Opportunities for Cooperative Conservation

Remarks by Bruce I. Knight, Chief, Natural Resources Conservation Service, at the National Council of Farmer Cooperatives Annual Meeting

Carlsbad, CA
January 22, 2005

I want to thank Jean-Mari Peltier for inviting me to be here today. I’ve had the pleasure of working with Jean-Mari over the years, and I can assure you that you are fortunate to have her as your president and chief executive officer.

NCFC and conservation are a great combination. I am excited to have this opportunity to explore some ways in which NCFC and NRCS can continue to work together on conservation issues.

I am happy to be sharing this session with Tim Searchinger from Environmental Defense. Tim is a strong advocate and visionary for incentive-based approaches to private lands conservation.


Private Lands Conservation in the United States

Jean-Mari asked me to start off this morning with a brief description of the conservation programs offered by USDA. But before listing any programs, I want to spend just a minute giving an overview of our conservation efforts.

Private lands conservation in the United States is a cooperative venture between landowners, government agencies at all levels, and nongovernmental organizations. The various individuals and groups involved in conservation have their own ways of getting things done, but we all share the common goals of maintaining a profitable agricultural economy while at the same time conserving, maintaining, and improving our natural resources and environment. The solid foundation of private lands conservation in the United States is the stewardship ethic of our farmers and ranchers. I mentioned that USDA has been helping farmers and ranchers reach their conservation goals for 70 years.

As most of you know, our involvement started with the Dust Bowl, when it became apparent that landowners could not protect their operations from erosion without help from the government. By 1935, things were bad enough that Congress created the Soil Conservation Service, which eventually became the Natural Resources Conservation Service.

Over the past few decades, society increasingly has come to expect landowners and the government to protect other resources, including water, air, and wildlife habitat and to preserve the open spaces around our cities. Over the years, Congress has created a truly unique approach to conservation, a portfolio of voluntary programs to help private landowners produce the environmental benefits that society wants and needs.

The 2002 farm bill recognized the importance of private lands conservation by raising the Federal investment to a record level -- an increase of more than $17 billion over a 10 year period. The farm bill re-authorized many existing programs, modified some programs, and added a host of new programs to the mix. It focused our efforts on working lands and assisting farmers with efforts to comply with federal, State, and local regulations.

President Bush believes strongly that conservation of private lands is vital to the health of our nation's resources and has provided high levels of funding for conservation in each of his budgets. The tremendous investment in conservation, beginning 2-1/2 years ago and continuing through 2007, makes these exciting times for conservation.

We are bringing in more conservation partners, serving more landowners, and getting more conservation done than ever before. The opportunities for cooperative conservation have never been greater.

Now, let me give you a brief overview of the portfolio of conservation programs available to farmers and ranchers and rural landowners. First, let me stress that all of our programs are voluntary. We are not a regulatory agency, but we do help farmers comply with other agencies’ regulations. Landowners can participate or not participate, as they choose.

Conservation Technical Assistance Program

The Conservation Technical Assistance Program – or CTA – has been the foundation of our agency throughout our 70-year history. The CTA Program is the basis for much of the Nation’s private lands conservation infrastructure. CTA plays an important role in applying the technical expertise that gets sound conservation solutions applied on the ground. CTA provides help for farmers and ranchers and others who need advice to help them solve particular conservation problems.


Working Lands Programs

EQIP

As I mentioned, the 2002 farm bill emphasizes conservation on working agricultural lands. Our largest working lands program is the Environmental Quality Incentives Program – EQIP. EQIP provides about a billion dollars a year to promote agricultural production and environmental quality as compatible national goals. Last year, we signed about 48,000 EQIP contracts. EQIP offers financial and technical assistance to help producers install or implement structural, vegetative, and management practices.

CIG

EQIP also includes funding for Conservation Innovation Grants CIG. These grants stimulate the development and adoption of innovative conservation approaches and technologies in conjunction with agricultural production. The grants go to non-Federal governmental or non-governmental organizations, Tribes, or individuals for projects that accelerate technology transfer and adoption of promising technologies and approaches to address some of the Nation's most pressing natural resource concerns. We’ll speak a bit more about this later.

CSP

Our newest program for working lands is the Conservation Security Program – CSP. CSP is a new approach. It recognizes conservation achievements on working farm and ranch lands by identifying and rewarding farmers and ranchers who are meeting high standards of conservation and environmental management on their operations. No other Federal conservation program rewards agricultural producers for their overall conservation effort.

CSP motivates producers to be better stewards. It provides strong incentives for producers to improve their stewardship sufficiently to fully participate in the program. As former Secretary Veneman was fond of saying, “CSP rewards the best and motivates the rest.”

We got CSP off to a great start last year, investing $41 million on farms and ranches in 18 watersheds across 22 States. This year, we have about $200 million in CSP, enough to fund 202 watersheds -- watersheds in every State and the Caribbean Basin. We’ll talk more about this later.

WHIP

The Wildlife Habitat Incentives Program – WHIP – helps producers who want to develop and improve wildlife habitat on their land. WHIP includes both technical assistance and up to 75 percent cost-share assistance to establish and improve fish and wildlife habitat. WHIP agreements between NRCS and the participant generally last from 5 to 10 years from the date the agreement is signed.


Easement Programs

Other USDA conservation programs are designed to use easements and rentals to protect agricultural land or ecosystems from development.

CRP

The Conservation Reserve Program – CRP – is administered by the Farm Service Agency to encourage farmers to convert highly erodible cropland or other environmentally sensitive acreage to vegetative cover.

CREP

The Conservation Reserve Enhancement Program – CREP – is an offspring of CRP that funds unique State-federal partnerships to assist landowners in installing specific conservation practices, such as buffers. CREP is only available in specific States at any given time. The details are on the Farm Service Agency web page.

WRP

The Wetlands Reserve Program – WRP – offers landowners technical and financial assistance to protect, restore, and enhance wetlands on their property. WRP has attracted quite a bit of attention as one way in which landowners can contribute to meeting President Bush’s goal of restoring, creating or protecting 3 million affected acres of wetlands over the next 5 years.

GRP

Our newest conservation easement program is the Grassland Reserve Program – GRP – jointly administered by NRCS, the Farm Service Agency, and the Forest Service.
The program will conserve vulnerable grasslands from conversion to cropland or other uses and conserve valuable grasslands by helping maintain viable ranching operations.

FRPP

The Farm and Ranch Lands Protection Program – FRPP – provides matching funds to help purchase conservation easements to keep productive farm and ranchland in agricultural uses. USDA provides up to 50 percent of the fair market easement value, with State, Tribal, or local governments and non-governmental organizations coming up with the rest.


Other Programs

We also administer the Resource Conservation and Development Program – RC&D – which for more than 40 years has been helping accelerate the conservation, development and utilization of natural resources in rural areas across the country.

And finally, NRCS also has programs for watershed protection and flood prevention, watershed rehabilitation, emergency watershed protection, and floodplain easements. As an example, Congress authorized $250 million late last year through an emergency supplemental appropriation for the Emergency Watershed Protection Program. Much of this funding is being used for natural resources-related recovery work from this past year’s hurricanes in the Southeast. I will be touring similar projects this afternoon devoted to fire recovery.

This gives you a general idea of the scope and magnitude of the programs we have available at USDA to help farmers and ranchers reach their conservation goals.


Opportunities for Cooperative Conservation

Now, let’s look at some ways in which agricultural cooperatives might be able to get involved in helping local producers benefit from the assistance offered by the portfolio of programs.

Technical Service Providers

One way agricultural cooperatives can get involved in conservation is by improving the access of co-op members to Technical Service Providers – called TSPs. The workload created by the conservation title of the 2002 farm bill is so large that NRCS could never do all the work in-house.

We are relying on a large number of Technical Service Providers from the private sector to help us get the job done. We certify these providers to perform work related to various conservation practices in particular geographic areas. Right now, we have about 2,200 certified TSPs nationwide. Many of these providers are hired by the landowner and paid by the landowner using funds from their conservation program contracts with USDA. Others are work under contract with the State NRCS offices. We also set not-to-exceed rates for these services, based on local market factors.

Cooperatives have expertise in many of the technical disciplines involved in conservation, so they are in an ideal position to add to the pool of certified Technical Service Providers in many rural areas. We do need more TSPs in many parts of the country, and we are particularly short on minority TSPs. It is important that local landowners have access to local service providers who know the local communities and with whom they can have a comfortable working relationship.

Cooperatives could be very effective providers of technical services, such as developing Comprehensive Nutrient Management Plans with livestock producers – given the trust and confidence that producers have in the expertise of their cooperatives. Other possible areas of expertise include irrigation water management, nutrient management, integrated pest management, feed management for nutrient output reduction, and grazing management.

In essence, there are opportunities as TSPs for anyone who has expertise in either the management aspect or the engineering aspect of conservation practices – anything from conservation planning to design, installation, or checkout of approved conservation practices.

Last year, we spent more than $40 million on technical service providers, and I am confident that figure will grow this year.

Conservation Innovation Grants

Cooperatives could also get involved in Conservation Innovation Grants – CIGs. We will be awarding almost $15 million in grants this year to groups and individuals who want to prove or demonstrate the effectiveness of innovative conservation approaches and technologies. Funding for these grants is part of the Environmental Quality Incentives Program.

Last year, we awarded more than $14 million in grants to universities, nongovernmental organizations, agribusinesses, State governments, resource conservation and development councils, conservation districts, and individuals. The federal contribution may not exceed $1 million for a single project, and the grantee has to come up with at least 50 percent of the total project cost from nonfederal sources.

These grants have been very competitive, so only the most original and innovative proposals are funded. We have funded grants for everything from tillage practices to manure management, grazing systems, alternative energy sources, water quality, and integrated pest management.

As your conference slogan implies, I think co-ops could be effective both in coming up with innovative ideas and developing sources for the nonFederal funding. We are accepting applications now through the end of March for this year’s grants.

Energy Biomass Research and Development Initiative

For those of you into ethanol or biodiesel, listen up!

Another grant program that cooperatives could participate in is the USDA-Department of Energy Biomass Research and Development Initiative. This year the two departments will be awarding $15 million in grants to carry out research, development and demonstrations on biobased products, bioenergy, biofuels, biopower and related processes. NRCS is soliciting proposals through the middle of February. We anticipate that the grants will range from $250,000 to $2 million each.

Energy Biomass Research and Development Initiative funds will be awarded competitively based on technical merit and program priorities identified in the solicitation package. Applicants must come up with a minimum of 20 percent of the cost of the project.

Conservation Partnership Initiative

Another area for possible cooperative conservation is our Conservation Partnership Initiative – CPI. We awarded nearly a million dollars in CPI funds last year to support the development of locally led solutions to pressing natural resource problems and to help farmers and ranchers cooperate and share information to address environmental challenges. CPI funds are available in watersheds of special significance and other geographic areas of environmental sensitivity. State and local governments, Tribes, and nongovernmental organizations with a history of working with agricultural producers are eligible to participate. We are accepting applications now through mid February for this year’s CPI funds.

Conservation Security Program

Some cooperatives could be of great help to their members and to NRCS when it comes to identifying and selecting watersheds to participate in the Conservation Security Program each year. You would do this by advising your State Technical Committee. Eventually, landowners in every watershed in the United States will have a chance to participate in CSP. But we are having to choose which watersheds will participate in the early years of the program.

To qualify for CSP, producers must be able to document their conservation practices. Cooperatives can help producers in their efforts to qualify for CSP by helping them with documentation systems for such things as nutrient and pesticide use.

We are looking for watersheds that have high-priority resource issues to address – especially issues that match the State priorities. We are also looking for watersheds in which the landowners have a history of good land stewardship. Cooperatives are in a good position to make a suggestion when the producers they serve meet these criteria.

Of note for many of you in this room is that CSP specifically provides support for renewable energy use. Biodiesel or ethanol use can add to the total CSP conservation payment.

Risk Management

Any of you who are involved in loaning money to agricultural operations or providing them with insurance might also be interested in how cooperative conservation could help you manage risks. Producers have to make decisions every day on how to allocate their resources – including which conservation programs to participate in and what projects to undertake. Advising them on the feasibility of projects that reduce the risks associated with agricultural production can be good for both the individual operator and those whose well being depends on his or her success.

Conservation programs can help with waste management systems, rinse pads, fuel containment structures, and other projects that reduce risk to the producer, the environment, and the lender. Conservation programs can help producers comply with regulations, such as Concentrated Animal Feeding Operations, Endangered Species Act, and cultural resources.

Regulatory compliance reduces the risk of government or legal action against producers. Good conservation assures the investment – and its resale value – will be maintained and likely enhanced.

Other Possible Areas of Cooperation

Most of our programs involve contracts with individual producers, so our opportunities to apply these funds through groups are rather limited. We found these limitations to be a real problem in getting work done on Indian reservations, because in some cases the tribal government needs to sign the contracts, rather than the individual producers. It took some innovative thinking, but we have overcome that challenge. It may be that you will come up with some great ideas about how cooperatives could participate in conservation if the rules were a bit different.

Maybe there are projects that are too large for individual operators, but just right for a cooperative. If you come up with appropriate projects, we will work with you to see how we can get the job done.


Conclusion

I hope I have given you some food for thought as you contemplate how cooperatives can participate in what we call “The Next Golden Age of Conservation.”

Let me congratulate you again on undertaking your new policy initiative on cooperative conservation. I look forward to working with you to get more conservation done on America’s agricultural lands.