Mr. Chairman and Members of the Committee, I am pleased to appear before you today.

Given the short time available, I would like to focus my remarks on the Conservation Security Program (CSP).

The U.S. Department of Agriculture (USDA) has been moving forward aggressively to implement the program and we are proud of the work that has been achieved thus far. We at USDA are enthusiastic about the prospects of CSP and look forward to making the program available on farms and ranches across America.


The Conservation Security Program proposed rule was published for public comment on January 2, 2004 with a comment period that closed on March 2, 2004. The response from the public was overwhelming with more than 14,000 comments from the public, in a variety of forms including e-mail, paper letters, and facsimiles, including more than 70,000 specific comments. The agency also conducted 10 National listening sessions around the country and many individual sessions in states on the proposed rule. Our staff has worked diligently to assemble the body of comments and ensure that each comment will receive fair consideration and review and we have made the comments available for public viewing and copying at USDA, and have also made the comments available electronically as well. Ultimately, it is this body of public discourse that will drive the next steps of policy decisions on program design. While we are not in a position today to debate the contents of the proposed rule, I would like to put the contents of the proposed rule in perspective in terms of our approach and rationale.



Budgetary Aspects of CSP
Mr. Chairman, the single most misunderstood aspect of CSP is the budget for the program. When the President put pen to paper and signed the 2002 Farm Bill into law, the Conservation Security Program was estimated to cost $2 billion over ten years. I would note that this amount is 400 times the amount originally authorized for the Wildlife Habitat Incentives Program, and 571 times greater that the original funding for the Farm and Ranch Lands Protection Program.

Under revised law, the Congress anticipated an expenditure of less than $7 billion on the program over a ten-year period, with a cap of only $41.443 million for this fiscal year. Through the hard work of this Administration, we have been able to design the program in a way that provides funding obligations in a similar to the way that Conservation Reserve Program obligations are structured. For example, the President’s Budget Request of $209 million for CSP in FY 2005 will represent about $2 billion in funding provided to farmers and ranchers. In total, our proposed CSP program will provide more than $13 billion in CSP assistance to farmers and ranchers – which is an amount far greater than proponents of an open-ended program have been discussing. We are proud of what we are accomplishing, and are looking forward to making funding available to producers this year.

Watershed Approach
A second area of misunderstanding is about our proposed watershed approach. Even though we have been able to maximize funding obligations of CSP, the dollars available will not even begin to satiate the immediate demand. There is a potential applicant pool of 700,000 producers to signup for the CSP program. The CSP statute prohibits ranking applications, but instead would mandate that all applicants be accepted into the program and receive a payment. Given the $41 million available for this Fiscal Year and unknown amounts for FY 2005 and beyond, USDA has proposed a program that is flexible enough to match funding available for any given fiscal year, by making the program available in watersheds and emphasizing enrollment categories. Our approach also deals with the constraint placed in statute on technical assistance at 15% of expended CSP funding. If USDA were to conduct a nationwide signup for CSP, technical assistance costs would far exceed the $41million made available for the program just for the signup. Mr. Chairman, it is clear that we have proposed the best course of action in designing a staged program that can be expanded based upon funding available.

Base Payments and Enhancements
There has also been considerable discussion regarding the way the CSP base payment is structured under the proposed rule. Again, it is critical that one consider the funding available and demand for the program. In order to ensure defensible environmental results for the program, we have proposed placing “increased emphasis on increased conservation.” That is to say, those farmers and rancher who agree to do more, get more in the way of financial support from the program. It is our goal to design a program that is easy to understand for farmers, ranchers, and those implementing the program. We also want to ensure that the program produces demonstrable conservation results that will show the American taxpayer the value of good conservation on working lands.

Conclusion
As I mentioned, our next step is to provide thorough review and consideration to the comments from the public. It will be this input that assists us in finalize the program design. The task will be massive, but we have dedicated appropriate staff expertise to tackle the job. Our goal is to publish a final rule this summer with a signup occurring during FY 2004. USDA is ready to deliver the program to the public and begin seeing results. We consider the CSP to be a brand new day for conservation policy.


I thank Members of the Subcommittee for the opportunity to appear, and would be happy to respond to any questions that Members might have.