Conservation Security Program

1. Conservation Security Program Overview

2. Help people conserve, maintain, and improve our natural resources and environment. Partnerships Voluntary Science-based Natural Resources Conservation Service- Our Mission -

3. 2002 Farm Bill Title I Commodity Programs Title II Conservation Title III Trade Title IV Nutrition Programs Title V Credit Title VI Rural Development Title VII Research & Related Matters Title VIII Forestry Title XI Energy Title X Miscellaneous

4. Title II Conservation • Conservation Reserve Program • Conservation Security Program • Environmental Quality Incentives Program • Ground & Surface Water Conservation • Farm and Ranchland Protection Program • Grasslands Reserve Program • Wetland Reserve Program • Wildlife Habitat Incentives Program

5. Conservation Security Program “CSP gives us the opportunity to reward those working conservationists who are trying to do leading-edge conservation, going beyond the minimum conservation requirements and really trying to reach for the stars in terms of what you can do with conservation,” –NRCS Chief Bruce Knight, Ag Web, March 22, 2003

6. The Promise of Conservation • Traditionally, USDA assisted producers with: • Installing conservation practices • By providing financial and technical assistance • First program in history to reward producers who have traditionally applied conservation

7. Conservation Security Program • Voluntary program authorized by the 2002 Farm Bill • Rewards producers applying and documenting high levels of conservation and management • Ability to earn payments by adding and/or expanding conservation activities 2004 Participants

8. Who’s Eligible to Participate? • Are You in a Priority Watershed? • Is Your Land Eligible? • Are you, as an applicant, eligible? • Have you achieved treatment requirements for soil and water? • Are you willing to do additional resource enhancement? • Are you willing to provide the necessary documentation for eligibility?

9. Watershed Approach • A rotating eligibility system that will give all producers an opportunity to participate • Easily adapted to funding changes

11. 2005

12. 2005

13. 2005

14. Lower Yellowstone 2005

15. Eligibility Requirements for the Land • Majority of agricultural operation within priority watershed • Privately owned or Tribal lands • In compliance with HEL/wetland provisions

16. Land Eligibility continued • Eligible land uses include: • Cropland, pasture, rangeland • Ineligible lands include: • Land in the Conservation Reserve Program, Wetlands Reserve Program, or Grasslands Reserve Program • Recently converted cropland • Forest land • Public land

17. Eligibility Requirements for the Applicant Must: • have an active interest in operation • control the land for life of contract • share risks and be entitled to share profits / crops / livestock • meet conservation requirements for their tier

19. CSP: A Three Tiered Program Protect soil and water quality on part of your operation Protect soil and water quality on all of your operation Locally identified resource – Wildlife Habitat III. Protect all natural resources concerns on all of your operation

20. Sample Practices for Achieving Soil and Water Quality • Conservation tillage • Erosion control • Using residue and/or cover crops • Nutrient management • Grazing management • Pesticide management • Use of buffers

21. Soil Quality Eligibility Criteria • Cropland • Soil Conditioning Index -Positive Producer records Based on your crop rotation, tillage system, yields and soils.

22. Water Quality Eligibility Criteria Cropland Surface Water • Nutrients • Requires soil test within past 5 years, OR agree to test prior to planting in 2005 • Pesticides • Record of pesticides applied to land and mitigation documented for sensitive chemical/soil combinations • Salinity and sediment

23. Water Quality Eligibility Criteria Cropland Ground Water • Nutrients • Pesticides • Salinity

24. Pasture and Rangeland Eligibility Criteria • Grazing Lands Following a Grazing Management Plan • Forage-animal balance • Proper livestock distribution • Timing and use • Managing livestock access to water courses

25. TIER I EXAMPLE with Four Sections Meets soil quality and water quality on part of the farm 2 sections are eligible for Tier I = Fulfills minimum soil quality criteria on that part of the farm = Fulfills minimum water quality criteria on that part of the farm = Fulfills other minimum criteria on that part of the farm

26. TIER II EXAMPLE with Four Sections Meets soil quality, water quality and wildlife on all of the farm 4 sections are eligible for Tier II = Fulfills minimum soil quality criteria on that part of the farm = Fulfills minimum water quality criteria on that part of the farm = Fulfills wildlife habitat minimum criteria on that part of the farm

27. TIER III EXAMPLE with Four Sections Meets all resource concerns on all of the farm 4 sections are eligible for Tier III = Fulfills minimum soil quality criteria on that part of the farm = Fulfills minimum water quality criteria on that part of the farm = Fulfills other minimum criteria on that part of the farm

28. CSP Payment Components • Stewardship Payment (rental) • Annual payment for the current level of conservation treatment • Existing Practice Payment • Annual payment for maintaining existing conservation practices • New Practice Payment • One-time cost-share for additional practices • Enhancement Payment • For exceptional conservation effort beyond sustainable levels

29. For exceptional conservation effortbased on the activity cost and net benefits CSP Payment Components Enhancement Payment One-time, cost share for additional practices: 50% cost share; 65% limited resource & beginning farmers New Practice Payment Maintaining existing conservation practices(25% of the stewardship payment) Existing Practice Payment Current level of conservation treatment, based on 2001 land use rental rates Stewardship Payment

30. 5 -10 Yearsup to $45,000per year CSP Payment Components Components apply to all tiers 5 -10 Yearsup to $35,000per year 5 -Year Contractsup to $20,000per year Enhancement Payment New Practice Payment Existing Practice Payment Stewardship Payment Tier I Tier II Tier III

31. Beyond Eligibility: Enhancements $ Available for producers who go beyond the minimum conservation treatment levels

32. Enhancement Job Sheets

33. Potential Enhancements for North Dakota’s CSP Watersheds

36. Enhancements • In 2005 Contract Enhancement Limits were assigned: • Tier I = $13,750 per year • Tier II = $21,875 per year • Tier III = $28,125 per year • Variable Rates • Existing (Step-down approach) • Future or New Enhancements – 100% of the rates

39. Payment Example – Tier 1 Grazingland Cropland Total Agricultural Operation consists of 4 Sections(2 eligible sections) Two Sections meet minimum eligibility requirements • Grazing Land Information 4 pastures Would like to expand to 6 pastures -need cross fence In the fall, the producer has cattle aftermath graze the adjacent cropland • Cropland Information • Practices No-till on cropland • Rotation of spring wheat, winter wheat, flax, winter wheat • Soil Conditioning Index = 0.7 • Conducted soil test for N&P in 2000 and 2002

40. Stewardship Payment Cropland 2001 Average County Rental Rate = $30/ac $30 X .25 X .05 = $0.375/ac x 640 ac = $240 Grazing Land 2001 Average County Rental Rate = $10/ac $10 X .25 X.05 = $0.125/ac X 640 ac = $80 Total Stewardship Payment = $320/year • Tier Specific Reduction Factor • Tier I=.25, Tier II= .50, Tier III=.75 • Tier Specific Percentage • Tier I= 5%, Tier II= 10%, Tier III= 15%

41. Existing Practice Payment • 25% of Stewardship Payment • $320/year X 0.25 = $80/year • Total Existing Practice Payment $80/year

42. New Practice Payment • Plan to install 2700 feet of fence • 2700 ft X $0.60/ft X 50% = $810 • Total New Practice Payment = $810

43. Existing Soil Conditioning Index 0.7 4 Pastures Aftermath Grazing Planned 6 Pastures Enhancements

44. Enhancement Payments Cropland: • SCI = 0.7 • $1.16 X 7 = $8.12/acre/year • $8.12/ac/yr X 640 ac = $5196.80 • First year - $5196.80 x 150% = $7795 • Second year - $5196.80 x 90% = $4677 Grazing Land: • 4 pastures: • $1.50 x 640 = $960 • First year - $960 x 150% = $1440 • 6 pastures: • $2.50 acre/yr X 640 ac = $1600/yr • Crop aftermath grazing: • $0.50 ac/yr X 640 ac = $320/yr • First year - $320 x 150% = $480 • Second Year - $320 x 90% = $288 First Year Enhancement Payment = $9715 Second Year Enhancement Payment = $6565

45. Approximate Tier 1 Payment • Stewardship Payment: $320/yr • Existing Practice Payment:$ 80/yr • New Practice Payment: $810 • Enhancements: $9715/yr First Annual Payment = $10,115 + a one-time payment of $810 for cost share of fence construction

46. Grazingland Cropland Payment Example – Tier 3 Total Agricultural Operation consists of 2 Sections All of the Agricultural Operation meets minimum eligibility requirements on all land uses • Grazingland Information 4 pastures Would like to expand to 6 pastures -need cross fence In the fall, the producer has cattle aftermath graze the adjacent cropland • Cropland Information • Practices No-till on cropland • Rotation of spring wheat, winter wheat, flax, winter wheat • Soil Conditioning Index = 0.7 • Conducted soil test for N&P in 2000 and 2002

47. Stewardship Payment Cropland 2001 Average Rental Rate = $30/ac $30 X .75 X .15 = $3.375/ac x 640 ac = $2160 Grazing Land 2001 Average Rental Rate = $10/ac $10 X .75 X.15 $1.125/ac X 640 ac = $720 Total Stewardship Payment = $2880/year • Tier Specific Reduction Factor • Tier I=.25, Tier II= .50, Tier III=.75 • Tier Specific Percentage • Tier I= 5%, Tier II= 10%, Tier III= 15%

48. All other Payments Remain the Same

49. Approximate Tier 3 Payment • Stewardship Payment: $2880/yr • Existing Practice Payment: $ 720/yr • New Practice Payment: $ 810 • Enhancements: $9715/yr First Annual Payment = $13,315 + a one-time payment of $810 for cost share of fence construction

50. Categories:Meeting two major constraints Entitlement Program with many eligible applicants Limited Funding