National Economics Meeting

1. National Economics Meeting The World is Flat • 1989 Fall of the Berlin Wall (World Market) • 1995 Web Browsers (Netscape IPO) • Standard web-based software • Open software movement • Late 1990s, laying of fiber optic cable • Off-shoring to India and China • Insourcing • Google (in-forming) Thomas Friedman

2. National Economics Meeting Something Happened • 1990 Conservation Effects for Decisionmaking • 1995 The NTCs disappeared • Lost 13 “mid-level” economists (+ 2) • Changed oversight or quality control • Changed capacity for technology development • Reduced capacity for technology transfer • Reduced capacity for training

3. National Economics Meeting Something Happened • The 1996 and 2002 Farm Bills • Increased NRCS Financial Assistance Dramatically • Increased number of programs • OMB’s interest in benefit cost analysis increases demand for national policy analysis for rule making • Program backlogs appeared • The Senescent Watershed Program

4. National Economics Meeting Something Happened • GRPA • Loss of Policy Analysis Capacity - Klaus Alt, Jim Lewis, Paul Fugelsted, John Sutton • RCA and NCP given low priority • Reduced number of economists • 1974 - 140 • 1990 - 80 • 2005 - 45

5. National Economics Meeting Something Happened • Presidents Management Initiative • Strategic Management of Human Capital • Competitive Sourcing • Improved Financial Performance • Expanding e-Government • Budget and Program integration

6. National Economics Meeting Something is Happening • Goals for the Second Term • Enhancing cooperative conservation as a driving force in NRCS programs future • Restructuring the delivery of NRCS programs at the watershed level to better integrate NRCS programs and coordinate with other efforts • Realizing full implementation and full participation in the 2002 Farm Bill. • Creating a new, private funding stream to support private land conservation through an emission credit trading program.

7. National Economics Meeting Something is Happening • Limitations of Practice-Based Conservation — • Practice-based conservation depends on standards and specifications • Application of standard and specifications to management activities has always been problematic. • Standards and specifications are not static. Clearly feedback and improvement in practice standards is an important consideration. • Practice-based conservation is depends on an inherent inflexibility that is both strength and a weakness.

8. National Economics Meeting Something is Happening • Expanding the Conservation Tool Kit • Use conservation performance payments to stimulate innovation • Create a knowledge-based conservation approach • Expand the use of market-oriented approaches such as environmental credit trading, mitigation banking, and auctions, among others.

9. National Economics Meeting Knowledge-Based Conservation • Focus on management practices • The ability to measure outcomes (SCI) • Incentives for innovation by farmers and ranchers • Incorporation of the farmer innovations into NRCS guidance • Payments based on changes in the environmental performance, as measured by the appropriate index

10. National Economics Meeting Knowledge-Based Conservation • Payments for Environmental goods rather than payments for practices. • A system that taps into the innovative capacity of farmers and ranchers in order to expand the conservation knowledge base. • A closer alliance to industry, precision agricultural systems, and production technology. • Greater linkage between Conservation Innovation Grants and conservation.

11. National Economics Meeting Knowledge-Based Conservation • Benefits of performance-based conservation • Greater Federal program efficiencies • “Permanent” behavior change, improved management • Conservation measures that have greater on-farm economic incentives

12. National Economics Meeting Role of Economists - 1977 • Formulate the NED Plan • Evaluate all other Alternatives • Be responsible for the reasonableness of all data used in the economic analysis

13. National Economics Meeting Role of Economists - 2005 • Getting practice costs right • Formulate low a suite of low cost practices • Precision agriculture • Economic effect of regulations • Getting incentives right • Thumb on the scale • Encouraging innovation • Maximizing conservation per $ of FA and TA • Getting ranking criteria right

14. National Economics Meeting Role of Economists - 2005 • Facilitating market-oriented approaches • Environmental credit trading • Transfer of development rights • Mitigation banking • “Business analysis” • Working with the IAS data

15. National Economics Meeting RESS Division • Build on the contributions of the past and continue to move toward operating more like an Office of the Chief Economist • Lead in implementing market-oriented solutions, energy management, precision agriculture, program incentives • Expand national policy analysis capacity

16. National Economics Meeting RESS Division • Exercise oversight responsibilities • Greater support of State and Field Office economic needs • Strengthen networks

17. National Economics Meeting Next Steps • Expanded collaboration • Monthly national economics netconferences • National Headquarters rotations for state office and Center economists • NTSC rotations for state office economists • Temporary in-place promotions for economists with national responsibilities

18. National Economics Meeting Next Steps • Establish an economist trainee program • Enhance economics in the directives system • Find new ways to train • Establish an Economics Advisory Board comprised of State Conservationists • Enhance professionalism of economists • Develop human capital • Expand recognition • Expand networks

19. National Economics Meeting Putting the Pieces Together • The world is Flat and we about information... we need to make better use of information technology • The plan shouldn’t depend on having more economists… we need more collaboration. • The New Deal approach is passe