Conservation Compliance and
U.S. Farm Policy
Megan Stubbs
Specialist in Agricultural Conservation and Natural Resources Policy
July 24, 2012
Congressional Research Service
7-5700
www.crs.gov
R42459
CRS Report for Congress
Pr
epared for Members and Committees of Congress

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Conservation Compliance and U.S. Farm Policy

Summary
The Food Security Act of 1985 (P.L. 99-198, 1985 farm bill) included a number of significant
conservation provisions designed to reduce production and conserve soil and water resources.
Many of the provisions remain in effect today, including the two compliance provisions—highly
erodible land conservation (sodbuster) and wetland conservation (swampbuster). The two
provisions, collectively referred to as conservation compliance, require that in exchange for
certain U.S. Department of Agriculture (USDA) program benefits, a producer agrees to maintain
a minimum level of conservation on highly erodible land and not to convert wetlands to crop
production.
Conservation compliance affects most USDA benefits administered by the Farm Service Agency
(FSA) and the Natural Resources Conservation Service (NRCS). These benefits can include
commodity support payments, disaster payments, farm loans, and conservation program
payments, to name a few. If a producer is found to be in violation of conservation compliance,
then a number of penalties could be enforced. These penalties range from temporary exemptions
that allow the producer time to correct the violation, to a determination that the producer is
ineligible for any USDA farm payment and must pay back current and prior years’ benefits.
As Congress considers the reauthorization of farm policy through the next farm bill, issues related
to conservation compliance have emerged. The reduction in soil erosion from highly erodible
land conservation continues, but at a slower pace than following enactment of the 1985 farm bill.
The leveling off of erosion reductions leaves broad policy questions related to conservation
compliance, including whether an acceptable level of soil erosion on cropland has been achieved;
whether additional reductions could be achieved, and if so, at what cost; and how federal farm
policy should encourage additional reductions in erosion. These broad policy questions, in
addition to general concerns of program oversight and implementation, continue to influence the
farm bill debate.
One of the most controversial issues has been the idea that crop insurance subsidies should be
added to the list of benefits that could be lost if a producer is found to be out of compliance.
Federal crop insurance subsidies were originally included as a benefit that could be denied under
the compliance provisions. However, they were removed in the Federal Agricultural Improvement
and Reform Act of 1996 (1996 farm bill) to increase producer flexibility, while at the same time
direct payments were added. Presently, high commodity prices have resulted in few or no
counter-cyclical payments, leaving conservation program participation and direct payments as the
remaining major benefits that might motivate producer compliance with conservation
requirements. The Senate-passed version of the 2012 farm bill (S. 3240) would eliminate counter-
cyclical and direct payments, and retie federal crop insurance subsidies to compliance
requirements. The House-reported farm bill (H.R. 6083) would also eliminate direct payments,
but does not tie crop insurance subsidies to compliance requirements. Many environmental and
conservation groups support the re-tying of crop insurance subsidies to compliance requirements,
while some farm organizations and the crop insurance industry continue to oppose the measure.
Both the Senate-passed and House-reported bills establish a “sodsaver” provision for new crop
production on native sod. The provision reduces crop insurance premium subsidies and prohibits
benefits under the Noninsured Crop Disaster or general commodity programs on land that has
never been tilled. Under the Senate-passed bill, the sodsaver provision would apply nationwide,
while the House-reported bill would only apply to five states in the prairie pothole region.
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Contents
Recent Developments ...................................................................................................................... 1
Senate Bill S. 3240 .................................................................................................................... 1
House Bill H.R. 6083 ................................................................................................................ 2
Conservation Compliance Today..................................................................................................... 2
Sodbuster ................................................................................................................................... 2
Swampbuster ............................................................................................................................. 3
Sodsaver .................................................................................................................................... 4
Affected Program Benefits ........................................................................................................ 5
Implementation.......................................................................................................................... 6
Issues for Congress .......................................................................................................................... 7
Crop Insurance Linkage ............................................................................................................ 7
Erosion and Conversion Rates................................................................................................... 9
Oversight ................................................................................................................................. 11
Conclusion ..................................................................................................................................... 12

Figures
Figure 1. Prairie Pothole National Priority Area.............................................................................. 4
Figure 2. County-Level Crop Insurance Subsidies and Direct Payments, 2005-2010..................... 8
Figure 3. Soil Erosion on Cropland by Year .................................................................................. 10

Tables
Table 1. USDA Benefits Affected by Conservation Compliance .................................................... 5
Table 2. Summary of Conservation Compliance Status Reviews.................................................... 6
Table B-1. FSA and NRCS Responsibilities Administering Conservation Compliance on
Highly Erodible Land ................................................................................................................. 18

Appendixes
Appendix A. A Brief Legislative History of Conservation Compliance........................................ 13
Appendix B. FSA and NRCS Responsibilities .............................................................................. 18

Contacts
Author Contact Information........................................................................................................... 19

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ederal policies and programs traditionally have offered voluntary incentives to producers to
plan and apply resource-conserving practices on private lands. It was not until the 1980s
F that Congress took an alternative approach to agricultural conservation through enactment
of the Food Security Act of 1985 (P.L. 99-198, 1985 farm bill). The bill’s more publicized
provisions––the Conservation Reserve Program (CRP),1 highly erodible land conservation
(sodbuster), and wetland conservation (swampbuster)2––remain significant today. The latter two
“conservation compliance” provisions require that in exchange for certain U.S. Department of
Agriculture (USDA) program benefits, a producer agrees to maintain a minimum level of
conservation on highly erodible land and not to convert wetlands to crop production. As Congress
continues to debate the reauthorization of the farm bill, questions surrounding conservation
compliance have arisen, such as how it works, whether it is effective, whom it impacts, how it has
changed over time, and how it might continue if current farm programs change. One of the most
controversial issues has been whether conservation compliance should be tied to federal crop
insurance subsidies.
Recent Developments
Senate Bill S. 3240
The Senate passed the Agricultural Reform, Food, and Jobs Act of 2012 (S. 3240) on July 21,
2012. In addition to other conservation changes, the bill reties federal crop insurance premium
subsidies to conservation compliance requirements (discussed further below, in the “Issues for
Congress” section). The provision was added as a floor amendment.3 Under the Senate-passed
bill, producers on highly erodible land affected by this change have until January 1st of the fifth
year after the date on which payments become subject to compliance to develop and implement
an approved conservation plan. Compliance with wetlands conservation (swampbuster) would be
effective immediately.
The Senate-passed bill also includes a new nationwide “sodsaver” provision that would reduce
crop insurance premium subsidies by 50 percentage points4 for production on native sod during
the first four years of planting. Crops planted on native sod would also be ineligible for the
Noninsured Crop Assistance Program (NAP) and general commodity support programs. The bill
also repeals select farm program benefits that are currently tied to conservation compliance––
direct payments and counter-cyclical payments––while adding a new farm program (Agricultural
Crop Risk, ARC) to the list of affected benefits.
Many in the conservation and environmental community support the conservation compliance
changes included in S. 3240. Some farm organizations and crop insurers were surprised by the
Senate bill’s addition of crop insurance as an affected program benefit under conservation

1 CRP is not discussed in depth in this report. For additional information and issues related to CRP reauthotization, see
CRS Report R42093, Agricultural Conservation and the Next Farm Bill.
2 Highly erodible land conservation and wetland conservation are collectively referred to as conservation compliance in
this report.
3 “Amendment No. 2438,” Senate consideration of the Agriculture Reform, Food, and Jobs Act of 2012,
Congressional Record, vol. 158, part 94 (June 20, 2012), pp. S4353-S4354.
4 In 2011, an average of 62% of a producers insurance premium was paid for by the federal government. The Senate-
passed sodsaver provision could reduce a producer’s crop insurance premium subsidy by 50 percentage points if found
out of compliance. For example, a 50 percentage point reduction would lower a premium subsidy rate of 62% to 12%.
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compliance and continue to oppose the measure, suggesting that such a prerequisite might reduce
farmer participation in the federal crop insurance program.
House Bill H.R. 6083
The House Committee on Agriculture passed the Federal Agriculture Reform and Risk
Management Act of 2012 (H.R. 6083) on July 12, 2012. The House-reported bill does not retie
crop insurance subsidies to conservation compliance requirements like the Senate-passed bill. No
amendments on the issue were offered during committee markup, but some speculate that
compliance amendments could be offered during House floor debate.5
H.R. 6083 does include a sodsaver provision for crops planted on native sod that is similar to the
Senate-passed bill. The House-reported version of sodsaver, however, is limited to the Prairie
Pothole National Priority Area (Figure 1), located in Montana, North Dakota, South Dakota,
Minnesota, and Iowa. The House-reported bill currently awaits floor action.
Conservation Compliance Today
The 1985 farm bill included a number of significant conservation provisions designed to reduce
crop production and conserve soil and water resources. The highly erodible land conservation
provision (sodbuster) introduced in the 1985 farm bill was not intended to “allow the Federal
government to impose demands on any farmer or rancher concerning what may be done with
their land; ... only that the Federal government will no longer subsidize producers who choose to
convert highly erodible land to cropland unless they also agree to install conservation system(s)
... ”6 Similarly, the wetland conservation provision introduced in the 1985 farm bill does not
authorize USDA “to regulate the use of private, or non-Federal land”; rather, “the objective of this
provision is to deny various Federal benefits to those producers who choose to drain wetlands for
the purpose of producing agricultural commodities.”7 Since the enactment of the 1985 farm bill,
each succeeding farm bill has amended the compliance provisions. For a brief history of the farm
bill legislative changes to the conservation compliance provisions since the 1985 farm bill, see
Appendix A.
Sodbuster
The highly erodible land conservation provision, as enacted in the 1985 farm bill, introduced the
idea that in exchange for certain federal farm benefits a producer must implement a minimum
level of conservation. The provision, still in force today, applies the loss of benefits to land
classified as highly erodible that was not in cultivation between 1980 and 1985 (i.e., newly
broken land, referred to as sodbuster) and any highly erodible land in production after 1990,
regardless of when the land was put into production. Land meeting this classification can be
considered eligible for USDA program benefits if the land user agrees to cultivate the land using
an approved conservation plan.

5 Marc Heller, “Conservation Mandate Will Not Burden Farmers, Sen. Johanns Says,” BNA Bloomberg, June 26, 2012.
6 H.Rept. 99-271, p. 84.
7 Ibid., p. 88.
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In addition to the application of an approved conservation plan, a number of exemptions are
possible.8
• Good faith. If the person has acted in
What Is “Highly Erodible”?
good faith and without the intent to
For land to be considered highly erodible (as defined
violate the compliance provisions,
under 16 U.S.C. 3801) it must be—
then the producer may be granted up
•
land that currently has, or if put into agricultural
to one year to comply with a
production would have, an excessive average annual
conservation plan.
rate of erosion in relation to the soil loss tolerance
•
level (see “The ‘T’’ Factor” text box, below); or
Graduated penalty. Under some
circumstances, producers could be
•
cropland that is classified as class IV, VI, VII, or VIII
subject to a minimum of $500 and no
land under the land capability classification system in
effect on December 23, 1985.
more than $5,000 loss in benefits,
rather than a loss of all benefits.
The land capability classification system is an interpretive
grouping on soil maps made primarily for agricultural
• Allowable variance. If a conservation
purposes. Capability “classes” are broad categories of
system fails and the failure is
soils with similar hazards or limitations. There are eight
classes, with soil damage and limitations on use becoming
determined to be technical and minor
progressively greater from class I to class VIII.9
in nature, and to have little effect on
the erosion control purposes of the
conservation plan, then the producer may not be found out of compliance.
Similarly, the producer may not be found out of compliance if the system failure
was due to circumstances beyond the control of the producer.
• Temporary variance. A producer may be granted a temporary variance for
practices prescribed in the conservation plan due to issues related to weather,
pest, or disease. USDA has 30 days from the date of the request to issue a
temporary variance determination; otherwise the variance is considered granted.
• Economic hardship. A local Farm Service Agency (FSA) county committee, with
concurrence from the state or district FSA director and technical concurrence
from the Natural Resources Conservation Service (NRCS), is allowed to permit
relief if it is determined that a conservation system causes a producer undue
economic hardship.
Swampbuster
The “swampbuster” or wetland conservation provision extends the sodbuster concept to wetland
areas. Producers who plant a program crop on a wetland converted after December 23, 1985, or
who convert wetlands, making agricultural commodity production possible, after November 28,
1990, are ineligible for certain USDA program benefits. This means that, for a producer to be
found out of compliance, crop production does not actually have to occur; production only needs
to be made possible through activities such as draining, dredging, filling, or leveling the wetland.

8 In addition to those listed, a producer who participated in a USDA program that set aside land for the purpose of
reducing production of an agricultural commodity, may also not be considered ineligible. Many of these “set-aside”
programs are no longer utilized.
9 USDA, Soil Conservation Service, Land Capability Classifications System, Agricultural Handbook 210, Washington,
DC, 1961, ftp://ftp-fc.sc.egov.usda.gov/NSSC/LCC/handbook_210.pdf.
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Under the wetlands compliance provision, the following lands are considered exempt:
• a wetland converted to cropland before enactment (December 23, 1985);
• artificially created lakes, ponds, or wetlands;
• wetlands created by irrigation delivery systems;
• wetlands on which agricultural production is naturally possible;
• wetlands that are temporarily or incidentally created as a result of adjacent
development activities;
• wetlands converted to cropland before December 23, 1985, that have reverted
back to a wetland as the result of a lack of drainage, lack of management, or
circumstances beyond the control of the landowner;
• wetlands converted if the effect of such action is minimal; and
• authorized wetlands converted through a permit issued under Section 404 of the
Federal Water Pollution Control Act (33 U.S.C. 1344), for which wetland values,
acreage, and functions of the converted wetland were adequately mitigated.
Sodsaver
The 2008 farm bill created a new compliance provision under the crop insurance title (Section
12020), known as sodsaver. The sodsaver provision makes producers who plant an insurable crop
(5 or more acres) on native sod ineligible for crop insurance and the noninsured crop disaster
assistance (NAP) program10 for the first five years of planting. The conference agreement to the
2008 farm bill states that this provision may apply to virgin prairie converted to cropland in the
Prairie Pothole National Priority Area (Figure 1), but only if elected by the state. USDA
established a sign-up date of February 15, 2009, in which no governors opted to participate in the
program. Additional opportunities to participate are possible, though thought unlikely, if the
program remains voluntary.
Figure 1. Prairie Pothole National Priority Area

Source: USDA, RMA, Prairie Pothole National Priority Area, April 28, 2008, http://www.rma.usda.gov/data/
pothole/2008/all_states.pdf.
Notes: States included in the Prairie Pothole National Priority Area (left to right) are Montana, North Dakota,
South Dakota, Minnesota, and Iowa.

10 For more information on crop insurance and NAP, see CRS Report R40532, Federal Crop Insurance: Background
and Issues; and CRS Report RS21212, Agricultural Disaster Assistance.
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Affected Program Benefits
As it exists today, conservation compliance applies to most farm program payments, loans, or
other benefits administered by FSA and NRCS. Table 1 includes the statutory description and
examples of specific USDA program benefits that are affected if a producer is found to be out of
compliance with the highly erodible land and wetland conservation provisions. Conservation
compliance provisions do not apply to the federal crop insurance program as administered by
USDA’s Risk Management Agency (RMA).
Table 1. USDA Benefits Affected by Conservation Compliance
Statutory Description
Examples of Benefits
Contract payments under a production flexibility contract,
Direct payments, counter-cyclical payments, Milk Income Loss Contract
marketing assistance loans, and any type of price support
(MILC) payments, Average Crop Revenue Election (ACRE), and
or payment made available under the Agricultural Market
Marketing Assistance Loans
Transition Act, the Commodity Credit Corporation
Charter Act (15 U.S.C. 714 et seq.), or any other Act.
A farm storage facility loan made under Section 4(h) of the
Farm Storage Facility Loan
Commodity Credit Corporation Charter Act (15 U.S.C.
714b(h)).a
Disaster paymentsa
Noninsured Crop Disaster Assistance program, ad hoc disaster
assistance programs, Emergency Forest Restoration Program (EFRP),
Emergency Assistance for Livestock, Honey Bees, and Farm-raised Fish
(ELAP), Livestock Forage Program (LFP), Livestock Indemnity Program
(LIP), Tree Assistance Program (TAP), and Supplemental Revenue
Assurance (SURE)b
A farm credit program loan made, insured, or guaranteed
FSA Farm Operating Loans, Farm Ownership Loans, and Emergency
under the Consolidated Farm and Rural Development Act
Disaster Loans
or any other provision of law administered by FSA.c
A payment made pursuant to a contract entered into
Agricultural Water Enhancement Program (AWEP), Conservation
under the Environmental Quality Incentives Program
Stewardship Program (CSP), Conservation Reserve Program (CRP),
(EQIP) or any other provision of Subtitle D of the Food
Environmental Quality Incentives Program (EQIP), Farmland Protection
Security Act of 1985, as amended
Program (FPP), Grassland Reserve Program (GRP), Wetlands Reserve
Program (WRP), and Wildlife Habitat Incentives Program (WHIP).
A payment made under Section 401 or 402 of the
Emergency Conservation Program (ECP) and Emergency Watershed
Agricultural Credit Act of 1978 (16 U.S.C. 2201 or 2202).
Protection (EWP) Program
A payment, loan, or other assistance under Section 3 or 8
Watershed Protection and Flood Prevention program
of the Watershed Protection and Flood Prevention Act (16
U.S.C. 1003 or 1006a).
Source: 16 U.S.C. 3811 and 16 U.S.C. 3812.
Notes: The examples listed should not be considered an exhaustive list. Also affected would be any payments made
under Section 4 or 5 of the Commodity Credit Corporation Charter Act (15 U.S.C. 714b or 714c) for the storage of
an agricultural commodity acquired by the CCC.
a. Applies only to highly erodible land conservation provisions.
b. Authority expired September 30, 2011, for new contracts under EFRP, and for disaster payments under ELAP,
LFP, LIP, TAP and SURE for disasters occurring after that date.
c. Only applies if the proceeds of the loan will be used for a purpose that contributes to the conversion of
wetlands that would make production of an agricultural commodity possible or for a purpose that contributes to
excessive erosion of highly erodible land. Loans made before enactment of the1985 farm bill are not affected.
If a producer requests any payment, loan, or other benefit subject to the conservation compliance
provision, then the provision applies to all land owned by the producer or the producer’s
affiliates. This includes land located anywhere in the United States or U.S. territories, without
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regard to whether payments, loans, or other benefits are actually received for such land. In other
words, if producers are found out of compliance on one portion of their land, they are deemed out
of compliance for all land owned or associated with them, regardless of where it is located.
Implementation
Both NRCS and FSA implement conservation compliance as part of USDA farm programs. FSA
has primary responsibility for making producer eligibility determinations about conservation
compliance. NRCS has primary responsibility for technical determinations associated with
conservation compliance. Each agency’s role is outlined in Appendix B.
Following the 1985 farm bill, conservation compliance requirements created a large workload for
NRCS staff. Compliance required that new plans be completed by 1990 on the approximately 140
million acres classified as highly erodible. In contrast, in 1984, the year before compliance was
enacted, NRCS assisted with plans on about 2.5 million acres. Demands remained high ahead of
the 1995 deadline for full implementation. Almost half of these plans were revised at least once
before the 1995 deadline because of changes in farming techniques and crops, new conservation
technology, and changes in ownership and tenancy.
Another dynamic of implementing compliance was the requirement for NRCS to work with a
large number of new, and sometimes less cooperative, clients. Most producers receiving farm
program benefits were familiar with FSA because the agency was already administering many
federal farm programs. However, prior to 1985, conservation programs administered by NRCS
were small and voluntary. Because conservation compliance tied federal farm program benefits to
the requirement for a conservation plan, some producers viewed compliance as coercive. This
perspective made implementation more difficult, and caused many in the agricultural community
to view NRCS as a regulatory agency. This resulted in several congressional oversight hearings to
explore implementation of compliance following enactment.
NRCS continues to conduct compliance status reviews on farm and ranch lands that have
received USDA benefits and which are subject to the conservation compliance provisions (highly
erodible land, wetland compliance, or both). A compliance status review is an inspection of a
cropland tract to determine whether the USDA farm program beneficiary is in compliance with
the conservation compliance provisions (Table 2). The review process requires an NRCS
employee to make an on-site determination when a violation is suspected, and ensures that only
qualified NRCS employees report violations. Ultimately, penalties for noncompliance are
determined by FSA. Penalties may range from a good faith exemption that allows producers up to
one year to correct the violation, to a determination that the producer is ineligible for any
government payment and must pay back current and prior year’s benefits.
Table 2. Summary of Conservation Compliance Status Reviews
2007
2008
2009
2010
Total Tracts Reviewed
20,134
22,755
20,474
18,704
Tracts Out of Compliance
276
333
277
344
Percentage Out of Compliance
1.4%
1.5%
1.4%
1.8%
Number of States Recording Non-Compliance 33
34
30
28
Source: USDA, NRCS.
Notes: Totals do not include the number of variances or exemptions issued within a given year. For example, in
2010, 4% (732 tracts) of tracts reviewed were issued variances or exemptions and therefore not considered to
be out of compliance.
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Issues for Congress
The 1985 farm bill created the highly erodible land conservation and wetland conservation
compliance provisions, which tied various farm program benefits to conservation standards.
These provisions have been amended with each subsequent farm bill. As the 112th Congress
continues to debate the reauthorization of farm programs, issues related to conservation
compliance have been raised.
Crop Insurance Linkage
The 1996 farm bill made several changes to conservation programs (see Appendix A). It not only
strengthened voluntary incentive conservation programs but also lessened the effect on certain
conservation compliance provisions. Most notably, the 1996 farm bill removed crop insurance as
a program benefit that could be denied, and added production flexibility contracts—now referred
to as direct payments. The debate surrounding this decision centered on the policy goal of
encouraging producers to purchase crop insurance while responding to farmer concerns that
compliance requirements were too intrusive.
Currently, the major farm program benefits that could be affected by compliance are direct
payments, counter-cyclical payments, and payments under conservation programs. High
commodity prices in recent years have resulted in few or no counter-cyclical payments. This
leaves conservation program participation and direct payments as the remaining major benefits
that could motivate producer compliance with conservation requirements. 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 payments
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.
One solution, offered by environmental and conservation organizations, is re-coupling
conservation compliance to crop insurance premium subsidies. Crop insurance is purchased by a
producer growing an insurable crop and a percentage of the premium (averaging about 60% of
the total) is paid for by the federal government.11
Farm organizations and the crop insurance industry are generally opposed to tying crop insurance
to compliance requirements, citing the potential for reduced farmer participation in crop
insurance.12 Agricultural interest groups also cite the possibility of losing crop insurance subsidies

11 The government-paid portion of crop insurance premiums can range between 38% to 80% of the total premium. A
producer’s premium for a policy increases as the levels of insurable yield and price coverage rise, and the premium on
buy-up coverage is subsidized by the government depending on the coverage level. The subsidy rate declines as the
coverage level rises, but the total premium subsidy in dollars increases because the policies are more expensive. In
total, the government cost for crop insurance programs was $11.3 billion in FY2011. Insurance policies are sold and
completely serviced through 15 approved private insurance companies; however, the insurance companies’ losses are
reinsured by USDA, and their administrative and operating costs are reimbursed by the federal government. For
additional information, see CRS Report R40532, Federal Crop Insurance: Background and Issues.
12 For example, several groups voiced opposition to the linkage of crop insurance subsidies to conservation compliance
during the Senate Committee on Agriculture, Nutrition, and Forestry hearing on risk management and commodities in
the 2012 farm bill (March 15, 2012), including the American Soybean Association, the U.S. Rice Federation, the U.S.
Rice Producers Association, the National Association of Wheat Growers, the National Council for Farmer
Cooperatives, and the American Farm Bureau Federation. For individual testimonies, see http://www.ag.senate.gov/
hearings/risk-management-and-commodities-in-the-2012-farm-bill.
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when severe weather events out of their control occur.13 Environmental interest groups counter
this argument, stating that the exemptions allowed under the law provide producers relief from
such a determination, including variance exemptions (variance from prescribed conservation plan
practices for the purpose of handling a specific weather, pest, or disease problem), good faith
exemptions (the producer acted in good faith and without the intent to violate the compliance
provision), and economic hardship exemptions (variance when the application of the conservation
system would impose an undue economic hardship).14 A few farm industry groups support linking
crop insurance subsidies to conservation compliance.15
Figure 2. County-Level Crop Insurance Subsidies and Direct Payments, 2005-2010

Source: Roger Claassen, The Future of Environmental Compliance Incentives in U.S. Agriculture: The Role of
Commodity, Conservation, and Crop Insurance Programs, USDA, ERS, Bulletin No. 94, Washington, DC, March
2012, http://www.ers.usda.gov/Publications/EIB94/EIB94.pdf.
Notes: County-level estimates based on average direct payments and crop insurance subsidies.
According to USDA’s Economic Research Service (ERS),16 if direct payments were reduced or
eliminated and crop insurance was once again added to the list of possible USDA program

13 U.S. Congress, Senate Committee on Agriculture, Nutrition, and Forestry, Statement of the American Farm Bureau
Federation, President Bob Stallman, hearing on risk management and commodities in the 2012 farm bill, 112th Cong.,
2nd sess., March 15, 2012, p. 7.
14 Craig Cox, “Guest Columnist: The Farm Bureau Bogeyman,” Des Moines Register, January 30, 2012.
15 National Farmer Union, “2012 NFU Special Order of Business—The 2012 Farm Bill: Investing in Rural America,”
press release, March 7, 2012, http://www.nfu.org/images/stories/SpecialOrders/2012/
FarmBillAMENDED_SpecialOrder.pdf and American Farmland Trust, “Conservation Compliance: A Key Part of
Incentive-Based Conservation,” March 7, 2012, http://www.farmbillfacts.org/conservation-compliance-a-key-part-of-
incentive-based-conservation.
16 Roger Claassen, The Future of Environmental Compliance Incentives in U.S. Agriculture: The Role of Commodity,
Conservation, and Crop Insurance Programs, USDA, ERS, Bulletin No. 94, Washington, DC, March 2012,
http://www.ers.usda.gov/Publications/EIB94/EIB94.pdf.
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benefits subject to conservation compliance, the incentive for compliance could vary depending
on location. In areas with higher crop production risk, such as the Northern Plains, crop insurance
could provide a compliance incentive that is equal to or even larger than the current one tied to
direct payments. In other areas where direct payments offer more of an incentive but crop
insurance is not as widely utilized, such as the Mississippi Delta, there might be less incentive to
comply with conservation requirements (Figure 2).
Erosion and Conversion Rates
The reduction in soil erosion from highly
The “T” Factor
erodible land conservation continues, but at a
Soil erosion occurs for a variety of natural and manmade
slower pace than following enactment of the
reasons. An evaluation of different soil types and
1985 farm bill (Figure 3). The leveling off of
surrounding conditions (e.g., soil depth, slope, etc.)
reduced erosion leaves several broad policy
allows soil scientists to determine what an “acceptable”
rate of soil erosion is for a given area. This is commonly
questions that may be discussed in the context
referred to as “T” or soil loss tolerance rate. T is the
of the next farm bill, including whether an
maximum rate of annual soil loss that will permit crop
acceptable level of soil erosion on cropland
productivity to be sustained economical y and indefinitely
has been achieved; whether additional
on a given soil. Erosion is considered to be greater than
reductions could be achieved, and if so, at
T if either the water (sheet and ril ) erosion or the wind
erosion rate exceeds the soil loss tolerance rate. The
what cost; and how federal farm policy should
higher the T value, the more soil erosion can be
encourage additional reductions in erosion.
tolerated.
Some environmental and conservation groups
The use of T is one of the bases for identifying highly
have asked Congress to tighten compliance
erodible land associated with conservation compliance.
requirements as one way of reducing soil
The erodibility index for a soil is determined by dividing
erosion. Many agricultural groups, however,
the potential average annual rate of erosion for each soil
prefer additional financial incentives through
by its predetermined soil loss tolerance (T) value.17 T is
also used as one of the criteria for planning soil
voluntary conservation programs, such as
conservation systems required by conservation
EQIP.
compliance. Conservationists focus on reducing soil loss
to or below T by applying practices, such as terraces,
According to USDA’s Natural Resource
contour strips, grassed waterways, and residue
Inventory, in 2007, 99 million acres (28% of
management.
all cropland) was eroding above soil loss
The use of T has been and will likely remain
tolerance (T) rates (see text box).18 This
controversial. Some soil scientists have suggested that
compares to 169 million acres (40% of
the current values of T far exceed the actual soil
formation rates and therefore are not truly “sustainable”
cropland) in 1982. Between 1982 and 2007,
(Craig Cox, Andrew Hug, and Nils Bruzelius, Losing
farmers reduced total cropland soil erosion by
Ground, Environmental Working Group, April 2011).
43% (Figure 3). The bulk of this reduction
Despite these concerns, T remains the only commonly
occurred following the 1985 farm bill and the
used standard by which soil erosion is measured.
implementation of CRP and conservation
compliance requirements. Reduction in soil erosion may also be attributed to other factors.
Estimates indicate that compliance provisions could be responsible for approximately 295 million
tons, or 25% of the 1.2 billion ton reduction in cropland soil erosion that occurred between 1982

17 7 C.F.R. §12.21(a)
18 USDA, NRCS, 2007 National Resources Inventory: Soil Erosion on Cropland, April 2010,
http://www.nrcs.usda.gov/Internet/FSE_DOCUMENTS/nrcs143_012269.pdf.
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and 1997 (most recent information available).19 Another 31%, or 365 million tons reduced could
be attributed to land use changes, including CRP enrollment.20
In addition to soil erosion reductions following the 1985 farm bill, the number of wetlands
converted to cropland was also reduced. Unlike the highly erodible land conservation provision,
the impact of the wetland conservation provision is increasingly difficult to measure.
Figure 3. Soil Erosion on Cropland by Year
(billions of tons)
3.5
3
Water Erosion
Wind Erosion
2.5
1.38
1.3
2
0.99
1.5
0.85
0.8
0.77
1
1.68
1.49
1.118
0.5
1.04
1.01
0.96
0
1982
1987
1992
1997
2002
2007

Source: USDA, NRCS, 2007 National Resources Inventory: Soil Erosion on Cropland, April 2010,
http://www.nrcs.usda.gov/Internet/FSE_DOCUMENTS/nrcs143_012269.pdf.
Notes: Total includes cultivated and non-cultivated cropland. Water erosion includes sheet and rill erosion.
Swampbuster is one of several federal, state and local policies that discourage the conversion of
wetlands to other uses.21 Other farm bill programs such as the Wetlands Reserve Program (WRP)
and CRP, seek to provide a reverse effect and encourage landowners to restore wetlands. Between
1997 and 2007, USDA estimates that the U.S. experienced a net wetlands gain of about 250,000
acres.22 Sixty percent of the gross loss (440,000 acres) during that time period is attributed to
urban and industrial development and 15% is attributed to agriculture. Both WRP and CRP are to
be considered for reauthorization in the next farm bill. Whether the wetland conservation

19 Roger Claassen, “Have Conservation Compliance Incentives Reduced Soil Erosion?” USDA, ERS, Amber Waves,
June 2004, http://www.ers.usda.gov/AmberWaves/June04/Features/HaveConservation.htm.
20 Ibid.
21 The other major federal policy is Section 404 of the Clean Water Act. For additional information, see CRS Report
RL33483, Wetlands: An Overview of Issues.
22 USDA, RCA Appraisal: Soil and Water Resources Conservation Act, Washington, DC, July 2011,
http://www.nrcs.usda.gov/Internet/FSE_DOCUMENTS/stelprdb1044939.pdf.
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provision is an effective policy tool for reducing wetland conversions, compared to financial
incentives programs (i.e., WRP and CRP) could be part of the policy debate.
Swampbuster continues to be a controversial provision with some producers. NRCS completes
certified wetland determination in response to request from producers, or in response to
whistleblower complaints. With commodity crop prices currently at high levels, producers desire
to increase their agricultural production by clearing and/or draining wetlands, and request wetland
determinations from the NRCS to ensure compliance with the wetland conservation provision.
This has led to an increased workload for NRCS and could impact the ability of NRCS to provide
technical assistance for other farm bill programs.
Oversight
The conservation compliance requirements have undergone several program audits by both the
Government Accountability Office (GAO) and USDA’s Office of the Inspector General (OIG).
The most recent GAO audit was in 2003,23 which found that many NRCS field offices were not
implementing compliance requirements as outlined in the law and issued through agency policy.
Reasons for the discrepancy related to a lack of resources, training, and guidance; de-emphasis on
compliance relative to other work; and a reluctance to assume an enforcement role. The report
noted that the lack of NRCS oversight and called into question the accuracy of agency’s claims
that 98% of tracts reviewed were found to be in compliance. The report also faulted FSA for
granting waivers with inadequate documentation. Between 1993 and 2001, FSA waived 4,948 of
8,118 cases (61%) in which farmers were cited with violations. These waivers were granted by
local FSA county committee, which generally consist of farmers elected by other farmers in the
county. The report stated that NRCS staff and conservation groups believed that the county
committees were predisposed to approve farmers’ appeals so as not to penalize a neighbor’s
eligibility for farm program benefits.
In 2008, OIG issued phase I of a two-phase investigation.24 Phase I evaluated changes to the
status review process based on prior audit recommendations made by GAO and OIG. According
to the report, NRCS addressed concerns from the previous GAO and OIG investigations by
implementing improvements on the sampling methodology and the process by which
conservation compliance status review results are summarized, analyzed, and reported. The report
found that between 2002 and 2006, the average rate of compliance reported by NRCS was 98%.25
Between 1993 and 2005, a total of $125 million in program benefits was subject to withholding
due to compliance violations. Of this total, FSA issued good faith exemptions and restored $103
million (83%) in program benefits. The OIG report concluded that the number of compliance
violations reported by NRCS was too low and the number of restored benefits issued by FSA was
too high. Phase II is intended to evaluate the effectiveness of the status review process through

23 U.S. GAO, Agricultural Conservation: USDA needs to better ensure protection of highly erodible cropland and
wetlands, GAO-03-418, April 2003, http://www.gao.gov/assets/240/237878.pdf.
24 USDA, Office of the Inspector General, Audit Report: Natural Resources Conservation Service Status Review
Process, Report No. 50601-13-KC, Great Plains Region, June 2008.
25 Specifically on average, 58% were found to be in compliance, 37% required no conservation plan because no highly
erodible land was present or if wetlands were present there was no violation found, 3% were found to be out of
compliance but granted variances (e.g., weather, pest, disease exemptions), and 2% were found to be out of
compliance.
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field inspections and possibly provide an explanation for the high rate of reinstated benefits. To
date, no report or status on phase II has been released.
The 2008 farm bill (Section 2002) amended the compliance provisions to include a second level
of review for waivers granted by FSA. The conference report cited the changes as “resolv[ing] a
long-standing problem and provid[ing] for increased oversight of the violation process.”26
Opinions vary on how well USDA is enforcing the conservation compliance provisions.
Environmental organizations advocate for more consistent and rigorous status reviews. Producer
organizations advocate for continued flexibility and more additional voluntary programs
incentives to support any necessary improvements. Congress may consider remaining oversight
issues and the enforcement of conservation compliance in the next farm bill.
Conclusion
As Congress considers the reauthorization of farm policy in the next omnibus farm bill, there is
considerable pressure to reduce federal spending. While most farm organizations prefer voluntary
financial incentive programs to policies such as conservation compliance, increasing or
maintaining funding levels for such financial incentives could be challenging. Some point to the
use of agricultural conservation compliance provisions as a way to discourage the degradation of
private lands without increasing federal spending. This approach, however, has historically met
with controversy, which seems likely to continue.

26 H.Rept. 110-627.
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Appendix A. A Brief Legislative History of
Conservation Compliance
Prior to the 1985 farm bill, approximately two dozen soil and water conservation programs
existed. These programs reflected a pattern that was established in the 1930s––voluntary
cooperation from land users and incentive-based programs––and changed little in fifty years. The
expansion of agricultural production in the 1970s to respond to growing world demand for farm
products was accompanied by an increase in soil erosion.27 Much of this erosion was attributed to
producers expanding their acreage into “marginal” land––land that easily erodes and is often less
productive. Intense production practices were supported by many of the federal farm policies in
place at the time.
In 1977, Congress enacted the Soil and Water Resources Conservation Act (P.L. 95-192, referred
to as the RCA). The RCA required USDA to appraise the nation’s natural resources on nonfederal
land and provide Congress with an annual evaluation report. Many of the soil and water resource
issues were highlighted in the 1980 RCA report and drew attention to the high societal cost of soil
erosion and wetland conservation that resulted from intense production.28 As part of the National
Program for Soil and Water Conservation, USDA presented the alternative of “cross-compliance,”
in which farmers who receive USDA benefits would be required to meet minimum conservation
standards.29
In the early 1980s, large-scale commodity surpluses of certain agricultural products developed
from weak global demand and advances in agricultural productivity. In response, during the 1985
farm bill debate, Congress sought new farm policies to increase export markets and reduce
domestic production, thereby reducing surpluses. The result was what some classified as a radical
departure from the traditional conservation approach.
1985 Farm Bill
The Food Security Act of 1985 (P.L. 99-198, 1985 farm bill) included a number of significant
conservation provisions designed to reduce production and conserve soil and water resources.
The Conservation Reserve Program (CRP), as authorized in the 1985 farm bill, was allowed to
remove up to 45 million acres of land from production under multi-year rental agreements. The
financial incentives of CRP far exceeded those of most early conservation programs, and CRP
remains the largest conservation program (in terms of funding) to date.30 The other conservation

27 J. Douglas Helms, Leveraging Farm Policy for Conservation: Passage of the 1985 Farm Bill, USDA, Natural
Resources Conservation Service, Historical Insights Number 6, June 2006, http://www.nrcs.usda.gov/Internet/
FSE_DOCUMENTS/stelprdb1044129.pdf.
28 U.S. Department of Agriculture, Summary of Appraisal, Parts I and II, and Program Report, GPO 1980 633-
769/460, 1980.
29 U.S. Department of Agriculture, A National Program for Soil and Water Conservation, 1982 Final Program Report
and Environmental Impact Statement, GPO 1982-0-522-010/3711, September 1982.
30 CRP is currently authorized to enroll up to 32 million acres and annually spends an average of over $2 billion in
mandatory funding. The purpose of CRP has long been debated. In its early years, some believed the program’s sole
purpose was for production control. Others saw CRP as a soil erosion control program. Today, many view it as a
wildlife habitat program. The program’s objectives and purpose are not debated in this report. For additional
information and issues related to CRP reauthotization, see CRS Report R42093, Agricultural Conservation and the
(continued...)
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provisions were highly erodible land conservation (sodbuster) and wetland conservation
(swampbuster). Despite the historic significance of these provisions there was surprisingly little
debate recorded at the time.
Sodbuster
The highly erodible land conservation provision, as enacted in the 1985 farm bill, introduced the
requirement that in exchange for certain federal farm benefits a producer must implement a
minimum level of conservation. The provision applies the loss of benefits to land classified as
highly erodible that was not in cultivation between 1980 and 1985 (i.e., newly broken land,
referred to as sodbuster) and any highly erodible land in production after 1990, regardless of
when the land was put into production. Land meeting this classification could be considered
eligible for USDA program benefits if the land user agreed to cultivate the land using an approved
conservation plan.
There were two main exceptions. First, the farmer had until January 1, 1990, or two years after
the completion of a soil survey – whichever was later – to be actively applying an approved
conservation plan. Second, if a farmer was actively applying an approved conservation plan, then
they had until January 1, 1995, to be full in compliance with the plan. The program benefits that
could be lost included:
• price supports and related payments,
• farm storage facility loans,
• crop insurance,
• disaster payments,
• any farm loans that will contribute to excessive erosion of highly erodible land,
and
• storage payments made to producers for crops acquired by the Commodity Credit
Corporation (CCC).
Swampbuster
The “swampbuster” or wetland conservation provision extends the sodbuster requirement to
wetland areas. Producers who plant a program crop on a converted wetland would be ineligible
for certain USDA program benefits. The most controversial debate over the swampbuster
provision was on the definition of an affected wetland areas. This resulted in many wetland areas
being exempt, including:
• wetlands converted before enactment (December 23, 1985),
• artificially created lakes, ponds, or wetlands,
• wetlands created by irrigation delivery systems,

(...continued)
Next Farm Bill.
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• wetlands on which agricultural production is naturally possible, or
• wetlands converted if the effect of such action is minimal.
Changes Since the 1985 Farm Bill
Since the enactment of the 1985 farm bill, each succeeding farm bill has amended the compliance
provisions (both highly erodible land and wetland conservation).
1990 Farm Bill
The compliance provisions were amended in several ways in the Food, Agriculture, Conservation,
and Trade Act of 1990 (P.L. 101-624, 1990 farm bill). Conservation provisions were expanded to
include wetlands converted after enactment (November 28, 1990), where agricultural commodity
production was made possible. This meant that crop production did not actually have to occur in
order to be found out of compliance, only that production was made possible through activities
such as draining, dredging, filling, or leveling the wetland. The 1990 farm bill added six more
federal farm programs to the list of benefits that could be lost for non-compliance, including
many of the conservation programs. A graduated penalty was added so that under some
circumstances, producers could be subject to a loss in benefits of between $500 and $5000. This
graduated penalty may be applied only once every five years. The revisions protect tenant farmers
who may be ruled out of compliance because of the actions of the landowner or previous tenants.
Compliance exemptions were also expanded to include highly erodible land set aside, or taken
out of production, under the commodity support programs.
1996 Farm Bill
Beginning in 1994, conservation policy discussions in Congress focused on identifying ways to
make the compliance programs less intrusive on farmer activities. As a result, conservation
compliance provisions were significantly amended in the Federal Agricultural Improvement and
Reform Act of 1996 (P.L. 104-127, referred to as the 1996 farm bill). Many of the conservation
compliance changes enacted in the 1996 farm bill were meant to provide producer flexibility and
reduce the impact on farm operations. Some of the major amendments to highly erodible land
conservation compliance in the 1996 farm bill include:
• removing crop insurance from the list of benefits that could be lost if the farmer
is found out of compliance;
• adding production flexibility contracts31 to the list of benefits that could be lost if
found out of compliance;
• highly erodible land exiting CRP would not be held to a higher compliance
standard than nearby cropland;
• providing violators with up to one year to meet compliance requirements;
• developing procedures to expedite variances for weather, pest, or disease
problems;

31 Producer flexibility contracts are now referred to as direct payments.
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• requiring an erosion measurement before the conservation system is
implemented;
• allowing third parties to measure residue and require that residue measurements
take into account the top two inches of soil;
• allowing producers to modify plans as long as the same level of treatment is
maintained;
• allowing local county committees to permit relief if a conservation system causes
a producer undue economic hardship; and
• establishing a wind erosion estimation pilot study to review and modify as
necessary wind erosion factors used to administer conservation compliance.
Several changes were made in the 1996 farm bill to the wetland conservation provisions as well.
Similar to the provisions for highly erodible land, wetland conservation provisions were meant to
provide greater program flexibility. Major changes included:
• exempting swampbuster penalties when wetland values and functions are
voluntarily restored following a specified procedure;
• providing that prior converted wetlands will not be considered “abandoned” as
long as the land is only used for agriculture;
• giving the Secretary of Agriculture discretion to determine which program
benefits violators are ineligible for and to provide good-faith exemptions;
• establishing a pilot mitigation banking program (using the CRP);
• repealing required consultation with the U.S. Fish and Wildlife Service; and
• expanding the definition of agricultural lands used in a 1994 interagency
Memorandum of Agreement.
While the 1996 farm bill reduced the impact of the compliance requirements it also expanded the
voluntary incentive-based programs for agricultural conservation. For the first time the majority
of conservation funding was authorized as mandatory funding.32 Total funding levels for
conservation were increased. The conservation agenda was also broadened by adding wildlife
considerations and evaluating nonpoint source pollution from agricultural sources.
2002 Farm Bill
The Food Security and Rural Investment Act of 2002 (P.L. 107-171, 2002 farm bill) continued
and expanded many of the conservation priorities in the 1996 farm bill, especially those related to
voluntary incentive programs and increased funding. Few changes were made to the conservation
compliance provisions. The primary change was the requirement that USDA not delegate
authority to other parties to make highly erodible land determinations. Also, any person who had
highly erodible land enrolled in the CRP was given two years after a contract expires to be in full
compliance.

32 Mandatory funding is made available by multiyear authorizing legislation and does not require annual appropriations
or subsequent action by Congress.
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2008 Farm Bill
The Food, Conservation and Energy Act of 2008 (P.L. 110-246, referred to as the 2008 farm bill)
again made few changes to the conservation compliance provisions. The primary change was the
addition of a second level of review by the state or district FSA director, with technical
concurrence from the state or area NRCS conservationist if USDA determines that this exception
should apply.
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Appendix B. FSA and NRCS Responsibilities
Table B-1. FSA and NRCS Responsibilities Administering Conservation Compliance
on Highly Erodible Land
FSA Responsibilitiesa
•
Establish field/tract boundaries, field numbers, and acreage
•
Consult with NRCS about the adequacy of conservation
systems as needed
•
Determine whether a tenant is required to produce an
•
Determine whether a producer violated the conservation
agricultural commodity on highly erodible land under the
compliance provisions (both highly erodible land
terms and conditions of an agreement between the
conservation and wetland conservation)
landlord and the tenant or sharecropper
•
Determine whether an individual, joint venture, or entity is
•
Notify new owners and operators of a tract of previous
a producer on a highly erodible field or converted wetland
determinations and the status of conservation system on
the tract
•
Determine whether the land meets the sodbuster
•
Determine whether proceeds of a farm program loan
provisions (i.e., was converted from native vegetation, such
made, insured, or guaranteed by FSA-Farm Credit wil be
as grassland, rangeland, or woodland, to agricultural
used for a purpose that will contribute to excessive
production after December 23, 1985)
erosion on highly erodible land or to the conversion of a
wetland to produce an agricultural commodity
•
Determine if the conversion of a wetland was caused by a
•
Determine whether persons qualify for a good faith
third party
exemption
•
Provide general supervision for day-to-day conservation
•
Determine on request whether application of a
compliance operations
conservation system causes a person undue economic
hardship
•
Refer cases requiring a technical determination to NRCS
•
Provide producers with appeal rights and mediation
•
Obtain producer’s certification of intentions to comply
•
Consult with NRCS about determinations of third-party
with conservation compliance requirements
conversion
•
Determine the accuracy of a producers certification
•
Make determinations of ineligibility for certain program
according to the spot-check procedures
benefits, as violations are discovered
NRCS Responsibilitiesb
•
Provide technical assistance for conservation planning
•
Complete compliance reviews that are (1) regularly
when requested, and applying conservation systems to the
scheduled, (2) in response to an FSA request, and (3) in
land upon request
response to a whistleblower complaint
•
Make determinations for highly erodible soil map units and
•
Provide assistance for conservation system revisions for
the predominance of highly erodible land in a field
USDA participant reinstatement
•
Determine whether land meets wetland criteria and
•
Provide FSA with information for making tenant exemption
whether a wetland exemption applies (see those listed
determinations and provide conservation planning
above)
assistance to the tenant
•
Determine qualifications for temporary variances from the
•
Provide FSA with information for making good faith
requirements of a conservation system
exemptions
•
Identify NRCS error or misinformation
•
Apply a conservation system that meets the soil reduction
and/or improvement criteria.
a.
As outlined in USDA Farm Service Agency, Highly Erodible Land Conservation and Wetland Conservation Provisions,
FSA Handbook 6-CP (revision3), Washington, DC, http://www.fsa.usda.gov/Internet/FSA_File/6-cp.pdf.
b. As outlined in USDA Natural Resources Conservation Service, National Food Security Act Manual, Fifth Edition,
M_180_NFSM_510, November 2010.

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Author Contact Information

Megan Stubbs

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


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