Working Lands ProgramsFood, Conservation, and Energy Act of 2008

Jim PeaseDept of Agricultural & Applied Economics

Virginia Tech

Jim.Pease@vt.edu540/231-4178

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From Aillery, M. “Contrasting Working-land and Land Retirement Programs, Economic Brief No. 4, ERS/USDA, March 2006

Principal “Working Lands” Programs

• Environmental Quality Incentives Program (EQIP). Funding (“to the maximum extent practicable”) FY2008-2012 is $7.325 billion

• Conservation Stewardship Program (CSP). Funding (“to the maximum extent practicable”) for 12.769 million acres enrollment per year over FY2009-2017 at average contract payment of $18/acre

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Environmental Quality Incentives Program (EQIP)

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Environmental Quality Incentives Program (EQIP)

• Voluntary program providing financial and technical assistance to protect water, air and soil quality and wildlife habitat by implementation and management of conservation practices on livestock and cropping operations

• Conservation practices include: – Structural– Land management– Vegetative– Forest management– Conservation plan development

• Emphasis on assisting livestock operations to meet regulatory requirements, available nationally, no previous conservation practice required

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EQIP Principal Changes• Increased funding FY2008-2012 to $7.325 billion• Allows practices related to:

– livestock air quality concerns– organic transition or production– water conservation/irrigation efficiency

practices – comprehensive Nutrient Management Plan

• Agricultural Water Enhancement Program to fund water quality and water conservation activities

• Payment limit reduced to $300,000• Modifies evaluation process of contract proposals

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EQIP Land Eligibility

– Land which agricultural commodities, livestock, or forest-related products are grown, including cropland, grassland, rangeland, and pasture land

– Other private agricultural land, such as cropped woodland, marshes, or agricultural land used for livestock production

– Nonindustrial private forest land

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Ranking of EQIP Applications Based on:

• Cost-effective• Comprehensive and effective• Fulfill EQIP purpose• Improve conservation practices/

systems

(similar crop/livestock operations grouped for evaluation)

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EQIP Contracts

• Term 1-10 years• Payments cover costs of

structures/practices (max 75%) and income foregone (max 100%)– For limited resource, beginning, or socially

disadvantaged producers, payments for costs incurred are lesser of 25% over the regular rate, or 90%

• Payment limit $300,000/person over 6 years

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Conservation Stewardship Program (CSP)

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Conservation Stewardship Program (CSP)

• Voluntary program providing payments for maintenance/adoption of conservation practices that – Address a state-defined resource concern– Are operated beyond a threshold

resource/environmental management level • Replaces/revamps the 2002

Conservation Security Program beginning FY2009– Tiered payment system eliminated– Watershed-based eligibility eliminated

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CSP Land Eligibility

– Private agricultural land, including cropland, grassland, prairie land, improved pasture, rangeland, and agro-forestry land

– Forested land incidental to agricultural operation

– Other private agricultural land, such as cropped woodland, marshes, or agricultural land used for livestock production

– Tribal agricultural land– Nonindustrial private forest land

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CSP Priority Resource Concern

• 3-5 resource concerns identified by NRCS in consultation with a state Technical Committee as priority for a watershed or other area within the state

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CSP Funding Allocation

• Allocation by state based on: – proportion of national eligible acres– conservation needs in each state– expected effectiveness of program

implementation– other regional equity considerations.

• Requirement of 5% funding for beginning producers and 5% for socially disadvantaged producers

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Conservation Stewardship Plan

• Must have met threshold of at least 1 resource concern

• Must propose to meet/exceed stewardship threshold of at least 1 priority resource concern by installing/adopting conservation activities and improving/maintaining /managing conservation activities

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Ranking of CSP Applications Based on:

• Level of conservation treatment• Effectiveness of proposed

conservation treatment on priority resource concerns

• Number of priority resource concerns proposed

• Other resource concerns addressed• Benefit/cost relative to other

proposals

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CSP Contracts• Continuous enrollment• 5-year term, renewable for another 5• Annual payments based on costs incurred,

income forgone, and environmental benefits• Specialty crop and organic producers may

participate• CSP payments now allowed for:

– organic certification– on-farm conservation research/demonstration or

pilot testing• Supplemental CSP payments for resource-

conserving crop rotations• Payment limitation $200,000 total over 5

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Critical Elements of Working Lands Programs

• Annual Congressional appropriations?• Program access, benefit/cost affected by state

allocation• EQIP:Program requests exceed funding 4:1• CSP:USDA “reliable conservation measurement

tools”?• Technical assistance availability?• “Stickiness” of conservation practices after

contract expires?• Enrollment with current high commodity prices?

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Final Notes

• Environmental Services Markets: Mandate for USDA to develop technical guidelines for measuring and reporting environmental services on farm, ranch, and forest lands; and guidelines for registry of benefits; priority for emerging carbon markets

• Chesapeake Bay Program watershed funding $188m FY2009-2012

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