The Farm Bill: Soil and Water Conservation Issues

Jeffrey A. Zinn
Environment and Natural Resources Policy Division

Updated December 29, 1995

IB95027

CONTENTS

SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
-- Evolution of Federal Resource Conservation Issues
-- The Current Conservation Effort
-- Other Programs and Issues
-- Conservation Issues in the 104th Congress
-- -- Conservation Appropriations
-- -- Reconciliation
-- The Farm Bill
LEGISLATION
CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS
FOR ADDITIONAL READING

SUMMARY

Resource conservation topics are a part of the farm bill debate. The 104th Congress has held hearings exploring conservation themes and heard from many interests, most of whom have announced proposals and positions. The Clinton Administration announced guidance on farm bill issues on May 10, 1995.

Congress is both reviewing existing programs and considering new approaches. Debate on existing programs focuses on reauthorization of the Conservation Reserve Program and possible amendments to the reserve, swampbuster, and conservation compliance. New approaches may include increasing program effectiveness and efficiency, explicitly addressing private property rights, and identifying opportunities to tie together agricultural interests with pending environmental legislation. Numerous proposals dealing with these topics have been introduced.

An important component in deliberations in this Congress is the conservation budget. While it was significantly reduced in FY1995, FY1996 appropriations (P.L. 104-37) provide constant funding overall, and even increased some programs.

The House budget resolution for FY-1996 (H.Con.Res. 67) would reduce or terminate most conservation programs, while the Senate budget resolution (S.Con.Res. 13) is not specific. Congress passed reconciliation legislation (H.R.2491), which would implement the funding levels set in the budget resolution through 2002. It included provisions to amend and extend the Conservation Reserve and Wetland Reserve Programs and create a new cost-sharing Livestock Environmental Assistance Program; net savings attributable to these provisions are $342 million. President Clinton vetoed this bill.

Other conservation issues remain to be addressed in separate farm bill legislation, now being referred to as the "rump farm bill." Representative Allard, chair of the House Agriculture subcommittee dealing with conservation, introduced a conservation title (H.R. 2542) on Oct. 26, 1995. The House Agriculture Subcommittee on Resource Conservation marked up a substitute version of H.R. 2542 on Nov. 8, 1995. Senators Dole, Lugar, Craig, and Grassley introduced a conservation title (S. 1373) on Nov. 1, 1995. According to committee staff, this bill will be replaced before the committee acts.

Behind many of the specific proposals is the continuing question whether traditional approaches to soil conservation can be expanded to accommodate broader environmental concerns in agriculture, or whether new approaches and programs are needed. Support for traditional approaches has been voiced by key agricultural leaders in the 104th Congress.

The conservation debate has changed from earlier years. In 1985 and 1990, when the two most recent farm bills were enacted, Congress created many new initiatives and greatly expanded the conservation agenda. The debate this year is centered on addressing existing problems and decreasing activities viewed by some as excessive and disruptive.

MOST RECENT DEVELOPMENTS

Resource conservation topics are a central part of the farm bill debate. The agriculture committees in both Chambers have held hearings to review accomplishments and receive recommendations. The new leadership in both Chambers has changed the debate over both specific proposals and broader philosophies about the role of Government in farm policy. Another influence on the debate is that actions to deal with the budget deficit, through the budget reconciliation process, are likely to limit the feasible policy options through 2002. Congress adopted reconciliation provisions that would amend the Conservation Reserve and Wetland Reserve Programs and create a new cost-sharing program, the Livestock Environmental Assistance Program. The net savings attributable to these changes over the next 7 years is $342 million. President Clinton vetoed this bill.

Subcommittee chair Allard introduced a conservation title for the farm bill on Oct. 26, 1995 (H.R. 2542); the subcommittee marked up a substitute bill on Nov. 8, 1995. Senators Dole, Lugar, Craig, and Grassley introduced a conservation title on Nov. 1, 1995 (S. 1373). on Nov. 2, 1995, the Department of Agriculture held a "hearing" on conservation topics, citing a lack of congressional exposure for the policies that are currently being discussed. Beyond this hearing, however, the Clinton Administration has been low key since it issued guidance in mid May on what it would like to see in a farm bill.

The House passed a Clean Water Act reauthorization bill (H.R. 961) that contains wetland and non point pollution provisions and property rights protection legislation (H.R. 925) that could tie in with the farm bill. Senate action on comparable Clean Water Act legislation is not anticipated soon, but the Senate Judiciary Committee recently approved property rights legislation (S. 605). Endangered species legislation is also being considered in both Chambers that could tie in with elements of a farm bill conservation title.

BACKGROUND AND ANALYSIS

Evolution of Federal Resource Conservation Issues

Conservation of soil and water resources has been a public policy issue for more than 50 years, an issue repeatedly recast as new problems have emerged or old problems have resurfaced. Two themes have dominated the debate. One has been that high levels of soil erosion can lead to a decline in farmland productivity. According to a 1992 SCS survey, cropland erosion totals 2.13 billion tons per year. This is in the annual rate decline of 1.0 billion tons from the 1982 estimate. Both the average rate of loss and the percentage of cropland suffering loss have declined in recent years, largely in response to the programs that have been implemented during the past decade.

The second theme has been that water resources should be available for agriculture in quantity and quality that enhance farm production. Water issues take many forms. In the arid West, water supply questions revolve around maintaining dependable sources. In the humid East, water issues have centered on maintaining stream conditions that enhance farming by controlling floods and streambank erosion.

Congress has responded repeatedly to these themes by creating new programs or revising existing programs. Most of them are administered by two agencies. The Natural Resources Conservation Service (NRCS, formerly the Soil Conservation Service) provides technical assistance to producers who wish to plan, install, and maintain conservation practices. The Consolidated Farm Services Agency (CFSA, formerly the Agricultural Stabilization and Conservation Service) provides cost-sharing assistance to producers as an incentive to encourage them to practice conservation. (Reorganization legislation enacted in 1994 shifted the smaller cost-sharing programs to the NRCS). These programs were designed to resolve resource problems on the farm, with the primary benefits accruing to the farmer and to agriculture.

By the early 1980s, concern was growing, especially among environmentalists, that traditional programs were ineffective in dealing with environmental problems (especially off the farm), which were often caused by widely accepted agricultural practices. Publicized instances of significant problems, such as water pollution combined with large estimates of the total cost of offsite impacts of soil erosion, increased awareness and altered the debate over the most appropriate policy responses.

Congress responded by enacting four major new conservation programs in the conservation title of the 1985 Food Security Act. This response was a watershed event in the evolution of resource conservation policy. One of these programs, the Conservation Reserve, greatly increased the Federal financial commitment to conservation, and the other three, sodbuster, conservation compliance, and swampbuster, created a new approach to conservation. With the exception of swampbuster, these provisions were designed to address excessive soil erosion.

The conservation provisions enacted in the most recent farm bill, in 1990, reflected a rapid evolution of the conservation agenda over the intervening 5 years. By 1990, Congress concluded that soil erosion was adequately addressed in legislation and that the conservation agenda should be expanded. The growing influence of environmentalists and other non-agricultural interests in the formulation of agricultural policy contributed to this conclusion. This changing perspective led to a new theme for the conservation title in 1990: water quality. While some provisions in the 99 subsections of the conservation title and in other titles amended the four programs enacted in 1985, most addressed other environmental topics, including groundwater pollution, water quality, and sustainable agriculture.

Since 1990, Congress has debated whether new approaches and programs are needed. Congress concluded in the 1990 farm bill that the traditional approaches to solving resource problems -- voluntary participation, incentive payments, technical assistance, and the like -- remain the best way to respond to the expanding array of environmental concerns. This approach continues to be supported by numerous agricultural interests. Critics counter that many environmental problems exceed the capabilities of current programs to respond, both because the problems and concerns have changed and because of limitations in the Department and its agencies.

In 1995, the debate has changed markedly, under new leadership in both Chambers. Where the 1990 and 1985 farm bills resulted in significant new conservation initiatives, the 1995 debate appears to be over reining in some of these programs, which are viewed as excessive and intrusive on farmer activities and decisions. Where environmental interests had a major role in crafting provisions in 1985 and 1990, commodity interests appear to have a much stronger voice in the deliberations this year. These changes may result in provisions that a very different from the past two farm bills.

Private property rights have become a prominent component of this debate. Property right advocates contend that landowners should be compensated when Federal programs, including those affecting agriculture (especially wetland protection and endangered species), reduce the value of land. Other counter that commodity programs already enhance farmland values by up to 20% and more, and this is another reason to reduce or eliminate them. (For more information, see The Property Rights Issues, CRS Report 95-200 A.)

Congress has also debated whether USDA is the most appropriate agency to implement broader environmental efforts. Supporters of the USDA role contend that it has a long history of interacting with the residents of rural America through numerous programs and agencies, and that the effectiveness of programs rests on rural acceptance and broad partnerships. They emphasize the importance of a local delivery system. Critics counter that success using these programs has been limited in relation to Federal costs, that USDA serves the interests of commercial agriculture and the farm economy first and foremost, and that USDA does not have the expertise or motivation to implement some of the broader environmental efforts. Aspects of this debate have been a subject of frequent oversight hearings on implementing conservation programs. Reorganization legislation, enacted by the 103rd Congress, and the reinvention and downsizing initiatives of the Clinton Administration have altered the capability of USDA agencies to deliver conservation at the local level, and may affect the debate. Part of this conservation debate will be whether to include provisions that tie into proposed revisions to the Clean Water Act and the Endangered Species Act.

The Current Conservation Effort

USDA's current conservation effort is centered on three activities; implementing the Conservation Reserve Program, implementing the compliance programs on highly erodible lands (HEL), and carrying out wetland protection responsibilities.

Conservation Reserve. Under the Conservation Reserve Program (CRP), producers can bid to enroll highly erodible or environmentally sensitive lands into the reserve during signup periods, removing it from production for 10 years. In return, farmers receive annual rental payments, as well as cost-sharing and technical assistance to plant conserving vegetation on land in the reserve. The program goal is to enroll at least 38 million acres of cropland by the end of 1995. Incentives were included so that approximately one-eighth of the enrolled acres would be planted in trees.

Data for the twelve signups held between 1986 and 1992 show that 36.5 million acres have been enrolled. The average erosion rate on enrolled acres has been reduced from 21 to less than 2 tons per acre per year, according to USDA estimates. Retiring these lands also produces other significant benefits, including habitat expansion, water quality enhancement, and soil restoration; estimates of the value of these benefits range from less than $1 billion to more than $1.5 billion per year, and some estimate that those benefits approach the costs.

Appropriations to support existing contracts are somewhat less than $2 billion per year now and will total almost $20 billion over the life of the program. These costs, which now are greater each year than all the other resource conservation expenditures combined, guarantee program benefits only for the life of the contract. The General Accounting Office addressed this topic in a March 1993 report that was critical of the program. It reported that the environmental benefits of CRP could not be calculated and that those benefits could be lost as soon as the 10-year contracts expire.

Determining what land owners will do with enrolled land after the contracts expire is of high interest because the earliest CRP contracts will expire at the end of FY1995. Results of a 1993 survey sent to 5% of the CRP contract holders indicate that more than 60% of the acres will be put back into crop production (the highly erodible portion will have to be farmed under an approved conservation compliance plan), while 23% will be kept in grass. Farmer plans undoubtedly will change with changes in prices for commodities, the land market, and other related variables. Responding to the survey, contract holders said they would return only 54% of their acres to crop production if crop prices were 20% lower than in 1993, but 74% if crop prices were 20% higher.

The Administration announced several initiatives to continue the program beyond the expiration of the current contracts under existing authority on Dec. 14, 1995. This announcement has led CBO to extend CRP funding in the Federal budget baseline. However, CBO anticipates that the reserve will shrink to about 15 million acres in the future, that participation criteria will center more on environmental factors and less on erosion, and that the annual program cost will gradually decline to about $1.2 billion. CBO's interpretation of the Administration proposal has brought strong reaction from many interests who hope to extend CRP benefits in different directions (a larger reserve or setting priorities that would lead to enrollment of different acres) in the future. CBO has further revised its estimates in response to reconciliation proposals, discussed below.

The Department issued interim rules to implement its proposal on May 8, and over 650,000 acres were offered by producers to terminate their contracts prematurely. The Department held a signup to enroll the same number of acres on September 27. This signup, the first since 1992, attracted bids to enroll 1.2 million acres. States with the most bid acres were Iowa, Missouri, and Montana. The Department will decide which acres it will accept shortly, using a modified environmental benefits index.

The Department also used this authority to allow contract holders for the 2.1 million acres of contracts scheduled to end on Sept. 31, 1995, to extend them for one year at the same rental rates. The reason for the extension was to allow these producers to have the same options based on possible amendments to the program in the 1995 farm bill, as all other producers. Owners of about 1.6 million acres decided to extend their contracts. (For more information on CRP provisions, the Administration's current activities, and major issues that might be addressed in 1995 farm bill legislation, see CRS Report 95-8 ENR, The Conservation Reserve Program: Policy Issues for the 1995 Farm Bill.)

Sodbuster and Conservation Compliance. Under sodbuster provisions, producers who cultivate highly erodible land (HEL) not cultivated between 1981 and 1985 are ineligible for most major farm program benefits, including price supports and related payments. These benefits are lost for all the land the farmer operates, not just for the HEL, although graduated penalties are available to producers once every 5 years. A producer is not subject to these provisions if he cultivates his highly erodible land using an approved conservation plan.

Under conservation compliance, producers who cultivate HEL lose the same program benefits as sodbusters unless they had obtained an approved conservation plan by 1990 and had fully implemented it by the end of 1994. As under sodbuster, benefits are lost for all the land the non-complying farmer operates, and graduated penalties are available once every 5 years. Implementing regulations under conservation compliance require producers to meet somewhat less stringent erosion control standards than sodbuster regulations. Any person who had HEL enrolled in the CRP will have 2 years after his contract expires to be fully in compliance (or longer if the Secretary determines that 2 years is not feasible).

According to preliminary data for 1994 compiled by NRCS, producers were actively applying plans on more than 93% of the tracts of land that were reviewed. Plans were not being actively applied on 2.9%, and the remaining 4% had received variances for being out of compliance. According to the NRCS, soil erosion on these acres is being reduced from an average of 17 tons per year to 6 tons per year.

Implementation of compliance has been a contentious issue, especially as the 1995 deadline for full implementation approached. Supporters of farmer efforts contend that almost all producers are well on their way to meeting this goal. They also argue that the purpose of the program was never to drive producers out of business, but rather to improve resource conditions while dealing with producers in a reasonable way. Critics contend that success is far more limited. For example, a 1992 study by the Center for Resource Economics, and environmental policy analysis group now called the Environmental Working Group, estimated that the portion of producers out of compliance was greater than 15%. In a 1993 report, the Center concluded that relatively few benefits had been denied to producers determined to be out of compliance and nearly half those benefits were later restored.

These allegations are part of a broader question of whether USDA staff is vigorously enforcing conservation requirements. The Inspector General and the U.S. General Accounting Office also have been critical of the implementation effort. Others have countered that the Department has been too vigorous, and inconsistent from county to county. The perceived ability of USDA agencies to effectively implement this program is expected to be an important component of debate in the 1995 farm bill and in future debates on what role USDA might play in implementing other environmental legislation that affects agriculture. (For more information on conservation compliance, see CRS Report 95-6 ENR, Conservation Compliance: Policy Issues for the 1995 Farm Bill.)

Wetlands and Agriculture. Swampbuster is one of two main agricultural wetland protection programs. Under swampbuster, a farmer who converts a wetland so that agricultural production is possible loses the same farm program benefits as under sodbuster or conservation compliance. Wetlands, which are defined in the farm bill, are exempt from swampbuster if they: (1) previously converted or artificially created; (2) created by irrigation or water delivery systems; (3) made possible agricultural production under natural conditions or where production had a minimal effect; or (4) an approved wetland conservation plan. A penalty that is smaller than full loss of benefits is allowed once every 10 years under certain circumstances. More than 5 million acres of wetlands are estimated to have a high or medium potential for conversion to cropland, according to NRCS.

Environmental and other groups have criticized the administration of the swampbuster program, as they have conservation compliance, for weak and inconsistent enforcement. A December 1992 report from the USDA's Office of Inspector General supported some allegations and found that benefits were not being denied in a large portion of the sample cases that had been found to be out of compliance. This report identified farmer self-certification and lack of monitoring as major problems. USDA and farmer representatives countered that the program needs to be implemented with some flexibility and should take into account the changing conditions and the circumstances of producers.

Implementation of swampbuster has been caught up in the broader wetlands policy debate, and it is no surprise that the agriculture committees in both Chambers chose to address wetland issues during their initial farm bill hearings. The farm community has viewed wetland protection efforts on agricultural lands as too extensive and overzealous, while wetland protection advocates have viewed the same efforts as insufficient and inconsistent. Some agricultural concerns were thought to have been addressed when a Memorandum of Agreement (MOA) making NRCS responsible for all wetland determinations on agricultural lands was signed by NRCS, the U.S. Army Corps of Engineers, the U.S. Fish and Wildlife Service, and the U.S. Environmental Protection Agency (EPA) on Jan. 6, 1994. But aspects of implementation have proven to be controversial, and the Department announced on Apr. 5, 1995, that it would only certify wetlands in response to producer requests.

These specific actions do little to address broader concerns about regulatory wetland "takings" that diminish the value of private lands or about the possibility of compensation for declines in value. Some closely related wetland issues have been addressed in the Clean Water Act reauthorization legislation that passed the House on May 10, 1995 and have been the subject of a hearing in the Senate. (For more information about the Swampbuster program, see CRS Report 95-7 ENR, Wetlands and Agriculture: Policy Issues in the 199S Farm Bill; and for more information about broader wetland issues, see CRS Issue Brief 93025, Wetland Issues; and for more information about the Clean Water Act reauthorization, see CRS Report 95-427 ENR, Clean Water: A Summary of H.R. 961 as Passed.)

A new Wetland Reserve Program (WRP), established in the 1990 farm bill for farmed wetlands, is the other major program. The current enrollment goal is at least 975,000 acres. These wetlands are to be protected through easements; the Department has chosen to use only permanent ones. The Secretary can delegate the administration of easements to other Federal or State agencies that have the necessary expertise. Approximately 50,000 acres were enrolled in the WRP in a nine-State pilot program in FY1992. No funding was provided in FY1993. For FY1994, funding of more than $66 million was approved to enroll 75,000 acres in 20 States. For FY1995, the Clinton Administration budget requested $240 million; Congress provided $93 million to enroll an estimated 100,000 acres nationwide. More than 575,000 acres were offered for enrollment. The top States were Louisiana (66,271 acres) and Texas (64,560 acres). Also, additional acres were enrolled when emergency funding was appropriated to respond to the floods of 1993 in the upper Midwest. Farmer interest has generally exceeded available funding, but data on enrollment is incomplete.

Other Programs and Issues

Groundwater and Water Quality Efforts. As more instances of contamination originating from agricultural sources have been identified, groundwater and non point pollution have rapidly emerged as major issues. Questions are being raised about the extent of the problems and the severity of the potential threat to human health. Concern is especially strong in rural America, where non point pollution is generally the most significant remaining water quality problem and groundwater is the source of drinking water for about 95% of the residents. Some contamination is the result of accepted agricultural practices, not illegal acts.

USDA established in 1989 an interagency working group on water quality, chaired by the Deputy Assistant Secretary for Science and Education, to coordinate a "water quality initiative." A number of agencies now are implementing strategies developed under this initiative. To support these efforts, the Department has started hydrologic unit and special demonstration projects. The largest funding increases for these activities have been in the Extension Service and CFSA.

The 1990 farm bill responded to water quality concerns with a number of new initiatives and amendments to established programs. A new voluntary Water Quality Incentive Program, that can include up to 10 million acres was created. This program seeks to reduce pollution sources by providing cost-share payments to implement 3- to 5-year agreements with producers. They develop and implement a water quality management plan that would provide water quality benefits and may provide wetland protection benefits. As of spring 1995, about 2,900 farms were receiving payments under this program. Funding, using an earmarked portion of the Agricultural Conservation Program, has been limited, and is $11 million for FY1996.

Also, USDA was designated as the principal Federal agency responsible for agricultural groundwater concerns. Protecting and improving groundwater were added to the missions of the NRCS and the Extension Service. The 1990 law also required that all existing conservation plans be reviewed by Jan. 1, 2000, for their impact on water quality. The Secretary is to establish a program in each State to coordinate the Department's water quality programs with State agencies.

Sustainable Agriculture. Sustainable agriculture includes a collage of activities that range from totally organic systems to targeted and efficient application of agricultural chemicals. Sustainable agriculture is viewed by some as a potential solution to many current environmental and resource problems that are byproducts of production agriculture. Farmers are seeking ways to control input costs and protect profit margins while maintaining productivity, and environmentalists are looking for ways to make agriculture more environmentally benign. This approach contrasts with conventional agriculture, which uses a full range of tillage practices and larger quantities of chemical inputs. USDA has had a small research and education program in this area since the late 1980s. The 1990 farm bill reauthorized this program at $15 million annually, although appropriations have been less.

Conservation Issues in the 104th Congress

The 104th Congress is addressing conservation issues in three ways; through annual appropriations, through reconciliation legislation, and through the 1995 farm bill. How this Congress will attempt to address conservation has come into sharper focus with recent actions. The appropriations process is now finished, reconciliation language has been approved in conference, and key leaders in both Chambers have introduced free-standing conservation proposals.

Conservation Appropriations

The Clinton Administration budget request for FY1996 called for an increase for NRCS programs totaling $187.5 million, to $1.02 billion. Almost half of the increase was $83 million more for the WRP, to enroll 300,000 additional acres. Conservation Operations would have increased by $58 million (primarily to enhance the technical assistance capability), and Watershed Operations would have increased by $30 million. One CFSA conservation program that provides cost-share assistance, the Agricultural Conservation Program, was to be cut by half, to $50 million, while another, the Emergency Conservation Program, was to be reduced from $23 million to $3 million. CRP would have increased $67 million, however, to implement the reenrollment plan announced by the Clinton Administration in December with a goal of having 38 million acres enrolled by the end of FY1996.

Congress changed many of the Administration proposals before passing H.R. 1976, the FY1996 Agriculture Appropriations legislation. It increased Conservation Operations funding by $74 million from FY1995, to $630 million. It combined two water planning programs together in a single line item. It agreed with the Senate to fund the Wetland Reserve Program (WRP) at $77 million (to enroll up to 100,000 acres); this was $133 million less than the Administration had requested and the House had approved (to enroll up to 300,000 acres). It decreased funding for the Agricultural Conservation Program by $25 million, to $75 million, as passed by the House, rather than by the $50 million requested by the Administration and supported by the Senate. It funded the CRP at $1.82 billion, $144 million less than requested and prohibited new enrollments during FY1996. Also, it eliminated funding for the Great Plains Conservation Program, but earmarked $5 million in the Conservation Operations Programs for a new grazing lands conservation initiative. The President signed Agriculture Appropriations on Oct. 21, 1995 (P.L. 104-37).

Appropriations for CRP and WRP have been directed, in part, by requirements under the Omnibus Budget Reconciliation Act of 1993, P.L. 103-66. This package of modifications to reduce projected agricultural spending by more that $3 billion by 1998, includes projected savings of $469 million by limiting the CRP to 36 million acres through 1995 and 38 million acres thereafter, and enrolling not less than 330,000 acres in the WRP by the end of 1995, and not less than 975,000 acres through the year 2000.

Reconciliation

The reconciliation process started with the budget resolutions. The FY1996 budget resolutions in both Chambers would make significant cuts in conservation. The Senate version (S.Con.Res. 13), passed May 25, does not specify which programs might be cut or by how much. The House version (H.Con.Res. 67), passed May 18, 1995, would fund the Agricultural Conservation Program at $50 million (a reduction requested by the Administration). It would terminate several programs including the Resource Conservation and Development Program, River Basin Surveys and Investigations, the Great Plains Conservation Program, the Colorado Basin Salinity Control Program, and the Forestry Incentives Program. It would reduce by 10% funding for both Conservation Operations activities and Watershed and Flood Prevention Planning. Savings in budget authority in FY1996 would be $160 million and would approach $200 million annually in 2002.

Congress has adopted reconciliation legislation to implement cuts called for in the budget resolutions (H.R.2491). The conservation provisions would amend the CRP and the WRP while extending authorization through 2002; also, they would create a new Livestock Environmental Assistance Program. Enrollment in the CRP would be capped at 36.4 million acres and new signups would be prohibited in 1997. (Appropriations legislation already prohibits new signups in 1996.) Participants could terminate their contracts at any time by giving 60 days notice; participants terminating contracts in the first 3 years must repay all cost-share assistance. The WRP would be amended by prohibiting permanent easements and allowing 15-year easements, and by capping overall enrollment at 975,000 acres. The 7-year savings would be $577 million for the CRP and $387 million for the WRP.

In addition, a new voluntary cost-sharing program, the Livestock Environmental Assistance Program (LEAP), would be established. LEAP would authorize the installation of structural and land management practices designed to reduce natural resource degradation on land used for confined livestock production. LEAP would be an entitlement of $100 million annually, funded through the Commodity Credit Corporation. Annual payments per year are not to exceed $10,000 per contract, and total payments could not exceed $50,000 over the life of each contract. Estimated outlays would total $614 million over 7 years. President Clinton vetoed this bill, and it is unclear whether these provisions will again appear, unchanged, in future reconciliation legislation. In a statement, the President listed 82 reasons for his veto; one was the threat he believes these provisions pose to the conservation benefits achieved under the CRP.

The Farm Bill

Will there be a separate farm bill? Farm bill legislation, being called the "rump farm bill" is moving to the fore, although it may be temporarily pushed aside when reconciliation legislation is again being considered. The farm bill will address major farm policy questions not covered by reconciliation. Agricultural leaders in Congress say that the farm bill will move quickly. If it does not, however, then it may get caught up in election year politics. Also, those interests who believe they will lose through provisions that they anticipate would be in a farm bill may try to delay the legislative process in the hope that the 1996 election results will favor their positions.

Proposals for new programs and amendments to existing programs continue to accumulate in anticipation of a farm bill. Many of these have been brought together in H.R. 2542, introduced October 26, and S. 1373, introduced November 1. (For more information on both bills, see CRS Report 95-1106, Conservation Titles in the 1995 Farm Bill: A Comparison.)

House Proposal (H.R. 2542). The House proposal as amended by the subcommittee on November 8, would make the following changes:

Title I would replace the NRCS with the Soil Conservation Service and place it under the Under Secretary for Farm and Foreign Agricultural Services. SCS would lose administration of all conservation cost-share programs.

Title II would consolidate all conservation cost-share programs (12 are listed in the bill) into a single program, to be known as the Agricultural Conservation Assistance Program. Contracts with producers under this program would not exceed 5 years; the Federal cost share would not exceed 50%, and total assistance would not exceed $5,000; the Secretary could exceed each of these limits. All contracts would be approved by elected county committees that support the Consolidated Farm Services Administration. The program would be funded through annual appropriations. The program would be implemented within 120 days of enactment.

Title III would establish a water quality conservation program for livestock operations to install structural practices under contracts not to exceed 10 years. Producers would seek contracts through a competitive offer process; county committees would determine the successful proposals. The cost share would not exceed 75% of the total amount and could not exceed $10,000 annually or $50,000 in total. Several priorities are specified. All participants would need to have a county committee-approved livestock operations plan. This program would be funded as an entitlement through the Commodity Credit Corporation; funding between 1995 and 2002 would be $380 million. (This program is very similar to the LEAP Program, described above and included in reconciliation legislation.)

Title IV would amend conservation compliance. It would add and revise definitions. The Department would be required to publish the equations used to define highly erodible lands. The notion of compliance would be greatly reduced through several conforming amendments to the existing legislation. The goal of compliance plans (to be called conservation plans in the future) would be a substantial reduction in erosion, and there would be flexibility if implementing the plan would cause undue economic hardship. Expedited variance procedures for pests and diseases would be established, and good faith exemptions for up to one year would be allowed. Violators would lose program eligibility for price support programs only on fields where the violations occur. Crop insurance would be removed from the list of programs that would become inaccessible to violators. The highly erodible land program would expire in 2002.

Title V would amend the Environmental Conservation Acreage Reserve Program, which includes both WRP and CRP. (Both WRP and CRP would be amended by the reconciliation provisions outlined above as well.) WRP contract terms would be specified, including activities allowed and prohibited. Contracts would have a maximum length of 15 years. All references to easements, to consultation with the Secretary of the Interior, and to the environmental easement program would be deleted. The Department could extend all CRP contracts entered into before 1990, when an environmental benefits index (EBI) was adopted, before 2000. Rental rates for new contracts could not exceed the average fair market value for comparable county lands. Existing WRP easements would not be affected.

During markup, a new Title VI was added that would reform wetlands programs. It would restate the program benefits that would be denied, and allow the Secretary to determine the size of the penalty. Wetland delineations would remain until a review is requested by the producer. Exemptions would be added, including all wetlands smaller than one acre and lands that were converted wetlands but returned to wetland conditions because of lack of farm management. Mitigation through enhancement and creation (as well as restoration) would be encouraged, restrictions on land eligible for mitigation would be removed, and a mitigation banking pilot program would be established. Good faith violators would be given up to one year to restore wetlands without penalty. The consultative role of the Fish and Wildlife Service would be ended.

Title VII (previously Title VI) includes miscellaneous amendments that would clarify the effect of resource planning on water allocation on or crossing Forest Service or Bureau of Land Management lands, alter technical assistance to State foresters, prohibit forest management plans from being amended to maintain a viable species population, unless its existence is likely to be jeopardized, eliminate State technical committees (created in the 1990 farm bill), repeal the composting research and extension program, repeal the farmland protection provisions known as the Farms for the Future Act, repeal provisions establishing an Agricultural Council on Environmental Quality, and create a grazing lands assistance program with authorization of $20 million in FY1996, $40 million in FY1997, and $60 million annually thereafter.

Senate Proposal (S. 1373). If the conservation proposals in reconciliation do not survive that process, staff has said that they will be considered for inclusion in the Senate version of the farm bill. As introduced, the Senate proposal would make the changes outlined below. Reportedly, committee staff is working to assemble another conservation bill to replace S. 1373 as the basis for committee consideration.

Section 2 lists three purposes of the act; respecting private property rights and the productivity of agriculture, reducing unnecessary regulatory burdens while protecting the environment, and recognizing the central role of a voluntary approach.

Section 3 would add or amend definitions, including "alternative conservation system," "conservation system," and "frequently cropped agricultural land."

Section 4 would amend the highly erodible provisions. Many of these proposals are similar or identical with the House bill's language. The Highly Erodible Land provisions would be modified to provide producers with greater flexibility in applying conservation and when violations occur, add flexibility to modify or amend compliance plans, expedite actions on variances, and prohibit more stringent erosion standards from being applied to CRP land at the end of the contract.

Section 5 would make wetlands reforms, mostly by amending swampbuster. Several exemptions to swampbuster would be added or expanded. The Department of Agriculture would be made responsible for all wetland delineations on a farm. Penalties would become more flexible. It would amend mitigation provisions and encourage mitigation banking. Beyond swampbuster, changes would be made to conform with proposals to amend the Section 404 wetland permit program under the Clean Water Act and to halt the use of permanent easements on wetlands and floodplains.

Section 6 would reauthorize the Environmental Conservation Acreage Reserve Program, which includes CRP, WRP, an unimplemented environmental easement program, and the EQIP program that is in reconciliation legislation, through 2002. Priority areas are specified.

Section 7 would amend the CRP, which would be reauthorized through 2002, capping enrollment and setting limits on funding annually. CRP would become an entitlement. It would provide a preference for enrolling up to 1.5 million acres of partial fields for water quality using filter strips and the like, and up to 1.5 million acres of "frequently cropped agricultural lands" (an agricultural wetland classification). It would set a minimum rate ("cup") of 80% of the previous rate for renewals, allow 5-year renewals and new contracts for 5, 10, or 15 years. Wildlife benefits would be given greater recognition.

Section 8 would amend the WRP by deleting authority for permanent easements and allowing contracts of 20 to 30 years. It would permit water quality acres such as filter strips, grassed waterways, and settlement ponds to be enrolled. Wildlife benefits would be added to eligibility requirements. The Fish and Wildlife Service would be replaced by State Technical Coordinating Committees for consultation about eligibility and developing restoration plans.

Section 9 addresses funding, making EQIP an entitlement of $100 million per year, making WRP an entitlement totaling $614 million by 2002, and setting caps on annual appropriations for CRP. These provisions would also set acreage limits by county on program participation.

Section 10 contains conforming amendments, most of them repealing conservation programs that are not being implemented, but also extending the Environmental Easement Program through 2002 and reauthorizing the Resource Conservation and Development Program through 2002.

Section 11 encourages promotion of wildlife benefits, where practicable.

Clinton Administration Guidance for the 1995 Farm Bill. On May 10, 1995, when the Committees were just starting to consider how to approach conservation issues in the farm bill, USDA released guidance from the Administration. In past farm bills, the Administration has submitted draft legislation rather than guidance. Most of these suggestions do not appear to have found their way into the Senate and House proposals. The guidance includes the following:

Conservation Farm Option could permit producers in selected environmentally sensitive areas to receive guaranteed commodity program payments in exchange for implementing a whole farm conservation plan. The guarantee could last for a specified number of years and equal the estimated deficiency payments. Also, producers could receive agreements that they would not be subject to further requirements under the Federal environmental laws and regulations addressed in their plan.

CRP could be reauthorized, allowing the Administration to implement the program extension it announced in December 1994. Additional enrollments through the year 2000 would be based on environmental criteria, and all existing contracts could be extended, as allowed under the current budget baseline. Economic use of CRP lands could be permitted in some circumstances, in return for lowered rental rates.

Wetlands Reserve Program could be reauthorized, and changes are suggested to make the program easier and less costly to administer.

Highly Erodible Land Conservation could be amended to ensure that a good faith exemption is applied when appropriate and that the graduated penalty is commensurate with the severity of the violation. Additional administrative changes are suggested.

Swampbuster could be amended to ensure that it conserves important wetland functions and values while providing greater administrative flexibility, especially in implementing mitigation provisions and approaching wetland protection on a watershed basis.

Coordinated Conservation Assistance could be provided by simplifying the mix of available conservation technical and financial assistance programs, and better coordinating their delivery to the areas of greatest need.

Resource Conservation and Development Program, which expires on Dec. 31, 1995, could be reauthorized.

National Natural Resources Conservation Foundation could be created to assist the NRCS with marketing and implementing conservation programs.

Grazing Lands Conservation Initiative could coordinate technical, educational, and related assistance programs to help land owners voluntarily enhance their privately owned grazing land resources.

Also, on Nov. 2, 1995, the Administration held a conservation "hearing' to learn about the positions of various interest groups. The Administration said that it initiated this hearing because Congress had not conducted hearings on the proposals now moving through the legislative process.

Conservation Proposals in a Broader Setting. Before the farm bill process began, and especially before that 1994 election, the discussions about conservation were about how to build on provisions enacted in the previous two farm bills, and about finding new ways to expand the conservation effort. For example, the "green ticket," an approach that received consideration, generally would replace or supplement commodity program payments to producers who can demonstrate conservation benefits. Also, new concepts for resource management that look at natural systems larger than individual farms received increased attention. The most common terms were ecosystem, watershed, and landscape. Conservation policy was at the forefront of these discussions. These types of ideas are not being discussed in the 104th Congress.

At the scale of the individual farm, proposals to integrate many of the elements of the conservation program, which have proliferated during the past decade, are receiving some attention. Critics of the current structure contend that requirements to implement multiple plans on individual farms to meet different requirements have become time-consuming, confusing, and sometimes inconsistent. While legislation was reported by a House Agriculture subcommittee in the 103rd Congress that would have allowed all plans to be combined into a single, comprehensive document, often referred to as a total resource management plan or whole farm plan, no further action was taken. NRCS is initiating a six-State pilot study of this approach. Congress may provide some guidance to NRCS in farm bill language.

LEGISLATION

Numerous bills dealing with conservation issues or issues connecting agriculture with other topics, including water quality and endangered species have been introduced. These bills are too numerous to list below.

H.Con.Res. 67 (Kasich)
Concurrent budget resolution. Passed House May 18, 1995.

H.R. 2196 (Roberts/Barrett)
Known as the "Freedom to Farm" proposal, it establishes limits on CCC farm and export expenditures for 1996-2002 crop years, authorizes the use of market transition contracts to support farming certainty and flexibility and ensure continued compliance with farm conservation plans and wetland protection, makes marketing assistance loans available for certain crops, establishes a commission to examine the future of production agriculture, and for other purposes. Introduced Aug. 4; referred to Committee on Agriculture.

H.R. 2542 (Allard)
Consolidates conservation cost-share programs, reestablishes the Soil Conservation Service, amends existing conservation programs, and for other purposes. See discussion above. Introduced Oct. 26, 1995; referred to Committee on Agriculture. Subcommittee on Resource Conservation reported a substitute bill (amended); Nov. 8, 1995.

S.Con.Res. 13 (Domenici)
Concurrent budget resolution. Passed Senate May 25, 1995.

S. 864 (Lugar)
Amends the Food Security Act of 1985 to improve the agricultural resources conservation program, and for other purposes. Introduced May 25, 1995; referred to Committee on Agriculture.

S. 1373 (Dole)
Amends the Food Security Act of 1985 to minimize the regulatory burden on agricultural producers in the conservation of highly erodible land, wetland, and retired cropland, and for other purposes. Introduced Nov. 1, 1995; referred to Committee on Agriculture.

CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS

U.S. Congress. House. Committee on Agriculture. Subcommittee on Environment, Credit, and Rural Development. Conservation Compliance Provisions of the 1995 Farm Bill. Hearings, 103rd Congress, 2nd session. Aug. 11, 1994. 156 p. Serial No. 103-93

----- Review of the Budget and Policy Consequences of Extending the Conservation Reserve Program. Hearings, 103rd Congress, 2nd session. Aug. 2, 1994. 173 p. Serial No. 103-91

U.S. Congress. House. Committee on Agriculture. Subcommittee on Resource Conservation, Research, and Forestry. Consideration of Agricultural Wetlands and Wetlands Issues in the 1995 Farm Bill Hearings, 104th Congress, 1st session. Apr. 6, 1995. 215 p. Serial No. 104-12

FOR ADDITIONAL READING

Board on Agriculture, National Research Council. Soil and Water Quality: An Agenda for Agriculture. Washington, 1993. 516 p.

Center for Resource Economics. "Taking" the Taxpayer: Wetlands and Farm Subsidies in Perspective. Washington. April, 1995. 16 p.

U.S. Department of Agriculture. Economic Research Service. Agricultural Resources and Environmental Indicators. Washington, December 1994. 205 p. Agricultural Handbook No. 705.

U.S. General Accounting Office. Conservation Reserve Program: Alternatives Are Available for Managing Environmentally Sensitive Cropland. Washington, Feb. 4, 1995.
GAO/RCED-95-42

----- Agricultural Conservation: Status of Programs That Provide Financial Incentives. Washington, April 1995. 46 p.
GAO/RCED-95-169

U.S. Library of Congress. Congressional Research Service. Conservation Compliance: Policy Issues for the 1995 Farm Bill, by Jeffrey Zinn. [Washington] 1994. 6 p.
CRS Report 95-6 ENR

----- Conservation Reserve Program: Policy Issues for the 1995 Farm Bill, by Jeffrey Zinn. [Washington] 1994. 6 p.
CRS Report 95-8 ENR

----- Conservation Titles in the 1996 Farm Bill: A Comparison, by Jeffrey Zinn. [Washington] 1995. 6p.
CRS Report 95-1106 ENR

----- Wetlands and Agriculture: Policy Issues in the 1996 Farm Bill, by Jeffrey Zinn. [Washington] 1994. 6 p.
CRS Report 95-7 ENR