Order Code IB96030
CRS Issue Brief for Congress
Received through the CRS Web
Soil and Water Conservation Issues
Updated November 1, 2005
Jeffrey A. Zinn
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

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CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Evolution of Federal Resource Conservation Issues
Current Major Conservation Activities
Conservation Reserve Program (CRP)
Wetlands and Agriculture
Environmental Quality Incentives Program (EQIP)
Conservation Security Program (CSP)
Technical Assistance
Selected Other Conservation Activities
Watershed Programs
Conservation Compliance and Sodbuster
Resource Conservation and Development (RC&D)
Farmland Protection Program (FPP)
Wildlife Habitat Incentives Program (WHIP)
Emergency Programs
Water Quality Programs and Initiatives
Private Grazing Lands Program
Grasslands Reserve Program
Air Quality Activities
Research and Technical Activities
Other Conservation Programs and Provisions in the 2002 Farm Bill
Implementing the 2002 Farm Bill Conservation Provisions
Conservation Funding
FY2006 Appropriations
FY2006 Budget Reconciliation
2007 Farm Bill
LEGISLATION
CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS

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Soil and Water Conservation Issues
SUMMARY
Soil and water conservation may be
Two Department of Agriculture agencies
prominent farm policy topics in the 109th
implement most agriculture conservation
Congress as the Administration continues to
programs, which attract voluntary participants
implement provisions in the 2002 farm bill
by providing financial and technical incen-
(P.L. 107-171) and starts to prepare for the
tives. The Natural Resources Conservation
next farm bill. The 2002 farm bill increased
Service provides technical assistance and
spending and expanded the scope of the
administers most programs, and the Farm
conservation effort by reauthorizing and
Service Agency administers the most expen-
amending many conservation programs and
sive program currently (the CRP) and an
enacting new ones, mostly through FY2007.
emergency program.

The Congressional Budget Office (CBO)
As both agencies implement the farm
estimated that conservation spending would
bill, controversies have arisen, especially
increase by $9.2 billion in new mandatory
when Members disagree with the Administra-
budget authority above the April 2001 base-
tion’s interpretation of the law. Two of the
line through FY2007 (and the March 2004
larger controversies have been how to fully
baseline raised this total by an additional $2.3
fund technical assistance in support of the
billion). Examples of increases include the
mandatory programs, and how to implement
Environmental Quality Incentives Program
the Conservation Security Program (CSP).
(from $200 million annually to $1.3 billion in
The first was resolved with legislation enacted
FY2007) and the Farmland Protection Pro-
in late 2004 (P.L. 108-498). The second has
gram (from a total of $35 million to $125
remained, however, as Congress has limited
million annually starting in FY2004). Enroll-
funding for the CSP and NRCS has responded
ment ceilings were raised for the Conservation
to less funds by limiting program eligibility to
Reserve Program (CRP) (from 36.4 million
specified watersheds. Program proponents
acres to 39.2 million acres) and the Wetlands
both seek more funding and oppose this eligi-
Reserve Program (from 1,075,000 acres to
bility limitation.
2,275,000 acres).
The House and Senate Agriculture Com-
Several new programs expand the scope
mittee’s conservation subcommittees both
of the conservation effort. The largest of these
held oversight hearings in 2004. This year,
(potentially), the Conservation Security Pro-
the Senate subcommittee held hearings on
gram (CSP), provides payments to producers
endangered species on July 26 and the Conser-
who address natural resource concerns on
vation Reserve Program on July 27.
private lands in specified locations. Other new
programs conserve grasslands, address surface
Appropriators continue to influence
and ground water conservation needs and
conservation topics through their actions.
conservation issues in certain regions, permit
They recently completed action on FY2006
approved third parties to provide conservation
appropriations with a conference agreement
assistance, and (in the forestry title) replace
that makes cuts in several mandatory pro-
existing programs with a new consolidated
grams. Longer-term cuts continue to be con-
financial assistance program.
sidered in connection with reconciliation and
other legislation.
Congressional Research Service ˜ The Library of Congress

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MOST RECENT DEVELOPMENTS
Impacts from Hurricane Katrina may affect several aspects of the conservation effort.
Funding for emergency programs may be substantial, and staff and program resources may
be shifted to assist in the clean up. Funds from other programs may also be shifted into the
area of impact to help farmers and land owners address conservation needs. The
Administration has proposed shifting funds, including $10 million from an agriculture
conservation program, to help pay for hurricane-related disaster relief.
A conference committee has completed action on FY2006 funding for agriculture. The
House has approved the committee report (H.Rept. 109-255), and Senate action is
anticipated. For conservation, the conference committee included more funds for
discretionary conservation programs than was in either the House or the Senate bill, while
making cuts to several mandatory programs. Congress also continues to work on
reconciliation legislation, and reductions in funding for conservation programs are prominent
in recommendations passed by the House and Senate Agriculture Committees. The House
version would reduce conservation spending by $760 million over five years, while the
Senate version would reduce conservation spending by $1,054 million over the same time
period.
Agencies at USDA continue to implement conservation programs. Recent
announcements include an August 2005 announcement that 110 watershed would be eligible
for the Conservation Security Program in FY2006; an August 2005 announcement about
extending contracts and reenrollment of more than 28 million acres in the Conservation
Reserve Program; an April 2005 announcement soliciting input about future priorities for the
Environmental Quality Incentives Program; and a September 2005 announcement of a pilot
initiative for conservation planning in nine states.
BACKGROUND AND ANALYSIS
Evolution of Federal Resource Conservation Issues
Conservation of soil and water resources has been a public policy issue for more than
60 years, an issue repeatedly recast as new problems have emerged or old problems have
resurfaced. Two themes involving farmland productivity dominated debate on this issue
until 1985. One was to reduce the high levels of soil erosion, and the other was to provide
water to agriculture in quantities and quality that enhance farm production.
Congress responded repeatedly to these themes by creating or revising programs. These
programs were designed to reduce resource problems on the farm. They combined voluntary
participation with technical, educational, and financial assistance incentives. By the early
1980s, however, concern was growing, especially among environmentalists, that these
programs were not adequately dealing with environmental problems resulting from
agricultural activities (especially off the farm). Publicized instances of significant problems,
especially soil erosion rates said to rival the dust bowl era, increased awareness and
intensified the policy debate.
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Congress responded, in a watershed event, by enacting four major new conservation
programs in the conservation title of the 1985 Food Security Act. One of these programs,
the Conservation Reserve (CRP), greatly increased the federal financial commitment to
conservation and targeted federal funds at some of the most severe problems by retiring land
under multi-year contracts. The other three, sodbuster, conservation compliance, and
swampbuster, created a new approach to conservation, by halting producer access to many
federal farm program benefits if they did not meet conservation program requirements for
highly erodible lands and wetlands.
Provisions enacted in the next farm bill, in 1990, reflected a rapid evolution of the
conservation agenda, including the growing influence of environmentalists and other non-
agricultural interests in the formulation of conservation policy, and a recognition that
agriculture was not treated like other business sectors in many environmental laws. Congress
expanded this agenda to address groundwater pollution, water quality, and sustainable
agriculture, and allowed for the use of easements, as well as amending existing programs.
Amendments to the CRP reflect these changes; its earlier focus on highly erodible land
shifted to give greater emphasis to environmental concerns.

After the congressional party control switched in 1994, conservation policy discussions
turned to identifying ways to make the conservation compliance and swampbuster programs
less intrusive on farmer activities. This switch also reduced the influence of environmental
interests in developing conservation policy. The 1996 farm bill included a wide ranging
conservation title drafted by the Senate Agriculture Committee staff. The enacted bill gave
considerable attention to wildlife. (For an overview of conservation provisions in the 1996
farm bill, see CRS Report 96-330, Conservation Provisions in the Farm Bill: A Summary.)
The nature of the conservation effort continued to evolve after 1996, as reflected in the
provisions of the 2002 farm bill. Conservation themes included (1) increasing overall
funding, (2) creating new programs and addressing new issues, (3) providing more
conservation on lands that are in production (called working lands), and (4) using funding
for conservation programs to meet world trade obligations. Major conservation activities are
discussed below, followed by other new programs, then implementation activities. (Other
activities that could be categorized as conservation are not discussed below, including those
that center on research, forestry, and energy.) For detailed information about the enacted
provisions in the farm bill’s conservation title, including how they compare with prior law,
see CRS Report RL31486, Conservation Title of the 2002 Farm Bill: A Comparison of New
Law with Bills Passed by the House and Senate, and Prior Law.
Current Major Conservation Activities
USDA’s conservation efforts have centered in recent years on implementing the
Conservation Reserve Program (CRP), wetland protection programs, the Environmental
Quality Incentives Program (EQIP), and the Conservation Security Program (CSP), and on
funding technical assistance. By FY2007, when the current law expires, funding for the
overall conservation effort will be much larger. The suite of programs will place a reduced
emphasis on land retirement programs and to land producing row crops, and more attention
to conservation on other land and to livestock producers. Recognizing this expanding effort,
Congress also included a provision in section 2005 of the 2002 law that requires the
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Secretary to submit a report to both agriculture committees by December 31, 2005 (with
implementing recommendations) about how to better coordinate and consolidate
conservation programs. Lead conservation agencies continue to be the Natural Resources
Conservation Service (NRCS), which provides technical assistance and administers most
programs, and the Farm Service Agency (FSA), which provides cost-sharing assistance and
administers the most expensive program currently, CRP. (For more information on the suite
of current conservation programs, see CRS Report RL32940, Agriculture Conservation
Programs: A Scorecard.)
Conservation Reserve Program (CRP)
Under the CRP, producers can bid to enroll highly erodible or environmentally sensitive
lands into the reserve during signup periods, retiring it from production for at least 10 years.
Successful bidders receive annual rental payments and cost-sharing and technical assistance.
Enrollment is limited to 25% of the crop land in a county. Funding is mandatory spending.
Section 2101 of the 2002 farm bill reauthorizes the CRP through FY2007 and raises the
enrollment cap from 36.4 million acres to 39.2 million acres. Also, only land that was
cropped in four of six years preceding enactment is eligible, thus making it more difficult to
cultivate land primarily to gain access to the program. It makes the six-state pilot program
to retire small, isolated farmable wetlands into a national program, with an enrollment ceiling
of 1 million acres. Some economic uses of enrolled lands are being permitted for the first
time, with a reduction in annual rental payments.
FSA issued an interim rule on May 8, 2003, that implements these changes. FSA’s
summary of participation through September 2005 shows 36.1 million acres were enrolled,
with more than 4 million acres in Texas and about 3.5 million acres in Montana and North
Dakota. In August 2004, USDA requested comments in response to 10 questions it posed
about long-term policy topics related to the CRP. In August 2005, Secretary Johanns
announced that USDA will offer opportunities to reenroll or extend contracts involving more
than 28 million acres of land where current contracts expire in the next five years; specifics
have yet to be announced. Priority for reenrollment will be based on the relative ranking of
the land using the Environmental Benefits Index, and whether the land is located in any of
five national priority areas. Contracts will be offered in five groups, with the land in the
highest ranked group receiving the longest contract extension (10-15 years), while land in
the lowest ranked group would receive contract extensions of two years. In addition, rental
rates will be updated to reflect local market conditions.
USDA has estimated that the average erosion rate on enrolled acres has been reduced
from 21 to less than 2 tons per acre per year. Retiring these lands also expanded wildlife
habitat, enhanced water quality, and restored soil quality. The annual value of these benefits
has been estimated from less than $1 billion to more than $1.5 billion; in some regions where
there is heavy participation, estimated benefits exceed annual costs. However, the
Government Accountability Office (GAO) and others have criticized the potentially
ephemeral nature of these benefits, because the landowner is under no obligation to retain
them after contracts expire, although they must follow a conservation plan on any previously
enrolled highly erodible land to retain eligibility for many types of farm program payments.
In addition to general signups, FSA has enrolled about 3.1 million acres under several
more targeted options. These acres can be enrolled continuously because they provide large
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environmental benefits. The newer options include enrolling up to 500,000 acres of
floodplains to be planted in hardwood trees, with allotments specified for states; enrolling
up to 250,000 acres of field boarders for northern bobwhite quail habitat; and creating up to
250,000 acres of wetlands in non-floodplain areas. The three largest and oldest options are:
! Enrolling portions of fields with especially high environmental values.
Through January 2005, more than 2.25 million acres had been enrolled, with
more than 412,000 acres in Iowa. The most common conservation practice
is buffer strips along water bodies (these strips are usually called riparian
buffers by NRCS). NRCS estimated that almost 1.55 million miles of buffer
strips had been enrolled. FSA enrollment data showed that almost 740,000
acres of buffer strips had been enrolled through September 2005.
! A state-initiated enhancement program (Conservation Reserve Enhancement
Program, or CREP) under which states contribute funds so that higher rents
can be offered to potential participants in smaller specified areas where
benefits will be greater. For example, Maryland, the first state to implement
a program, is enrolling stream buffers, restored wetlands, and highly
erodible lands along streams in a portion of the Chesapeake Bay watershed.
Currently, 26 states have one or more approved enhancement programs.
FSA data show that more than 710,000 acres had been enrolled through
September 2005.
! A program to enroll up to 1 million acres of small, isolated farmable
wetlands. USDA offers signup bonuses to attract participation. Almost
135,000 acres had been enrolled through September 2005, with almost half
those acres in Iowa.
NRCS provides technical assistance in support of CRP, but the 1996 farm bill placed
a cap on funding from the CCC that can be used to reimburse agencies for services provided
to deliver CCC programs. These funds have been insufficient to pay all related technical
assistance costs in recent years, and in FY1999, NRCS briefly suspended CRP-related
activities. Recent efforts to address this issue are discussed in the subsection titled Technical
Assistance, below. (For more information on CRP, see CRS Report RS21613, Conservation
Reserve Program: Status and Current Issues.)
Wetlands and Agriculture
Swampbuster and the Wetlands Reserve Program (WRP) have been the main
agricultural wetland protection programs. (An expanded small, isolated farmable wetlands
program, added to the CRP in the 2002 farm bill, is discussed above.) Under swampbuster,
farmers who convert wetlands to produce crops lose many federal farm program benefits
until the wetland is restored. Swampbuster includes four major exemptions. It allows a
partial penalty once a decade.
Swampbuster has been controversial since it was first enacted. Some from the farm
community view wetland protection efforts on agricultural lands as too extensive or
overzealous. They observe that it protects some sites that appear to provide few of the values
attributed to wetlands. A portion of this group also view these efforts as an unacceptable
intrusion of government into the rights of private property owners, or “takings.”
Environmental and other groups counter that the swampbuster program has been enforced
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weakly and inconsistently, with few violators losing farm program benefits. Controversies
also arise over inconsistencies, such as when adjoining states use different interpretations of
rules that lead to different determinations. The only provision in the 2002 farm bill
amending swampbuster addresses a concern expressed by the farm community by prohibiting
USDA from delegating the authority to make wetland determinations to other parties.
Some concerns raised by the agricultural community about the potential roles of other
federal agencies were thought to have been addressed when a Memorandum of Agreement
(MOA) making NRCS responsible for all federal wetland determinations on agricultural
lands under swampbuster (and the Clean Water Act’s §404 Program) 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) in 1994. But these agencies were unable to revise
the MOA to reflect changes in the 1996 farm bill.
An additional issue for agriculture was raised in January 2001 when the Supreme Court
determined, in Solid Waste Agency of Northern Cook County (SWANCC) v. U.S. Army Corps
of Engineers, that §404 (of the Clean Water Act) wetland permit program should not apply
to certain “isolated waters.” One result is that an estimated 8 million acres of agricultural
wetlands that had been subject to the §404 program will now be subject only to
swampbuster. Some of these wetlands (up to 1 million acres) may be enrolled in the new
farmable wetland component of the CRP. For more information on this decision, see CRS
Report RL30849, The Supreme Court Addresses Corps of Engineers Jurisdiction Over
“Isolated Waters”: The SWANCC Decision.)

The second wetlands program, the WRP, was established in the 1990 farm bill. It uses
permanent and temporary easements and long-term agreements to protect farmed wetlands.
Enrollment reached almost 1.63 million acres in January 2005. Permanent easements
account for more than 80% of the total, and have been perfected on 1.17 million acres. The
Secretary may delegate the administration of easements to other federal or state agencies with
the necessary expertise. Section 2201 of the 2002 farm bill reauthorizes the WRP through
FY2007 and increases the enrollment cap to 2,275,000 acres, while limiting enrollment to
250,000 acres per year. The Office of Inspector General released an audit report earlier in
the year which found that “unwarranted payments” had been made because of lax controls
and poor appraisals.
On June 29, 2004, USDA announced a partnership initiative in Nebraska, modeled after
the CREP component of the CRP, to enroll almost 19,000 acres. This may be a prototype
for future initiatives. Another wetland protection program is created in Section 2101 to retire
1 million acres of small isolated agricultural wetlands as part of the CRP, and a more recent
initiative taken administratively will be used to create 250,000 acres of wetlands (see the
CRP discussion, above). (For more information about wetlands, see CRS Issue Brief
IB97014, Wetland Issues, updated regularly.)
Environmental Quality Incentives Program (EQIP)
EQIP provides financial incentives to induce farmers to participate in conservation
efforts. It pays a portion of the cost of installing or constructing approved conservation
practices. EQIP is a mandatory spending program which supports structural, vegetative, and
land management practices. Under provisions in the 2002 farm bill, annual funding is
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authorized to increase from $200 million in FY2002 to $1.3 billion in FY2007, with 60% of
these funds each year to be used to address the needs of livestock producers. A plan is
required to participate. The total of all EQIP payments a single entity can receive, combined,
is $450,000 through FY2007. Contracts can be 1 to 10 years in length. Producers with
comprehensive nutrient management plans are eligible for incentive payments, and producers
receiving funding for animal waste manure systems must have these plans. Cost share
assistance can be higher for beginning and limited resource producers. The implementing
regulations list four national priorities that guide decisions about which producers receive
assistance and help optimize environmental benefits from this program. NRCS has called
for public comments about whether these priorities should be altered, and held a national
listening session on May 5, 2005 (and state listening sessions) to gather input.
Three new subprograms are authorized under EQIP. First, a portion of EQIP funds in
FY2003 through FY2006 can be used to make grants for innovative efforts, such as fostering
markets for nutrient trading. On September 23, 2004, NRCS announced that it had awarded
$14.5 million to 41 entities. It solicited proposals for FY2005 in March. Second, additional
funds, starting at $25 million in FY2002 and growing to $60 million annually between
FY2004 and FY2007 are provided for a new ground and surface water conservation program
within EQIP. The first year that funds were available, $53 million was provided to 17
western states to implement water conservation practices in response to drought conditions;
a total of 32 states have received assistance. Third, an additional $50 million is earmarked
for the Klamath River basin in Oregon and California, and is to be provided as soon as
possible; through FY2004, more than $31 million had been allocated. In FY2004, funds
were used to complete irrigation management plans on more than 30,000 acres and apply
conservation practices on more than 6,300 acres.
Interest in participating in EQIP continues to far exceed available funds. For FY2004,
for example, NRCS reports that it received almost 183,000 applications, but was only able
to sign almost 48,000 contracts. The cost of funding the remaining applications is more than
$2.0 billion. On May 23, 2004, USDA announced that it was making $18.3 million available
to fund 1,153 contracts with low income farmers. (For further information on EQIP, see
CRS Report RS22040, Environmental Quality Incentives Program (EQIP): Status and
Issues.)
Conservation Security Program (CSP)
Section 2001 of the 2002 farm bill authorizes the new Conservation Security Program
(CSP) to provide payments to producers on all agricultural land that was cropped in four of
six years before 2002. Payments are based on which of three levels of conservation is
planned for and practiced. The lowest level allows contracts of five years and annual
payments up to $20,000; the middle level allows contracts of 5 to 10 years and annual
payments up to $35,000; the top level allows contracts of 5 to 10 years and annual payments
up to $45,000. The lowest level requires a plan that addresses at least one resource concern
on part of a farm; the middle level requires a plan that addresses at least one resource concern
on the entire operation, and the top level requires a plan to address all resource concerns on
the entire operation.
Implementation has proven controversial, as the authorizing legislation created this
program as a true entitlement, but appropriators prohibited funding in FY2003, then allowed
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only $41.4 million in FY2004 and $202 million in FY2005 to implement this program.
NRCS issued a draft rule that generated more than 10,000 comments, then issued an interim
final rule on June 21, 2004. This rule requires interested producers to complete a self-
assessment to determine their eligibility. NRCS designed the program so that it could be
expanded or contracted from year to year based on funding levels, by limiting signup each
year to producers in specified watersheds. Based on this rule, signups in the summer of 2004
enrolled nearly 2,200 producers in 18 specified “priority watersheds.” On November 2,
2004, NRCS announced that 202 watersheds encompassing more than 83 million acres in
every state would be eligible for the FY2005 signup, which closed on May 28. On July 25,
it announced that more than 12,500 contracts had been accepted; the largest number (2,040)
was in Iowa. In a separate action that will affect CSP in the future, Congress capped total
funding for CSP over the next 10 years at $6.0 billion to pay for disaster assistance during
October 2004 (Division B, P.L. 108-324). This action generated complaints from program
supporters in Congress and elsewhere. On August 25, it announced that land in 110
watersheds in portions of all 50 states would be eligible to enroll in FY2006. (For more
information, see CRS Report RS21739, The Conservation Security Program in the 2002
Farm Bill; and CRS Report RS21740, Implementing the Conservation Security Program.)
Technical Assistance
NRCS provides technical assistance (TA) at the request of the landowner to conserve
and improve natural resources. TA includes professional advice on how to design, install,
and maintain land management and structural practices that provide conservation benefits.
NRCS combines that advice with knowledge of local conditions. TA is a component of most
conservation programs, and NRCS estimates that the cost of providing it in FY2004
amounted to about $1 billion. Almost $400 million came from the CCC and the remainder
was in the Conservation Operations as a line item.
A subsection of §2701 of the 2002 farm bill provided that technical assistance in
support of each mandatory program come from the funding provided by the CCC for that
program. However, the Office of Management and Budget, supported by the Department of
Justice, issued an opinion in late 2002 that technical assistance funding for mandatory
programs remains limited under a cap that has been placed in §11 of the CCC charter under
prior law. Many in Congress had thought that the language in the 2002 farm bill had
resolved this issue, and they were supported in this conclusion by a GAO opinion.
The Administration repeatedly proposed to address this limit in appropriations by
creating a new farm bill technical assistance account, to be funded through annual
appropriations in FY2003, FY2004, and FY2005. Congress rejected this proposal each year.
In FY2003 and FY2004, Congress prohibited using any of the discretionary funds from
Conservation Operations for technical assistance to implement any mandatory programs.
This prohibition, combined with a retention of the cap on CCC funds that can be spent on
administrative expenses, meant that some of the mandatory programs donated funding for
technical assistance to other programs, thereby leaving less money available to implement
their activities. In P.L. 108-498 (S. 2856), enacted December 23, 2004, Congress amended
the 1985 farm bill to require that technical assistance for each mandatory program be paid
from funds provided for that program annually, and that funding for technical assistance
cannot be transferred among the mandatory funded programs, starting in FY2005.
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Other actions related to technical assistance may also attract congressional interest.
First, GAO released a report in November 2004 titled USDA Should Improve Its Methods for
Estimating Technical Assistance Costs (GAO-05-58). This assessment may contribute to
discussions about the cost of providing technical assistance, which critics state is too high
and reduces the amount of money that goes to program participants. Second, in February
2005, NRCS announced new policy guidance for technical assistance that will establish
national priorities. For the current year, national priorities center on helping producers
comply more easily with environmental regulatory requirements. Third, in September 2005,
NRCS announced that it would initiate a new pilot program for conservation planning in 9
states, using a land-owner self assessment process.
Selected Other Conservation Activities
Federal conservation efforts include many additional activities and programs. The list
below includes only selected conservation activities in USDA that are administered by NRCS
and FSA. Other USDA agencies who make significant contributions to the conservation
effort include the Agricultural Research Service, the Economic Research Service, and the
Forest Service. Also, none of the many conservation programs that have been authorized but
are not being implemented are included.
Watershed Programs. NRCS has worked with local sponsors under several
authorities for more than 50 years to construct more than 10,500 structures to prevent floods,
protect watersheds, control erosion and sediments, and other purposes. A rehabilitation
program for aging small watershed structures was enacted in the Small Watershed
Rehabilitation Amendments of 2000 (§313 of P.L. 106-472). Section 2505 of the 2002 farm
bill authorizes both mandatory funding for the rehabilitation program, rising from $45
million in FY2003 to $65 million in FY2007, and additional appropriations, rising from $45
million in FY2003 $85 million in FY2007. The law permits federal funds to pay for 65%
of rehabilitation projects, with the remainder coming from local sponsors.
Conservation Compliance and Sodbuster. Under conservation compliance and
sodbuster provisions, established in the 1985 farm bill, producers who cultivate highly
erodible land (HEL) 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.
A smaller penalty can be imposed on producers once every five years if circumstances
warrant. Producers who cultivate highly erodible land using an approved conservation plan
are not subject to conservation compliance. Section 2002 of the 2002 farm bill prohibits
USDA from delegating authority to other parties to make highly erodible land
determinations. Any person who had HEL enrolled in the CRP has two years after a contract
expires to be fully in compliance.
According to 1997 data compiled by NRCS, producers were actively applying plans on
more than 97% of the tracts of land that were reviewed. NRCS estimates that soil erosion
on these acres is being reduced from an average of 17 tons per year to 6 tons per year.
Critics, primarily from the environmental community, have contended that USDA staff has
not vigorously enforced these requirements. GAO issued a report critical of the
implementation effort in April 2003 titled USDA Needs to Better Ensure Protection of
Highly Erodible Cropland and Wetlands (GAO-03-418). Others, primarily from the
agriculture community, have countered that the department has been too vigorous at times.
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Resource Conservation and Development (RC&D). RC&D provides a
framework for local interests to work together to improve the economy, environment, and
living standard in multi-county areas through RC&D Councils. USDA provides technical
and financial assistance to councils, and helps them secure funding and services from other
sources. NRCS states that 375 areas encompassing more than 85% of the counties in the
country have been designated. This total includes 7 that were accepted from 28 applications
during the summer of 2003. Section 2504 of the 2002 farm bill permanently reauthorizes the
program, and makes numerous technical amendments.
Farmland Protection Program (FPP). (USDA calls it the Farm and Ranch Lands
Protection Program.) The 1996 farm bill authorized USDA to assist state and local
governments to acquire easements to limit conversion of agricultural lands to nonagricultural
uses. Section 2503 of the 2002 farm bill greatly increases mandatory funding from $50
million in FY2002 to a high of $125 million in FY2004 and FY2005. The definition of
eligible land is expanded to include rangeland, pastureland, grassland, certain forest land, and
land containing historic or archeological resources. The program is subject to conservation
compliance. Certain private nonprofit organizations can compete for these funds. Eligible
lands must be subject to a pending offer. Through FY2004, almost $265 million had been
obligated to acquire 870 easements on almost 178,000 acres in 37 states. An additional 959
easements are pending on more than 209,000 acres in every state. States where the most
funds have been obligated include Maryland ($17.7 million), Pennsylvania ($15.8 million),
and New Jersey ($15.5 million).
Wildlife Habitat Incentives Program (WHIP). WHIP was authorized in 1996 to
use a total of $50 million from mandatory funds allocated to the CRP to provide cost sharing
and technical assistance for conservation practices that primarily benefit wildlife. This
money was allocated in FY1998 and FY1999. Congress provided additional conservation
funding for FY2001, and the Department allocated $12.5 million to WHIP. Section 2502 of
the 2002 farm bill provides $15 million in FY2002, growing to $85 million in FY2005 and
thereafter. It provides that up to 15% of the funding each year can be used for higher cost
sharing payments to producers who protect and restore essential plant and animal habitat
under agreements of at least five years. Through FY2004, more than 2.8 million acres have
been enrolled. In FY2004, 3,012 contracts were signed, affecting about 432,000 acres.

Emergency Programs. The Emergency Watershed Program (EWP) is administered
by the NRCS and the Emergency Conservation Program (ECP) is administered by the FSA.
The EWP provides technical and cost sharing assistance for projects that restore land after
flooding and protect it from future damage. The ECP provides cost-sharing and technical
assistance to rehabilitate farmland damaged by natural disasters, and to carry out emergency
water conservation measures during severe drought. Emergency programs are implemented
most years; for example, the FY2004 omnibus appropriations bill provided $150 million of
EWP funds and $22 million in ECP funds in response widespread wildfires in southern
California. Substantial funding can be anticipated this year in the wake of Hurricane Katrina
and other natural disasters.
Water Quality Programs and Initiatives. Groundwater and nonpoint pollution
have emerged as major issues for conservation policy as more instances of contamination in
which agricultural sources play major roles have been identified. Specific occurrences that
drive public interest and concern range from a very large hog farm waste spill in North
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Carolina to the Pfiesteria outbreak and fish kills in portions of the Chesapeake Bay and
hypoxic conditions creating a large “dead zone” in the central Gulf of Mexico and in several
estuaries. Questions are being raised about the extent of the problems, the severity of the
potential threat to human health, the adequacy of government programs, and the contribution
of agriculture. In some cases, contamination may have resulted even though producers
followed accepted agricultural practices, and did not commit illegal acts. Current agricultural
conservation programs that address water quality concerns center on EQIP, plus both the
Enhancement Program (CREP) and the continuous enrollment option under CRP.
EPA and USDA announced a final revised rule for managing nutrient wastes from
animal feeding operations, as required under court order, on December 12, 2002. Large
operators will be required to develop comprehensive nutrient management plans while
smaller operators will be encouraged to develop them. It was published in the February 12,
2003 Federal Register, effective April 14, 2003. Farm interests were generally pleased
because it will affect less producers and cost less when compared with earlier proposals. On
February 27, 2004, NRCS released its National Animal Agriculture Conservation
Framework, which it describes as a blueprint for assisting livestock and poultry producers
with their voluntary efforts to deal with environmental issues. (For more information on this
rule, see CRS Report RL31851, Animal Waste and the Environment: EPA Regulation of
Concentrated Animal Feeding Operations (CAFOs).)
Limiting total maximum daily loadings (TMDL) is another approach to cleaning
polluted waterways authorized under the Clean Water Act. Congress included a rider in H.R.
4425, the FY2001 Military Construction and FY2000 Urgent Supplemental Appropriations
bill, prohibiting EPA from using FY2000 or FY2001 funds to implement the TMDL proposal
the Clinton Administration had announced in August, 1999. It responded to the rider by
issuing a revised rule delaying the effective date of the program until October 31, 2001. (For
more information, see CRS Report RL30437, Water Quality Initiatives and Agriculture.)
Water quality problems are likely to be addressed not only through existing programs,
such as EQIP, discussed above, but also through the new farm bill programs, including
! the Conservation Security Program, enacted in §2001, which is expected to
be used to address water quality problems, especially nutrient management;
! the Ground and Surface Water Conservation Program, enacted in §2301 as
part of EQIP and discussed above;
! the Small Watershed Rehabilitation Program amendments enacted in §2505;
! the Agricultural Management Assistance Program, reauthorized in §2501,
to provide $20 million annually between FY2003 and FY2007 and $10
million annually thereafter to 15 specified states that have been chronically
underserved by risk management programs (subsequent amendments limit
conservation funding to $14 million annually);
! a new program for the Great Lakes Basin states enacted in §2502;
! a new Grassroots Source Water Protection Program, enacted in §2502; and
! a new program for the Delmarva Peninsula enacted in §2601-2604.

In addition, USDA released a draft framework for addressing animal agriculture
conservation on September 9, 2003. The framework discusses how USDA can help
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producers meet environmental regulatory requirements and promote new opportunities while
sharing knowledge and increasing accountability.
The 108th Congress did enact legislation (P.L. 108-328) authorizing funding for the New
York City Watershed Protection Program through FY2010. This program funds conservation
practices on farms in watersheds that provide drinking water to New York City to maintain
a level of water quality that precludes the need to build a new water treatment plant.
Private Grazing Lands Program. A voluntary coordinated technical and
educational assistance program was enacted in the 1996 farm bill to maintain and improve
resource conditions on private grazing lands. Section 2502 of the 2002 farm bill reauthorizes
the program through FY2007 with appropriations of $60 million annually. Appropriators
continue to earmark a portion of NRCS’s Conservation Operations funds for this effort
annually, providing $23.4 million for FY2004 and $23.5 million in FY2005.
Grasslands Reserve Program. Section 2401 of the 2002 farm bill authorizes a
new Grasslands Reserve Program to retire 2 million acres under arrangements ranging from
10-year agreements to permanent easements, permits the delegation of easements to certain
private organizations and state agencies, and provides up to $254 million in mandatory
funding. The first national signup, in FY2003, placed more than 240,000 acres under
contract. For FY2004, the Department issued an interim final rule on May 11, 2004, that
guided enrollment of 283,000 acres under 1,055 contracts; an additional 9,000 applications
were processed, including at least one in every state. All the authorized funding will have
been spent by the end of FY2005.
Air Quality Activities. The 1996 farm bill created an interagency air quality task
force in USDA. The task force represented USDA on scientific topics such as EPA’s
proposals to revise National Ambient Air Quality Standards for ground-level ozone and two
sizes of particulates in 1997. USDA and EPA cooperate under a Memorandum of
Agreement signed in January 1998. More recently, federal agencies have been discussing
how agricultural practices and programs affect global warming, especially by sequestering
carbon. On March 23, 2005, USDA announced that NRCS and the National Forest Service
would start to track the amount of carbon that farmers would be sequestering. The 2002
farm bill did not amend air quality provisions. (For more information, see CRS Report 97-
670, Agriculture and EPA’s Proposed Air Quality Standards for Ozone and Particulates.)
Research and Technical Activities. Many agencies in USDA conduct research
and provide technical support. NRCS, for example, provides basic data about resource
conditions and characteristics through the soil and snow surveys and the National Resources
Inventory. It also does applied research through the plant material and technical centers.
Other Conservation Programs and Provisions in the 2002 Farm Bill. In
addition to the farm bill programs described above, the conservation title contains several
other programs. It:
! authorizes Partnerships and Cooperation in §2003, using up to 5% of
conservation funding, for both stewardship agreements with other entities
and special projects designated by state conservationists to enhance
technical and financial assistance to address resource conservation issues.
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! amends administrative requirements in §2004, to provide to beginning and
limited resource farmers and ranchers and Indian tribes, and to protect the
privacy of personal information related to natural resource conservation
programs and information about National Resources Inventory data points.
! reauthorizes the Agricultural Management Assistance Program through
FY2007 in §2501, and provides an additional $10 million (for a total of $20
million) in mandatory funding annually.
! authorizes a Grassroots Source Water Protection Program in §2501 and
annual appropriations of $5 million through FY2007.
! authorizes a Great Lakes Program for Erosion and Sediment Control in
§2501 and annual appropriations of $5 million through FY2007.
! authorizes Desert Terminal Lakes provisions in §2507 to require the
Secretary to transfer $200 million in mandatory funds to the Bureau of
Reclamation to pay for providing water to at-risk natural desert terminal
lakes; other provisions prohibit using these funds to purchase or lease water
rights.
! authorizes appropriations of matching funds through FY2007 to demonstrate
local conservation and economic development through a Conservation
Corridor Demonstration Program with state and local partners on the
Delmarva Peninsula in §2601-2604.
Implementing the 2002 Farm Bill Conservation Provisions
Official actions, including announcements in the Federal Register (FR), taken to
implement selected conservation programs authorized or significantly amended by the 2002
farm bill are listed below.
Agricultural Management Assistance Program. August 28, 2002 FR contains
proposed rule, and April 9, 2003 FR contains a final rule. The FY2004 appropriations
legislation amended the 2002 farm bill by allocating these funds among three purposes in
2004 and thereafter, and on February 23, 2004, USDA announced the FY2004 allocations
for conservation to eligible states.
Conservation Innovation Grants. An interim final rule and request for proposals
was published in the March 29, 2004 FR. A final rule and request for FY2005 proposals was
published in the January 11, 2005 FR.
Conservation Partnership Initiative. A call for FY2004 proposals was issued in
the July 24, 2004 FR, and a call for FY2005 proposals was issued in the December 17, 2004
FR.

Conservation of Private Grazing Lands Program. June 29, 2002 FR contains
proposed rule. November 12, 2003 FR contains final rule.
Conservation Reserve Program. A general signup, held between May 5 and June
13, 2003, was administered under an interim final rule, published in the May 8, 2003 FR.
The final rule was published in the May 14, 2004 FR. FSA announced three new initiatives
and called for responses to 10 questions about the future of CRP in an August 4, 2004 FR
announcement.
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Conservation Security Program. February 18, 2003 FR contains advance notice
of proposed rule making, with request for comments by March 20, 2003. January 2, 2004
FR contains a proposed rule. The May 4 FR contains a notice describing the criteria used to
select eligible watersheds. An interim final rule was published in the June 21, 2004 FR to
guide the FY2004 sign up.
Environmental Quality Incentive Program (EQIP). July 24, 2002 FR contains
notice providing additional $275 million for FY2002. February 10, 2003 FR contains notice
of proposed rules and requests comments by March 12, 2003. May 30, 2003 FR contains
final rule.
Farmland Protection Program (FPP). May 30, 2002 FR notice requests proposals
for FY2002, due August 15, 2002. October 28, 2002 FR contains proposed rule, with
comments to be submitted by December 30, 2002. May 16, 2003 FR contains final rule.
March 17, 2004 FR contains request for proposals, to be submitted by May 16, 2004. (Note:
NRCS is now calling this the Farm and Ranch Land Protection Program.)
Grasslands Reserve Program. June 13, 2003 FR contains a notice of availability
of funds that will apply to the 2003 signup only, which started on June 30, 2003. A
September 24, 2003 press release announced that a total of $49.7 million had been released
to all 50 states, funding only a very small portion of the $1.7 billion that had been requested.
The May 11, 2004 FR contains an interim final rule.
Resource Conservation and Development Program. Some action under
discretionary authority but no additional rule making.
Small Watershed Rehabilitation Program. Some action under discretionary
authority but no additional rule making.
Technical Assistance Service Providers. On November 7, 2002, a “summit”
is hosted by USDA in Washington to receive public input. November 21, 2002 FR contains
interim final rule, with comments to be submitted by February 19, 2003. Comments were
requested by June 23, 2003, on an interim final rule establishing payment rates for technical
service providers and USDA policy for subcontracting in the March 24, 2003 FR. NRCS
announced payment rates for providers, by state, on August 6, 2003, and revised rates on
October 27, 2004. A final rule was published in the November 11, 2004 FR.
Wetland Reserve Program. June 7, 2002 FR contains final notice of amendment
to existing rule.
Wildlife Habitat Incentive Program. July 24, 2002 FR contains final rule
providing additional cost share assistance to participants with agreements exceeding 15
years.
Conservation Funding
FY2006 Appropriations. Conservation spending combines discretionary spending
in five accounts (all administered by NRCS) and mandatory funding for a dozen programs
through the Commodity Credit Corporation. (This excludes two emergency programs that
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are almost always funded in supplemental appropriations legislation.) The conference
agreement provides more funds for discretionary programs ($1,004.2 million) than either the
Senate-passed bill ($964.0 million) or the House-passed bill ($939.8 million). This amount
is also a small increase from the FY2005 appropriation ($991.9 million) and a substantial
increase from the Administration’s FY2006 request ($814.4 million). The agreement rejects
many of the Administration’s proposed reductions from FY2005 funding for discretionary
programs. The agreement also reduces funding for selected mandatory conservation
programs. With these reductions, overall mandatory funding will decline slightly from
$3.805 billion in FY2005 to $3.729 billion in FY2006.
Discretionary Programs. For the largest program, Conservation Operations, the
conference agreement provides $839.5 million, which is an increase above both the Senate
bill ($819.6 million) and the House bill ($773.6 million). It is also more than the FY2005
appropriation ($830.7 million) and much more than the Administration request ($767.8
million). The reduction requested by the Administration was based on a decision not to fund
earmarks, which totaled more than $122 million in FY2005 and would have saved an
estimated $114.3 million in FY2006. However, the conference agreement rejects this
proposal and the committee report identifies numerous earmarks. It requires the Secretary
to report to the appropriations committees by July 1, 2006, on any projects or activities
earmarked in this bill for which funds have not been obligated. The conference agreement
does not allocate any funds to assist producers in meeting regulatory requirements, as called
for the Administration request and the House bill.
Among the other discretionary programs, the conference agreement provides $75
million for Watershed and Flood Prevention Operations, which is $15 million more than
provided in the House and Senate bills and the same as the FY2005 appropriation, but $75
million more than the Administration had requested. It limits spending on technical
assistance to $30 million of this total. For Watershed Surveys and Planning, the conference
agreement provides $6.1 million, which is less than the House and last year’s appropriation
($7.0 million) but more than the Senate ($5.1 million). The conference agreement provides
$31.6 million for the Watershed Rehabilitation Program, which is more than the Senate
provided ($27.3 million) and the Administration had requested ($15.1 million), but less than
the House provided ($47.0 million). The conference agreement provides $51.3 million for
the Resource Conservation and Development Program (RC&D), which is nearly identical
to funding in both Chambers ($51.2 million in the Senate and $51.4 million in the House).
These amounts are substantially more than the Administration request of $25.6 million.
In one major change from the Administration’s request, the conference committee, like
both Chambers, includes numerous priority projects using funds from the Watershed and
Flood Prevention Operations account, but does not earmark specific amounts. The
Administration had asserted that elimination of Watershed and Flood Prevention Operations
would allow resources to be redirected to other priority “regulatory challenges.” In a second
major change from the request, the conference committee, like both Chambers, rejects the
Administration’s proposed reduction to the RC&D account that would have been based on
a change in policy to phase out federal support to RC&D councils after they had received
federal funds for 20 years. Of the 375 participating councils, 189 (50%) would have lost
funding under this proposal. The conference agreement adopted language from the House
committee report stating that changes in funding policy for this program should be based on
“effectiveness and performance” rather than on the age of councils.
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Mandatory Programs. Overall funding for the suite of mandatory conservation
programs declines slightly from FY2005. Specific reductions in the conference agreement
and in bills passed by both Chambers are listed in Table 1on the next page. The conference
committee does not place funding or enrollment limits on the largest of these programs, the
CRP. This action concurs with the Administration request, and, as a result, program
spending is estimated to increase by $79 million to $2.021 billion in FY2006. All the
mandatory programs have authorized dollar or acreage limits either annually or for the life
of the authorization, so changes in funding should be compared with these limits, which can
change from year to year. One large reduction from FY2005, for the Grasslands Reserve
Program from $128 million to $0 in FY2006, reflects the allocation of the entire $254
million authorized in the FY2002 farm bill by the end of FY2005. The largest reductions are
EQIP, authorized at $1.2 billion but slated to receive $1.017 billion in FY2006, and the
WRP, limited to enrolling 150,000 acres rather than the 250,000 acres authorized.
Among the largest increases from FY2005 are the CRP (up $79 million) and the CSP
(up $56 million). While the CSP would increase under the request, CBO estimated in its
January 2005 baseline that it would grow by $254 million in FY2006, rather than this smaller
amount, so program supporters are likely to view this increase as a significant reduction from
the higher estimated level.
The conference agreement also provides $2.5 million to initiate a new 2 million acre
land retirement program authorized in forestry legislation, the Healthy Forest Reserve. This
program will be administered by NRCS. The Senate bill would have provided $5 million to
implement it while the House bill did not provide any funding. (For more information on
authorized funding levels for the mandatory conservation programs and reductions, see CRS
Report RS22243, Mandatory Funding for Agriculture Conservation Programs. For a more
detailed review of FY2006 appropriations, including a table showing the reductions in
mandatory programs from authorized levels, see CRS Report RL32904, Agriculture and
Related Agencies: FY2006 Appropriations.)
The FY2006 appropriation still may be affected by other actions. The Administration
proposed a package of rescissions to partially offset the emergency costs associated with
hurricane-related disaster relief on October 28, 2005. These proposed rescissions total $2.3
billion from “lower-priority federal programs and excess funds” in FY2006 funding.
Programs in the Department of Agriculture would contribute $641 million to this effort, with
$10 million coming from unobligated balances in the Conservation Operations account.
FY2006 Budget Reconciliation. The House and Senate Agriculture Committees
have completed action on their recommendations for budget reconciliation that would reduce
agriculture funding from FY2006 through FY2010. The House recommendations would
reduce spending by a total of $3.7 billion over that time period while the Senate would
reduce it by $3.0 billion. Conservation programs would provide $760 million (21% of the
total) under the House version, and $1,054 million (35% of the total) under the Senate
version. More specifically, the House version would limit authorized spending for the CSP
(a savings of $504 million), eliminate funding for the Agriculture Management Assistance
Program (a savings of $31 million), and both reduce funding for the Watershed
Rehabilitation Program and prohibit funds to be carried over from year to year (a savings of
$225 million). The Senate would also limit CSP funding (a savings of $821 million), reduce
authorized acreage in the CRP (a savings of $129 million), and reduce funding for EQIP (a
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savings of $104 million). For more information on the reconciliation, see CRS Report
RS22086, Agriculture and FY2006 Budget Reconciliation.
Table 1. Changes in Mandatory Conservation Programs
FY2005
FY2006
FY2006
FY2006
FY2006
Enacted
Authorizatio
House bill:
Senate bill:
Program
Conference
(P.L. 108-447): n under 2002
Allowed
Allowed
Agreement
Allowed Level
Farm Bill*
Level
Level
Environmental Quality
$1.017 billion $1.200 billion $1.052 billion $1.017 billion $1.017 billion
Incentives Program
Conservation Security
$202.4 million
$331 million
$245 million
$331 million
$259 million
Program
Wildlife Habitat
$47 million
$85 million
$43 million
$47 million
$43 million
Incentives Program
Wetlands Reserve
154,500 acres 250,000 acres 154,500 acres 150,000 acres 150,000 acres
Program
Farm and Ranch
$112 million
$100 million
$73.5 million
$100 million
$73.5 million
Lands Protection
Program
Ground and Surface
$51 million
$60 million
$51 million
$51 million
$51 million
Water
Small Watershed
$0
$210 million
$0
$0
$0
Rehab. Program
Ag. Management
$0
$20 million
$6 million**
$20 million
$6 million
Assistance
* Figures in the FY2006 authorized column represent how much would be available under current law, including the
carryover of unobligated balances from prior years, had no restrictions been placed.
** Under this program, as amended, $14 million of the total goes to NRCS, and that would not be funded; the remaining
$6 million, which goes to RMA and AMS, would be fully funded.
2007 Farm Bill
Many interests are starting to discuss what provisions might be considered for a farm
bill in 2007. Coalitions are forming and groups are developing their priorities and positions.
Farm bill considerations are in the formative stages in Congress, however, and there is little
specific on which to usefully comment at this time. As a possible prelude to farm bill
discussions, the Senate Agriculture Committee’s Subcommittee on Forestry, Conservation,
and Rural Revitalization held hearings on endangered species and on the CRP on July 26 and
27, respectively.
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LEGISLATION
Bills will be listed in this section only after the 109th Congress takes some action beyond
introduction.
CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS
U.S. Congress. Senate. Committee on Agriculture. Conservation. Hearings. 107th
Congress, 2nd session. February 28 and March 1, 2002. 250p. S. Hrg. 107-225.
——Conservation on Working Lands for the New Federal Farm Bill. Hearings. 107th
Congress, 1st session. July 31, 2001. 86p. S. Hrg. 107-828.
——Oversight of Conservation Programs of the 2002 Farm Bill. Hearings. 108th Congress,
2nd session. May 11, 2004. 155p. S. Hrg. 108-564.
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