Key Changes
The 2002 Farm Act increases funding for almost every existing
agri-environmental program. Overall spending for conservation
and environmental programs will rise by 80 percent to a projected
10-year total of $38.6 billion, according to Congressional
Budget Office (CBO) estimates (based on the April 2002 baseline).
While continuing and expanding the programs that retire environmentally
sensitive land from crop production, the 2002 Act emphasizes
programs that support conservation on land in production,
including livestock operations. New programs, including the
Conservation Security Program (CSP) and the Grassland Reserve
Program, further expand the objectives and role of agri-environmental
policy.
Summary of Provisions
Under the 2002 Farm Act, producers can choose from a wide
range of voluntary conservation and environmental programs
designed to protect a wide range of resources. Like the three
previous farm acts, the 2002 Act continues the trend of increasing
the size and scope of agri-environmental programs. While programs
that support better conservation and environmental management
on working land have accounted for less than 15 percent of
Federal conservation expenditures over the past 15 years,
they receive more than 60 percent of the $17.1-billion increase
in conservation spending.
These existing programs get acreage or funding increases:
- The Conservation
Reserve Program (CRP) offers annual payments and
cost sharing to establish long-term, resource-conserving
cover on environmentally sensitive land. The acreage cap
is increased from 36.4 million acres to 39.2 million acres.
Funding is through the Commodity
Credit Corporation (CCC). CBO estimates increased spending
of $1.5 billion over 10 years.
- The Wetlands Reserve
Program (WRP) provides cost
sharing and/or long-term or permanent easements for
restoration of wetland on agricultural land. The acreage
cap is increased from 1.075 million acres to 2.275 million
acres. The Secretary of Agriculture is required (to the
greatest extent practicable) to enroll 250,000 acres per
year. Funding is through the CCC. CBO estimates increased
spending of $1.5 billion over 10 years.
- The Environmental
Quality Incentives Program (EQIP) provides technical
assistance, cost sharing, and incentive
payments to assist livestock and crop producers with
conservation and environmental improvements. EQIP is slated
to receive $5.8 billion in CCC funding for fiscal years
(FY) 2002-07 and a total of $9 billion over 10 years. Funding
is phased up to $1.3 billion annually by FY 2007, compared
with annual funding of roughly $200 million per year under
the 1996 Farm Act. Additional CCC funding of $250 million
over FY 2002-07 is provided for ground and surface water
conservation. An additional $50 million (to be made available
as soon as practical) is allocated to water conservation
activities in the Klamath Basin.
- The Wildlife Habitat
Incentives Program provides cost sharing
to landowners and producers to develop and improve wildlife
habitat. Total CCC funding of $360 million is mandated over
FY 2002-07, ranging from $15 million in FY 2002 to $85 million
in FY 2005-07, and a total of $700 million over 10 years.
- The Farmland Protection
Program (FPP) provides funds to State, tribal, or
local governments and private organizations to help purchase
development rights and keep productive farmland in agricultural
use. Total CCC funding of $597 million is mandated over
FY 2002-07, ranging from $50 million in FY 2002 to $125
million in FY 2004-05, and totaling $985 million over 10
years.
New programs will also receive significant funding while
expanding the overall scope of USDA conservation programs:
- The Conservation Security Program will provide
payments to producers for maintaining or adopting a wide
range of structural and/or land management practices that
address a variety of local and/or national resource concerns.
CSP will be funded through the CCC. CBO estimates spending
of $369 million for FY 2003-07 and $2 billion over 10 years.
- The Grassland Reserve Program will protect up
to 2 million acres of grassland. CCC funding of up to $254
million is available.
Economic Implications
Funding shifted toward working land—The
increase in funding for conservation on working agricultural
land is large relative to the increase in funding for land
retirement. Past conservation funding had been skewed toward
land retirement and the funding shift is a major change in
conservation program emphasis. EQIP and the new Conservation
Security Program are slated to receive new funding of $11
billion over 10 years, compared with a combined increase of
$3 billion for CRP and WRP over the same period. This change
may lead to a broader array of options and greater flexibility
for producers to develop conservation strategies that deliver
agri-environmental gains at the lowest possible cost. Greater
overall funding should increase the overall level of conservation
effort on farms, providing higher benefits from increased
environmental quality to consumers.
Increase in land retirement to emphasize wetlands—Land
retirement programs, principally CRP and WRP, are also expanded.
The 2002 Act expands authority for land retirement by a total
of 4 million acres, an increase of nearly 11 percent over
current authority. A significant share of the increase will
be devoted to wetland restoration as the WRP enrollment cap
more than doubles, increasing from 1.075 million acres to
2.275 million, an increase of 1.2 million acres. In the CRP,
500,000 acres of the 2.8-million-acre increase in the acreage
cap could be used to enroll farmed
wetlands and associated buffer acreage. Increased land
retirement could affect commodity production and prices. Because
these programs are voluntary and not commodity-specific, the
subsequent commodity output, price, and environmental effects
will depend on which producers bid and how bids are selected
for CRP or WRP enrollment.
Farmland Protection will receive a major funding increase—FPP
will receive 10-year funding of $985 million, which represents
a nearly twenty-fold increase over the $53.4 million provided
since 1996. The cap on enrolled acreage is removed. How much
land is ultimately preserved, and the location of that land,
depends on a number of factors. FPP money is expended through
States, local governments, and private organizations that
pay at least 50 percent of the cost of purchasing development
rights, so it will protect farmland where those programs or
organizations exist. Like CRP and WRP, FPP is a voluntary
program, so the location and extent of enrollment—and
ensuing environmental benefits—will depend on who submits
bids and how these bids are selected for enrollment.
For More Information...
For Program Agency Information...
- Farm
Service Agency—Administers the Conservation Reserve
Program, the Conservation Reserve Enhancement Program and
other conservation programs.
- Natural
Resources Conservation Service—Administers the
Environmental Quality Improvement Program, Wetland Reserve
Program, Wildlife Habitat Improvement Program, Farmland
Protection Program, and other conservation programs.
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