The new Farm Bill has finally arrived, and we’ve highlighted some program changes, key new provisions, as well as entirely new conservation and energy programs.  Without further ado, let’s jump right in to the programs…


Conservation Reserve Program (CRP)
This very successful long-term land retirement program, established in 1985 and administered by USDA’s Farm Service Agency, has been extended through fiscal year 2012.  CRP’s general sign-up and continuous sign-up remain unchanged, but starting Oct 1, 2009 the program area will be capped at 32 million acres, down from 39.2 million acres.

The 2008 Farm Bill modifies the land eligibility requirements so that alfalfa and other multi-year grasses and legumes are to be considered agricultural commodities when grown in a rotation practice approved by the Secretary of Agriculture (the Secretary).  The new bill also clarifies that when alfalfa is grown in an approved rotation practice, it is to be considered an agricultural commodity and can be used to fulfill the requirement that land be cropped in 4 of 6 previous years in order to be eligible.

CRP, under the old Farm Bill, allowed managed haying and grazing (including the harvest of biomass) and the placement of wind turbines (with a commensurate reduction in payment) at the Secretary’s discretion if consistent with conservation of soil, water quality, and wildlife habitat.  The 2008 Farm Bill authorizes routine grazing, the frequency of which is decided by local resource conditions, as well as adds prescribed grazing for control of invasive species as a permissible activity.

There are a couple of new provisions in this Farm Bill’s CRP.  First, $100 million in funding has been authorized for FY 2009-12 in cost-share payments for thinning (trees, windbreaks, shelterbelts, and wildlife corridors) to improve condition of resources on the land. Another new provision affords special treatment of CRP land transitioning from a retiring farmer or rancher to a beginning or socially disadvantaged farmer or rancher.  $25 million in funding for FY 2009-12 has been authorized to facilitate these transactions.   This includes:

• Beginning 1 year prior to contract termination date, the new farmer or rancher is allowed to make land improvements and begin organic certification process.
• The new farmer must develop and implement conservation plan.
• The new farmer is provided the opportunity to enroll in CSP and EQIP.
• Allow them to re-enroll certain partial field conservation practices.
• Requires the landowner to sell CRP land to a beginning or a socially disadvantaged farmer on contract termination date.
• Retiring farmer may receive up to 2 years of additional payments.
  

CRP Conservation Reserve Enhancement Program (CREP)
The 2008 Farm Bill reauthorizes funding for CREP, a joint state/federal program that targets specific agriculture related environmental problems that are significant at the state or national level.  CREP offers additional financial incentives beyond CRP to encourage farmers and ranchers to enroll in 10-15 year contracts to retire land from production.


CRP Farmable Wetlands Program (FWP)
FWP, a voluntary program to restore up to 1 million acres of farmable wetlands and associated buffers by improving the land’s hydrology and vegetation, has been reauthorized and extended through FY 2012.  The total enrolled acreage of FWP is considered part of the overall CRP acreage cap.  State limits on enrolled acreage remains at 100,000 acres for any 1 state, but upon review by the Secretary, the maximum acreage/state may be increased to 200,000 acres (up from 150,000 acres in the previous Farm Bill)

The 2008 Farm Bill expands land eligibility for FWP from land that was cropped during at least 3 of the immediately preceding 10 crop years as well as contiguous buffer acreage to protect the wetlands to now include:

• Land on which constructed wetland is to be developed that will receive flow from row-crop agriculture drainage system and is designed to provide nitrogen removal in addition to other wetland functions.
• Land that was devoted to commercial pond-raised aquaculture in any year during calendar years 2002-2007.
• Intermittently flooded land provided land had cropping history in 3 years between 1990 and 2002 and was subject to natural overflow of prairie wetland.
• Buffer acreage has been expanded to include land that enhances wildlife benefits (in terms of appropriate mix of upland and wetland, as determined by the Secretary).
• On a single tract of land, enrollment is now set at a maximum of 40 contiguous wetland acres.  However, “flooded farmland” has a 20-acre limit.  Participants must refrain from commercial use of the land (newly added participant duty).

Wetland Reserve Program (WRP)
WRP has been reauthorized through FY 2012.  This program requires participating landowners to implement an approved wetlands restoration and protection plan.  Landowners may sell a permanent or 30-year conservation easement to the USDA, or they may enter into a 10-year cost-share restoration agreement to restore and protect the wetlands.  The total acreage cap for WRP has been increased with the 2008 Farm Bill from 2.275 million acres to 3.041 million acres.

There are changes to WRP.  Previous acreage limitations required that the total of WRP and CRP acreage not exceed 25% of a county’s farmland acreage.  Now, in addition to the overall cap of 25%, the acreage limitations have been expanded to require that WRP easements are not to exceed 10% of the county’s farmland acreage.

Previously, eligible land included farmed wetlands or land that was previously converted from wetland to farmland (note: land that was converted from wetland to farmland after Dec 23, 1985 is NOT eligible for WRP), and buffer acreage adjacent to the wetland.  Eligible land has now been expanded to include cropland or grassland that was used for agricultural production prior to flooding from natural overflow of a closed basin lake or pothole.  Also, enrollment of land that has changed ownership during the previous 7 years is now prohibited, with certain exceptions.

In determining the acceptability of easement offers, the Secretary’s decision was based on the extent to which the purposes of the easement program would be achieved, the productivity of the land, and on-farm and off-farm environmental threats of using land for agricultural production.  The Secretary may now also consider the environmental benefits, the cost-effectiveness with a goal of maximizing the benefits relative to the costs, and whether or not the landowner offers to contribute financially to the cost of the easement.  Consideration is also to be given to the likelihood of success of the easement, the offsite environmental benefits, and damages avoided by wetland restoration.

Easement payments have been modified as well.  The 2008 Farm Bill clarifies that easement payments are not to exceed the lowest of the following:

• Fair market value of the land, as determined by the Secretary using appraisal or area wide market analysis or survey.
• Geographical cap, as determined by the Secretary.
• Offer made by the landowner.
• To further the purposes of the program, easements greater than $500K are now to be paid in 5 to 30 annual installments, unless the Secretary grants a waiver allowing a lump-sum payment.  Easements of less than $500K will continue to be paid in 1 to 30 installments.  Additionally, the total restoration cost-share payments are now limited to $50,000 annually to an individual or legal entity, either directly or indirectly.

A new provision to WRP requires the Secretary to submit a report, no later than Jan 1, 2010, that evaluates implications of long-term nature of easements on USDA resources.  This report is to include data on the number and location of easements, an assessment of the impacts that oversight of agreements has on resources (including technical assistance), an assessment of the uses and values of agreements with partner organizations, and finally any additional information relevant to the programs costs and impacts.

The 2008 Farm Bill has also created the Wetland Reserve Enhancement Program (WREP) that allows States, NGOs, or Indian tribes to partner with the USDA in selection and funding of contracts, as long as the selected contracts meet the purposes of WRP.  WREP includes pilot program that allows landowners to retain grazing rights when consistent with long-term wetland enhancement and protection goals.


Wildlife Habitat Incentives Program (WHIP)
WHIP has been reauthorized through FY2012 with CCC funding of $85 million/yr.  The new farm bill increases funding cap on long-term agreements – providing higher levels of cost-share assistance for priority habitat land – to 25%.  Priority may be given to projects that address State, regional, and national conservation initiatives.  Individual annual payments under the program are limited to $50,000, and participation is restricted to private agricultural land, nonindustrial private forest land, and tribal lands.


Environmental Quality Incentives Program (EQIP)
EQIP, established in 1996 to consolidate and better target the functions of the Agricultural Conservation Program, Water Quality Incentives Program, Great Plains Conservation Program, and the Colorado River Basin Salinity Program, has been extended with a funding increase that now totals $7.325 billion through FY 2012.  This new funding is subject to a conservation access provision that requires 5% of the funds be made available for beginning farmers and another 5% for socially disadvantaged producers.  EQIP continues to be subject to the regional equity provision. 

One new provision allows for conservation practices related to organic production and transition are now eligible, but payments to producers or entities are limited to $20K annually and $80K over 6-yr period. 

Cost sharing is now extended to include land or forest management practices and development of conservation or comprehensive nutrient management plans.  The extended provision does limit payments for any practice to 75% of practice costs and 100% of income foregone from practice installation.  That said, beginning, limited-resource or socially disadvantaged farmers or ranchers are eligible for cost-share rates at least 25% above otherwise applicable rates (up to 90%) and advance payments of up to 30%.

EQIP limits payments in aggregate to $300K/person or legal entity for any 6-year period.  For projects of special environmental significance, the Secretary may allow payments up to $450K during any 6-year period.

The criteria for ranking program applications includes national conservation priorities and cost-effectiveness of practices.  EQIP now has additional ranking criteria that includes how comprehensively the project addresses resource issues, and whether it improves or completes conservation system.  To extent practical, similar crop and livestock applications are to be grouped for evaluation purposes.  Maintains “bidding down” prohibition on prioritizing on basis of least cost.

Conservation Innovation Grants (CIG)

• Adds forest management as an activity eligible for grant funds.  Projects that increase conservation efforts by producers of specialty crops also eligible for funding.  Federal share no longer capped at 50%
• Provides payments to producers using innovative technologies and cost-effective methods to address air quality.  Sets aside $37.5 million of EQIP funds annually in FY2009-2012 for projects addressing air-quality concerns.

Agricultural Water Enhancement Program (formerly the Ground and Surface Water Conservation (GSWC) Program)

• Mandates $280 million in CCC funding for FY2009-12.  Expands purpose to include improving water quality on agricultural lands.  In addition to signing contracts with individuals, the Secretary can contract with partners including producer associations, State or local governments and Indian tribes to collectively address water quality concerns on a regional basis.
• Priority to be given to activities proposed by producers according to requirements under EQIP.  Establishes criteria to be considered for prioritizing proposals from partners, and requires priority be given to partner proposals that include conversion of agricultural land to dry land farming, that provide some of their own funds, and that assist producers in States with water-quality concerns, as determined by the Secretary.
• Payments to be in amounts sufficient to achieve program purposes.  Payments can be made for 5 years under partner agreements in States with water quality concerns.

Conservation Stewardship Program (CSP)
The Conservation Stewardship Program replaces the Conservation Security Program.  Existing Conservation Security Program contracts to continue as written, but no new contracts will be initiated after Sept 30, 2008.  CCC funds, as necessary, to be available to fund these contracts.

Enrollment of acreage into the program is authorized through FY2017.  The Secretary is directed to enroll 12.77 million acres/year at an average cost of $18/acre/year, including financial assistance, technical assistance, and other expenses.  CSP is subject to conservation access provision requiring 5% of acres be made available for beginning farmers and another 5% of acres for socially disadvantaged producers.

All privately owned cropland and grazing land (including land under the jurisdiction of an Indian tribe) is generally eligible for enrollment, except:

• Cropland must have been cropped in 4 of 6 years prior to 2008 (except land in long-term rotation)
• Land enrolled in CRP, WRP, or Grasslands Reserve Program is NOT eligible.
• Nonindustrial private forest land incidental to agricultural operation is also eligible but cannot account for more than 10% of acres enrolled in any given year.

Program acreage to be allocated to States is based primarily on each State’s proportion of total national eligible acres, but also takes into account:

• Extent of conservation needs in each state
• Degree to which CSP can help address these needs
• Other considerations in order to achieve equitable distribution of funds, as determined by the Secretary.

The program requires producer contract offers to include all eligible land within a farm.  At a minimum, contract offers must:

• Demonstrate that stewardship threshold is being met for at least 1 resource concern.
• Agree to address at least 1 priority resource concern by the end of the Stewardship contract.

Contract offers are to be ranked for program enrollment according to the following:

• Level of existing conservation treatment on all resource concerns present at time of CSP application, measured as much as possible using conservation measurement tools
• Level of proposed treatment of priority resource concerns, measured as much as possible by conservation measurement tools.
• Number of priority resource concerns that would be addressed to stewardship threshold
• Extent to which other resource concerns would be addressed
• Extent to which environmental benefits are provided at least cost (although producers cannot improve their rank by offering to take lower payment)

All Conservation Stewardship Program contracts are to be 5 years in length and can be renewed for 1 additional 5 year period if the producer demonstrates compliance with contract terms and agrees to adopt new conservation activities, as determined by the Secretary.

A new provision in CSP now requires the Secretary to establish a means for producers to initiate organic certification while participating in new CSP.  The Secretary is also required to ensure that outreach and technical assistance are available to organic and specialty crop producers and that program specifications are appropriate for participation of these producers.

In Conservation Stewardship Program, payments are to compensate producers for:

• Installing and adopting additional conservation activities
• Improving, maintaining, and managing conservation activities already in place.
• Adoption of resource-conserving crop rotations.

Payment amounts are to be based on the cost of installing, adopting, or maintaining conservation activities; the income forgone by producer; and the expected environmental benefits as determined by conservation measurement tools.  Payments cannot be made for expenses associated with animal-waste transport or transfer devices for animal feeding operations.  Total CSP payments to any 1 person or legal entity cannot exceed $200,000 during any 5 year period.