Agricultural Conservation and the
Next Farm Bill
Megan Stubbs
Analyst in Agricultural Conservation and Natural Resources Policy
January 17, 2012
Congressional Research Service
7-5700
www.crs.gov
R42093
CRS Report for Congress
Pr
epared for Members and Committees of Congress

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Agricultural Conservation and the Next Farm Bill

Summary
As Congress debates the next farm bill, the conservation title continues to receive increased
attention and interest from farmers and ranchers as well as environmental and conservation
organizations. Several conservation programs, provisions, and funding authorized in the Food,
Conservation, and Energy Act of 2008 (2008 farm bill) will expire at the end of FY2012.
Discussions for the conservation title could center on amending existing programs, adding new
options to protect or restore resources on agricultural lands, and/or consolidating duplicative
approaches.
Conservation is provided through a combination of technical assistance, cost-sharing, and
performance-based incentives that are supported by education and research programs. The
existing portfolio of conservation includes more than 20 programs, ranging in size and scope.
Participation is voluntary and all farm bill conservation programs are administered by the U.S.
Department of Agriculture (USDA). Generally, farm bill conservation programs may be grouped
by similar characteristics, such as working lands, land retirement and easements, conservation
compliance, and other programs and overarching provisions. The majority of these programs are
authorized to received mandatory funding from USDA’s Commodity Credit Corporation (CCC).
During this time of heightened budgetary concerns, additional emphasis is placed on reducing
mandatory spending. In the past 25 years, conservation has received an increasing level of
mandatory funding authorized through farm bills. Nutrition, direct payments, crop insurance, and
conservation make up 99% of the 10-year estimated baseline funding for farm bill programs. As a
result, conservation is one of the four major sources of mandatory program spending that is
expected to be closely examined during reauthorization. Also, 37 farm bill provisions do not have
baseline funding beyond FY2012, five of which are within the conservation title. It appears that
funding continues to be at the forefront of discussions surrounding the conservation title, and
could likely drive the debate for program reauthorization.
Aside from budgetary issues, other programmatic topics continue to be discussed. Major
questions being debated about conservation include the following: (1) Should existing programs
be amended, and if so, how? (2) Could savings be created by reducing program duplication?
(3) How should funding be divided between programs for land retirement and for working lands?
(4) Should conservation programs be subject to the same program limitations as other commodity
support programs? (5) What will be the impact on the debate of new data that highlights the
connection between conservation practices and positive environmental results? Answers to these
questions have been offered in extensive testimony at hearings, and are reflected in the policy
options that Congress is considering.
The federal response to environmental concerns related to agriculture is viewed as both
supportive and restrictive. One of the primary means of support is provided through the voluntary
conservation programs established in the farm bill. These conservation programs are increasingly
called upon to support best management practices to meet federal environmental requirements;
however, these programs are being considered for funding reductions. Other conservation efforts,
such as conservation compliance on highly erodible lands and wetlands compliance, may be
viewed as restrictive. Potential changes in commodity programs could reduce the effectiveness of
compliance programs. This has caused some to advocate for reestablishing compliance ties to
other farm programs, such as crop insurance.
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Contents
Current Conservation Portfolio........................................................................................................ 1
Programs by Type...................................................................................................................... 1
Working Lands .................................................................................................................... 2
Land Retirement and Easement Programs .......................................................................... 2
Conservation Compliance ................................................................................................... 2
Other Programs and Provisions........................................................................................... 3
Program Funding....................................................................................................................... 4
Issues for the Next Farm Bill........................................................................................................... 5
Budget and Baseline Issues ....................................................................................................... 5
Overall Farm Bill Baseline.................................................................................................. 6
Conservation Programs With No Baseline.......................................................................... 6
Spending Limits on Mandatory Program Spending............................................................ 8
Mandatory Reductions in FY2012 and Extension to FY2014 ............................................ 9
Programmatic Issues................................................................................................................ 10
Simplifying the Conservation Portfolio ............................................................................ 10
Working Lands or Land Retirement.................................................................................. 11
Payment and Income Limitations...................................................................................... 13
Compliance Requirements....................................................................................................... 14
Environmental Regulation and Certainty Projects .................................................................. 15
Evaluation and Reports............................................................................................................ 16
Conclusion ..................................................................................................................................... 17

Figures
Figure 1. Historical USDA Conservation Program Funding ........................................................... 5
Figure 2. CBO Baseline for Mandatory Agriculture and Farm Bill Programs ................................ 7
Figure 3. Authorized and Actual Funding Levels for Mandatory Farm Bill Conservation
Programs....................................................................................................................................... 8
Figure 4. Effect of Reductions in FY2012—EQIP Example......................................................... 10
Figure 5. Mandatory Federal Conservation Support Compared to Land Use, 1997...................... 12
Figure 6. Mandatory Federal Conservation Support Compared to Land Use, 2007...................... 12
Figure 7. Allocation of Total Conservation Funding, 2002 ........................................................... 12
Figure 8. Allocation of Total Conservation Funding, 2010 ........................................................... 12

Tables
Table 1. Conservation Programs in the 2008 Farm Bill Without Budget Baseline After
FY2012 ......................................................................................................................................... 7
Table 2. Conservation Programs Affected by Payment and Income Limitation Changes in
the 2008 Farm Bill...................................................................................................................... 13
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Agricultural Conservation and the Next Farm Bill

Contacts
Author Contact Information........................................................................................................... 17

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gricultural conservation began in the 1930s with a focus on soil and water issues
associated with production and environmental concerns on the farm. By the 1980s,
A agricultural conservation policies broadened to include environmental issues beyond soil
and water, especially environmental issues related to production (off the farm). Many of the
current agricultural conservation programs were enacted as part of the 1985 farm bill (P.L. 99-
198, Food Security Act of 1985), which also included for the first time a conservation title. These
programs have been reauthorized, modified, and expanded, and several new programs have been
created, particularly in subsequent omnibus farm bills. While the number of programs has
increased and new techniques to address resource problems continue to emerge, the basic
approach has remained unchanged—voluntary farmer participation encouraged by providing land
rental payments, cost-sharing conservation practice implementation, technical assistance,
education, and basic and applied research.
The Food, Conservation, and Energy Act of 2008 (P.L. 110-246), the 2008 farm bill, reauthorized
almost all existing conservation programs, modified several programs, and created various new
ones.1 Funding authority for most of these programs expires at the end of FY2012. The 112th
Congress continues to evaluate USDA’s implementation of these provisions as well as to discuss
their potential reauthorization in the context of the next farm bill.
Current Conservation Portfolio
Since its first inclusion in the 1985 farm bill, the conservation title has been a significant and
visible title in the farm bill. As the title has grown in both size and interest, so too have questions
and concerns about program funding, policy objectives, individual program effectiveness,
comparative geographic emphasis, and the structure of federal assistance. Congress has continued
to debate and address these concerns with each omnibus farm bill. The 2008 farm bill was no
exception. While almost all existing conservation programs were reauthorized, several programs
were modified to address concerns. The 2008 farm bill also created new programs, expanding the
range of USDA conservation activities.
Currently, more than 20 agricultural conservation programs are administered by USDA, mostly
by the Natural Resources Conservation Service (NRCS). Starting in 1985, each succeeding farm
bill has expanded the range of natural resource problems to be addressed as well as the number of
conservation programs and level of funding. In some cases, the programs are subsets of
overarching programs that apply to a specific place or a specific resource, but with unique
provisions and eligibility requirements. Though some similarities among these programs exist,
each is administered with slight differences. For a list of most agricultural conservation programs,
see CRS Report R40763, Agricultural Conservation: A Guide to Programs.
Programs by Type
Generally, farm bill conservation programs can be grouped into the following four categories
based on similarities: working land programs, land retirement and easement programs,
conservation compliance programs, and other programs and overarching provisions. Most of

1 For additional information on conservation provisions in the farm bill, see CRS Report RL34557, Conservation
Provisions of the 2008 Farm Bill.
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these programs are authorized to receive mandatory funding (i.e., they do not require an annual
appropriation) and include authorities that expire with other farm bill programs at the end of
FY2012.2 Other types of conservation programs such as watershed programs, emergency
programs, and technical assistance are authorized in other non-farm bill legislation. Most of these
programs have permanent authorities and receive appropriations annually through the
appropriations process. These programs are not generally discussed in the context of a farm bill
and are not covered in detail in this report.
Working Lands
Working lands conservation programs are typically classified as programs that allow private land
to remain in production, while implementing various conservation practices to address natural
resource concerns specific to the area. The largest of these programs is the Environmental Quality
Incentives Program (EQIP), currently authorized at a total of $7.3 billion between FY2008 and
FY2012. Others, such as the Wildlife Habitat Incentives Program (WHIP), Agricultural
Management Assistance (AMA), and Agricultural Water Enhancement Program (AWEP), operate
similarly to EQIP; however, they target specific resource concerns or geographic areas. The
Conservation Stewardship Program (CSP) replaced the Conservation Security Program in the
2008 farm bill and is designed to encourage producers to address specific resource concerns in a
comprehensive manner. CSP operates differently from the other working lands programs in that it
employs a “pay-for-performance” approach. This approach pays producers based on their
quantifiable level of environmental outcomes. Payments may vary to further incentivize higher
levels of performance.
Land Retirement and Easement Programs
Land retirement programs provide federal payments to private agricultural landowners for
temporary changes in land use or management to achieve environmental benefits. Conversely,
conservation easements impose a permanent land-use restriction that is voluntarily placed on the
land in exchange for a government payment. The largest land retirement program is the
Conservation Reserve Program (CRP), which reimburses the landowner for removing land from
production for up to 10 years at a time and is authorized to enroll up to 32 million acres. Other
programs such as the Wetlands Reserve Program (WRP) and the Grasslands Reserve Program
(GRP) use a combination of long-term and permanent easements as well as restoration contracts
to protect wetlands and grasslands from production. The Farmland Protection Program (FPP) also
uses easements; unlike the aforementioned programs, however, it does not remove land from
production, but rather restricts productive farmland from being developed for non-farm purposes.
Conservation Compliance
USDA also administers highly erodible lands conservation and wetland conservation compliance
programs, referred to as Sodbuster, Swampbuster, and Sodsaver. These programs prohibit
producers from receiving many farm program benefits when certain compliance requirements are
not met. Under Sodbuster, farmers who cultivate highly erodible lands must have fully
implemented an approved conservation plan or risk losing eligibility for various farm support

2 The FY2012 Agriculture Appropriations Act (P.L. 112-55) extends certain conservation programs’ funding authority
to FY2014. This is further discussed in the “Mandatory Reductions in FY2012 and Extension to FY2014” section.
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programs on all the land the producer cultivates. Similarly, under Swampbuster, producers who
convert a wetland, making production of an agricultural commodity possible, after November 28,
1990, are ineligible for program benefits. The 2008 farm bill created a new compliance provision
known as Sodsaver. Under Sodsaver, producers that plant an insurable crop (over 5 acres) on
native sod are ineligible for crop insurance and the noninsured crop disaster assistance (NAP)
program for the first five years of planting. This provision requires states to sign up for
participation. To date, no state governors have opted to participate in this program.
Other Programs and Provisions
USDA administers several other farm bill conservation programs, many of which were created in
the 2008 farm bill. Some programs are geographically specific, such as the Chesapeake Bay
program and the Great Lakes Basin program, which focus on select watershed regions. Other
programs, such as the Cooperative Conservation Partnership Initiative (CCPI), use existing
conservation program funds as leverage for partnership agreements with non-federal funding.
Grant programs are also available, such as the Voluntary Public Access and Habitat Incentives
program and the Conservation Innovation Grants (CIG). Other farm bill provisions redirect
funding to various priority areas, such as the regional equity provision3 and additional incentives
for beginning, socially disadvantaged, and limited resource producers.4

USDA Farm Bill Conservation Programs and Provisions
Working Lands Programs—typically classified as programs that allow private land to remain in production, while
implementing various conservation practices to address natural resource concerns specific to the area.
•
Environmental Quality Incentives Program (EQIP), Conservation Stewardship Program (CSP)/Conservation
Security Program, Wildlife Habitat Incentives Program (WHIP), Agricultural Water Enhancement Program
(AWEP), and Agricultural Management Assistance (AMA) program.
Land Retirement and Easement Programs—land retirement programs provide federal payments to private
agricultural landowners for temporary changes in land use or management to achieve environmental benefits.
Conversely, conservation easements impose a permanent land-use restriction that is voluntarily placed on the land in
exchange for a government payment.
•
Conservation Reserve Program (CRP, includes the Conservation Reserve Enhancement Program (CREP) and
Farmable Wetlands), Wetlands Reserve Program (WRP), Farmland Protection Program (FPP), Grassland Reserve
Program (GRP), and Healthy Forests Reserve Program (HFRP).
Compliance—prohibits a producer from receiving most federal farm program benefits (including conservation
assistance) when conservation requirements for highly erodible lands and wetlands are not met.
•
Conservation Compliance, Sodbuster, Swampbuster, and Sodsaver.
Other Conservation Programs and Provisions—Chesapeake Bay Watershed Program, Cooperative
Conservation Partnership Initiative, Conservation Innovation Grants, conservation technical assistance, Great Lakes
Basin Program, regional equity, Voluntary Public Access and Habitat Incentive Program, and Grassroots Source Water
Protection Program.

3 The regional equity provision was first instituted in the 2002 farm bill and reauthorized in the 2008 farm bill. The
provision mandates that each state receive annually a minimum aggregate amount of funding for specified conservation
programs. Regional equity affects EQIP, WHIP, FPP, and GRP. The 2008 farm bill increased the minimum level of
funding to each state for these combined four conservation programs from $12 million to $15 million.
4 Added in the 2008 farm bill, this provision directs funding for EQIP and acres for CSP to beginning farmers and
ranchers (5%) and socially disadvantaged farmers and ranchers (5%).
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For additional information and program descriptions for most conservation programs within the
farm bill discussion, see the CRS Report R40763, Agricultural Conservation: A Guide to
Programs.
Program Funding
The majority of farm bill conservation programs are funded through USDA’s Commodity Credit
Corporation (CCC)5 as mandatory spending. Mandatory spending can be thought of as multiyear
appropriation in authorizing legislation (e.g., a farm bill). These authorizations do not require an
annual appropriation. Mandatory conservation programs either receive a statutorily authorized
level of funding (e.g., $1.75 billion available for a conservation program during a fiscal year) or
an acreage allotment (e.g., enroll up to 32 million acres nationally). Mandatory funds from the
authorizing law are assumed to be available unless they are expressly reduced to smaller amounts
by a subsequent act of Congress, usually initiated in the appropriations process or by the
authorizing committees.
Historically, most conservation programs did not receive mandatory funding. The majority of
conservation programs prior to the 1985 farm bill (P.L. 99-198) had discretionary funding
authority and were funded through the annual appropriations process. Since the 1985 farm bill,
the number of programs receiving mandatory funding as well as the level of authorized funding
has grown (Figure 1). Most conservation program advocates view mandatory funding as a more
desirable approach than the annual appropriations process. They believe that it is generally easier
to protect authorized mandatory funding levels from reductions during the appropriations process
than to secure appropriations each year. Congress has supported this by continuing to enact
provisions that allow many conservation programs to receive mandatory funding. One of several
concerns regarding conservation funding in the next farm bill centers on the possible reduction of
mandatory program spending, without an increase in discretionary spending, thereby reducing the
total level of conservation funding.
During the 2008 farm bill debate conservation groups and producers found themselves competing
with other agricultural interests for the necessary resources to expand or even continue many
conservation programs. Upon passage of the 2008 farm bill, the conservation title was one of the
few titles to have received an increase in mandatory funding levels, which was seen as a victory
by many in the conservation and environmental communities. Conservation program funding was
authorized to expand from approximately $4 billion total in FY2008 to $6.1 billion in FY2012.
In an environment of pronounced domestic budget constraints, many mandatory conservation
programs have faced reductions from the farm bill authorized levels, usually through the
appropriations process. While other farm bill mandatory programs have experienced reductions in
appropriations, the majority affect conservation programs. Conservation and environmental
groups criticize these reductions, arguing that when appropriators reduce conservation funding
they undercut many of the programs that generated political support for the farm bill’s initial
passage. Others point out that funding for mandatory conservation programs continues to increase
despite these reductions (see Figure 1). For additional information on reductions to mandatory
agricultural spending, see CRS Report R41245, Reductions in Mandatory Agriculture Program
Spending and CRS Report R41964, Agriculture and Related Agencies: FY2012 Appropriations.

5 The CCC is the funding mechanism for the mandatory payments administered by various agencies of USDA,
including farm commodity price and income support programs.
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Figure 1. Historical USDA Conservation Program Funding
(nominal historical dol ars, 1936-2010)
7,000
6,000
All USDA Mandatory Conservation Programs
All USDA Discretionary Conservation Programs
5,000
4,000
s $
n 3,000
io
ill
M
2,000
1,000
0
63
93
6
19361939194219451948195119541957196019 19661969197219751978198119841987199019 199 1999200220052008

Source: George A Pavelis, Douglas Helms, and Sam Stalcup, Soil and Water Conservation Expenditures by USDA
Agencies, 1935-2010, USDA, NRCS, Historical Insights Number 10, Washington, DC, May 2011.
Notes: The graph includes both financial and technical assistance expenditures for 32 USDA conservation
programs; excludes funding for conservation-related research. Total conservation program funding through these
32 programs since 1935 is approximately $110 billion.
Issues for the Next Farm Bill
Current budgetary constraints continue to drive the debate related to the next farm bill. Most
programs authorized in the 2008 farm bill (P.L. 110-246), including many conservation programs,
will expire on September 30, 2012. Additional issues surrounding program consolidation,
environmental regulation, and conservation compliance continue to be debated and discussed.
Budget and Baseline Issues
One overarching issue affecting conservation in the next farm bill is budgetary constraints and
baseline funding. Similar to the conditions during debate on the 2008 farm bill, the upcoming
farm bill debate is likely to be driven in part by relatively large budget deficits and demand for
fiscal restraint. Most conservation programs authorized in the farm bill receive mandatory
funding, and various deficit reduction proposals would reduce mandatory conservation funding in
advance of or as part of farm bill reauthorization. Also, reductions in mandatory funding through
the annual appropriations process could impact conservation program funding before
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reauthorization discussions begin.6 Many of these proposed reductions continue to receive strong
opposition from conservation and farm supporters alike.
Overall Farm Bill Baseline
The Congressional Budget Office (CBO) generates a budget score and baseline projection for
mandatory spending. A “baseline” is an estimate at a particular point in time of what federal
spending on mandatory programs likely would be under current law. The baseline serves as a
benchmark or starting point for the budget under which the authorizing committees write the farm
bill. When new provisions are introduced that affect mandatory spending, their impact (or
“score”) is measured as a difference from the baseline. Increases in cost above the baseline may
be subject to budget constraints such as pay-as-you-go (PAYGO) or cut-as-you-go (CUTGO).7
Conservation currently accounts for 7% of the overall farm bill baseline funding for the next 10
years (Figure 2). The largest percentage of baseline funding is in the nutrition title (primarily the
Supplemental Nutrition Assistance Program, or food stamps), which has long been believed to be
difficult politically to reduce. If it is assumed that no additional money from outside the
agriculture committees’ jurisdiction is expected, then funding for any new programs or program
growth will likely come from existing farm bill baseline. The three largest sources of funding
after nutrition are direct payments, crop insurance, and conservation. Authorizing committees are
not restricted by the current division of the farm bill baseline—only the total amount of baseline
available during reauthorization. This could mean that the authorizing committees may choose to
shift funding from one title or program to another, depending on priorities.
Conservation Programs With No Baseline
Thirty-seven provisions in the 2008 farm bill received mandatory budget authority but are not
assumed to receive such funding in the budget baseline beyond the end of the farm bill
(FY2012).8 Of these 37 provisions, five are for programs within the conservation title (Table 1).
The estimated cost to extend these five programs for five years is approximately $3 billion.9 If
policymakers want to continue these programs, under current budget rules, they will need to pay
for the programs with offsets from other sources.
Some conservation programs such as CRP will maintain their baseline beyond 2012 even though
their funding authority expires. Some are concerned that the expiring provisions could be
reauthorized at the expense of other conservation programs that have baseline funding.

6 This is discussed further in the “Mandatory Reductions in FY2012 and Extension to FY2014” section. For additional
information on overall farm bill spending, see CRS Report R41195, Actual Farm Bill Spending and Cost Estimates.
7 For more information on budget rules, see CRS Report R41926, House Rules Changes Affecting the Congressional
Budget Process Made at the Beginning of the 112th Congress.
8 For additional information on the 37 farm bill provisions without baseline, see CRS Report R41433, Previewing the
Next Farm Bill: Unfunded and Early-Expiring Provisions.
9 $3 billion is a cost estimate based on known and projected data through the March CBO baseline (Congressional
Budget Office, CBO March 2011 Baseline for CCC & FCIC, March 2011), and should not be considered an official
CBO score of program cost.
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Figure 2. CBO Baseline for Mandatory Agriculture and Farm Bill Programs
($ billion, FY2012-FY2021)
Crop Insurance,
80.2
Commodities,
65.1
Conservation,
63.1
Trade, 3.4
Horticulture &
Organic, 1.1
Energy, 0.4
Nutrition, 700
Total 10-Year Baseline: $903 billion
(FY2012-FY2012)

Source: CRS using CBO baseline (March 2011).
Table 1. Conservation Programs in the 2008 Farm Bill Without Budget Baseline
After FY2012
($ in millions, over 5 years)
CBO Score CBO Baseline
in 2008,
in March 2011,
time of
FY2013-
Section Program enactment
FY2017
2008 Farm Bill Provisions
2202
Wetlands Reserve Program
$1,460
$2,440
3.04 million acres to be enrolled through FY2012.
The 2008 farm bill added $128-$338 million of costs
to baseline annually.
2403
Grassland Reserve Program
$320
$331
1.22 million additional acres to be enrolled during
FY2009-FY2012. The farm bill added $63-$80 million
of costs to baseline annually.
2606
Voluntary Public Access and
$50
$50
$50 million for the period FY2009-FY2012.
Habitat Incentive Program
2803 Smal
Watershed
$100
$100
$100 million in FY2009, to remain available until
Rehabilitation Program
expended. Discretionary appropriations also are
authorized.
2807
Desert Terminal Lakes
$175
$175
$175 million in FY2008, to remain available until
expended (transfer from USDA to Dept. of the
Interior’s Bureau of Reclamation).

Total $2,105
$3,096

Source: Based on CRS Report R41433, Previewing the Next Farm Bill: Unfunded and Early-Expiring Provisions, but
updated for the March 2011 baseline.
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Spending Limits on Mandatory Program Spending
The 2008 farm bill authorized increases in mandatory funding for many conservation programs.
Unlike the discretionary conservation programs, which must be funded through the annual
appropriations process, mandatory programs have an authorized level of funding (or acreage
enrollment) that is available unless reduced to smaller amounts in the appropriations process. If
appropriators do not set a spending limit or reduce the authorized level, then the program receives
the authorized level of funding.
Despite the increase in mandatory funding authority, many conservation programs have been
reduced or capped through annual appropriations acts since FY2003 (Figure 3). Many of these
spending reductions were at the request of both the Bush and Obama Administrations. The mix of
programs and amounts of reduction have varied from year to year. Some programs, such as the
CRP, have not been reduced by appropriators in recent years, while others, such as EQIP, have
been repeatedly reduced below authorized levels. Total mandatory funding for conservation was
reduced by over $4.6 billion from FY2003 through FY2012. Even with these reductions, total
mandatory funding for conservation programs has remained relatively constant at around $5
billion annually. For more information about reductions in mandatory program spending, see CRS
Report R41245, Reductions in Mandatory Agriculture Program Spending.
Figure 3. Authorized and Actual Funding Levels for
Mandatory Farm Bill Conservation Programs
(FY2008-FY2012)
$7,000
$6,000
$5,000
$4,000
s
n
o
illi
$ m
$3,000
$2,000
$1,000
Authorized
Actual
$0
2008
2009
2010
2011
2012
Fiscal Year

Source: CRS using CBO estimates and funding reports from the President’s annual budget requests.
Although some titles in the 2008 farm bill (e.g., commodities and crop insurance) received a
reduction in mandatory funding authority, the conservation title received increased mandatory
funding authority. Many supporters of conservation programs viewed this as a victory during the
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farm bill debate. Yet the President’s budget proposals in FY2010, FY2011, and FY2012 continued
the trend of proposed reductions. These requests in total would have reduced mandatory
conservation funding by more than $2 billion.10 While the FY2010 Agriculture appropriations bill
(P.L. 111-80) did not include many of these reductions (with the exception of EQIP and
Watershed Rehabilitation), the FY2011 and FY2012 appropriations reduced mandatory
conservation program funding by $673 million and $929 million, respectively.11 Advocates for
these programs contend that these limitations are significant changes from the intent of the farm
bill, which they say compromise the programs’ ability to provide the anticipated magnitude of
benefits to producers and the environment. Others, including those interested in reducing
agricultural expenditures or in spending the funds for other agricultural purposes, counter that
even with these reductions, overall funding for conservation has not been reduced.
Mandatory Reductions in FY2012 and Extension to FY2014
While most conservation advocates decry reduced conservation funding for any fiscal year,
additional emphasis is placed on reductions proposed in FY2012. Authority for many of the farm
bill conservation programs expires at the end of FY2012. Because CBO uses the last year of
authorization to determine future authorization levels, a reduction in the last year’s authorized
level could compound the effect on available baseline for the next farm bill.
To address this concern, the FY2012 Agriculture appropriations act (P.L. 112-55) extends the
expiration date of selected farm bill conservation programs to FY2014. Authority for these
programs—AMA, CSP, EQIP, WHIP, and FPP—would have expired in FY2012. Appropriators
also placed limitations on FY2012 spending for all of these programs. Without the program
extension, the reduced FY2012 spending levels would have served as the baseline for future
years, based on CBO scoring rules.
For example, the FY2012 Agriculture appropriations act reduces EQIP from an authorized level
of $1.75 billion to $1.4 billion in FY2012, creating a savings of $350 million. Without an
extension of authority, CBO would use the level of funding in the last year of authorization
(FY2012) to determine the future farm bill baseline. This means that the reduction of $350
million in FY2012 would have a cumulative effect of a $3.5 billion reduction over a 10-year
baseline (see Figure 4). The act, however, extends the EQIP authority to FY2014, thereby
preserving the original authorized level ($1.75 billion) rather than the lower level. Just as the
savings from conservation reductions in appropriations bills are not always redirected toward
other conservation activities, the reestablishment of the farm bill baseline through expiring
conservation programs does not guarantee that future farm bills will extend the same level of
support for conservation.

10 The FY2010 President’s budget requested reductions of $809 million in the following conservation programs: AMA,
EQIP, FPP, HFRP, Watershed Rehab., WHIP, and WRP. The FY2011 President’s budget requested reductions in the
following conservation programs totaling $761 million: AMA, CSP, EQIP, FPP, GRP, Watershed Rehab., WHIP, and
WRP. The FY2012 President’s budget requested reductions of $583 million in the following conservation programs:
AMA, EQIP, GRP, Watershed Rehab., WHIP, and WRP.
11 See CRS Report R41475, Agriculture and Related Agencies: FY2011 Appropriations; and CRS Report R41964,
Agriculture and Related Agencies: FY2012 Appropriations.
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Figure 4. Effect of Reductions in FY2012—EQIP Example
(authorized vs. actual funding levels)
$2,000
$1,800
$1,600
$1,400
$1,200
)
$
(
s
n $1,000
Millio
$800
$600
$400
Actual
Authorized
$200
$0
7
99
0
01
03
4
06
7
10
1
13
16
20
199 1998 19
200 20
2002 20
200 2005 20
200 2008 2009 20
201 2012 20
2014 2015 20
2017 2018 2019 20
2021
Year

Source: CRS from historical appropriations and farm bill authorizations.
Notes: The Consolidated Appropriations Act (P.L. 110-161) reduced funding for EQIP in FY2008 by $200
million. However, the 2008 farm bill (P.L. 110-246) was enacted after the appropriations act was enacted,
thereby restoring funding to its previously authorized level.
Programs that are reduced in the approved FY2012 appropriations but do not have a baseline
beyond 2012—when authority for most farm bill programs expires—are not extended. Programs
such as WRP and GRP do not have a budget baseline beyond FY2012 and therefore reductions in
FY2012 would not affect the future farm bill baseline. For this reason, some view these programs
as more vulnerable to reductions in FY2012. For example, the Voluntary Public Access and
Habitat Incentives Program has authority to spend $50 million until September 30, 2012, and has
no baseline funding beyond 2012. The enacted FY2012 appropriations allows no funds to be
expended in FY2012, effectively terminating the program before its authorized expiration.
Extending the authority of these programs would require an offset or reduction elsewhere under
current budget law and procedures. For more information on the funding proposals for FY2012,
see CRS Report R41964, Agriculture and Related Agencies: FY2012 Appropriations.
Programmatic Issues
Simplifying the Conservation Portfolio
Before the 1985 farm bill, few conservation programs existed and only two would be considered
large by today’s standards. The current conservation portfolio includes more than 20 distinct
programs with annual spending over $5 billion. The differences and number of programs can
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create some general confusion about the purpose, participation, and policies of the programs.
Discussion about simplifying or consolidating conservation programs to reduce overlap,
duplication, and generate savings frequently arises during farm bill reauthorization. Prior to the
2008 farm bill, USDA proposed a major consolidation of several conservation programs. While
the 2008 farm bill did eliminate some conservation programs, it also created several more. In
light of current funding constraints, program consolidation to generate potential savings could be
viewed favorably during reauthorization.
On the other hand, program consolidation could remove the geographic or issue-specific
emphasis that was originally created by Congress to address identified priorities. The majority of
conservation programs are administered nationwide. Some programs have sub-programs that
address specific issues or are geographically defined in statute or report language (e.g., the
Conservation Innovation Grants is a subprogram of EQIP). Other programs that are
geographically specific or issue-specific are stand-alone programs and receive funds in addition
to other nationwide programs (e.g., the Chesapeake Bay Watershed Program). If program
consolidation occurs, it could remove these previously identified priorities that allowed the
number of programs to expand. Conversely, program consolidation could also lead to additional
congressionally directed language or “carve-outs” within programs to ensure that identified
priorities are still addressed. Efficiencies created by a reduction in the number of programs could
be negated or reduced by additional carve-outs within remaining programs.
Working Lands or Land Retirement
Land retirement programs, such as the CRP, began with a soil conservation and commodity-
reduction purpose, during a time of economic downturn in the farm sector. As the conservation
effects of these programs were identified, the potential for generating multiple environmental
benefits beyond soil conservation emerged and included benefits to wildlife habitat, air and water
quality, and carbon sequestration. For producers, land retirement programs are attractive because
they receive rental payments at acceptable levels. However, with high commodity prices and
incentives to plant crops, producer interest in land retirement may be declining. Some forecasts
are that these high commodity price levels may continue for the foreseeable future, thus shrinking
farmer interest in land retirement for some time.12 Also, increased commodity prices can lead to
increased land rental rates, which in turn increases the cost of land retirement programs. These
factors could signal a shift in farm bill conservation policy away from the traditional land
retirement programs toward an increased focus on conservation working lands programs—
programs that keep land in production while implementing conservation practices to address
natural resource concerns. Some of this shift has already occurred in the last decade (see Figure 5
and Figure 6) as the percentage of mandatory program funding for land retirement programs
(e.g., CRP) has declined relative to working lands programs (e.g., EQIP) and overall land use.
Most conservation and wildlife organizations support both land retirement and working lands
programs; however, the appropriate “mix” continues to be debated. Even debate between shorter-
term land retirement programs such as CRP and longer-term easement programs such as WPR
continues. Supporters of long-term or permanent easement programs cite a more cost-effective
investment in sustainable ecosystems for long-term wildlife benefits. Short-term land retirement

12 Daniel Hellerstein and Scott Malcolm, The Influence of Raising Commodity Prices on the Conservation Reserve
Program, USDA, ERS, ERR-110, Washington, DC, February, 2011, http://www.ers.usda.gov/Publications/ERR110/
ERR110.pdf.
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program supporters cite the increased flexibility, which can generate broader participation than
permanent easement programs.
There is also a noticeable increase in what USDA terms land preservation programs (long-term
and permanent easement programs, see Figure 7 and Figure 8). The high cost of land retirement
programs (e.g., CRP, which is based on land rental rates) and the lack of baseline for most land
preservation programs (e.g., WRP and GRP) make the future of these programs uncertain in the
current budget situation. With any proposal, it is likely that environmental interests will not
support a reduction in one conservation program without an increase in another conservation
program.
Figure 5. Mandatory Federal Conservation
Figure 6. Mandatory Federal Conservation
Support Compared to Land Use, 1997
Support Compared to Land Use, 2007
100%
100%
90%
90%
80%
80%
70%
70%
60%
60%
50%
50%
40%
40%
30%
30%
20%
20%
10%
10%
0%
0%
Nonforested Agricultural Land Use
Federal Conservation Support
Nonforested Agricultural Land Use
Federal Conservation Support
Working Land
Retired/Easement Land

Working Land
Retired/Easement Land

Source: USDA, NRCS, 1997 National Resources Inventory,
Source: USDA, NRCS, 2007 National Resources Inventory,
revised 2000, December 1999 and USDA historical funding for
December 2009 and USDA historical funding for
conservation.
conservation.
Figure 7. Allocation of Total Conservation
Figure 8. Allocation of Total Conservation
Funding, 2002
Funding, 2010
Rural
Research
Rural
Development
6%
Development
Research
Emergency
1%
2%
4%
Emergency
Response
4%
Response
5%
Technical
Landscape
Assistance,
Scale
Technical
Landscape
Education,
3%
Assistance,
Scale
Land
Outhreach
Education,
3%
Preservation
15%
Outhreach
15%
Land
22%
Preservation
9%
Land
Working Lands
Working Lands
Retirement
11%
28%
44%
Land
Retirement
28%


Source: USDA, RCA Appraisal, Soil and Water Resources
Source: USDA, RCA Appraisal, Soil and Water Resources
Conservation Act, Washington, DC, July 2011, p. 60.
Conservation Act, Washington, DC, July 2011, p. 60.
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Payment and Income Limitations
Two types of payment limits exist for conservation programs. One sets the maximum amount of
conservation program payments that a person or legal entity can receive during a specified period
of time. The other (known as the adjusted gross income or AGI limit) sets the maximum amount
of income that an individual can earn and still remain eligible for conservation program benefits.
Limitations on payments received through conservation programs were expanded in the 2008
farm bill. Prior to the 2008 farm bill, most conservation programs were affected by an income
limitation, not a limitation on payments. Now, most programs are affected by both, which in turn
can affect program participation (see Table 2).
Table 2. Conservation Programs Affected by Payment and Income Limitation
Changes in the 2008 Farm Bill
Prior Law (2002 farm bill, as amended, P.L. 107-171) Current Law (2008 farm bill, P.L. 110-246)
Payment Limit
Income Limit
Payment Limit
Income Limit
AMA, CRP, and
AMA, Chesapeake Bay Watershed
AMA, Chesapeake Bay
AMA, AWEP, CRP, CSP, EQIP,
EQIP
Program, CRP, CSP, EQIP, FPP, GRP,
Watershed Program,
FPP, GRP, GSWC, WRP, WHIP,
WRP, WHIP, and other programs
CRP, CSP, CCPI,
and other programs under Title II
under Title II of the 2002 farm bill
EQIP, AWEP, FPP,
of the 2008 farm bill
GRP, WRP, and WHIP
Source: Income limits may be found under Section 1604 of the 2002 farm bill (P.L. 107-171) and Section 1604
the 2008 farm bill (P.L. 110-246). Payment limitations may be found under individual program sections under
Title II of both enacted bills.
Payment Limits
Payment limits are the maximum amount of conservation program funding that a person or legal
entity can receive during a specified period of time. As with commodity programs, payment limits
for conservation programs are controversial because of issues relating to the size of operations
receiving support and who should receive payments. The effect of payment limits varies by
program and the conservation practices implemented.13 Most conservation programs with higher
payments tend to be distributed to farms and ranches with larger acreage because payments for
many conservation practices are scaled by the number of acres on which that practice is applied
or acres are enrolled.14
Supporters of payment limits are often advocates for smaller farms and opponents of large animal
feeding operations. Most working lands conservation programs provide a percentage of the cost
to install conservation practices (known as cost-share) or implement site-specific management
practices. As noted above, most of these payments are made on a per-acre applied basis, thereby
skewing larger payments to contracts with more acres enrolled. Small farm advocates claim that
this disproportionately benefits large agricultural producers by making less money available for
small producers. Also, in the case of EQIP, cost-share assistance is provided for more expensive
practices such as animal waste storage facilities in concentrated animal feeding operations

13 Payment limits vary from $300,000 for any six-year period for EQIP to $50,000 annually for WHIP payments.
14 Soil and Water Conservation Society and Environmental Defense, Environmental Quality Incentives Program
(EQIP)—Program Assessment, March 2007, http://www.swcs.org/documents/filelibrary/EQIP_assessment.pdf.
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(CAFOs).15 Opponents of these animal operations criticize the higher payment limit because of
the recipients’ production methods.
Those who oppose payment limits (or support higher limits) for conservation programs counter
that conservation programs should focus on land with the greatest environmental need and not be
limited to a price per participant. They argue that higher payment limits allow for greater
environmental stewardship on farms and ranches, particularly larger operations with a greater
land base, which may have greater natural resource concerns. Others claim that payment limits on
restoration agreements could create a disincentive to enroll larger conservation easements, which
can be most desirable. Because most conservation easement programs, namely WRP and GRP,
enroll land that will also require restoration, a limit on restoration payments could reduce the
enrollment of large acre tracts.
Income Limits
The AGI limit sets a maximum amount of income that an individual can earn and still remain
eligible for program benefits. The 2008 farm bill made the AGI limitation for conservation
programs higher than the AGI limitation for the commodity farm support programs. Despite this
higher limit, income limitations on conservation programs remain somewhat controversial.
Previously, the AGI limit for both conservation and commodities programs was set at $2.5 million
and had an exception if three-fourths of AGI was earned from farming sources. Now, if the three-
year average of non-farm income AGI exceeds $1,000,000, no conservation program benefits are
allowed. The exception to this limit is if two-thirds of the three-year AGI was earned from
farming sources. In addition, this limitation may be waived by USDA on a case-by-case basis for
the protection of environmentally sensitive land of special significance. In general, the AGI limit
for conservation programs is higher than that for commodity programs to encourage
environmental stewardship on farms and ranches, particularly larger operations that may have
greater natural resource problems.
Supporters of AGI limits believe that tighter limits benefit small producers and gain additional
public support for all agricultural programs through fiscal responsibility. Opponents of AGI limits
on conservation programs believe that if there are greater conservation benefits provided to the
general public, then, irrespective of wealth, a producer’s enrollment is good for the general
public.
Compliance Requirements
The 1985 farm bill created the highly erodible lands (HEL) conservation and wetland
conservation compliance programs, which tied various farm program benefits to conservation
standards. These programs require farmers producing agricultural commodities on HEL to fully
implement an approved conservation plan or to not convert wetlands to production in order to
remain eligible for certain farm program benefits. Between 1982 and 2007, farmers reduced total

15 The 2002 farm bill increased the payment limit from its 1996 farm bill levels of $10,000 for any fiscal year and
$50,000 for any multi-year contract, to a limitation on total payments to $450,000. The 2002 farm bill also required that
60% of EQIP funds should be made available to payments for practices relating to livestock production.
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cropland soil erosion by 43%.16 The bulk of this reduction occurred following the 1985 farm bill
and the implementation of CRP and conservation compliance requirements.
Under the original provisions enacted in 1985, a producer could lose the following farm program
benefits if found to be out of compliance: price and income supports and related programs, farm
storage facility loans, crop insurance, disaster payments, storage payments, and any farm loans
that contribute to erosion on highly erodible lands. The provision has since been amended
numerous times to remove certain benefits and add others.
Most notably, the 1996 farm bill (P.L. 104-127) removed crop insurance as a program benefit that
could be denied and added production flexibility contracts—the precursor to what is now referred
to as direct payments. The debate surrounding this decision centered on the desire to encourage
producers to purchase crop insurance and to respond to farmer concerns that compliance
requirements were intrusive.
Currently, the major farm program benefits that could be affected by compliance are counter-
cyclical payments, direct payments, and conservation programs. Presently, high commodity prices
have resulted in few or no counter-cyclical payments. This leaves conservation program
participation and direct payments as the remaining major benefits that could be affected by
compliance. The current financial climate has caused direct payments under the farm commodity
support programs to come under considerable scrutiny. Debate continues regarding their fate, and
many believe that the program could be reduced or eliminated in the next farm bill
reauthorization as a budget saving measure. Conservation advocates worry that without direct
payments there will be little incentive for producers to meet conservation compliance and wetland
conservation requirements. Environmental and conservation organizations are asking Congress to
consider requiring conservation compliance for crop insurance benefits or any new revenue
assurance programs.17
Environmental Regulation and Certainty Projects
Farm bill conservation programs are the voluntary federal policy for addressing environmental
impacts related to agriculture. Another federal policy for addressing environmental impacts is
through regulation.18 Increasingly, conservation programs are called upon to prevent or reduce the
need for environmental regulation. While the farm bill debate will likely not focus specifically on
environmental regulations because most environmental law originates outside of the House and
Senate Agriculture Committees, debate could focus on strengthening the voluntary response to
environmental issues through conservation programs. This, in turn, could influence the funding
debate and how much of the overall farm bill budget is appropriate for conservation programs.

16 USDA, RCA Appraisal, Soil and Water Resources Conservation Act, Washington, DC, July 2011.
17 Examples of such requests include Principals for Strengthening the Conservation Title, released by 56 policy and
advocacy organizations, September 7, 2011, http://www.farmland.org/documents/
092811JointConservationTitlePrinciples.pdf; Izaak Walton League of America, 2012 Farm Bill Issue Brief, II.
Conservation Compliance and Crop Insurance, November 19, 2010, http://www.iwla.org/index.php?ht=a/
GetDocumentAction/i/11073; and Jon Scholl, President, American Farmland Trust, “Conservation Compliance is
Critical,” Agri-Pulse, October 5, 2011, http://www.agri-pulse.com/Conservation_Compliance_Oped_10052011.asp.
18 For more information about environmental regulations effecting agriculture, see CRS Report R41622, Environmental
Regulation and Agriculture.
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Another assistance mechanism recently discussed in relation to environmental regulation is
referred to as “certainty” or “assurance standards.” Several states have in place or are developing
certainty programs to encourage farmers to implement water quality improvement measures
without the fear that those actions could lead to further regulation and enforcement under national
environmental laws such as the Clean Water Act (CWA). While this is a somewhat new concept
for addressing water quality concerns, similar certainty programs have been established in the
past between state and federal agencies for the protection of wildlife habitat in private lands.
On January 17, 2012, a memorandum of understanding (MOU) was signed between EPA and
USDA to establish a water quality certainty program in Minnesota.19 This is the first formal state-
federal certainty program to be developed in the area of water quality. USDA officials continue to
express interest in developing a “safe harbor”-type mechanism between USDA and EPA for water
quality; however, no formal proposal has been released nationwide.20 Legislation was proposed in
the 111th Congress (H.R. 5509) that included similar assurance standard provisions for the
Chesapeake Bay, but the proposal was not enacted. It is possible that additional proposals for
creating a national certainty program or pilot program in select watersheds (e.g., the Chesapeake
Bay) could be included in the farm bill reauthorization debate.
Evaluation and Reports
Following the significant increase in funding for conservation programs in the 2002 farm bill,
USDA initiated a project to measure the environmental benefits of many of these programs. The
project is a multi-agency effort known as the Conservation Effects Assessment Project (CEAP).
CEAP’s stated purpose is to aid policymakers in developing new conservation programs and help
existing conservation program managers implement programs more effectively and efficiently to
meet the goals of Congress and the Administration.
CEAP does not quantify the environmental benefits of any single conservation program or
approach; instead, it attempts to understand how conservation efforts are working and what future
improvements are needed. CEAP assessments are being developed for cropland, grazing lands,
wetlands, and wildlife. To date, three watershed cropland reports have been released: Upper
Mississippi River Basin, Chesapeake Bay, and Great Lakes Basin.21 The reports have shown that
conservation practices adopted on cropland have an effect in reducing sediment, nutrients, and
pesticides from farm fields.22 Despite these gains, the reports also find that additional measures
are needed within the watersheds studied.
One of the recommended approaches is through targeting conservation programs resources to
areas that have high need for additional treatment—acres most prone to runoff or leaching. While

19 USDA, “Secretary Vilsack Signs Historic Agreement with EPA and State of Minnesota Encouraging Farmers to
Protect Rivers, Streams and Lakes,” press release, January 17, 2012, http://www.usda.gov/wps/portal/usda/usdahome?
contentidonly=true&contentid=2012/01/0010.xml.
20 A draft proposal between USDA and EPA was made public in a BNA article, however, no official announcement has
been released. Linda Roeder, “EPA, USDA Develop Framework to Promote Conservation Practices,” BNA Daily
Environment Report, August 2, 2011, pp. 148 DEN A-1.
21 The reports are publically available here: http://www.nrcs.usda.gov/wps/portal/nrcs/main/national/technical/nra/ceap.
22 The results vary by watershed; however, preliminary results from the national CEAP cropland assessment show that
over 50% of cropland acres are under adequate conservation treatment. The practices put in place on these acres are
shown to have a beneficial impact in reducing losses of nitrogen, phosphorus, and sediment to water resources.
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a targeted approach could increase the effectiveness of conservation programs, it could also
reduce the availability of funds in certain areas considered to be at a lower risk. As additional
reports continue to be released, their potential outcomes could prove useful in shaping future
policy debates surrounding environmental issues in the farm bill.
Conclusion
As Congress debates conservation provisions in the next farm bill the focus continues to be on
overall federal spending and agriculture’s share. Conservation funding has grown to represent a
sizable portion of the overall farm bill baseline and could see reductions during reauthorization.
Many in the conservation community see this as inevitable; however, they do not want to see a
reduction in conservation that is disproportionate to other areas of agricultural spending. While
most producers are in favor of conservation programs, it is unclear how much of a reduction in
other farm program spending they would be willing to support to further conservation efforts.
Recent reports and studies have shown that conservation measures are effective in addressing
environmental concerns; however, spending reductions, program efficiencies, and federal policies
surrounding environmental regulation will likely drive conservation farm bill discussion in the
112th Congress.

Author Contact Information

Megan Stubbs

Analyst in Agricultural Conservation and Natural
Resources Policy
mstubbs@crs.loc.gov, 7-8707


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