Order Code RS22243
September 7, 2005
CRS Report for Congress
Received through the CRS Web
Mandatory Funding for Agriculture
Conservation Programs
Jeffrey Zinn
Specialist in Natural Resources Policy
Resources, Science, and Industry Division
Summary
The Farm Security and Rural Investment Act of 2002 authorized large increases in
mandatory funding for several agricultural conservation programs. Since FY2002,
Congress has acted, through the appropriations process, to limit funding for some of
these programs below authorized levels. It limited funding for all these programs,
combined, to 97.6% of the authorized total in FY2003, 93.1% in FY2004, and 89.5%
in FY2005. Program supporters decry these growing reductions as changes that
increasingly compromise the intent of the farm bill. Others counter that, even with these
reductions, funding for these programs continues to grow, from almost $3.1 billion in
FY2003 to more than $3.8 billion in FY2005. This report reviews the funding history
of these programs since the 2002 farm bill was enacted. It will be updated periodically.
Introduction
The Farm Security and Rural Investment Act of 2002 (P.L. 107-171) authorized
increased mandatory funding for agriculture conservation programs. Mandatory funding
means that the amount authorized by Congress is available unless limited to smaller
amounts in the appropriations process; if appropriators do not act, the amount that was
authorized is provided to the program. These mandatory funds are provided by the U.S.
Department of Agriculture’s Commodity Credit Corporation, a financing institution for
many agriculture programs, including commodity programs and export subsidies.
While most conservation programs currently are authorized using mandatory
funding, discretionary funding is used for five conservation programs. For discretionary
programs, appropriators decide how much funding to provide each year in the context of
the annual agriculture appropriations bill. Four of these programs do not specify a
maximum limit, leaving the setting of the funding level to the discretion of the
appropriators. Conservation program advocates prefer mandatory funding over
discretionary funding. They believe that it is generally easier to defend authorized
mandatory funding levels from reductions during the appropriations process than to secure
appropriations each year. However, since FY2002, Congress has limited funding for
some of the mandatory programs each year below authorized levels in annual
Congressional Research Service { The Library of Congress

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CRS-2
appropriations acts. Supporters of these programs, including environmentalists,
conservationists, and some in agriculture, decry these reductions as significant changes
from the intent of the farm bill. They contend that such reductions compromise the ability
of these programs to provide the magnitude of anticipated benefits to producers and the
environment. Others, including those interested in reducing agricultural expenditures or
in spending these funds for other agricultural purposes, counter that, even with these
reductions, funding is substantially higher and continues to increase from year to year.
Mandatory Conservation Funding Before 2002
Congress provided mandatory funding for selected conservation programs for the
first time in the 1996 farm bill (P.L. 104-127).1 Prior to 1996, with the single exception
identified in footnote 1, all conservation programs were funded as discretionary programs.
Mandatory funding was viewed as a much more desirable approach by conservation
program advocates, who succeeded in having Congress enact provisions that moved some
conservation programs from discretionary to mandatory funding. Some of these
advocates viewed enacting this change in funding as one of their major achievements in
the 1996 farm bill. However, amounts authorized for these programs may seem modest
when compared with today’s levels. Programs funded using mandatory funding, and the
authorized levels under the 1996 law, were:
! Conservation Reserve Program (a maximum of 36.4 million acres at any
time through FY2002, with no dollar amount specified);
! Wetland Reserve Program (a maximum of 975,000 acres at any time
through FY2002, with no dollar amount specified);
! Environmental Quality Incentives Program ($130 million in FY1996, and
$200 million annually thereafter through FY2002);
! Wildlife Habitat Incentives Program (a total of $50 million between
FY1996 and FY2002);
! Farmland Protection Program (a total of $35 million with no time span
specified); and
! Conservation Farm Option ($7.5 million in FY1997, increasing each year
to a high of $62.5 million in FY2002).
The 2002 Farm Bill
The 2002 farm bill greatly expanded mandatory funding for conservation,
authorizing the annual funding levels shown in Table 1. Mandatory funding was provided
both for expiring programs that were reauthorized and for new programs created in this
legislation. This increase in authorized funding levels was widely endorsed for many
reasons. Many supporters of conservation long had been seeking higher funding levels,
and this was another significant step in that effort. An argument that proved to be
particularly persuasive in this farm bill debate was documentation of large backlogs of
producer interest to enroll in many conservation programs. Demand to participate in
some of these programs exceeded the available program dollars several times over, and
some Members reasoned that higher funding was warranted to satisfy this demand.
1 The one exception to this statement is that the 1985 farm bill (P.L. 99-198) authorized
mandatory funding for the Conservation Reserve Program in FY1986 and FY1987.

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CRS-3
The authorization and actual funding for FY2002 are not included in the table. The
FY2002 appropriations legislation was enacted on November 28, 2001, six months before
the 2002 farm bill, and program funding decisions were based on provisions that had been
enacted in the 1996 farm bill. The 2002 farm bill was enacted on May 13, 2002. Indeed,
by the time this farm bill was enacted, the process of determining FY2003 appropriations
was well along.2 Notwithstanding the date of enactment, the 2002 farm bill did authorize
money in FY2002 for several mandatory programs.
Spending Limits on Mandatory Appropriations Since FY2002
Since FY2002, the annual agriculture appropriations acts have capped funding for
some of the mandatory conservation programs below authorized levels each year. The
programs that are limited and the amounts of the limitations change from year to year.
One of these programs, the Wetland Reserve Program, has been capped in enrolled acres,
which appropriators translate into savings, based on average enrollment costs. Table 1
compares the authorized farm bill spending level for each of these programs with the
amount that was actually made available after Congress had completed the appropriations
process.
Many of these annual spending limits did not originate in Congress as, each year, the
Administration has called for lower funding levels than authorized in its budget request.
Since the farm bill states that the Secretary “shall” spend the authorized amounts for each
of these programs each year, action by Congress is required to permit a lesser amount to
be spent. The mix of programs and amounts of reduction in the Administration request
have varied from year. Justification for these proposed reductions are seldom discussed
in budget documents or at appropriations subcommittee hearings. Congress has concurred
with the Administration request some years for some programs. Starting in FY2003, the
requested reductions in mandatory funding below the authorized levels (shown in the
table), are as follows:
! In FY2003, the request was submitted before the farm bill was enacted,
and did not include any requests to reduce funding levels.
! In FY2004, the request was to limit the Wetlands Reserve Program
(WRP) to 200,000 acres ($250 million), limit the Environmental Quality
Incentives Program (EQIP) to $850 million, limit the Ground and Surface
Water Program (GSWP) to $51 million, limit the Wildlife Habitat
Incentive Program (WHIP) to $42 million, limit the Farmland Protection
Program (FPP) to $112 million, limit the Conservation Security Program
(CSP) to $19 million, and eliminate funding for the Watershed
Rehabilitation and Agricultural Management Assistance (AMA)
Programs.
2
In addition, during the FY2001 appropriations process, Congress had provided one-time
funding to several conservation programs beyond what had been authorized in the 1996 farm bill.
These one-time appropriations were congressional and administration responses to a combination
of forecasts of federal budget surpluses, and high demand to participate in these programs.

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CRS-5
! In FY2005, the request was to limit the WRP to 200,000 acres ($295
million), EQIP to $985 million, WHIP to $59 million, FPP to $120
million, CSP to $209 million, and eliminate funding for the Watershed
Rehabilitation and AMA Programs.
! In FY2006, the request was to limit the WRP to 200,000 acres ($321
million), EQIP to $1.0 billion, WHIP to $60 million, FPP to $84 million,
Biomass Research and Development to $12 million, CSP to $274
million, and eliminate funding for the Watershed Rehabilitation and
AMA Programs.
Discussion
While Congress has reduced funding for some of these mandatory conservation
programs, either in support of an Administration request or on its own, the reductions only
exceeded 10% of the total in FY2005. However, this reduction has risen each year, from
less than 2.4% of the total authorized amount in FY2003 to 10.5% in FY2005. Even with
these reductions, however, actual total funding has risen $740 million over the same
three-year time period, which is an increase of more than 21% from the FY2003
authorization.3
Reductions have not been uniform among programs. One of the largest programs,
the Environmental Quality Incentives Program, has absorbed the largest reductions,
totaling $213 million between FY2003 and FY2005. By contrast, the largest mandatory
program, the Conservation Reserve Program, has not been limited in any way by
appropriators since the 2002 farm bill was enacted. Funding for a third program, the
Conservation Security Program, has been amended three times since enactment in 2002,
and it is currently a capped entitlement. As first enacted, it was the first true conservation
entitlement program, that is, any individual who met the eligibility requirements would
be accepted into the program.
More generally, the table shows that these reductions have varied from year to year
and program to program since 2002. At one extreme, the Watershed Rehabilitation
Program has received no mandatory funding in any year (it is one of the five conservation
programs authorized to receive discretionary appropriations as well, and those have been
provided), and at the other extreme, the Conservation Reserve Program has not been
limited in any way. Some of the programs have unusual characteristics which affect how
they are treated for budget purposes, as noted in the table footnotes. For example, the
Grasslands Reserve and Klamath River Basin Programs each have a total authorized level
that is not subdivided by fiscal year in the authorizing legislation. For those programs,
the amount that was spent each year (not the remaining lifetime authorization) is included
for purposes of calculating the percentage by which funding is reduced.
As a result of these characteristics, there are several alternative ways to calculate the
annual and total reduction. However, all of these options lead to the same general set of
observations. First, overall funding for the suite of mandatory agriculture conservation
programs has been reduced each year. Second, the magnitude by which this suite of
3 If the full authorized amount had been provided in FY2005, the increase would have been more
than 35% from the FY2003 authorized amount.

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CRS-6
programs is being reduced has been growing each year. Third, while the reductions, in
total, have been modest as a percent of the total, they may still be significant to current
or potential beneficiaries of those program. Fourth, funding for the discretionary
agricultural conservation programs varies more from year to year, with much larger
percentage reductions than the mandatory programs in some years. Greater variation in
funding for discretionary programs supports the view that using the mandatory approach
has been a more successful and predictable approach to conservation program funding in
recent years. ( For more information on each of these programs, see CRS Report
RL32940, Agriculture Conservation Programs: A Scorecard.)
Concluding Observations
When considering whether reductions in mandatory funding for conservation
programs are compromising the conservation effort, three points should be considered.
First, FY2006 spending for mandatory programs will be subject to the reconciliation
process. Under reconciliation, House and Senate Agriculture Committees are required
to reduce total funding for USDA mandatory programs by $3.0 billion over five years,
including a reduction of $176 million in FY2006. Some are concerned, based on past
experience, that conservation could be asked to bear a disproportionate share of these
reductions. Congressional treatment of conservation spending through the reconciliation
process will indicate how conservation funding is viewed in relation to other agriculture
funding. (For more information on reconciliation, see CRS Report RS22086, Agriculture
and FY2006 Budget Reconciliation.)
Second, it appears highly likely that reductions to mandatory program spending at
the current scale will continue. Reductions have been in every annual appropriations bill
since FY2003, and are in both the House and Senate versions of the FY2006 legislation.
It is uncertain, however, whether these reductions will continue to grow, as a percentage
of the total. Whether they will continue to grow will depend both specifically on
congressional support for conservation, and more broadly on other pressures that
influence federal spending in general. It is likely that the affected programs and the
magnitude of the reductions will vary from year to year, making it difficult to forecast the
future based on the past.
Third, supporters of conservation programs may look for ways to address the
challenge of spending reductions in the next farm bill. However, several broader forces
at work may make it difficult to further protect funding for these conservation programs.
One of those forces may be broader efforts to control federal spending. A second force
may be competition among the various agriculture constituencies for limited funds; the
FY2006 reconciliation process will provide some indication of how conservation will be
treated when Congress must make decisions based on this competition. A third force may
be limits on the capacity of federal conservation agencies at current staffing levels and
with the current approaches, to plan and install all the conservation practices that
increased funding would support, and it is likely that increasing staff levels in federal
agencies to provide more conservation will not be an option.

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