Making the Farm Bill Work for Texas Farmers and Ranchers"

Remarks by Bruce I. Knight, Chief, Natural Resources Conservation Service
at the Corn Producers Association of Texas Annual Meeting
Corpus Christi, TX
January 8, 2003

Thank you, Dee (Vaughan), for that wonderful introduction. And,
congratulations on your selection as president-elect of the National Corn
Growers Association.

It is a pleasure to be here today to talk about the conservation provisions
of the farm bill and what they mean for corn producers and other farmers and
ranchers in Texas. Texas has long been a leader in conservation. Given the
amount of land you have in production in this great state, it is no wonder
you were among the first to become conservation minded. You have such a
diversity of agriculture and people in this state that you lead the way
in many different areas of conservation, from grazing, to commodity crops,
to wildlife habitat, to water conservation and sustaining rural economies.

You have also been blessed with conservation-minded leaders in Washington,
including Representatives Larry Combest and Charles Stenholm on the House
Agriculture Committee and Representative Henry Bonilla. who ably looks out
for agricultural interests from his seat on the House Appropriations
Committee. And, of course, you have my boss, Mack Gray, the Deputy Under
Secretary for Natural Resources and Environment at USDA. and, my ultimate
boss, President Bush, who signed the new farm bill, which will set the tone
for conservation on working lands in Texas and throughout the Nation over
the next six years.

Today, I would like to give you an overview of the new farm bill, talk a bit
about what USDA and the agriculture community need to do to successfully
implement the bill, and, finally. suggest a few things producers and your
associations can do to get the most out of the conservation provisions of
the new farm bill.


FARM BILL PROGRAM RUN DOWN

The new farm bill represents the largest investment in conservation on
Americas working lands in farm bill history. The farm bill will result in
an increase of $17.1 billion in conservation spending over ten years. Most
Importantly, the new farm bill is heavily focused on working lands
conservation.

The farm bill announces our entry into what I call the next golden age of
conservation. It provides a great deal of flexibility for Americas farmers
and ranchers. It provides opportunities for more farmers overall, and more
flexibility to address unique local conservation issues. For example, I
know many of you are interested in opportunities to do more in many areas,
including irrigation efficiency, conservation tillage, erosion control,
water quality, and buffer strips.

The farm bill can help you in these areas. It provides ways both to improve
our environment and to enhance profitability. And, it provides resources to
help producers meet regulatory requirements such as the Endangered Species
Act and the Clean Water Act.

The farm bill provides a portfolio of conservation programs to help
producers meet their environmental and business goals.

The biggest single program in the farm bill is the Environmental Quality
Incentives Program. The farm bill provides an extra $5.5 billion over six
years for EQIP. This fiscal year EQIP will have $700 million, plus $45
million for ground and surface water conservation. We hope to have the
proposed rule for EQIP out this month. There is more money in EQIP each
year under the new farm bill, which means additional opportunities for
producers to reach their goals for preventing soil erosion, and improving
air and water quality, among other objectives.

Even though livestock producers will get 60 percent of the EQIP funds, the
pie is getting larger, giving everyone more opportunities. And, of course,
I dont have to remind Texas corn producers of the importance insuring that
this program works for you as well as your customers in the livestock
sector.

Other programs show similar increases under the new farm bill.

The farm bill provides $360 million for the Wildlife Habitat Incentives
Program over six years. WHIP has $30 million for FY 2003.

The new farm bill provides for several programs to protect working farmland
and ranchland, including the Farmland Protection Program and the new
Grassland Reserve Program.

FPP will have nearly $600 million over six years. For fiscal year 2003, FPP
funding is $100 million. FPP is a great way for corn farmers near urban
areas to ensure that their farms remain as farms for future generations.

The Grassland Reserve Program will have a quarter of a billion dollars in
mandatory spending
to enroll up to two million acres of grazing land. It remains to be seen
how much of that money will be available each year.

In addition, the Wetlands Reserve Program has significant increases in its
acreage cap. Secretary Veneman released $275 million in WRP funds this
fall, and we were able to enroll more than 200,000 acres.

The new Conservation Security Program will provide payments for producers
who have historically practiced good stewardship on their agricultural lands
and incentives for those who want to do more. USDA is working hard on the
rule for the Conservation Security Program. We are determined to create a
program that works, so it may take some time to iron out the details.

One last feature of the new farm bill that is of interest to corn and other
producers is that it provides for confidentiality of case file data.


OUR STRATEGIC PLAN

So, what have we at USDA and in the agriculture industry been doing to
implement the farm bill, and what do we need to do in the future to ensure
its success?

The farm bill meant release of about $700 million for conservation programs
late in the Federal fiscal year. NRCS offices around the country dusted off
the old applications, took in new applications, assigned them priorities,
and, by the end of the year, nearly the entire $700 million was committed.
We funded more than 19,000 EQIP applications with $414 million in new farm
bill money and more than 800 applications for WRP, with $274 million.

Getting all that money invested in such a short time is a tribute to the
hard work of NRCS staff and to the preparedness of NRCS field offices, as
well as strong interest on the part of Americas farmers and ranchers.

Today, we not only have enough applications to invest the 2003 farm bill
money we are back in the position of having a backlog of applications.
EQIP alone now has a backlog of $1.4 billion nationwide. WRP has 2,800
pending applications, amounting to 475,000 acres. FPP has more than $100
million in pending offers for easements.

This backlog means that for farmers, NRCS professionals, and our partners,
hard work lies ahead. Tough decisions will need to be made as to how to
rank and prioritize the applications.


IMPLEMENTING OUR CONSERVATION STRATEGY

There is more to implementing the farm bill than just getting the word out
and accepting applications as they come in the door. To be truly effective,
we need to be more strategic in three major areas: getting the word out
which includes setting reasonable expectations, making sure the applications
we approve meet local and national priorities, and leveraging Federal
dollars to get the most conservation done.

GETTING THE WORD OUT

The first thing we need to do is increase our effort to get the word out.
We have reached a lot of producers with the farm bill message, but have we
reached them all?

I dont think so. The word is getting out, but it has not reached everyone
who needs to know. This meeting is another way of letting a wider range of
producers know about the farm bill. In November, USDA began a string of
regional informational briefings to reach more farmers and ranchers. NRCS
sponsored the latest informational briefing, In Itta Bena, Miss., last
month. And, USDA will be coming to Victoria, Tex., on January 15.

It might be fair to say we have reached those who are well tuned in to our
usual and even modern ways of getting the word out. But, we have not
done enough to reach other audiences especially the traditionally
underserved farmers and ranchers, including minorities, women, beginning
farmers, and part-time farmers.

The farm bill is designed to extend opportunities for every farmer and
rancher to reach his or her conservation goals. To make that potential a
reality, we have to reach out to every farmer and rancher. So, outreach is
one of our strategies.

When we see farmers and ranchers from all parts of the country and
representing all parts of the producer community participating in farm bill
implementation, we will know our strategy is successful.

FOCUSING ON CONSERVATION GOALS

The second thing we have to do is focus more on conservation goals and less
on programs. Having a lot of applications on file is a good feeling. It
shows farmers and ranchers are interested and eager to participate.

But our grand strategy is not to pile up a large number of applications.
Our strategy is to get as much good, priority-based conservation done on the
ground as we can. Now that we are sure enough farmers and ranchers want to
participate, we must move beyond numbers of applications to consider how to
get the best and most conservation done. We need to look at how
applications relate to a producers overall conservation goals. And we need
to look at how applications relate to national and local conservation
priorities.

The key to reaching individual and local conservation goals is to keep
decisions at the local level. That is why we are keeping program rules
lean and local to implement the new farm bill. The rules are simple and
leave the decision making to local officials. In the case of EQIP, I
anticipate the rule will be 1/3 less in volume, due to our lean and local
effort.

When we see that we are accepting applications based on what they contribute
to conservation on the farm and in the local community, we will know our
strategy is successful.

GETTING MORE CONSERVATION DONE

The third thing we have to do is focus more on getting as much conservation
done as we can, as widely and as wisely as we can, rather than settling for
getting the dollars out the door. The foundation of our effort is to offer
incentives to producers who practice conservation. Part of the idea of
incentives and cost share is to make it possible for producers to undertake
conservation practices that they could not normally afford to do. Another
part of the idea of incentives is to leverage tax dollars to get more
conservation done.

Our strategy should be to use incentives properly and not treat them as
entitlements. We need to look carefully at applications in a number of ways
to be sure we are getting the most for the taxpayer dollar. We need to look
at local farm and ranch communities to see how incentives and cost shares
operate. The same cost share may not be needed everywhere at all times.
The much bally-hooed 75 percent cost-share level authorized in the farm bill
will be the rarity, not the norm.

We need to look at other sources of funds to see how to leverage the Federal
dollar. The Federal government and the producers can get more conservation
done when the cost is shared several ways.

We cannot simply accept the first applications through the door, but must
approve the applications that objectively rank as having the potential of
doing the most conservation work. We cannot award all of the largest
contracts, because there are smaller operations that need the incentives.
We have to do what it takes to gain the participation of traditionally
underserved segments of the producer community.

When we see that we are getting more conservation done per dollar of Federal
investment, we will know this strategy is successful.


CONCLUSION

To summarize, let me say that we have had six months to celebrate passage of
the new farm bill and what I call the birth of the next golden age of
conservation. We have made a strong start toward implementing the new farm
bill, with its tremendous investment in conservation on working lands. But
to be successful in the long run, we need to be more strategic.

We need to make sure every farmer and rancher knows about the farm bill and
has a chance to participate. We can use the continued efforts of
organizations like the Corn Producers Association of Texas to help get the
word out.

We need to focus more on overall conservation goals and less on program
implementation. I mentioned that NRCS needs to focus on accepting
applications that meet local and national priorities. Organizations like
the Corn Producers can help spread the word on these priorities. But,
beyond local and national priorities, conservation activities on any given
farm or ranch should meet the conservation goals of the owner and operator.

Each individual producer needs to look beyond the narrow confines of program
dollars and look at overall conservation needs and priorities. After all,
you are in the business because you love the land and love making it
produce, not because you love applying for farm programs. That is why NRCS
believes in helping you set conservation goals and meeting them, rather than
just administering individual conservation programs.

The first step is for you to get some NRCS technical assistance to figure
out how to meet your conservation goals. The measure of our success in
focusing on conservation goals will be outcomes -- how well we help farmers
and ranchers and communities reach their conservation goals, not how many
acres we treat.

And finally, we need to get the most conservation done that we can for the
money. We need to use incentives properly, and we need to leverage the
Federal funding. Producer organizations can help by developing new
partnerships. The new farm bill gives us the resources to work with new and
existing partners and the flexibility to take on new projects. The more
partners we have, the more conservation we can do. Individual producers
also have a role in stretching the Federal dollar. By being open to new
ways of working and flexible in who you work with, you can get even more
conservation done on the land.

By working together to make the right choices, we can make this new farm
bill live up to its potential. And, that should be good for business.

I look forward to working with all of you to make the next golden age of
conservation a reality.

Thank you.

I'll be happy to answer any questions.