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Red clover growing in the open prairie EJ_Rodriquez/Getty images
STALLED GROWTH: Growth in federal conservation spending has largely stalled out, with total projected outlays increasing only modestly through 2023, compared to the near constant growth of the last 25 years.

Conservation for the long run

Policy Report: As producers look to continued stewardship of resources and their operations, consumer demands will impact those plans and future policies.

Amid the constant breaking headlines of COVID-19, trade and economic concerns, the immediate hurdles for agriculture seem to be popping up constantly. Managing production decisions under very difficult economic conditions, coping with market risk in a volatile and uncertain period, and managing personnel amid health and safety precautions can all be a challenge. Having or taking the time to sit back and think or manage for the long term may seem like a luxury, but of course, if there isn’t a long term, then all of the short-term decisions may not matter much.

Taking time to look at the long term is a great chance to remember the legacy and responsibility of farmers and ranchers to be stewards of the nation’s resources and environmental quality. As I note in my ag policy course on campus, the overwhelming share of U.S. land east of the Rocky Mountains is in private hands, and the overwhelming share of that private land is engaged in agriculture.

Agriculture has a role in environmental stewardship because it is the nation’s steward of its natural resources. And, it has a role in protecting the future productivity of those resources, as well as maintaining the quality of the surrounding environment and managing its environmental footprint.

Beyond the research, education, technology development, and best practices that help producers manage and protect the environment, there is a vast landscape of policies and programs as well (to use an appropriate pun).

Voluntary carrot

Conservation policies and programs provide the voluntary carrot to motivate and reward environmental efforts through:

  • Conservation Reserve Program (CRP) for land retirement
  • working lands programs such as the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP)
  • Agricultural Conservation Easement Program (ACEP) to preserve farmland and wetlands
  • Regional Conservation Partnership Program (RCPP) to target local priorities and leverage federal and local funding

Over the past 35 years, spending on these voluntary conservation programs has grown dramatically. From less than $300 million per year in conservation payments to producers in the 1970s and early 1980s, conservation payments grew first with the CRP implemented in 1985 to nearly $2 billion per year in total payments in the early 1990s. Then, the implementation of EQIP in 1996 and the introduction of CSP in 2002 (originally as the Conservation Security Program) put conservation spending on a path to essentially double total payments at nearly $4 billion per year throughout the 2010s.

While spending on CRP has been fairly stable in recent years, the total acres enrolled had come down substantially, from about 37 million acres in 2007 to less than 23 million acres in 2019. The acreage enrollment cap had come down as well, but the 2018 Farm Bill shifted the cap back up from 24 million to 27 million acres by 2023.

With lower agricultural prices, there were expectations that interest and enrollment in the CRP would grow with the larger cap. However, the general enrollment period from December 2019 to February 2020 saw only 3.8 million acres offered and 3.4 million accepted nationwide even, as 5.4 million acres under current CRP contracts are set to expire in September.

Certainly, another policy change in the 2018 Farm Bill to lower the cash rental rate offered in CRP affected enrollment decisions, but the results suggest CRP is not growing, but actually shrinking for now, tempered only by the number of acres accepted through high-priority continuous enrollment practices (typically several hundred million acres each year).

Working lands programs are also projected to be relatively flat, as projected spending by the Congressional Budget Office on EQIP and CSP lies between $2.7 billion and $2.9 billion through 2023. This represents a substantial change from the year-over-year growth in working lands programs largely seen since the introduction of EQIP in the 1990s. ACEP projected spending on preservation remains a distant third at around $400 million to $450 million per year through 2023, and the RCPP has its own funding line under the 2018 Farm Bill at up to $300 million per year.

Whether due to the funding limitations of the 2018 Farm Bill or a slowdown in priorities, growth in federal conservation spending has largely stalled out for now, with total projected outlays growing only modestly through 2023 in comparison to the near constant growth of the last 25 years.

Of course, a carrot is not the only policy tool, as the stick of regulations can drive the environmental agenda as well. The current regulatory outlook is a mix of rules and directions. Federal conservation compliance provisions may technically be voluntary, but are a requirement for producer eligibility for federal farm programs and were re-attached to federally subsidized crop insurance as well in the 2014 Farm Bill.

Some environmental regulations such as the Waters of the United States or Navigable Waters Rule have been pared back through rulemaking efforts of the current administration. Other regulations continue to put increasing pressure on agriculture through either federal or court action, such as water quality regulations in the Chesapeake Bay area that offer a glimpse of what has been proposed for the Mississippi River basin and could come to the Midwest as well.

Consumer demands

In the end, it may not even be public policy that drives the environmental and stewardship agenda, but growing consumer preferences and a responsive food supply chain that demands producers adopt more and improved conservation practices, including those that capture carbon and reduce impacts on the climate.

On this latter note of carbon and climate, there is also new movement in Congress to consider bipartisan legislation in the House and the Senate that address climate policy, and that may provide an opportunity for agriculture to earn credits and be rewarded for carbon sequestration and climate-friendly agricultural practices.

It was a decade ago when major climate legislation died in both the House and the Senate, and current efforts have only introduced new legislation or held hearings on the issues to date, but carbon and climate definitely seem to be on the radar again and could be higher on the agenda in the next Congress.

In the meantime, farmers and ranchers will continue their daily chores and manage the complexities of production, marketing, finance and other facets of their operations. But they will also be looking to the long run and the continued stewardship of their operations and their resources.

Federal policies, whether through voluntary programs, mandatory regulations or new legislative opportunities will have an impact on those stewardship plans, as will consumers and food manufacturers. Agricultural producers will want to keep looking up from the day-to-day work often enough to keep an eye on the horizon and see what the long run offers.

Lubben is an Extension policy specialist at the University of Nebraska-Lincoln.

 

TAGS: Conservation
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