Staying on Track with Conservation

Remarks at the National Association of Wheat Growers by Bruce I. Knight, Chief, Natural Resources Conservation Service at the National Association of Wheat Growers

Denver, CO
April 16, 2005


It is a pleasure to be here today to talk a bit about 2002 farm bill implementation and preparations for the 2007 farm bill. As a wheat farmer and former employee of NAWG, I feel right at home this afternoon.

I know this has been a challenging season for many, with several years of drought in some areas. I don’t need to tell you the value of conservation practices when it comes to mitigating low moisture conditions.

You’ve already heard a variety of perspectives on farm policy and where we should go from here. I’m looking forward to sharing mine as well.
70th Anniversary of NRCS

Before I launch into my discussion of the 2002 and 2007 farm bills, there is one thing I want to mention:

This is the 70th anniversary of NRCS.

We have been a partner in conservation since 1935, and wheat growers have always been vital participants in our partnership.

I look at this anniversary year as a good opportunity to celebrate the durable nature of the Conservation Partnership and to make farmers and ranchers and their city cousins more aware of the benefits of conservation on private lands.

Implementing the 2002 Farm bill

Next month will mark the third anniversary of the 2002 farm bill. The bill became law just a week before I became Chief of NRCS, so it and I share parallel histories.

Over the last three years, we have
• Invested billions of additional dollars in conservation.
• Written or revised rules for farm bill programs based on input from thousands of producers and partners.
• Implemented new programs.
• Involved many new partners in conservation.
• Implemented the Technical Service Provider process to help producers plan and implement their conservation activities, and
• Conducted extensive outreach to be sure every farmer and rancher knows about farm bill opportunities.

These three years have been a major challenge, but I think we are now implementing the farm bill pretty smoothly. Which is fortunate, and Congress will be using our performance both last year and during the current year as an indication of how well USDA and the conservation partners can handle additional conservation workload under the 2007 farm bill.

So, let’s look at what NRCS and the conservation partners accomplished in FY 2004 -- with a record investment in conservation during the year (nearly $2.8 billion), including several new conservation programs.

2004 Performance Data

We recently completed tabulating our 2004 performance data for farm bill programs. We posted the information on our web site, and it is stirring up quite a bit of interest.

Financial Assistance Programs --

EQIP
• Financial assistance to producers: nearly $720 million
• More than 46,000 participants (less than 20,000 in 2003)
• 62.6 percent of EQIP funds were associated with livestock concerns

WHIP
• More than $27 million
• More than 3,000 contracts
• 430,000 acres

CSP
• 18 watersheds in 22 States
• Nearly 2,200 contracts
• $35 million in contracts
• Nearly 2 million acres

Easement Programs –

WRP
• $274 million
• More than 1,000 contracts
• Close to 200,000 acres
– Overall, we were at 92 percent of our wetlands target.
– Need to do more to meet the President’s goal of
3 million acres
– Louisiana was the top state with 94 easements.
– Approved the first two Wetlands Reserve Enhancement Program projects -- one in Nebraska and one in Minnesota.

FRPP
• $88 million
• More than 550 easements
• Nearly 115,000 acres

GRP
• Implemented the program in 2004
• $56 million
• More than 1,000 projects
• 283,000 acres

You can find maps and tables with performance data for each farm bill program on the Programs tab of our Website at www.nrcs.usda.gov.

Other 2004 Accomplishments

• Provided conservation technical assistance.
• Applied conservation system plans on more than 27 million acres of crop and grazing lands (area the size of Louisiana).
• Developed and applied nearly 10,000 comprehensive nutrient management plans (up from just over 8,000 in 2003).
• Mapped soils or updated soils maps on 28 million acres (up from 22.5 million acres in 2003).
• Provided emergency watershed protection assistance in nearly 100 cases.

Strategic Accomplishments

• Developed national and local priorities for conservation programs.
• Reduced costs through program efficiencies, management, and automation.
• Increased grant opportunities:
– Conservation Innovation Grants – nearly 200 proposals
– Conservation Partnership Initiative – more than 30 proposals
– Biomass Research and Development Initiative – 650 proposals.
• Successfully reorganized many parts of NRCS to provide even better support to the conservation efforts of America’s farmers and ranchers and enhance technical capabilities.

Rounding out the Conservation Portfolio

We added two new programs in 2004 to round out the conservation portfolio.

Conservation Security Program

The first was the Conservation Security Program.

The first year of CSP—with 18 pilot watersheds—was a great success! This year, we will have 220 watersheds—enough to have at least one in every State and the Caribbean Area.

As you know, we originally planned to have 202 watersheds.
But wheat producers and others encouraged us to include again the original pioneer watersheds.

And we’re glad you did.

However, I want to make clear that this was a one-time, second-chance opportunity. We want to be sure that over the next eight years every farmer and rancher has the opportunity to participate in CSP. That’s why we’re rotating among watersheds.

Let me explain about the rotation. Rotation helps us control costs, minimizing our administrative expenses. The watershed approach is not about water, per se, but a management strategy that helps us contract and stay on target to get payments out this year.

Secretary Johanns announced the 2005 sign-up period in his National Agriculture Day address. The sign-up will run until May 27. It took off like a rocket:

As of April 11:

• More than 20,000 producers attended workshops and more than 20,000 contacted our offices.

• We have scheduled more than 2,000 appointments and completed more than 500 interviews.

We also have published an amendment to the interim final rule for CSP. There is a 120-day comment period on the amendment, and I hope you will submit comments.

CSP is a major change for all of us. It complements our other programs by filling the missing link of conservation for leading-edge conservationists.

We predict that concepts like the self-assessment process, management intensity, enhancement payments and management versus structure payments will spread to other programs.

Let me just mention some specifics of CSP related to wheat farmers. The practices that are helping diversified wheat farmers qualify for CSP include:

• Crop rotation and crop selection
• Residue management (Reduced till)
• Direct seeding (No-till)
• Grassed waterways
• Nutrient management
• Pest management
• Riparian buffers, filter strips and field borders
• Precision agriculture

Grassland Reserve Program

Under the 2002 farm bill, NRCS has also implemented the Grassland Reserve Program. We released the interim final rule for the program last summer. In January, we completed the first conservation easement in the Grassland Reserve Program.

Technical Service Providers

The 2002 farm bill enables us to use consultants to deliver conservation. We worked hard last year to build up our capacity to provide technical support by improving our Technical Service Provider process.

This process gives us a way to provide the increased amount of service demanded by the 2002 farm bill, while keeping government small and keeping functions that are available commercially from becoming part of the Federal government. This is not just plain good management, but also very key during this time of fiscal austerity.

The Technical Service Provider process is actually strengthening the partnership between NRCS and conservation districts, States, professional associations and firms, Tribes, and others who will be providing the service.

We made adjustments to the rule last year to ensure that we would continue to build upon the partnership. The final rule was published in the Federal Register on November 29.

Nearly 2,300 TSPs have completed the certification process.
We anticipate that TSP will continue to grow—with more work and more opportunities in the future.

We also have determined new not-to-exceed rates for TSPs, based on new data. The rate increased overall by about 20 percent. These rates are posted on the TechReg Web site and are being used today. The TechReg site is a wonderful example of e-Government at its best.

EQIP

Before we move on to look at the next farm bill, I want to just touch on what we’re doing in 2005 with EQIP, our largest conservation program.

We have about $740 million for EQIP technical assistance this year, and we’ve already received 88,955 applications. We expect to begin formally approving applications shortly. These incentive payments focus on no-till and precision agriculture strategies.

Over the past several months, States have been holding listening sessions on EQIP, as required by the farm bill.
We want to know how this program is working, how we can improve it.

We need to review our national priorities and identify emerging issues. And we need your help to do that.

The final listening session—a national session—will be held in Washington on May 5—details are on our website. We’re also taking written comments through June 5. Please take the time to give us your recommendations on how we can make this program even more effective.

The 2007 Farm Bill

Let’s turn toward the future for a moment. I see bright days ahead for conservation on America’s private lands.

The overall investment in conservation continues to be high. This year, our budget is about $3.2 billion -- nearly double the $1.7 billion investment in 2002.

The President’s Budget Proposal for 2006 includes $2.7 billion for NRCS—less than $100 million down in total from the 2005 proposed budget. This is a very modest reduction compared to many other spending areas.

We have increases in our Conservation Technical Assistance program and in CSP from $200 to $274 million. Funding for EQIP, WHIP and WRP is up, thanks to the changes in funding for technical assistance.

Preparation for Next Farm Bill

This means we have a lot of conservation to do this year, and in 2006 and 2007.

Over the next three years, the 2002 farm bill provides us about $9 billion for conservation. That represents a tremendous amount of work for us, for our partners, and especially for farmers and ranchers.

Here’s what I’m telling NRCS employees: Implementation of the 2002 farm bill is job one. If we do our job, and do it well, good things will follow.

The benefits of conservation are clear—for the public, for producers and for our economy. Now we just have to make it happen—on the ground. The best preparation for the future is doing a good job today.

At the same time, we know we need to begin thinking about the 2007 farm bill—just as NAWG is doing at this meeting.

Here are some of the major issues that I see.

– Streamline Programs

First, we need to continue our efforts to streamline existing farm bill programs. We have worked hard to improve program management by eliminating duplication of effort and unnecessary steps in conservation programs, and we must continue to do so.

We also have learned some things from the Conservation Security Program that would help make other programs more efficient. We are working to streamline program complexity by simplifying rules, forms, and manuals and offering computer assistance for program management.

-- Maximize Contracts

Second, as I said earlier, we need to get as much conservation done as we can this year.

How well are we serving the public? Are we holding the line on costs? Are we writing as many contracts as we can? How well have we lived up to the confidence Congress placed in us by passing the 2002 farm bill?

– Maximize Performance

We need to maximize our performance. We need to complete unfinished work from 2003 and 2004: look at older contracts, and get them done. The faster we can complete and close a contract, the less it costs. We can’t let those leftovers linger any longer.

We need to
– maximize our effectiveness,
– sign the largest number of contracts,
– benefit as many producers as possible, and
– buy as much conservation as we can.

We need to help the livestock sector comply with the exploding burden of air and water regulations. This is why the President is proposing to increase funding in our Conservation Technical Assistance Program.

We must demonstrate accountability for this increased funding and for all of our Conservation Technical Assistance spending.

Factors in Growth of Conservation

In conclusion, let me say that we are in a good position to continue the gains in conservation that we have made over the past few years. But we also face major challenges.

The status quo will not do the job!!!

We have record budgets for conservation, but the need for conservation continues to grow. Given present budgetary constraints, it is likely that the growth in the Federal investment in conservation will level off.

We will need to demonstrate our effectiveness to maintain and build on the existing support for conservation. And we will need to be creative to come up with new technologies, new program efficiencies, and new partnerships to get even more conservation with the money we have.

If we work effectively and creatively with our conservation partners, we will be able to maintain and build on the high levels we have attained under the 2002 farm bill, and prepare ourselves for even greater efforts under the 2007 farm bill.

Overall, we need a balanced approach.

Measuring the Impact of Conservation

We must meet changing expectations. Federal policymakers increasingly favor incentives over subsidies or income transfers. They expect to leverage resources with long-term commitments and inputs from partners.

The Conservation Security Program is a perfect example.

CSP is a working lands program, and it is the only program that recognizes and rewards ongoing stewardship and provides a strong incentive for others to follow the leaders in conservation.

Policymakers also are demanding measurable results.
They want to quantify success. They want to see specific outcomes.

We need to demonstrate that our programs, our efforts and our partnerships produce tangible benefits. We are making progress toward that goal in CSP.

As we fly across the country, we see the visual impact of conservation—the conservation patchwork. Most of this conservation is related to soil erosion and water conservation-- terraces, windbreaks, sediment basins.

Typically, government agencies report this visible progress toward achieving environmental goals as outputs such as acres managed (for example resource management systems planned or applied on grazing lands); acres created (such as wetlands); or for regulatory agencies—the tangible product of permits issued.

But success in reaching some environmental goals isn’t as easy to see or as simple to measure. How can we verify
• carbon stored,
• air quality improved,
• nutrient or pesticide loading avoided
• and water saved?

These objectives are clearly valuable—but not so clearly seen.

Environmental performance and actual field-based outcomes have proven difficult for agencies to establish and report. NRCS broke through the performance outcome barrier with its use of the soil conditioning index (SCI) during the 2004 CSP sign-up.

The SCI estimates the amount of net carbon stored in the soil and the reduction in sediment leaving the land on an annual basis. This moves us beyond the T-level.

The enhancement payment in CSP is based on the value of the outcomes, rather than calculated on the cost of implementing an activity. Additionally, NRCS is in the process of developing performance-based indexes similar to the Soil Conditioning Index for the major resource concerns, along with a payment structure that corresponds with the environmental benefit produced.

As part of the CSP rulemaking process, we are seeking comment on this approach to using indexes as a basis for measuring and rewarding environmental performance.

Finally, Federal policymakers increasingly expect that conservation programs serve as enablers of market-based solutions.

Conclusion

I am hopeful that investment in conservation will continue to grow. We have shown that:

• Programs can be administered efficiently—and transparently
• Incentives stimulate more conservation
• Many partners are interested in leveraging the Federal dollar
• Both urban and rural constituents support private lands conservation
• Programs work well in a portfolio approach.

World trade obligations are nudging us toward greater investment in conservation. I believe the next farm bill will produce shifts in several areas—even more emphasis on:

• Working lands – economic sustainability
• Incentives
• Voluntary efforts to avoid additional regulation
• Efficient program administration
• Measurable results, and
• Meeting wetlands and forest health objectives

August 29-31, in St. Louis, the White House is convening a Conference on Cooperative Conservation to facilitate the exchange of information and advice related to cooperative conservation.

The conference will involve the Departments of Interior, Agriculture, Commerce, and Defense and the Environmental Protection Agency. Even more importantly, our customers will be invited.

We expect the opinions expressed at the White House Conference will be useful in designing the conservation programs of the next farm bill and beyond.