Working Lands Programs Food, Conservation, and Energy Act of 2008

1. Working Lands ProgramsFood, Conservation, and Energy Act of 2008 Jim Pease Dept of Agricultural & Applied Economics Virginia Tech Jim.Pease@vt.edu 540/231-4178

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

3. 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

4. Environmental Quality Incentives Program (EQIP)

5. 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

7. 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

8. 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

9. 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)

10. 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

11. Conservation Stewardship Program (CSP)

12. 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

13. 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

14. 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

15. 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

16. 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

17. 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

18. 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 years

19. 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?

20. 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