.

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Figure 2. CSP FY2010 Sign-Up Period
Forest
9%

Cropland
38%

Range
47%

Pasture
6%

Source: NRCS, FY2010 Ranking Period One—Final Results, Conservation Stewardship Program, July 22, 2010,
http://www.nrcs.usda.gov/programs/new_csp/2010rp-one-results.html.

Wildlife Habitat Incentives Program (WHIP)
The 2008 farm bill placed new limitations on lands eligible for enrollment in WHIP, which will
likely reduce the number of eligible acres in traditionally high participation states. Language was
added requiring WHIP to be used “for the development of wildlife habitat on private agricultural
land, nonindustrial private forest land, and tribal lands.” The addition of this language reverses
the previous interpretation by NRCS, which extended eligibility to all privately owned land, tribal
land, state/local government land, or federal land. By previously offering support for wildlife
habitat projects on all land and aquatic areas, WHIP provided an assistance option to landowners
who were unable to meet the specific eligibility requirements of other USDA conservation
programs. The new requirement of agricultural production could shift financial assistance for
WHIP contracts away from the traditionally large-allocation states in the Northeast to more
agriculturally intensive states in the West and Midwest. For example, in FY2007, prior to the
agricultural production requirement, states that received large WHIP allocations were Rhode
Island, Alaska, Hawaii, Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, and
Vermont.16 In FY2009, following the agricultural production requirement, states that received
large WHIP allocations were Texas, Alaska, California, New Hampshire, and Florida.17

16

USDA, NRCS, FY2007 - WHIP Allocations to States, 2007, http://www.nrcs.usda.gov/programs/2007_allocations/
07WHIPAlloc.pdf.
17
USDA, NRCS, WHIP Financial Assistance Dollars Allocated, 2009, http://www.nrcs.usda.gov/programs/whip/
FY09contract_info/whip-dollars-obligated-2009-11-19-09.pdf.

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Wetlands Reserve Program (WRP)
The 2008 farm bill reauthorized WRP and increased the maximum enrollment to 3,041,200 acres,
an increase of 766,200 acres above the previous cap established in the 2002 farm bill. The
program receives mandatory funding through the Commodity Credit Corporation (CCC) and is
estimated at $441 million for FY2009.18 Between FY2003 and FY2007, WRP enrollment was
reduced through annual appropriations bills. As Congress faces continued budget constraints,
WRP could see similar reductions in the future.
One provision in the 2008 farm bill has generated considerable response from the environmental
and conservation communities. Under Section 2203, Congress extended the length of time
required to own the land before an applicant is eligible for the program from one year to seven
years. The bill retained the exemptions to the ownership requirement, allowing a landowner to
enroll land owned for less than seven years if the land was obtained (1) through inheritance;
(2) through foreclosure; or (3) for any reason that gives NRCS assurance that the property was
obtained for a purpose other than placing it in WRP. An investigation, conducted by the House
Agriculture Committee, prior to the seven-year requirement found that NRCS “routinely ignored,
or excluded its non-compliance with, the twelve-month ownership requirement” when in many
cases partnering organizations would purchase the land for the explicit purpose of enrolling it into
a WRP easement.19 Many environmental organizations believe the seven-year requirement is
excessive and will reduce the number of eligible lands and discourage enrollment. Supporters of
the requirement point to the results of the House Agriculture Committee’s investigation, which
stated that NRCS “became a cash cow enabling partner organizations to acquire private lands at
discount prices.”20

Farmland Protection Program (FPP)
The 2008 farm bill (P.L. 110-246, Sec. 2401) reauthorized FPP and made significant changes. The
enacted bill changes the program’s purpose from protecting topsoil to protecting the land’s
agricultural use by limiting nonagricultural uses and including lands that promote state and local
farmland protection. It also restructures the program to emphasize longer-term and renewable
cooperative agreements, and changes the authority of the Secretary from purchasing conservation
easements to facilitating the purchase of conservation easements. Some conservation
organizations have praised the increased authority for partners, while others have expressed
concerns that it could create inconsistencies within the program.

New Programs
In addition to the changes made to existing agricultural conservation programs, the enacted 2008
farm bill also expands the range of USDA conservation activities by creating several new
programs, including a program expanding conservation activities in the Chesapeake Bay region, a
18

U.S. Congressional Budget Office, CBO January 2009 Baseline for CCC, FCIC, and Conservation, January 2009.
U.S. Congress, House Committee on Agriculture, Subcommittee on Conservation, Credit, Energy, and Research,
Testimony from John Jurich, Investigator, Committee on Agriculture, U.S. House of Representatives, subcommittee
hearing to review the USDA administration of conservation program contracts, 111th Cong., 1st sess., March 25, 2009,
http://agriculture.house.gov/testimony/111/h032509/Jurich.pdf.
20
Ibid.
19

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new state grants program, a provision to limit production on native sod, and a provision
promoting market-based approaches to conservation. The progress USDA has made in
implementing these new programs varies and could be of interest for congressional oversight.

Chesapeake Bay Watershed Program
This program (Sec. 2605) is targeted at conserving and protecting the Chesapeake Bay and the
water sources that make up the watershed. The bill authorizes $188 million in mandatory funding
(FY2009-FY2012) to be used through existing conservation programs. Targeting funding to
specific geographic regions was debated during the 2008 farm bill. The effectiveness of targeting
federal conservation spending through identified states, regions, or watersheds is still a question
when developing conservation policy. The Chesapeake Bay Watershed Program has received
widespread support indicating that similar programs targeting other watersheds could be created
by Congress in the future.

Voluntary Public Access and Habitat Incentives Program
Also referred to as the “Open Fields” program, this program authorizes state grants to encourage
landowners to provide public access for wildlife-dependent recreation. The bill provides $50
million in mandatory funds (FY2009-FY2012) for the program. The Farm Service Agency (FSA)
implements the program through an interim rule published in the Federal Register on July 8,
2010.21 Only state and tribal governments are eligible for grants under this program. Funds may
be used to either expand existing public access programs or create new public access programs, or
to provide incentives to improve habitat on enrolled program lands. It is unclear how program
funding will be divided among these two program objectives.

Sodsaver Provision
This 2008 farm bill provision (Sec. 12020) makes producers that plant an insurable crop (over 5
acres) on native sod ineligible for crop insurance and the noninsured crop disaster assistance
(NAP) program for the first five years of planting. The conference agreement states that this
provision may apply to virgin prairie converted to cropland in the Prairie Pothole National
Priority Area (Figure 3), if elected by the state. USDA established a sign-up date of February 15,
2009, in which no governors opted to participate in the program. Additional opportunities to
participate are possible though thought unlikely if the program remains voluntary.

21

USDA, CCC, “Voluntary Public Access and Habitat Incentive Program,” 75 Federal Register 39135, July 8, 2010.

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Figure 3. Prairie Pothole National Priority Area

Source: USDA, RMA, Prairie Pothole National Priority Area, April 28, 2008, http://www.rma.usda.gov/data/
pothole/2008/all_states.pdf

Environmental Services Markets
The 2008 farm bill also included a new conservation provision intended to facilitate the
participation of farmers and ranchers in emerging carbon and emissions trading markets by
directing USDA to establish guidelines for standards, accounting procedures, reporting protocols,
and verification processes for carbon storage and other types of environmental services markets
(this is discussed further in the section on “Ecosystem Services Markets,” below). 22 This
provision was also intended to help address some of the measurement and quantification issues
surrounding agricultural and forestry carbon credits, as well as to expand existing voluntary
conservation and other farm bill programs, provide incentives that could accelerate opportunities
for agriculture and forestry to reduce emissions associated with climate change, adopt energy
efficiency measures, and produce renewable energy feedstocks.
In December 2008, USDA announced it would create a federal government-wide Conservation
and Land Management Environmental Services Board to assist USDA with the “development of
new technical guidelines and science-based methods to assess environmental service benefits
which will in turn promote markets for ecosystem services including carbon trading to mitigate
climate change.”23 A federally chartered public advisory committee will advise the board, and will
include farmers, ranchers, forest landowners, and tribal representatives, as well as representatives
from state natural resource and environmental agencies, agriculture departments, and
conservation and environmental organizations. USDA’s press release also announced that USDA
was establishing a new Office of Ecosystem Services and Markets, which would provide
administrative and technical assistance in developing the uniform guidelines and tools needed to
create and expand markets for ecosystem services in the farming and forestry sectors. In March
2010, USDA announced that the office’s title had changed to the Office of Environmental
Markets (OEM), and its functions were moved to the USDA Natural Resources and Environment
22

P.L. 110-246, Section 2709, included new language amending Section 1245(f) of the Food Security Act of 1985.
Ecosystem services refers to the environmental goods and services and other benefits that the society obtains from the
environment and ecosystems, both natural and managed. Examples include water filtration, flood control, provision of
habitat, carbon storage, and many others. For more information, see CRS Report RL34042, Provisions Supporting
Ecosystem Services Markets in U.S. Farm Bill Legislation, by (name redacted).
23
USDA, “USDA Announces New Office of Ecosystem Services and Markets,” Release No. 0307.08, Dec. 18, 2008.

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(NRE) mission area.24 No additional information has been provided on either the board’s or the
office’s activities.

Payment and Income Limitations
Two types of payment limits exist for conservation programs. One sets the maximum amount of
conservation program payments that a person or legal entity can receive during a specified period
of time. The other (known as the adjusted gross income or AGI limit) sets the maximum amount
of income that an individual can earn and still remain eligible for conservation program benefits.
Limitations on payments received through conservation programs were expanded in the 2008
farm bill. Prior to the 2008 farm bill, most conservation programs were affected by an income
limitation, not a limitation on payments. Now, most programs are affected by both (see Table 2).
Table 2. Conservation Programs Affected by Payment and Income Limitation
Changes in the 2008 Farm Bill
Prior Law (P.L. 107-171, as amended)

Current Law (P.L. 110-246)

Payment Limit

Income Limit

Payment Limit

Income Limit

AMA, CRP, and
EQIP

AMA, Chesapeake Bay Watershed
Program, CRP, CSP, EQIP, FPP,
GRP, WRP, WHIP, and other
programs under Title II of the
2002 farm bill

AMA, Chesapeake
Bay Watershed
Program, CRP, CSP,
CCPI, EQIP, AWEP,
FPP, GRP, WRP, and
WHIP

AMA, AWEP, CRP, CSP, EQIP,
FPP, GRP, GSWC, WRP, WHIP,
and other programs under Title
II of the 2008 farm bill

Source: Income limits may be found under Section 1604 of the 2002 farm bill (P.L. 107-171) and Section 1604
the 2008 farm bill (P.L. 110-246). Payment limitations may be found under individual program sections under
Title II of both enacted bills.
Notes: Listed programs include Environmental Quality Incentives Program (EQIP), Conservation Stewardship
Program/Conservation Security Program (CSP), Wildlife Habitat Incentives Program (WHIP), Agricultural Water
Enhancement Program (AWEP), Agricultural Management Assistance (AMA), Conservation Reserve Program
(CRP), Wetlands Reserve Program (WRP), Farmland Protection Program (FPP), Grassland Reserve Program
(GRP), Cooperative Conservation Partnership Initiative (CCPI), and Ground and Surface Water Conservation
(GSWC).

Payment Limits
Payment limits are the maximum amount of conservation program funding that a person or legal
entity can receive during a specified period of time. As with commodity programs, payment limits
for conservation programs are controversial because of issues relating to the size of operations
receiving support and who should receive payments. The effect of payment limits varies by
program and the conservation practices implemented.25 Most conservation programs with higher
payments tend to be skewed to farms and ranches with larger acreage because payments for many
conservation practices are scaled by the number of acres on which that practice is applied. 26

24

In addition to OEM, USDA’s NRE mission area oversees the USDA Forest Service and the Natural Resources
Conservation Service.
25
Payment limits vary from $300,000 for any six-year period for EQIP to $50,000 annually for WHIP payments.
26
Soil and Water Conservation Society and Environmental Defense, Environmental Quality Incentives Program
(EQIP)—Program Assessment, March 2007, http://www.swcs.org/documents/filelibrary/EQIP_assessment.pdf.

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Supporters of payment limits are often advocates for smaller farms and opponents of large animal
feeding operations. Most conservation programs provide a percentage of the cost to install
conservation practices (known as cost-share) or implement site-specific management practices.
As noted above, most of these payments are made on a per-acre applied basis, thereby skewing
larger payments to contracts with more acres enrolled. Small farm advocates claim that this
disproportionately benefits large agricultural producers by making less money available for small
producers. Also, in the case of EQIP, cost-share assistance is provided for more expensive
practices such as animal waste storage facilities in concentrated animal feeding operations
(CAFOs).27 Opponents of these animal operations cite the higher payment limit as “further
subsidizing an environmentally destructive method of production.”28
Those who oppose payment limits (or support higher limits) for conservation programs counter
that conservation programs should focus on land with the greatest environmental need and not be
limited to a price per participant. They argue that higher payment limits allow for greater
environmental stewardship on farms and ranches, particularly larger operations with a greater
land base, which may have greater natural resource concerns. Others claim that payment limits on
restoration agreements could create a disincentive to enroll larger conservation easements, which
are the most desirable. Because most conservation easement programs, namely WRP and GRP,
enroll land that will also require restoration, a limit on restoration payments could reduce the
enrollment of large acre tracts.

Income Limits
The AGI limit sets a maximum amount of income that an individual can earn and still remain
eligible for program benefits. The 2008 farm bill made the AGI limitation for conservation
programs higher than the AGI limitation for the commodity farm support programs; however,
income limitations on conservation programs have been somewhat controversial. Previously, the
AGI limit for both conservation and commodities programs was set at $2.5 million and had an
exception if three-fourths of AGI was earned from farming sources. Now, if the three-year
average of non-farm income AGI exceeds $1,000,000, no conservation program benefits are
allowed. The exception to this limit is if two-thirds of the three-year AGI was earned from
farming sources. In addition, this limitation may be waived by USDA on a case-by-case basis for
the protection of environmentally sensitive land of special significance. In general, the AGI limit
for conservation programs is higher than that for commodity programs to encourage
environmental stewardship on farms and ranches, particularly larger operations that may have
greater natural resource problems.
Supporters of AGI limits believe that tighter limits benefit small producers and gain additional
public support for all agricultural programs through fiscal responsibility. Opponents of AGI limits
on conservation programs believe that if there are greater conservation benefits provided to the
general public, then, irrespective of wealth, a producer’s enrollment is good for the general
public.
27

The 2002 farm bill increased the payment limit from its 1996 farm bill levels of $10,000 for any fiscal year and
$50,000 for any multi-year contract, to a limitation on total payments to $450,000. The 2002 farm bill also required that
60% of EQIP funds should be made available to payments for practices relating to livestock production.
28
Elanor Starmer, “Industrial Livestock at the Taxpayer Trough: How Large Hog and Dairy Operations are Subsidized
by the Environmental Quality Incentives Program,” Campaign for Family Farms and the Environment, December
2008, p. 3.

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Conservation Funding and Oversight
The majority of conservation program funding is mandatory and funded through the Commodity
Credit Corporation (CCC).29 Other conservation programs, mostly technical assistance, are
discretionary and funded through annual appropriations. Reductions in mandatory funding and an
increase in earmarks within discretionary funding, as well as fund accountability and quantifying
environmental benefits of conservation practices, could be issues for Congress.

Spending Limits on Mandatory Funding
The 2002 farm bill authorized significant increases in mandatory funding for many conservation
programs. Unlike the discretionary conservation programs, which must be funded through the
annual appropriations process, mandatory programs have an authorized level of funding (or
acreage enrollment) that is available unless reduced to smaller amounts in the appropriations
process. If appropriators do not set a spending limit or reduce the authorized level, then the
program receives the authorized level of funding. Mandatory conservation programs are usually
authorized through omnibus farm bills for four to five years. Mandatory funds are provided by the
CCC, USDA’s financing entity for many other agricultural programs and export subsidies.
Despite the increase in mandatory funding authority, many conservation programs have been
reduced or capped through annual appropriations acts since FY2003. Many of these spending
reductions were at the request of the Bush Administration. The mix of programs and amounts of
reduction have varied from year to year. Some programs, such as the CRP, have not been reduced
by appropriators in recent years, while others, such as EQIP, have been repeatedly reduced below
authorized levels. EQIP’s authorized mandatory funding was reduced by almost $1.16 billion
from FY2005 through FY2010. Even with these reductions, total mandatory funding for
conservation programs has remained relatively constant at a total over $4 billion annually. For
more information about reductions in mandatory program spending, see CRS Report R41245,
Reductions in Mandatory Agriculture Program Spending.
Although some titles in the 2008 farm bill received a reduction in funding over the next five to
ten years, the conservation title received increased funding. Many supporters of conservation
programs viewed this as a victory during the farm bill debate and were surprised to see that the
FY2010 President’s budget requested a reduction of over $500 million in mandatory funding
from many conservation programs.30 While the FY2010 Agriculture appropriations bill (P.L. 11180) did not include many of these reductions (with the exception of EQIP), the FY2011
President’s budget again requested multiple reductions in mandatory conservation funding.31
Advocates for these programs contend that these limitations are significant changes from the
intent of the farm bill, which they say compromise the programs’ ability to provide the anticipated
magnitude of benefits to producers and the environment. Others, including those interested in
29

The CCC is the funding mechanism for the mandatory payments that are administered by various agencies of USDA.

30

The FY2010 President’s budget requested reductions in the following conservation programs receiving mandatory
funding: AMA ($5 million reduction), EQIP ($250 million reduction), FPP ($30 million reduction), HFRP ($5 million
reduction), WHIP ($43 million reduction), and WRP (139,000 acre reduction).
31
The FY2011 President’s budget requested reductions in the following conservation programs receiving mandatory
funding: AMA ($5 million reduction), EQIP ($380 million reduction), FPP ($15 million reduction), CSP (769,000-acre
reduction), WHIP ($12 million reduction), GRP (184,000-acre reduction), and WRP (57,000-acre reduction). The
requested FY2011 reduction totals over $760 million.

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reducing agricultural expenditures or in spending the funds for other agriculture purposes, counter
that, even with these reductions, overall funding for conservation has not been reduced. With the
111th Congress facing tighter budget constraints, it is possible for conservation programs to face
spending reductions either in the appropriations process or if budget reconciliation is required.32

Congressionally Directed Projects
The Watershed and Flood Prevention Operations program has received discretionary funding for
an increasing number of congressionally directed projects (commonly referred to as earmarks).
The program is not authorized at a specified amount. Annual appropriations reached a high of
$200 million, including a $94 million supplemental, in FY2002 and have declined steadily to $30
million in FY2010.33 The program also received $145 million as part of the American Recovery
and Reinvestment Act of 2009 (ARRA, P.L. 111-5). As appropriated funding decreased, the
number of earmarks increased, reaching 97% of appropriated funding in FY2009 and 74% in
FY2010. The past five presidential budget requests, including the FY2011 request, have sought
zero funding for the program, citing the number of earmarks. Currently there are approximately
300 unfunded authorized watershed projects totaling over $1 billion.

Technical Assistance
Two issues associated with technical assistance have been whether NRCS has the capacity to
meet the growing technical assistance demand and how technical assistance costs should be
funded for mandatory programs.
The 2002 farm bill (P.L. 107-171, Sec. 2701) dramatically increased financial assistance in
conservation programs. This increase in financial assistance also led to an increased demand for
technical assistance. 34 The 2002 farm bill allowed NRCS to augment its technical assistance
capacity by allowing producers to use approved third parties to provide assistance. As of February
2010, approximately 1,140 individuals and businesses were certified and registered as third-party
providers with NRCS.35 Despite this increase in capacity, NRCS, like other organizations, is
facing personnel attrition in “mission critical occupations” (most of which provide technical
assistance). 36 The 2008 farm bill further increased funding for mandatory conservation programs,
which could cause the demand for technical assistance to increase, placing additional strain on the
current capacity.
32

For more information on the reconciliation process in general, see CRS Report RL30458, The Budget Reconciliation
Process: Timing of Legislative Action.
33
Much of the decline had been at the request of the USDA. Source: Agriculture, Rural Development, Food and Drug
Administration, and Related Agencies Appropriations Act, 2002 (P.L. 107-76); 2002 Supplemental Appropriations Act
for Further Recovery From and Response to Terrorist Attacks on the United States (P.L. 107-206); and Agriculture
Appropriations Act, 2010 (P.L. 111-80).
34
Most conservation programs that include financial assistance require a certain amount of technical assistance.
According to Section 2706 of the 2008 farm bill (P.L. 110-246), the purpose of technical assistance within farm bill
programs is to “provide eligible participants with consistent, science-based, site-specific practices designed to achieve
conservation objectives on land active in agriculture, forestry, or related uses.”
35
NRCS reports obligating $289 million for technical assistance provided through a third-party between 2004 through
February 2010. USDA, NRCS, Technical Service Provider, Mid Year Report to Management, Fiscal Year 2010,
Washington, DC, 2010, p. 1.
36
USDA, NRCS, “Human Capital Strategic Plan, 2006-2010,” at http://www.nrcs.usda.gov/about/humancapital/.

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Congress has addressed the issue of how to fund technical assistance in mandatory programs in
the past and will likely do so again in the future. The central issue is whether NRCS has the
authority to pay for technical assistance for mandatory programs using the mandatory programs’
funding.37 Previous conflicting interpretations by the Office of Management and Budget resulted
in Congress providing clarifying language through enacted legislation in 2002, 2005, and 2008.38
The clarifying language appeared to resolve the issue until recently. The 2008 farm bill
reauthorized and amended other mandatory conservation programs not originally authorized
under the 1985 farm bill. 39 Because previous language only addressed those programs authorized
under the 1985 farm bill, the issue of where technical assistance funding should originate for non1985 farm bill programs was once again raised. On February 17, 2009, Congress enacted
clarifying language for this issue in Section 103 of the American Recovery and Reinvestment Act
of 2009 (P.L. 111-5).40 The new language allows all mandatory programs established or amended
in the 2008 farm bill, excluding those in Title I, to use CCC funds for administrative expenses and
technical assistance. Congress will likely need to address this issue again because the new
language only covers FY2009 and FY2010, while funding authority for most farm bill programs
expires at the end of FY2012.

Financial Audit and Contract Administration
Most USDA agencies are covered by a consolidated financial statement audit for the entire
department. In FY2007, the OMB required NRCS to conduct a stand-alone audit for the FY2008
financial statement. In FY2008, NRCS contracted with a private auditing firm, KPMG, to review
the agency’s financial statements in its first stand-alone audit. KPMG was unable to provide an
opinion on the agency’s financial statements because NRCS could not document or support its
transactions or account balances.41
The FY2008 audit was NRCS’s first attempt at a comprehensive financial statement audit. The
lack of an opinion from the auditing firm was a result of several problems—namely, NRCS was
unable to provide material in support of transactions and account balances with respect to
obligations, accrued expenses and undeliverable orders, and unfilled customer orders. According
to NRCS, the agency has taken corrective actions to address the deficiencies found in the audit,
37

Unlike most government agencies, NRCS does not receive a salaries and expenses appropriation. Most of the
funding for employees and overhead (including what is known as technical assistance) is appropriated through the
Conservation Operations account, which is discretionary. OMB originally determined that technical assistance for
mandatory programs would be funded through annual discretionary appropriations and funding from larger mandatory
programs. Congress disagreed and passed legislation stating that funding for a mandatory program’s technical
assistance could only come from that mandatory program’s funding authority.
38
Section 2701 of the 2002 farm bill (P.L. 107-171) provided that technical assistance in support of each mandatory
program authorized under the 1985 farm bill, as amended, come from the funding provided by the CCC for that
program P.L. 108-498, further clarified the funding source for technical assistance in mandatory conservation programs
and specified that funding for technical assistance cannot be transferred among the mandatory funded programs,
starting in FY2005. The language was reauthorized in the 2008 farm bill (P.L. 110-246).
39
For example, the Healthy Forest Reserve Program authorized in section 502 of the Healthy Forest Restoration Act of
2003 (16 U.S.C. 6572), the Agricultural Management Assistance Program authorized in section 524 of the Federal
Crop Insurance Act (7 U.S.C. 1524), and the Chesapeake Bay Watershed Program authorized in section 2605 of the
Food, Conservation, and Energy Act of 2008 (16 U.S.C. 3839bb-3).
40
For more information on the ARRA see, CRS Report R40160, Agriculture, Nutrition, and Rural Provisions in the
American Recovery and Reinvestment Act (ARRA) of 2009.
41
For a copy of the FY2008 NRCS audit report by USDA’s OIG, see http://www.usda.gov/oig/webdocs/10401-2FM.pdf.

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including training over 300 employees in accounting principles, developing an automated tool for
general ledger accounts, and performing quality assurance reviews on over 160,000 open
obligations.42 Despite these corrective actions, a FY2009 audit of the NRCS financial statements
returned a similar no-opinion result. The auditing firm again cited NRCS’s inability to provide
material in support of transactions and account balances.
The 111th Congress continues to take action on this issue. On March 25, 2009, the House
Committee on Agriculture’s Subcommittee on Conservation, Credit, Energy, and Research held a
hearing to review the administration of conservation contracts. A similar hearing to review the
delivery of conservation programs conducted by the same subcommittee was held on July 1,
2010. Also, in the FY2009 Omnibus Appropriations Act, Congress provided $10 million in
Conservation Technical Assistance (CTA) funds to “strengthen the agency’s program and
financial management capabilities.”43 According to the committee print, NRCS is expected to use
the funds to enhance the agency’s budgeting, accounting, contracting, and information technology
systems. The agency is expected to issue a report to Congress detailing the use of these funds.
The committee print also requires NRCS to issue a report to Congress regarding the 2008 audit
and any corrective actions being taken.

Conservation Effects Assessment Project (CEAP)
Following the significant increase in funding for conservation programs in the 2002 farm bill,
USDA initiated a project to measure the environmental benefits of many of these programs. The
project is a multi-agency effort known as the Conservation Effects Assessment Project (CEAP).
CEAP’s stated purpose is to aid policymakers in developing new conservation programs and help
existing conservation program managers implement programs more effectively and efficiently to
meet the goals of Congress and the Administration.44
Now in its seventh year at USDA, CEAP continues to be supported by many in the conservation
community as a much-needed evaluation system to ensure that conservation programs produce
the desired environmental and production outcomes.45 Although the project is not legislatively
mandated, many believe its potential outcomes could prove useful in shaping future policy
debates surrounding environmental issues in the 111th Congress, namely environmental services
markets.
Despite some of the strides made to quantify the environmental benefits of conservation practices
through CEAP, there are possible limitations to its use, namely the availability of data. To date,
the depth of information gathered through this project is enormous, yet very little has been made
available to the public or to other federal agencies. Despite some frustration generated by
42
U.S. Congress, House Committee on Agriculture, Subcommittee on Conservation, Credit, Energy, and Research,
Testimony of Dave White, Chief, Natural Resources Conservation Service, USDA, Hearing to review the USDA
administration of conservation program contracts, 111th Cong., 1st sess., March 25, 2009.
43
U.S. Congress, House Committee on Appropriations, Omnibus Appropriations Act, 2009, Division A—Agriculture,
Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act 2009, committee print,
111th Cong., 1st sess., March 2009 (Washington: GPO, 2009).
44
Soil and Water Conservation Society, Final Report from the Blue Ribbon Panel Conducting an External Review of
the U.S. Department of Agriculture Conservation Effects Assessment Project, Ankeny, IA, 2006, http://www.swcs.org/
documents/filelibrary/advocacy_publications/CEAP_Final_Report.pdf.
45
Lisa F. Duriancik, Dale Bucks, and James P. Dobrowolski et al., “The First Five Years of the Conservation Effects
Assessment Project,” Journal of Soil and Water Conservation, vol. 63, no. 6 (Nov/Dec 2008), p. 185A.

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reporting delays, some in the scientific community support what they say is a meticulous in-depth
assessment and evaluation system, claiming it is necessary for statistical credibility.46 Only a few
initial results are currently available based on cropland in the upper Mississippi river basin. Initial
findings show beneficial effects from conservation practices as well as additional application
needs. Many conservation programs offer financial assistance to producers to implement many of
the conservation practices analyzed in the CEAP assessment; however, the assessment does not
correlate the effects and benefits of conservation practice to any one federal program.

Emerging and Continuing Issues
Emerging and continuing issues for agricultural conservation in the 111th Congress revolve
around ecosystem services markets, climate change, and bioenergy. The evolving debate over
climate change legislation has provoked several questions regarding the role of agriculture and
forestry. Other environmental concerns for agriculture, such as concentrated animal feeding
operation (CAFO) regulations, greenhouse gas emission reporting for livestock producers, and
wetlands mitigation, could lead to expanded opportunities for many conservation efforts.
Production pressures generated by corn-based ethanol have also had an ongoing impact on certain
conservation programs.

Ecosystem Services Markets
The participation of agriculture and forestry in emerging ecosystem services markets is gaining
wide support within the farm community and its supporting organizations and agencies, as well as
among the regulatory agencies and some environmental groups.47 Market-based approaches are
often viewed as encompassing broader societal benefits by complementing existing agricultural
conservation programs and evolving regulatory approaches intended to address environmental
improvements in the farm and forestry sectors. Among the principal questions regarding the
inclusion of ecosystem services provisions as part of any major legislative initiative is whether
the agriculture and forestry sectors can effectively provide environmental goods and services
along with the more traditional food, fiber, and other services these sectors already provide.
Ecosystem goods and services are the benefits society obtains from the environment and
ecosystems, both natural and managed, such as water filtration, flood control, provision of
habitat, carbon storage, and many others.48 In most cases, these constitute “free services,” since
landowners and managers are not compensated in the marketplace. The continued degradation of
these services over time has generated interest in creating markets, developed either through
regulation or voluntarily, so that providers of ecosystem services can be compensated in private
46

“Quantifying Practices with the Conservation Effects Assessment Project (CEAP),” panel discussion at the 2009
USDA Agriculture Outlook Forum, Arlington, VA, February 26, 2009.
47
In March 2009, Secretary of Agriculture Thomas Vilsack indicated that traditional agricultural support payments will
continue to be met with criticism and many producers should seek additional income from market-based ecosystem
services. U.S. Congress, House Committee on Appropriations, Subcommittee on Agriculture, Rural Development,
Food and Drug Administration, and Related Agencies, Statement by Thomas Vilsack, Secretary of Agriculture,
Submitted Remarks, 111th Cong., 1st sess., March 31, 2009. http://www.usda.gov/wps/portal?contentidonly=true&
contentid=2009/03/0077.xml
48
These may also be referred to as ecosystems services. See, for example, World Resources Institute, Millennium
Ecosystem Assessment, Ecosystems and Human Well-being, 2005, http://www.millenniumassessment.org/en/
index.aspx.

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markets for the services they provide. This could offer a potential business opportunity to the
agriculture and forestry sectors, which may be able to provide for such services and participate in
the market, for example, by creating, restoring, and preserving function and value in a natural
resources area, or by capturing and storing carbon before gases that contribute to global climate
change are released into the atmosphere. These services would be in addition to the food and fiber
services traditionally supplied by the agriculture and forestry sectors.49
Conservation practices on agricultural land provide one of the main vehicles through which
producers may develop environmental credits and benefits to be sold or traded in a market-based
system. Many existing USDA conservation programs offer incentives through financial and
technical assistance to implement these practices. For example, cropland tillage practices such as
reduced/medium-till, no-till, and ridge/strip-till practices sequester carbon that could be sold
through a carbon offset program. Conservation programs such as EQIP, AMA, CSP, and CTA
provide incentives for farmers to install these practices. Programs such as WRP offer incentives
for wetland restoration, the benefits of which could then be used in a wetlands mitigation
program. Other conservation practices such as riparian buffers, setbacks, wind breaks, and buffer
strips offered under EQIP, CRP, CSP and WHIP create water quality improvements that could be
traded in local water quality credit programs.
The inclusion of these market provisions in legislation has raised procedural and implementation
questions as Congress continues to consider the role of the agriculture and forestry sectors in
environmental legislation. 50 One key question is how USDA will respond to several existing
barriers that may prevent the development of ecosystem goods and services markets involving the
farm and forestry sectors, such as participation challenges, and issues of measuring and valuing
credits, monitoring, and enforcement, among others.51 It is also unclear how USDA will bridge
existing conservation program benefits with ecosystem services markets, and what direct role the
new USDA Office of Ecosystem Service Markets (see “Environmental Services Markets,” above)
plans to play.

Climate Change
Among the many questions for Congress regarding the topic of climate change is what role the
agriculture and forestry sectors will play; and, if they are allowed to participate, how concerns
regarding their participation will be resolved. Farm and forestry activities both emit and sequester
greenhouse gases (GHG) from the atmosphere. 52 As reported by the Environmental Protection
Agency (EPA), the agriculture and forestry sectors currently account for 6%-8% of estimated
49
For additional information, see CRS Report RL34042, Provisions Supporting Ecosystem Services Markets in U.S.
Farm Bill Legislation.
50
For more information on the role of agriculture in climate change policy, see CRS Report RL33898, Climate
Change: The Role of the U.S. Agriculture Sector. For other general information on climate change issues, see CRS
Report RL34513, Climate Change: Current Issues and Policy Tools.
51
For more information, see USDA, 2007 Farm Bill, Conservation and Environment Theme Paper, June 2006, at
http://www.usda.gov/documents/FarmBill07consenv.pdf; and M. Ribaudo and C. Jones, “Environmental Credit
Trading: Can Farming Benefit,” Amber Waves, USDA’s Economic Research Service, Feb. 2006.
52
GHG emissions from agriculture are associated with livestock operations (as part of the natural digestive process of
animals and manure management) and crop production (soil management, commercial fertilizer and manure
application, and production of nitrogen-fixing crops). The two key types of GHG emissions are methane (CH4) and
nitrous oxide (N2O). Estimated emissions are expressed on a CO2-equivalent basis. See CRS Report RL33898, Climate
Change: The Role of the U.S. Agriculture Sector.

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total U.S. GHG emissions annually.53 However, combined carbon sequestration on farm and
forested lands is currently estimated to mitigate about 11% of total annual GHG emissions in the
United States. The potential to reduce emissions and sequester carbon on agricultural lands is
reportedly much greater than current rates.
Congress is considering a range of climate change policy options, including greenhouse gas
(GHG) emission reduction programs that would either mandate or authorize a cap-and-trade
program to reduce GHG emissions.54 In general, the current legislative proposals would not
require emission reductions in the agriculture and forestry sectors. The drafters of some proposals
are reluctant to include opportunities for agriculture and forestry participation due to uncertainties
regarding measuring, monitoring, and permanence of agriculture and forestry activities.55 Others
in Congress would like a GHG program to include provisions allowing farm and forestry
landowners to receive emissions allowances (or credits) to generate carbon offsets.
Most land management and farm conservation practices can help reduce GHG emissions and/or
sequester carbon, including land retirement, conservation tillage, soil management, and manure
and animal feed management, among other practices. Many of these practices are encouraged
under existing USDA conservation programs that provide financial and technical assistance to
farmers, such as EQIP, CRP, CSP, CTA, and WHIP, among others. However, uncertainties are
associated with implementing these types of practices depending on site-specific conditions, the
type of practice, how well it is implemented, the length of time a practice is undertaken, and
available funding, among other factors.
USDA has already expanded some of its existing conservation programs to further encourage
emission reductions and carbon sequestration. For example, many of the practices encouraged
under EQIP and CSP reduce net emissions. Programs such as CTA, AMA, EQIP, and CSP list a
reduction in emissions as a national priority for the program, which affects the funding and
ranking of projects. Under CRP, USDA has modified how it scores and ranks offers to enroll land
in CRP in order to place greater weight on installing vegetative covers that sequester carbon.
USDA also has an initiative under CRP’s continuous enrollment provision to plant up to 500,000
acres of bottomland hardwoods, which are among the most productive U.S. lands for sequestering
carbon.56 Recently, USDA has recognized the potential credits generated by these conservation
programs and has removed any claim on the credits through recent changes to many of the
program rules.57 Whether or not benefits generated from existing conservation programs would be
considered eligible carbon offsets under current legislative proposals varies.

53

EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2007, April 2009, http://epa.gov/climatechange/
emissions/usinventoryreport.html.
54
For more information on the current GHG emissions legislation, see CRS Report R40556, Market-Based Greenhouse
Gas Control: Selected Proposals in the 111th Congress; and CRS Report RL34436, The Role of Offsets in a
Greenhouse Gas Emissions Cap-and-Trade Program: Potential Benefits and Concerns.
55
For more information on issues associated with measuring and monitoring carbon, see CRS Report RS22964,
Measuring and Monitoring Carbon in the Agricultural and Forestry Sectors.
56
For more information on these programs, see CRS Report R40763, Agricultural Conservation: A Guide to Programs.
57
The following program rules include a section recognizing the credits generated by programs and asserting no direct
or indirect claim on these credits: EQIP (§1466.36, 74 Federal Register 2317), WRP (§1467.20, 74 Federal Register
2336), AMA (§1465.36, 73 Federal Register 70256), GRP (§1415.10, 74 Federal Register 3875), FPP (§1491.21, 74
Federal Register 2822), WHIP (§636.21, 74 Federal Register 2800), CRP (§1410.63(6), 68 Federal Register 24845),
and HFRP (§625.8, §74 Federal Register 1967).

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Congress has already taken steps to address some of the challenges associated with measuring
carbon changes from forested and agricultural lands and practices. The 2008 farm bill includes
provisions that could expand the scope of existing land-based conservation and other farm bill
programs by providing incentives to encourage farmers and landowners to sequester carbon and
reduce emissions associated with climate change and participate in markets for carbon storage
(see “Environmental Services Markets” section, above). The Energy Independence and Security
Act of 2007 (P.L. 110-140, Sec. 712) directs the Secretary of the Interior to develop a
methodology to assess carbon sequestration and emissions from ecosystems. This methodology is
to cover measuring, monitoring, and quantifying GHG emissions and reductions, and provide
estimates of sequestration capacity and the mitigation potential of different ecosystem
management practices. Congress continues to face the question of whether its current authorized
activities (and proposed activities) provide adequate and sufficient guidelines for accurately
measuring carbon levels from forest and agricultural activities.
On June 29, 2009, the House passed H.R. 2454, which includes a new program for agricultureand forestry-related GHG offsets within USDA. 58 The so-called “Peterson amendment” was
added to H.R. 2454 just prior to the floor debate, following negotiations between the Chairmen of
the House Energy and Commerce Committee and the House Agriculture Committee. The Energy
Committee’s June 26, 2009, manager’s amendment included a new Title V to H.R. 2454—
”Agriculture and Forestry Related Offsets.” Among other provisions, the Peterson amendment
allowed for certain agricultural and forestry activities to become eligible to participate in a carbon
offset program, established that this program would be implemented by USDA (rather than EPA),
addressed concerns in the agricultural community about existing and evolving renewable energy
and certain biomass requirements, and also recognized certain early actions that have already
been taken by farmers and landowners to reduce emissions and sequester carbon. For the most
part, the provisions in Title V are similar to those found in Title III of H.R. 2454, with the most
notable exception being the difference in implementing agencies. 59
Similar action was taken in the Senate, where S. 1733 allows for agriculture and forestry offsets
as part of a cap-and-trade scheme. S. 1733 differed from H.R. 2454 in terms of the types of
projects and activities allowed, the total allowable quantity of domestic versus international
offsets, and agency administration of the program, among other differences. The Clean Energy
Partnerships Act of 2009 (S. 2729) was introduced by Senator Stabenow shortly after the Senate
EPW Committee completed work on S. 1733. This bill (often referred to as the “Stabenow
amendment”) is not comprehensive and only expands on the agricultural and forestry carbon
offset provisions in these climate bills and also allows for certain other provisions benefitting
U.S. farmers and landowners.

Energy Effects
Renewable energy and energy conservation continue to be topics of concern as Congress seeks to
reduce the national use of fossil fuels. Renewable energy is energy generated through natural
means, including wind, solar, geothermal, hydroelectric, and biomass, among others. With each
58
For more information on H.R. 2454, see CRS Report R40643, Greenhouse Gas Legislation: Summary and Analysis
of H.R. 2454 as Passed by the House of Representatives.
59
For additional information, see CRS Report R40994, Agriculture and Forestry Provisions in Climate Legislation in
the 111th Congress, by (name redacted); and CRS Report RL34436,The Role of Offsets in a Greenhouse Gas Emissions
Cap-and-Trade Program: Potential Benefits and Concerns, by (name redacted).

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renewable energy source comes benefits and consequences. Energy sources closely tied to the
agriculture and forestry sectors are biofuels derived from corn-based ethanol and cellulosic
feedstock. Federal support for ethanol through mandated levels of consumption, grants and loan
guarantees, tax credits, tariffs on imports, and research and development projects has generated
some controversy.60 Critics say that important and unwanted environmental consequences
resulting from the production of biofuels should be considered when evaluating renewable energy
options.
A continued expansion of corn-based ethanol production could have significant consequences for
traditional U.S. agricultural crop production and rural economies. Supporters of an expanded
renewable fuels standard (RFS, the statutorily required use of renewable fuels) claim that
increased biofuels production and use would produce enormous agricultural and rural economic
benefits by increasing farm and rural incomes and generating substantial rural employment
opportunities.61 However, large-scale shifts in agricultural production activities will likely also
have important regional economic consequences that have yet to be fully considered or
understood. As corn prices rise, so too does the incentive to expand corn production to more
marginal soil environments. Further, corn production is among the most energy-intensive of the
major field crops. This shift could have important and unwanted environmental consequences due
to possible increases in fertilizer and chemical use and soil erosion.
Ethanol and biodiesel produced from cellulosic feedstocks, such as prairie grasses and fastgrowing trees, have the potential to improve the energy and environmental effects of U.S.
biofuels. A key potential benefit of cellulosic feedstocks is that they can be grown without the
need for chemicals. Reducing or eliminating the need for chemical fertilizers could address one of
the largest energy inputs for corn-based ethanol production. However, additional concerns about
cellulosic feedstocks exist, including concerns that required increases in per-acre yields to obtain
economic feasibility could require the use of fertilizers; that availability of sufficient feedstock
supply is limited and expansion could generate additional land use pressures for expanded
production; and that development of harvesting machinery and technology lags behind that of
traditional corn-based ethanol production. In addition to these concerns, some groups say that
other potential environmental drawbacks associated with cellulosic fuels should be addressed,
such as the potential for soil erosion, increased runoff, the spread of invasive species, and
disruption of wildlife habitat.62
Although the 2008 farm bill expands many existing agricultural conservation programs to
encourage producers to adopt energy efficiency measures and produce renewable energy
feedstocks, it does not address the potential environmental consequences that could result from
biofuels production. Expanding existing conservation efforts or creating new ones can serve as a
potential countermeasure to the increased environmental pressures generated by biofuel
production. The extent to which this is or could be done is not clear.

60

For more information on ethanol policy issues, see CRS Report R40488, Ethanol: Economic and Policy Issues.

61

For more information on the renewable fuels standard, see CRS Report R40155, Renewable Fuel Standard (RFS):
Overview and Issues.
62
For more information on cellulosic biofuels, see CRS Report RL34738, Cellulosic Biofuels: Analysis of Policy Issues
for Congress.

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The EPA has proposed changes to the RFS program, as required by the Energy Independence and
Security Act of 2007 (EISA, P.L. 110-140).63 Two areas of this proposed rulemaking have caused
concerns among those in the U.S. agriculture sector: the EISA biomass definition and the
requirement that EPA consider so-called “indirect land use” effects when calculating GHG
emissions associated with advanced biofuels. Amendments to the Waxman/Markey climate
change and energy legislation (H.R. 2454) would change the EISA biomass definition to the
definition in the 2008 farm bill (P.L. 110-246) and prevent EPA (for at least six years) from
including emissions from international indirect land use changes when weighing biofuels’ carbon
footprint under the 2007 RFS.64

63
74 Federal Register 99, 24904-25143, May 26, 2009. EISA significantly expanded the RFS established in the Energy
Policy Act of 2005 (P.L. 109-58). The RFS now requires the use of 9.0 billion gallons of renewable fuel in 2008,
increasing to 36 billion gallons in 2022.
64
For more information on these requirements and related RFS issues, see CRS Report R40155, Renewable Fuel
Standard (RFS): Overview and Issues; and CRS Report R40460, Calculation of Lifecycle Greenhouse Gas Emissions
for the Renewable Fuel Standard (RFS). For more background on biomass definitions, see CRS Report R40529,
Biomass: Comparison of Definitions in Legislation.

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Appendix. USDA Conservation Programs: Funding
Table A-1. USDA Agricultural Conservation Program Funding Levels, FY2009 and FY2010
(listed by FY2009 funding level, in millions)
Program

Mandatory/ Discretionary

FY2009 Available

FY2010 Available

Conservation Reserve Program (CRP)

Mandatory

$1,888 est. (39.2 million acres)

$1,872 est. (32 million acres)

Environmental Quality Incentives Program (EQIP)

Mandatory

$1,067 ($1,337 authorized)

$1,180 ($1,450 authorized)

Conservation Operations (includes Conservation Technical Assistance,
Survey, Soil Survey, Grazing Lands Conservation Initiative, Plant Materials
Centers, Conservation Compliance, Sodbuster, and Swampbuster)

Discretionary

$730

$888

Conservation Stewardship Program (CSP)

Mandatory

$569 est. (12.5 million acres annually)

$752 est. (12.5 million acres annually)

Wetlands Reserve Program (WRP)

Mandatory

$417 est. (3.04 million acres)

$671 est. (3.04 million acres)

Emergency Watershed Program (EWP)

Discretionary

$245

$0

Watershed and Flood Prevention Operations

Discretionary

$169

$30

Farmland Protection Program (FPP)

Mandatory

$121

$150

Emergency Conservation Program (ECP)

Discretionary

$115

$0

Watershed Rehabilitation

Mandatory and Discretionary

$90

$41.1 discretionary, $0 mandatory
($165 authorized)

Wildlife Habitat Incentives Program (WHIP)

Mandatory

$85

$85

Agricultural Water Enhancement Program (AWEP)

Mandatory

$73

$73

Grassland Reserve Program (GRP)

Mandatory

$63

$78

Resource Conservation and Development (RC&D)

Discretionary

$51

$51

Chesapeake Bay Watershed Program

Mandatory

$23

$43

Healthy Forests Reserve Program (HFRP)

Mandatory

$9.8

$9.8

Agricultural Management Assistance (AMA)

Mandatory

$7.5 (conservation only)

$7.5 (conservation only)

Voluntary Public Access and Habitat Incentive Program

Mandatory

$50 (total for FY2009-2012)

$50 (total for FY2009-2012)

Source: Division A, Title II of the Omnibus Appropriations Act, 2009 (P.L. 111-8); Division A, Title I of the American Recovery and Reinvestment Act of 2009 (P.L. 111-5); Title
I and II of the Food, Conservation, and Energy Act of 2008 (P.L. 110-246); and Division B, Title I, Chapter I of the Consolidated Security, Disaster Assistance, and Continuing
Appropriations Act, 2009 (P.L. 110-329). Funding estimates for acreage based programs are taken from CBO Baseline projections, March 2009; and USDA, CCC, Commodity
Credit Corporations - Commodity Estimates Book, FY 2010 Mid-Session Review, August 25, 2009, http://www.fsa.usda.gov/Internet/FSA_File/msr10_commodity_estimates_book.pdf.
Notes: FY2009 available column represents the actual appropriated or authorized level of funding. The total includes funding from the American Recovery and Reinvestment
Act of 2009 (P.L. 111-5), which provided additional funding for Watershed and Flood Prevention Operations, Watershed Rehabilitation, and Emergency Watershed Program (in
the form of floodplain easements). Both EWP and ECP received funding in the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act, 2009 (P.L. 110329). FY2010 authorized limits are provided in title I and II of the Food, Conservation, and Energy Act of 2008 (P.L. 110-246).

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Author Contact Information
(name redacted)
Analyst in Agricultural Conservation and Natural
Resources Policy
/redacted/@crs.loc.gov, 7-....

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/crs%3AR40692. Public record. Not legal advice.