Conservation and Profitability: Farmers and Ranchers Can Have Both

New Orleans, LA
January 20, 2004

Thank you, Senator (Robert) Jackman. It is an honor to have been invited to be here with you today to talk about natural resources and profitability on America’s farms and ranches and about what government, Federal and State, can do to keep agriculture strong while helping farmers and ranchers do their part in maintaining and improving our natural resources.

NRCS is the agency within the U.S. Department of Agriculture that enables voluntary conservation on private lands. We provide technical assistance and financial assistance, largely through cost-share programs. We also develop o and maintain enabling platforms, such as technical standards, digitized soils information and plant materials. The culture of NRCS is built on decentralization and locally led conservation.


A More Complex, More Regulatory World

Citizens in the United States and other developed nations have rising expectations regarding the environment. Industries that fail to clean up their act face increased regulation which usually means increased expenses and less profit. Producers know very well, that in a post-Bovine Spongiform Encephalopathy (BSE) world, forces outside the farm or ranch gate can often have greater impacts on their operations than what happens from fence-row to fence-row.

A problem like climate change is an excellent example. The decisions government makes about climate change will certainly have implications for farmers, ranchers, and forest land owners. Government has to be very careful in implementing regulations. Regulation can have many effects, including causing production to move from state to state, region to region, and even nation to nation to control costs and improve profitability.

We live in a global economy, and the fact is you can grow corn or rice, cows or sows, lots of places in the world, not just in the United States. When production moves out of the country, we lose on many fronts. Obviously, we lose jobs and profits in this country, but we also lose any control we might have over the environmental issues that concern us. The best solution all around is to create incentives that allow agriculture to produce food and fiber and environmental benefits in this country, rather than forcing production overseas.

The proper role of government is to set goals and create an environment in which producers can reach those goals while preserving their profitability. For example, President Bush has set an ambitious agenda for reducing greenhouse gasses. He challenged USDA to recommend targeted incentives for greenhouse gas offsets from agriculture and forests. He also challenged us to help the Department of Energy in setting up a new and improved registry for crediting private sector actions to offset reductions in greenhouse gases.

The Natural Resources Conservation Service bases its entire philosophy on the conservation ethic of our customers, the producers. We have seen what producers have done voluntarily to reduce soil loss, improve water quality, and improve wildlife habitat. The voluntary approach works best when we create win-win, incentive based tools. On a policy level, we should be looking for ways to leverage public and private resources.


The Place of Agriculture in Society

While we work to meet society’s demands for environmental quality, we must always remember the important place of agriculture in our society. People eat food, and someone has to produce it.

In this country, we are blessed with the most productive agricultural economy in the world. We not only feed ourselves, but we help feed the world. Too often the costs of implementing conservation measures fall on the landowner, while many of the benefits go to the public. So, to keep agriculture strong, we must find ways for landowners to recover many of the costs.

In short, the focus on our working lands must remain the production of food and fiber.


The 2002 Farm Bill

Fortunately, with growing cooperation between Federal agencies and the passage of the new farm bill, we are beginning to make it more economical for domestic producers to do their job and meet regulatory objectives.

As you have probably heard, the new farm bill represents a level of investment in conservation that has not been present in any previous farm bill – an increase of more than $17 billion in conservation spending over ten years.

As President Bush said when he signed the farm bill, “This bill offers incentives for good conservation practices on working lands. For farmers and ranchers, for people who make a living on the land, every day is Earth Day. There are no better stewards of the land than people who rely on the productivity of the land. And we can work with our farmers and ranchers to help improve the environment.”

I am excited about the new farm bill because it gives us the ability to implement win-win solutions, supported by Federal and State Governments and worked out by local conservation leaders, and landowners, operators, and managers. And, that really goes back to what I learned, first from my father, and, later firsthand, as a landowner – a recognition that, while I may hold title to some of that land out there, I am only a steward of that land for a certain amount of time.

The beauty of the new farm bill is that it is specifically designed to reward landowners who have been practicing good conservation or who want to start practicing good conservation. It is directed at achieving both desirable environmental results – outcomes – and economic strength.

Certainly, producers can get help in doing what it takes to meet environmental requirements. And that kind of help is important. But the farm bill also greatly enhances the ability of operators to protect wetlands, water quality, and wildlife habitat in ways that go beyond regulatory requirements.

The Conservation Security Program

One feature of the 2002 farm bill that will help us move beyond programs to overall conservation goals is the Conservation Security Program. CSP recognizes the valuable conservation work farmers and ranchers have done historically and provides additional incentives for those who strive to do more. CSP represents a new direction for conservation on private lands.

In the past, much of the Federal investment in conservation went to idling marginal lands. Under the new farm bill, most of our increased investment goes to incentive and cost-share programs to promote conservation on working lands. In the largest single year under the new farm bill, our flagship working lands program, EQIP, will invest $1.3 billion in conservation practices – as much as it did in the entire life of the previous farm bill!

CSP takes conservation on working lands a step farther by adding a tool which shifts the emphasis of conservation in the direction of recognizing and stimulating conservation – what Secretary of Agriculture Ann Veneman refers to as “Rewarding the Best and Motivating the Rest”.

This will be a big year for the Conservation Security program, conceptually, if not on the ground. We have just issued the proposed rule for the program, with a comment period running until March 2. We will also be having public forums in several of your States to receive public input. I hope you and your constituents will take the time to comment.

The omnibus appropriation bill now in Congress only provides $41 million for the Conservation Security program in Fiscal year 2004, but I feel confident that Congress will greatly increase the funding in the coming years.

Technical Service Providers

I would like to speak for a few moments about one of the mechanisms the farm bill contains to make this massive investment in conservation work is the use of Technical Service Providers to help get the work done.

Technical Service Providers come from outside the federal government. They give farmers and ranchers a way to obtain these technical services locally. We have used our on-line certification system to certify more than 1,400 providers from all over the country, with another 1,100 applications in process. Essentially, we are creating an entire new industry of conservation providers. With that industry comes the opportunity to accomplish more conservation. Producers can choose a Technical Service Provider by going to our TechReg site on the Internet.

Part of creating the Technical Service Provider process was developing not-to-exceed rates for the various services in each State. We have developed the rates and made them available on the Internet – also on the TechReg site.

The number of certified Technical Service Providers varies dramatically among the States. Illinois has more than 200 providers. Wisconsin has more than 100. Many States have 25 or 50 or even 75 providers. And I am talking about providers who are actually based in the State. Other providers are certified in several States.

Last fiscal year, we obligated more than $23 million for technical services. That money went into your State economies through private vendors, State agencies, conservation districts, private organizations, county governments, and others.

We have found that some of the best opportunities for us to add capacity have not been with commercial consultants, but with the State agencies responsible for conservation, agriculture, and wildlife. These relationships are evolving through negotiations between your State agency heads and our State Conservationists in each State.

Leveraging Public Funding

So, here we are with a record investment in conservation; a host of new and expanded programs designed to stimulate even greater efforts in conservation, including the Conservation Security Program; and a Technical Service Provider system in place to help get more conservation done.

All that is excellent news, but, with that news, comes another challenge. There is so much need for conservation, and so much interest in conservation, that all that money, all these Federal programs, and all these service providers can’t hope to get the job done.

We have backlogs in applications for all of our Federal conservation programs. The strong demand for conservation means that all of us who are involved in conservation, whether at the Federal level or the State level, must focus on getting as much conservation done as we can, as widely as we can, rather than settling for just allocating the dollars we have available in our budgets.

The foundation of our effort is to offer incentives to producers who practice conservation. Part of the idea of incentives and cost-shares 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.

Another way to get more conservation done is to bring more partners into the conservation effort. We need to look at other sources of funds to see how to leverage Federal and State dollars. We can get more conservation done, at less cost to the producer, while meeting priorities, when the cost is shared several ways.


Conclusion

In conclusion, let me summarize the things I think we in the Federal Government and you in State government can do to maintain and improve our natural resources while promoting profitability for America’s farmers and ranchers.

First, we must push for environmental solutions based on voluntary action, measurable outcomes, and local leadership, rather than on relying too much on regulation. We need to create a regulatory environment that promotes the economic strength of our agriculture industry –an environment that allows farmers and ranchers to earn a decent living while meeting the environmental needs of our society.

Second, we must continue to use a variety of methods that provide technical and financial assistance in a flexible way that encourages farmers and ranchers to do more conservation. Programs at the Federal and State level should be complementary and inclusive. That is, participating in one program should not preclude participation in others.

Programs should encourage producers and government agencies at all levels to bring in more partners to participate in conservation, rather than making it hard to bring in such partners. The Conservation Security Program is a good example of this concept. It rewards producers for their conservation activities, whether their accomplishments are the result of Federal or State programs or work with partner organizations.

With the right regulatory climate and a commitment to flexibility and inclusiveness, we can all do our share to help farmers and ranchers meet their conservation goals and maintain their profitability and that is what the next golden age of conservation is all about.

Thank you.