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**United States Department of Agriculture---2007 Farm Bill Theme
Papers**

**Conservation and the Environment**

**June 2006**

**I. Introduction**

This paper is the second in a series of papers that assess general views
advanced at the 2007 Farm Bill Forums held during 2005 by Secretary Mike
Johanns as well as additional ideas that have emerged in recent months.
In general, public comments from the Secretary's Forums were supportive
of conservation programs that assist farmers and ranchers in making
structural and management changes on agricultural lands in order to
reduce erosion, enhance wildlife habitat, and improve water and air
quality. Support was also expressed for the protection of wetlands and
the preservation of farm and ranch lands. This paper discusses natural
resource issues, USDA conservation programs administered by the Farm
Service Agency (FSA) and the Natural Resources Conservation Service
(NRCS), and policy alternatives. The alternatives represent possible
approaches to addressing conservation and environmental issues on
agricultural lands. They are presented for public discussion and are not
being advocated.

### II. Background: Conservation and U.S. Agriculture

Non-federal agricultural and forest lands occupy 1.4 billion acres or
nearly 70 percent of the contiguous United States. These lands are the
foundation of strong and vibrant agriculture and forest sectors. They
also provide the habitat and corridors that support healthy wildlife
populations, filter groundwater supplies, regulate surface waters flows,
sequester carbon, and provide open space and scenic vistas that improve
the quality of life for large segments of our population. These lands
also support a growing population that is increasingly concerned about
the effects of farming and ranching on the environment.

While many farmers and ranchers have a strong conservation ethic and
produce in sustainable ways, farming and ranching can include activities
that may have negative environmental consequences. Crop and animal
production can affect water and air quality, water flows, and wildlife
habitat. Fertilizers, insecticides, pesticides, and livestock waste can
enter ground and surface water adversely affecting water quality.
Overgrazing and cropping fragile lands can increase particulate matter
in the air. The conversion of grasslands to cropland can increase soil
erosion and reduce wildlife cover.

As the U.S. population grows, demand for land for non-agricultural uses,
such as roads, shopping centers, housing, recreation, and open space
increases, resulting in conversion of agricultural land to
non-agricultural and non-forestry uses and fragmentation of open space.
Population growth in the past few decades has been high in the West,
where water supplies are generally limited and many ecosystems are
fragile. Greater population densities can exert greater pressures on the
environment. Population growth and affluence have also increased the
demand for food and fiber produced in ways that are more in harmony with
the environment. Finally, the past year has seen an accelerated interest
in the production of renewable fuels which may bring marginal cropland
into production.

Conservation is a continuing process, not a threshold that once achieved
can be ignored or set aside. And while conservation programs have made
progress, new conservation issues continue to emerge as land use
changes, population grows and becomes increasingly mobile, technology
changes, and research identifies relationships between farming and
ranching practices and environmental indicators. Current conservation
concerns include but are not limited to: water quality, water supply,
soil quality, invasive species, wildlife habitat, endangered species,
agricultural land preservation, and air quality.

**III. Federal Role in Conservation**

The effects of farming and ranching on water and air quality, wildlife
habitat, and other environmental indicators do not necessarily factor
into an individual producer's production decisions. In addition,
farmers, ranchers, and the public may not be fully aware of the offsite
effects of production practices on longer term environmental
performance. These longer term effects have given rise to Federal
programs that address a variety of environmental concerns on
agricultural lands.

Conservation programs have been part of farm policy since the 1930s,
when Congress found:

> *... the wastage of soil and moisture resources on farm, grazing, and
> forest lands of the Nation, resulting from soil erosion, is a menace
> to the national welfare and that it is hereby declared to be the
> policy of Congress to provide permanently for the control and
> prevention of soil erosion and thereby to preserve natural resources,
> control floods, prevent impairment of reservoirs, and maintain the
> navigability of rivers and harbors, protect public health, public
> lands ...*

Historically, the bulk of conservation program funding focused largely
on maintaining the productivity of cropland. Assistance primarily
focused on vegetative, engineering, and crop management measures to
control soil erosion. Strip cropping, terracing, drainage, crop
rotation, contouring, pasture management, tree planting, and other
measures became part of farm conservation plans. Programs also included
watershed planning and flood prevention activities, including structural
and land treatment measures.

### 

While there were significant conservation programs from the 1930s
through the 1950s, the current era of programs emerged with the 1985
Farm Bill, with succeeding Farm Bills expanding the scope and funding
for conservation programs. Major pieces of legislation include:

-   The 1985 Farm Bill established the Conservation Reserve Program
    (CRP), which provided payments to producers to put environmentally
    sensitive cropland into conserving uses for 10 to 15 years. The 1985
    Farm Bill also included sodbuster, swampbuster, and the highly
    erodible land provisions that tied eligibility for farm price and
    income support and other program benefits to adoption of soil and
    wetland conservation practices on fragile lands.

-   The 1990 Farm Bill created a Federal program to restore and place
    conservation easements on wetlands---the Wetlands Reserve Program
    (WRP). The 1990 Farm Bill also authorized the Water Quality
    Incentives Program (WQIP) that signaled the emergence of water
    quality as a primary environmental objective of conservation
    programs.

-   The 1996 Farm Bill created the Environmental Quality Incentives
    Program (EQIP) by consolidating the Agricultural Conservation
    Program, WQIP, the Colorado Salinity Program, and the Great Plains
    Conservation Program. In addition, the 1996 Farm Bill authorized the
    Farm and Ranch Land Protection Program (FRPP) and the Wildlife
    Habitat Incentives Program (WHIP).

-   The 2002 Farm Bill vastly increased funding for conservation on
    lands in crop and animal production, or "working lands," by
    authorizing increased spending for several programs authorized under
    prior Farm Bills and establishing the Conservation Security Program
    (CSP) and the Grassland Reserve Program (GRP) for the long-term
    protection and restoration of grasslands**.**

### 

### There are four basic approaches to address conservation and environmental concerns on farm and ranch lands, including: (1) education and technical assistance, (2) economic incentive payments, (3) conservation compliance, and (4) regulatory requirements. A key difference among these approaches is the degree to which producer participation is voluntary. (See Appendix Table 1 for an overview of conservation program tools.)

### Education and Technical Assistance 

Technical and educational assistance programs are used by USDA and the
private sector to work with producers and other stakeholders to develop
and implement conservation systems, sustainable production techniques,
and conservation technologies that achieve natural resource objectives.
Technical and educational assistance includes direct technical expertise
and assistance; conservation practice standards and technology; and
natural resource inventories, data, and information that USDA provides
to producers and other stakeholders.

### Financial Incentives 

Financial incentives delivered by USDA are designed to encourage and
enable owners and operators to meet natural resource conservation
objectives in concert with their particular economic or personal
circumstances. Financial incentive programs can be grouped by objective:

-   **Conservation on Working Farm, Ranch, and Forest Lands.** Payments
    are provided to operators and owners of working lands and forests
    who implement conservation measures and systems to address natural
    resource concerns. These may include incentive and cost-share
    payments for undertaking management or structural measures or
    stewardship payments to producers who have established and managed
    conservation measures and are maintaining them through their own
    financial resources. Conservation incentive programs for working
    lands, in combination with technical assistance, also are a means of
    reducing the economic burden on producers from Federal and State
    regulations on air and water quality. In addition, Federal research
    and grants help stimulate the development and adoption of innovative
    conservation approaches and technologies.

####### Conversion of Farm and Ranch Land to Conserving Uses to Achieve Specific Environmental Benefits. Payments for placing agricultural land into conserving uses are designed to protect sensitive, prime, and unique lands. Generally, producers receive annual rental or easement payments in return for long-term dedication of cropland to a specific environmental or resource-conserving use. Long-term land rental and easement programs are well suited for providing environmental benefits that increase with the length of time land is removed from agricultural production. 

####### Protection of Agricultural Lands from Conversion to Other Uses. Agricultural land protection programs purchase rights to certain lands in order to keep land in agricultural and forest uses. Permanent easements provide a stream of conservation and landscape protection benefits in perpetuity.

**Conservation Compliance**

Because producers and others have a responsibility to minimize the
environmental impacts of their activities, legislation has made
eligibility for certain programs contingent on producers taking specific
actions to address natural resource concerns. Such conservation
compliance provisions were first introduced in the 1985 Farm Bill and
have been included in subsequent Farm Bills. Conservation compliance
objectives are designed to: (1) reduce soil erosion on the Nation\'s
cropland; (2) protect the Nation\'s long-term capability to produce food
and fiber; (3) reduce sedimentation and improve water quality; and (4)
preserve and protect the Nation\'s wetlands.

Conservation compliance provisions require farmers to undertake resource
conservation activities to remain eligible for price and income support
payments and other USDA program benefits. Producers must apply an
approved conservation plan that provides a substantial reduction in soil
erosion or a substantial improvement in soil conditions on highly
erodible cropland. Participants must also certify that they have not
produced crops on wetlands converted after December 23, 1985, and did
not convert a wetland to agricultural production after November 28,
1990. Compliance is voluntary in that producers may choose not to
participate, in which case they are ineligible for USDA program
benefits.

**Regulatory Requirements**

The Federal government has also passed laws to prohibit certain actions
such as impairing water or air quality, destroying wetlands, or
destroying habitat of protected species. An objective of current
conservation programs is to assist producers in meeting the regulatory
requirements under these laws and avoid further regulatory action in the
future by adopting conservation practices that provide environmental
benefits. Major Federal regulations affecting crop and livestock
producers include:

-   The Clean Water Act (CWA) includes a number of sections that
    directly affect certain agricultural activities or enterprise types:

    -   The National Pollutant Discharge Elimination System (NPDES) and
        Effluent Limitation Guidelines regulate waste handling and
        disposal by large concentrated animal feeding operations
        (CAFOs). Operations defined as CAFOs must obtain NPDES permits
        and face penalties for failing to meet permit terms.

    -   Section 303(d) of the CWA establishes total maximum daily load
        (TMDL) requirements. TMDLs may indicate that certain
        agriculturally related pollutants need to be significantly
        reduced, which could affect U.S. agriculture and the forest
        products industry.

    -   Section 404 of the CWA regulates the filling or dredging of
        certain wetland resources. Operators may be required to obtain
        permits and mitigate wetland losses.

-   The Clean Air Act (CAA) regulates emissions of certain pollutants, a
    number of which can be associated with agriculture. Where
    agriculture is identified as a source of air pollutants in air
    quality non-attainment areas, State plans may require operators to
    reduce regulated emissions. Increasingly, state and local
    jurisdictions are regulating agricultural emissions that affect
    local air quality.

-   The Endangered Species Act (ESA) provides for protection of species
    listed as threatened and endangered. Farmers and forest landowners
    whose lands include habitat for species listed under the ESA may
    find their activities restricted. Forest and farmland stewardship
    programs and safe harbor provisions can help land managers implement
    practices to reduce the effects of agricultural activities on
    endangered species.

### 

**IV. Federal Cost of Conservation Programs and Distribution of
Assistance**

This section examines Federal spending for conservation programs and the
distribution of conservation enrollment and payments. Data on
conservation payments by program are presented, followed by data on the
distribution of conservation payments regionally and across farm types.
Budget data for conservation programs are complicated because there are
both payments to producers and technical assistance costs related to
each program, as well as broader conservation technical assistance
costs. In addition, some programs obligate funds for multiyear contracts
year by year, while other programs show the multiyear obligations in the
year the contract begins. For comparability, much of the data in this
section is for calendar year payments to producers.

**Conservation Payments by Program**

The 2002 Farm Bill authorized an historic increase in funding for
private lands conservation programs. Based on Congressional Budget
Office estimates, the 2002 Farm Bill increased funding (budget
authority) for conservation programs by over \$17 billion during FY
2002-11, as several existing programs were extended and new programs
were created to address resource concerns on working lands. This
expansion increased Federal funding (NRCS program obligations plus CRP
outlays) of USDA's conservation programs, including technical
assistance, to \$4.7 billion in FY 2005, compared with \$3.0 billion in
FY 2001. A short description of some of the key USDA conservation
programs follows, with added information in Appendix Table 2.

**The Conservation Reserve Program (CRP)** places environmentally
sensitive cropland in conserving uses for 10 to 15 years. In return for
an annual rental payment and partial reimbursement for the cost of
establishing and maintaining approved groundcover, participants agree to
plant grasses, trees, and other conserving cover crops, restore
wetlands, and establish buffers. Annual rental payments on land enrolled
in the CRP average \$48.43 per acre and are limited to \$50,000 per
person. In 2005, operators and landowners were paid about \$1.8 billion
in rental payments, cost-share payments, signing incentive payments,
practice incentive payments, and wetland restoration incentives on 35
million acres of enrolled land. Under the 2002 Farm Bill, enrollment in
the CRP is limited to a maximum of 39.2 million acres.

Since 1996, producers have had the option of enrolling land through a
continuous signup program focused on developing riparian buffers and
other specific conservation practices. Two million acres of riparian
buffers and grass filter strips have been enrolled to date. In 1997,
USDA implemented the Conservation Reserve Enhancement Program (CREP), a
Federal-State partnership that targets cropland in specific geographic
areas, to further local conservation goals. Nearly 800,000 acres have
been enrolled in CREP.

**The Wetland Reserve Program (WRP)** restores and preserves wetlands
that have been converted to cropland. The 2002 Farm Bill authorized
enrolling slightly over two million acres in WRP. WRP restores and
protects wetlands through cost-share assistance and purchase of 30-year
and permanent easements. Easement payments are limited to \$50,000 per
person per year. This limitation does not apply to WRP payments on land
enrolled in permanent easements. In 2005, farmers and landowners were
paid \$161 million for easement and restoration activities. By the end
of 2005, WRP enrollment was 1.7 million acres.

**The Environmental Quality Incentives Program (EQIP)** provides
financial and technical assistance to help participants install or
implement conservation practices on eligible agricultural land. EQIP is
designed to help farmers institute conservation practices and integrate
conservation structures into their farming operations. For structural or
vegetative practices, EQIP can reimburse up to 75 percent of the
installation costs, although the 2005 EQIP data indicate that the
national average cost share rate is about 60 percent. Producers can also
receive financial incentives for adopting certain management practices.
EQIP payments are limited to \$450,000 per person for all EQIP contracts
entered into during FY 2002-07. Under the 2002 Farm Bill, 60 percent of
EQIP funds must be targeted at practices relating to livestock
production. In 2005, \$444 million in EQIP funds were paid on 63,800
producer contracts to producers to implement 136,200 practices on 94.5
million acres to improve air, soil, and water quality. The EQIP program
level for FY 2005 was \$950 million, reflecting current year payments
and contract obligations for future years.

**The Conservation Security Program (CSP),** authorized by the 2002 Farm
Bill, rewards producers for ongoing environmental stewardship on working
lands. In addition, CSP provides financial incentives for producers to
adopt additional conservation practices on their farming operations.
Under the program, producers agree to maintain and implement designated
conservation practices for a period of 5 to 10 years. In return,
participating producers receive payments that increase as producers
address additional resource concerns on a larger portion of their farm
operation. The amount of payments a producer may receive over the period
covered by a CSP contract varies from \$20,000 to \$45,000, depending on
a producer's commitment to maintaining and adopting new conservation
practices.

In 2004, the first year of the program, eligibility was limited to 18
watersheds with 2,200 farmers enrolling about 2 million acres. The
number of watersheds eligible for CSP expanded to 220 in 2005, and
12,800 farmers enrolled 10.2 million acres in contracts. Producers
received \$206 million in CSP payments in 2005. In 2006, 60 additional
watersheds will be eligible for enrollment. The funding level for CSP
has changed multiple times adding complexity to program implementation.

**The Grassland Reserve Program (GRP)** helps landowners and operators
restore and protect grassland resources, including rangeland and
pastureland, while maintaining the land's suitability for grazing. GRP
emphasizes supporting grazing operations, enhancing plant and animal
biodiversity, and preserving land containing shrubs or forbs under the
greatest threat of conversion. Land must: (1) be grassland that contains
forbs or shrubs, including rangeland and pastureland, or (2) be located
in an area historically dominated by grassland, forbs, or shrubs with
potential to provide habitat for animal or plants of significant
ecological value, if the land is retained or restored to a natural
condition. GRP participants must follow a conservation plan on all acres
enrolled in the program.

Participants may enroll acreage in 10- to 30-year rental agreements,
30-year easements, or an easement for the maximum duration allowed under
State law. Grazing is permitted in a manner that is consistent with
maintaining the viability of natural grasses, shrubs, and forbs. Haying,
mowing, or harvesting for seed production is also permitted. The 2002
Farm Bill authorized \$254 million in funding for the GRP during FY
2003-07.

**The Farm and Ranch Lands Protection Program (FRPP)** authorizes the
Secretary of Agriculture to purchase easements for the purpose of
protecting cropland by limiting nonagricultural uses of the land. FRPP
provides up to 50 percent of the appraised fair market value of the
conservation easement. A participating entity may provide a maximum of
25 percent, in cash, of the appraised fair market value of the easement
or 50 percent of the easement's purchase price. The majority of FRPP
easements acquired are permanent.

To be eligible for FRPP assistance, a State or local governmental entity
or nonprofit organization must have the staffing and financial capacity
to acquire, hold, and manage conservation easements. USDA solicits
proposals for FRPP participation. Once the proposals and their parcels
are prioritized, USDA awards funds to eligible entities. It is the
responsibility of the cooperating entity to hold, manage, and enforce
acquired easements.

From 1996 to 2005, 49 States received nearly \$371.5 million in FRPP
funds. Approximately 449,000 acres on 2,290 farms, with an estimated
cumulative easement value of nearly \$1.1 billion, have or are committed
to have FRPP easements. For every Federal dollar invested through FRPP,
an additional \$3 has been contributed by the participating State and
local governmental entities, nongovernmental organizations, and
landowners. In 2005, producers received \$112 million in payments under
the FRPP.

**The Wildlife Habitat Incentives Program (WHIP**) provides technical
and financial assistance to enable eligible participants to develop
upland wildlife, wetland wildlife, threatened and endangered species,
and other types of wildlife habitat in an environmentally beneficial and
cost-effective manner. Some WHIP conservation practices enhance farm
profitability by improving grazing conditions, reducing management
expenses, and producing non-crop income. The program has been used to
control invasive species; re-establish native vegetation; manage
nonindustrial forestland; stabilize streambanks; protect, restore,
develop, or enhance unique habitats; and remove barriers that impede
migration of certain species. The 2002 Farm Bill authorized \$360
million in funding for WHIP during FY 2002-07. For FY 2005, \$47 million
was available for financial and technical assistance.

**Conservation Operations** consists of Conservation Technical
Assistance (CTA), a program that provides direct technical expertise and
assistance; conservation standards and technology; natural resource
inventories, data, and information; training and certification; and
incentives for conservation innovation to help producers protect natural
resources on non-federal lands. Grazing Lands Conservation (GLC)
provides special emphasis within CTA on grazing land conservation
activities. Conservation compliance activities also are carried out
under CTA. CTA provides the technical interface essential for direct
customized conservation planning and implementation assistance for
discretionary as well as mandatory conservation programs. The FY 2005
funding (program level) for CTA was \$696 million. Additional, discrete
activities conducted under CTA include: the National Resources
Inventory, which surveys natural resource conditions and trends on
nonfederal lands and the Conservation Effects Assessment Project (CEAP),
an effort to quantify the benefits delivered through conservation
actions on private land.

The 2002 Farm Bill's Technical Service Providers (TSP) provision allows
certified technical assistance providers to assist landowners with
conservation projects. To date, more than 2,500 TSPs have been certified
and \$52 million in funding was obligated for TSPs in FY 2005.

Other Conservation Operations activities include the National
Cooperative Soil Survey, which provides information for understanding,
managing, conserving, and sustaining the Nation's soil resources and
information to protect water quality, wetlands, and wildlife habitat;
the Plant Materials Program, which conducts research on native plants to
help solve natural resource problems; and Snow Survey and Water Supply
Forecasting, which provides western states and Alaska with information
on future water supplies through collection and analysis of snowpack at
more than 1,200 mountain sites.

**Distribution of Payments**

**Distribution by Region.** In calendar year 2005, nearly two-thirds of
conservation payments went to farmers participating in the CRP (Appendix
Table 3). CRP enrollment is concentrated in the Plains and western Corn
Belt where cropland is prone to wind erosion (Figure 1).

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Eight States each received more than \$100 million in CRP payments in
2005. These States---Illinois, Iowa, Kansas, Minnesota, Missouri,
Montana, North Dakota, and Texas---received 57 percent of CRP payments
and about 46 percent of all conservation program payments in 2005.

EQIP payments tend to be more heavily concentrated in the Western States
than CRP payments, reflecting both the distribution of cropland and the
eligibility of livestock producers for assistance under EQIP. EQIP
payments also appear to be slightly less geographically concentrated
(Figure 2). In 2005, the top 8 States---California, Colorado, Iowa,
Kansas, Minnesota, Montana, Nebraska, and Texas---received 38 percent of
EQIP payments.

**Farms Receiving Conservation Payments.** The 2004 Agricultural
Resource Management Survey (ARMS) provides calendar year information on
conservation payments to the farm operator household. ARMS data indicate
that 15 percent of all farms received conservation payments in 2004. For
farms that received a conservation payment, conservation payments
averaged \$5,330 per farm, with conservation payments accounting for 4
percent of gross cash farm income. Gross cash income of farms receiving
conservation payments averaged \$136,545 in 2004. In comparison, gross
cash income averaged slightly less than \$100,000 for all farms in 2004.
Many farms that received conservation payments also received commodity
program payments and other forms of government support. In 2004,
government payments averaged \$4,855 per farm on all farms and \$13,262
per farm on farms that received conservation payments, with conservation
payments accounting for 40 percent of total government payments.

**Distribution by Commodity Specialization.** Conservation payments were
fairly similar across various commodity farm types in 2004. A farm's
commodity specialization is determined by the one commodity or group of
commodities that makes up at least 50 percent of the farm's total value
of production. About 25 percent of cash grain and soybean farms and 38
percent of farms specializing in the production of other field crops
received conservation program payments in 2004. Conservation program
payments averaged \$5,462 per farm on cash grain and soybean farms and
\$5,033 per farm on other field crop farms that received conservation
payments.

While a lower percentage of livestock producers received conservation
payments, the average payment per farm was very similar to crop farms.
In 2004, about 10 percent or less of farms specializing in livestock
production received conservation payments. For farms receiving
conservation program payments and specializing in beef cattle
production, conservation program payments averaged \$6,244 per farm;
poultry, \$5,068 per farm; dairy \$4,618, per farm; and hogs, \$3,062
per farm.

**Distribution by Farm Typology.** An often used typology for grouping
farms consists of three categories: ***commercial farms***, with sales
of \$250,000 or more and the farm operator reports farming as the major
occupation (less than 10 percent of all farms); ***intermediate
farms***, with sales under \$250,000 and the farm operator reports
farming as the major occupation (25 percent of all farms); and ***rural
residence farms***, for which the farm operator's major occupation is
not farming or the farm is a limited resource farm (65 percent of all
farms).

Of farms receiving conservation payments, rural residence farms were
much more dependent on conservation payments as a source of income than
other farm types. Fourteen percent of rural residence farms and 16
percent of intermediate farms received conservation payments in 2004,
with payments averaging \$4,414 and \$6,497 per recipient farm,
respectively. Conservation payments accounted for 79 percent of all
government payments and 23 percent of gross cash income on rural
residence farms that received conservation payments. Conservation
payments represented nearly one-half of all government payments going to
intermediate farms that received conservation payments, with
conservation payments accounting for 7 percent of gross cash income on
these farms.

A larger percentage of commercial farms received conservation payments
than rural residence and intermediate farms, but these payments made up
a smaller share of total government payments and gross cash income. In
2004, 24 percent of commercial farms received conservation payments. The
average conservation payment for commercial farms was \$6,904 per
recipient farm, which represented 16 percent of all government payments
and only 1 percent of gross cash income.

Of just the farms receiving conservation payments, rural residence farms
accounted for the largest share (Figure 3). In 2004, 59 percent of farms
receiving conservation payments were rural residence farms, and these
farms received 49 percent of total conservation payments. Commercial
farms made up 15 percent of the farms receiving conservation payments
and they accounted for 20 percent of conservation payments.

![](media/image4.wmf)

The distribution of conservation payments across farms tends to reflect
participation in the CRP, since CRP comprises most of total conservation
payments to producers. Nearly 60 percent of CRP payments go to rural
residence farms. EQIP, on the other hand, focuses on a wide range of
practices on cropland and grazing land and issues related to animal
feeding operations (AFOs). Compared with CRP payments, a larger share of
EQIP payments go to larger farms. The percentage of farms that
participate in EQIP and other conservation programs does not appear to
vary greatly with farm size. Preliminary unweighted data from the 2003
and 2004 USDA Conservation Effects Assessment Project (CEAP) surveys
indicate that program participation is spread fairly evenly across farm
size (Table 1).

+---------------------+------------+--------+--------+------+---------+
| **Table 1. Share of |            |        |        |      |         |
| Survey Respondents  |            |        |        |      |         |
| Participating in**  |            |        |        |      |         |
|                     |            |        |        |      |         |
| **USDA Conservation |            |        |        |      |         |
| Programs in 2003    |            |        |        |      |         |
| and 2004**          |            |        |        |      |         |
+---------------------+------------+--------+--------+------+---------+
| **Size class**      | **No.      | *      | **     | **W  | *       |
|                     | survey**   | *CSP** | EQIP** | RP** | *WHIP** |
| **in acres**        |            |        |        |      |         |
|                     | **r        |        |        |      |         |
|                     | esponses** |        |        |      |         |
+---------------------+------------+--------+--------+------+---------+
| \<100               | 1139       | 0.7%   | 3.1%   | 0.2% | 0.2%    |
+---------------------+------------+--------+--------+------+---------+
| 101-400             | 1994       | 0.5%   | 3.6%   | 0.0% | 0.0%    |
+---------------------+------------+--------+--------+------+---------+
| 401-1000            | 3424       | 0.5%   | 3.8%   | 0.1% | 0.0%    |
+---------------------+------------+--------+--------+------+---------+
| 1001-2000           | 3125       | 0.5%   | 4.5%   | 0.2% | 0.1%    |
+---------------------+------------+--------+--------+------+---------+
| 2001-3000           | 1862       | 0.5%   | 3.7%   | 0.2% | 0.1%    |
+---------------------+------------+--------+--------+------+---------+
| \>3000              | 874        | 0.8%   | 2.9%   | 0.2% | 0.0%    |
+---------------------+------------+--------+--------+------+---------+

**Distribution by Farm and Household Income.** In 2004, 13 percent of
farms with net cash farm incomes of less than \$10,000 received
conservation payments in 2004, with payments averaging \$3,804 per
recipient farm. These farms received 45 percent of conservation payments
and accounted for 63 percent of farms receiving conservation payments.
In contrast, 23 percent of farms with net cash incomes of \$100,000 or
more received conservation payments and conservation payments averaged
\$7,882 per recipient farm. These farms received 14 percent of
conservation payments and accounted for 9 percent of farms receiving
conservation payments.

Farm households with household incomes of \$200,000 or more, over 7
percent of all farm households and nearly 10 percent of all farm
households receiving conservation payments, received 11 percent of
conservation payments (Figure 4). Twenty-seven percent of all farm
households receiving conservation payments had household income of
\$50,000-\$99,999 and they received nearly 28 percent of all
conservation payments in 2004. Forty-one percent of all conservation
payments went to farm households with household incomes of less than
\$50,000, 45 percent of all farms receiving conservation payments.

**V. General Performance of USDA Conservation and Environmental
Programs**

This section discusses the general performance of USDA conservation
programs and identifies concerns that may guide the development of
future conservation programs. Program issues addressed include:
conservation and environmental benefits achieved, program costs and
distribution of program assistance, economic and market impacts, and WTO
implications.

**Conservation and Environmental Benefits**

Evaluation of the environmental benefits of conservation programs is
difficult. Many factors beyond technical and financial assistance or
program compliance affect behavior of producers and the changes in the
condition of natural resources and the environment. For example, it may
not be possible to establish the relationship between a dollar of
technical or financial assistance received by a producer and the quality
of a water body distant from the farm. A variety of studies have used
different approaches to develop environmental indicators and assess the
impacts of conservation programs. Program evaluation is not attempted in
this paper. Instead, this section measures progress toward achieving
environmental goals using several environmental indicators.

![](media/image5.wmf)

The combination of technical assistance, financial assistance, and
conservation compliance programs has provided significant benefits that
include the reduction of the offsite environmental effects of
agricultural production, preservation of farm and ranch lands,
restoration and enhancement of wetlands, and promotion of wildlife
habitat. Technical assistance is used to develop the science and
technology that forms the basis for conservation practices. It is
essential for working with producers to plan, design, implement, and
maintain conservation measures in conjunction with financial assistance
and conservation compliance provisions.

**Soil erosion.** Between 1982 and 2003, total erosion on U.S. cropland
fell from 3.06 to 1.75 billion tons per year, a decline of 1.31 billion
tons per year, or about 43 percent. Just over half, about 700 million
tons per year, was due to reductions in sheet and rill (water) erosion,
while about 610 million tons per year was due to reductions in wind
erosion. Conservation compliance, CRP, EQIP and its predecessor
programs, and changing production practices have been the major
contributors to erosion reduction. A large majority of the total
reduction in erosion, almost 1.2 billion tons per year, occurred between
1982 and 1997, when major USDA soil conservation programs were first
implemented. Beginning in 1985, 1.7 million conservation plans were
established for 142 million acres of highly erodible land to address
conservation compliance. Between 1986 and 1990, CRP enrolled about 35
million acres, and at the start of 2006, contained about 36 million
acres. Of the 1.2-billion-ton reduction in soil erosion between 1982 and
1997, about one-fourth has been attributed to conservation compliance
(295 million tons per year), one-fifth (224 million tons per year) to
CRP, and the rest to technological changes and other programs.

Lowering soil erosion sustains land productivity and reduces the
off-site effects of agricultural production, such as water quality
impairment in rivers and streams. Recent preliminary environmental
benefit estimates for the CRP suggest water quality benefits from
reduced sediment loads of \$266 million per year, air quality benefits
of reduced dust from wind erosion of \$51 million per year, and soil
productivity benefits of \$161 million annually.

**Wetlands.** Since the late 1980s, wetland protection and restoration
efforts have been assessed against a goal of "no net loss" of wetland
functions and values. To maintain and increase wetland area and
functions, previously drained wetlands must be restored while existing
wetlands are conserved and, if necessary, enhanced. Wetland losses to
agriculture (gross) have steadily declined since the mid-1950s, dropping
from 593,000 acres per year during 1954-74, to 26,000 acres per year
during 1992-1997. Based on National Resource Inventory data, agriculture
surpassed the "no net loss" objective during 1997-2003, with a net gain
of more than 260,000 wetland acres.

The WRP and CRP made major contributions to wetland restoration and
enhancement. By the end of 2005, WRP enrollment was 1.8 million acres,
much of it in long term or permanent easements. As of April 2006, CRP
included over 2 million wetland and buffer acres under 10-15 year
contracts. Since 1985, the Swampbuster provision, which makes wetland
conservation a condition of farm program payment eligibility, has been
important in reducing wetland conversion for agriculture.

**Wildlife habitat.** Conversion of forest and grassland into cropland,
roads, housing developments, and industrial uses, and increasing
fragmentation of the agricultural landscape are the primary factors
associated with habitat loss and endangerment of native wildlife
species. Many factors influence the quality and extent of wildlife
habitat on agricultural land, including management choices that sustain
diversity and the protection of wetlands and associated uplands. Federal
conservation programs, such as CRP, WRP, WHIP, and EQIP have made major
contributions to wildlife habitat establishment and enhancement.

Research by the United States Geological Survey (USGS) has documented
increases in grassland bird populations on CRP land that were in serious
decline in the 1970s and 1980s. The U.S. Fish and Wildlife Service
estimates that CRP has substantially increased duck and ring-necked
pheasant populations. CRP is credited with the reappearance of prairie
chickens in Texas, recovery of sharp-tailed grouse, and increases in
Western State populations of big game elk, mule deer, white-tailed deer,
and pronghorn antelope. Selected CRP wildlife-related benefits are
estimated to be approximately \$737 million per year, the majority being
wildlife viewing (88 percent), followed by improved pheasant hunting in
13 north central and northern plains States. This estimate excludes
improved hunting for many species and increased protection of threatened
and endangered species. EQIP and WHIP have been successful in improving
habitat on working lands. WHIP has also contributed to aquatic species
through dam removal, culvert replacement, and the installation of
habitat structures that have opened spawning habitat. Targeted
assistance in WHIP, GRP, and EQIP has protected 80,000 acres of sage
grouse habitat.

**Livestock**. Addressing nutrient management and air quality concerns
related to livestock operations, particularly CAFOs, has become an
increasingly important objective of Federal conservation programs.
USDA's conservation programs assist producers in meeting regulatory
requirements that deal with potential air and water quality problems of
animal waste. Since 60 percent of EQIP funds are required by statute to
be devoted to animal agriculture, the distribution of EQIP assistance
funds closely follows the distribution of dairy, pork, poultry, and beef
populations (Table 2). A key goal has been the establishment of
site-specific comprehensive nutrient management plans (CNMPs). During FY
2002 through 2006, 6,398 CNMPs were applied under EQIP contracts and
under another 7,372 CNMPs were applied through Conservation Technical
Assistance. Livestock producers also benefit from the 2002 Farm Bill CRP
provision that allows for managed haying and grazing on CRP land
protected under a conservation plan. Prior to this change, only
temporary haying and grazing were allowed during periods of drought or
other emergencies. The GRP has preserved historic grasslands which also
may be hayed or grazed.

+--------------+------------+-----------+---------------+-------------+
| **Table 2.   |            |           |               |             |
| EQIP Funding |            |           |               |             |
| for          |            |           |               |             |
| Livestock**  |            |           |               |             |
+--------------+------------+-----------+---------------+-------------+
| **Species**  | **Funding  | **Percent | **Percent of  | **Percent   |
|              | for FY     | of total  | species       | of species  |
|              | 2003-**    | funding** | funding       | funding     |
|              |            |           | related to    | related to  |
|              | **FY       |           | animal        | grazing**   |
|              | 2005**     |           | feeding       |             |
|              |            |           | operations**  |             |
|              | **(Mil     |           |               |             |
|              | \$)**      |           |               |             |
+--------------+------------+-----------+---------------+-------------+
| **Beef**     | 825.1      | 65        | 16            | 84          |
+--------------+------------+-----------+---------------+-------------+
| **Dairy**    | 248.7      | 20        | 71            | 29          |
+--------------+------------+-----------+---------------+-------------+
| **Poultry**  | 73.3       | 6         | 89            | 11          |
+--------------+------------+-----------+---------------+-------------+
| **Swine**    | 43.1       | 3         | 70            | 30          |
+--------------+------------+-----------+---------------+-------------+
| **Sheep**    | 16.9       | 1         | 12            | 88          |
+--------------+------------+-----------+---------------+-------------+
| **Horses**   | 7.1        | 1         | 35            | 65          |
+--------------+------------+-----------+---------------+-------------+
| **Other**    | 46.0       | 4         | 14            | 86          |
+--------------+------------+-----------+---------------+-------------+
| **Total**    | 1.26       | 100       |               |             |
+--------------+------------+-----------+---------------+-------------+

*Source: NRCS Protracts data.*

**Water quality.** Improving water quality is a fundamental objective of
USDA conservation programs and the programs are credited with improving
water quality in many watersheds. Ideally, information on reduced
nutrient, pesticide, and sediment loadings into rivers, streams, and
lakes would be available by year for each practice and program. However,
quantifying the improvements that have occurred from conservation
efforts is difficult because there are multiple sources of nutrients,
sediment, and other pollutants. Additionally, the physical and chemical
processes involved are complicated and storage of agricultural chemicals
and sediment within a watershed, time lags, and metrological events are
all variables requiring careful analysis to identify the consequences of
conservation practices. Much of the benefits of soil erosion reduction
are increased water quality, as indicated by the estimated benefits of
reduced sediment loads under CRP. Water quality benefits can also be
attributed to conservation compliance, EQIP, and other programs to the
extent they have reduced sediment, nutrient, and pesticide runoff.
Swampbuster and WRP also contribute significantly to water quality
because wetlands filter sediment and nutrients from the water before in
reaches streams or lakes.

USDA is undertaking several efforts to better quantify the effects of
conservation on water quality. One such effort, the CEAP, is a
multi-agency effort to monitor, assess, and estimate the effects of
conservation practices on cropland, uses NRI sampling and long-term
watershed studies to build estimates of water quality responses to
conservation.

**Air quality.** Air quality concerns associated with agricultural
production include odors, ozone precursors, ammonia, particulate
emissions, and greenhouse gases. Addressing these concerns is an area of
increasing emphasis in USDA's conservation programs. Livestock producers
enrolled in EQIP can receive cost-share assistance for installing
anaerobic waste digesters. These technologies significantly reduce odors
associated with large animal feeding operations and, in many cases, can
result in significantly lower methane emissions. EQIP also provides
farmers with payments to adopt nutrient management practices that reduce
nitrogen fertilizer use and thus nitrous oxide emissions and to adopt
crop residue management practices that increase the organic content of
soils and sequester carbon. The CSP provides enhancement payments for
actions that directly benefit air quality, including: improving
visibility; reducing near-surface ozone levels; reducing transport of
fine and coarse particulates; decreasing livestock-related off-site odor
issues; reducing the potential for airborne agricultural chemicals and
volatile organic compounds to affect humans; decreasing agriculture's
potential contribution to the buildup of greenhouse gases; and
increasing the sequestration of carbon on crop, range, and pasture
lands. USDA programs encourage farmers and ranchers to adopt practices
that remove carbon from the atmosphere and sequester carbon in soil and
vegetation. The CRP provides significant carbon sequestration benefits,
sequestering more than 13 million metric tons of carbon annually.
Wetlands restored by the WRP also sequester substantial amounts of
carbon. In addition, EQIP and CSP increase the adoption of conservation
tillage and other practices that sequester carbon in cropland soils. In
2003, USDA initiated an effort to target greenhouse gases through
conservation programs and estimates that these efforts will result in an
additional 12 million metric tons of carbon reductions by 2012.

**Key issues for future programs.** While indicators, such as erosion
reduction and others, suggest environmental improvement is being made,
many challenges remain and new issues continue to emerge. For example,
excess nutrients impair water quality in many rivers, streams, and
lakes, and hypoxia is a problem in the Gulf of Mexico, Chesapeake Bay,
and other waters. In addition, conflicts over water availability for
agriculture, environmental, and urban use are increasing as water
demands increase. As one of the largest water users, agriculture has a
vital interest in securing water quality and quantity. Addressing soil
erosion has produced major benefits; however, progress may have leveled
off, suggesting past strategies may be reaching their limit. An
estimated one-third of the 269 million acres of U.S. cropland is eroding
at tolerable rates (below "T") continues to decline in soil condition
and could benefit from management systems that enhance soil organic
matter. Invasive species also threaten agricultural profitability in
some areas.

Conservation is bringing about important wildlife recoveries, but more
can be done, particularly for wetland and aquatic systems and species.
Much has also been done to protect farm and forest land from conversion,
but as residential and industrial development press into rural America,
more land is at risk, which could have repercussions for rural life,
including benefits from recreation and tourism. Another emerging
challenge is to better utilize carbon sequestration in agricultural
soils as a partial solution to rising greenhouse gas concentrations in
the atmosphere. Finally, interest in renewable energy using agricultural
lands is rapidly emerging in importance, driven by high oil prices and
demand for greater energy supply diversification, creating new
conservation dimensions.

**Program Costs and Distribution of Program Assistance**

The main conclusions related to program spending are: (1) funding for
conservation programs has risen sharply under the 2002 Farm Bill, mainly
due to expansion of programs on working lands, (2) participation in
financial and technical assistance programs is fairly evenly distributed
by farm size, (3) payments, relative to the overall size of the farming
operation, tend to be much larger for small, rural residence farms (23
percent of gross cash income) than on large, commercial farms (1 percent
of gross cash income), and (4) financial assistance varies based on
geography, environmental context, and the individual conservation
program.

Funding for conservation programs increased sharply following enactment
of the 2002 Farm Bill. In FY 2001, Federal funding for USDA's
conservation programs, including CTA, was \$3.0 billion, with the CRP
accounting for \$1.7 billion (Figure 5). In FY 2005, funding increased
to \$4.7 billion with CRP at \$1.8 billion. Thus, non-CRP spending
accounts for nearly all of the increase, more than doubling over the
period, with EQIP and CSP the fastest growing programs. CRP has also
shifted toward funding of high priority, partial field practices, such
as grassed waterways and edge-of-field filter strips. These practices
support working lands by mitigating damage from agricultural production.
About 20 percent of CRP spending is now devoted to these practices
through continuous sign-up and CREP.

![](media/image6.wmf)

*Source: USDA, Economic Research Service, Flexible Conservation*

*Measures on Working Land: What Challenges Lie Ahead?*

Funding for the 2002 Farm Bill's conservation programs has been an issue
since the Bill's enactment. Funding for major programs, such as EQIP and
CSP, have been reduced below levels authorized by the 2002 Farm Bill to
meet overall budget goals.

Because many more small farms participate in conservation programs
relative to large farms, the bulk of conservation payments go to smaller
farms. In contrast, price and income support program payments are
concentrated among larger farms. Smaller farms, however, tend to enroll
a larger share of their farming operations in conservation programs,
particularly whole-farm enrollment in CRP. Rural residence farms
received nearly 60 percent of CRP payments in 2004 but controlled only
20 percent of cropland and 24 percent of overall agricultural land. More
research is needed to understand why these farms participate more
heavily in CRP. There is some evidence to suggest that larger farms,
where the operator's primary occupation is farming, are more likely to
participate in working lands programs, including EQIP and CRP continuous
sign-up for high priority buffer practices.

Another issue is distribution of program resources by type of
environmental concern. Conservation assistance is difficult to assign to
specific environmental concerns because a dollar of assistance may
address multiple concerns. However, Table 3 provides some general
indications of the level of attention paid to various concerns by
program. During 2002-2005, the majority of resources for EQIP, CSP, and
CRP, based on the subjectivity of experts' opinions, were focused on
water quantity and quality, soils management, and wildlife habitat
management. Wetland conservation received less support. The smallest
portions of allocated resources were focused on air quality and energy
conservation.

+----------+-----+-----+------+------+----------+------+------+----+
| **Table  |     |     |      |      |          |      |      |    |
| 3.       |     |     |      |      |          |      |      |    |
| E        |     |     |      |      |          |      |      |    |
| stimated |     |     |      |      |          |      |      |    |
| Share of |     |     |      |      |          |      |      |    |
| Cons     |     |     |      |      |          |      |      |    |
| ervation |     |     |      |      |          |      |      |    |
| Program  |     |     |      |      |          |      |      |    |
| Funding  |     |     |      |      |          |      |      |    |
| A        |     |     |      |      |          |      |      |    |
| llocated |     |     |      |      |          |      |      |    |
| to       |     |     |      |      |          |      |      |    |
| Envir    |     |     |      |      |          |      |      |    |
| onmental |     |     |      |      |          |      |      |    |
| C        |     |     |      |      |          |      |      |    |
| oncerns, |     |     |      |      |          |      |      |    |
| 2        |     |     |      |      |          |      |      |    |
| 002-2005 |     |     |      |      |          |      |      |    |
| 1/**     |     |     |      |      |          |      |      |    |
+----------+-----+-----+------+------+----------+------+------+----+
| **P      | **W | **  | *    | **A  | **W      | **Wi | **   | *  |
| rogram** | ate | Soi | *Wat | ir** | etland** | ldli | Ener | *T |
|          | r** | l** | er** |      |          | fe** | gy** | ot |
|          |     |     |      | **Q  | **Conser |      |      | al |
|          | **  | **  | **Q  | uali | vation** | **Mg |      | ** |
|          | Mgm | Mgm | uali | ty** |          | mt** |      |    |
|          | t** | t** | ty** |      |          |      |      |    |
+----------+-----+-----+------+------+----------+------+------+----+
| **Tec    |     |     |      |      |          |      |      |    |
| hnical** |     |     |      |      |          |      |      |    |
|          |     |     |      |      |          |      |      |    |
| **Assi   |     |     |      |      |          |      |      |    |
| stance** |     |     |      |      |          |      |      |    |
+----------+-----+-----+------+------+----------+------+------+----+
| **EQIP** | 28  | 24  | 40   | 2    | 1        | 5    | \--  | 1  |
|          |     |     |      |      |          |      |      | 00 |
+----------+-----+-----+------+------+----------+------+------+----+
| **CSP**  | 3   | 39  | 45   | 3    | \--      | 6    | 4    | 1  |
|          |     |     |      |      |          |      |      | 00 |
+----------+-----+-----+------+------+----------+------+------+----+
| **CRP**  | \-- | 24  | 50   | 1    | 5        | 20   | \--  | 1  |
|          |     |     |      |      |          |      |      | 00 |
+----------+-----+-----+------+------+----------+------+------+----+
| **WRP**  | 2   | \-- | 10   | \--  | 35       | 53   | \--  | 1  |
|          |     |     |      |      |          |      |      | 00 |
+----------+-----+-----+------+------+----------+------+------+----+
| **Conser | 24  | 38  | 13   | 1    | 6        | 12   | 6    | 1  |
| vation** |     |     |      |      |          |      |      | 00 |
|          |     |     |      |      |          |      |      |    |
| **Tec    |     |     |      |      |          |      |      |    |
| hnical** |     |     |      |      |          |      |      |    |
|          |     |     |      |      |          |      |      |    |
| **Assi   |     |     |      |      |          |      |      |    |
| stance** |     |     |      |      |          |      |      |    |
+----------+-----+-----+------+------+----------+------+------+----+
|          |     |     |      |      |          |      |      |    |
+----------+-----+-----+------+------+----------+------+------+----+
| **Fin    | 31  | 21  | 36   | 2    | 1        | 9    | \--  | 1  |
| ancial** |     |     |      |      |          |      |      | 00 |
|          |     |     |      |      |          |      |      |    |
| **Assi   |     |     |      |      |          |      |      |    |
| stance** |     |     |      |      |          |      |      |    |
|          |     |     |      |      |          |      |      |    |
| **(EQIP, |     |     |      |      |          |      |      |    |
| GSWC,    |     |     |      |      |          |      |      |    |
| AMA,     |     |     |      |      |          |      |      |    |
| WHIP)**  |     |     |      |      |          |      |      |    |
+----------+-----+-----+------+------+----------+------+------+----+
| **EQIP** | 28  | 24  | 40   | 2    | 1        | 5    | \--  | 1  |
|          |     |     |      |      |          |      |      | 00 |
+----------+-----+-----+------+------+----------+------+------+----+
| **WHIP** | 1   | 2   | 3    | 1    | 3        | 90   |      | 1  |
|          |     |     |      |      |          |      |      | 00 |
+----------+-----+-----+------+------+----------+------+------+----+
| **       | \-- | 17  | 9    | \--  | 29       | 45   | \--  | 97 |
| Easement |     |     |      |      |          |      |      |    |
| Pr       |     |     |      |      |          |      |      |    |
| ograms** |     |     |      |      |          |      |      |    |
|          |     |     |      |      |          |      |      |    |
| **(WRP,  |     |     |      |      |          |      |      |    |
| GRP,     |     |     |      |      |          |      |      |    |
| FRPP)**  |     |     |      |      |          |      |      |    |
+----------+-----+-----+------+------+----------+------+------+----+
|          |     |     |      |      |          |      |      |    |
+----------+-----+-----+------+------+----------+------+------+----+
| **Ste    |     |     |      |      |          |      |      |    |
| wardship |     |     |      |      |          |      |      |    |
| Programs |     |     |      |      |          |      |      |    |
| (CSP,    |     |     |      |      |          |      |      |    |
| CRP)**   |     |     |      |      |          |      |      |    |
+----------+-----+-----+------+------+----------+------+------+----+
| **CSP**  | 3   | 39  | 45   | 3    | \--      | 6    | 4    | 1  |
|          |     |     |      |      |          |      |      | 00 |
+----------+-----+-----+------+------+----------+------+------+----+
| **CRP**  | \-- | 34  | 32   | 1    | 7        | 26   | \-   | 1  |
|          |     |     |      |      |          |      |      | 00 |
+----------+-----+-----+------+------+----------+------+------+----+

1/ These estimates are based on individual contract purpose adjusted by
program manager expert judgment. The CRP estimates are based on practice
and Environmental Benefit Index component scores.

**Key issues for future programs.** Competition for Federal funds
suggests there will be a growing need to find more efficient ways to
design programs to meet the broad range of conservation needs and to
deliver more cost-effective conservation technical assistance. For FY
2005, there were nearly 50,000 unfunded conservation program
applications representing \$2.4 billion. EQIP, GRP, and WRP account for
93 percent of the applications. While the merits of these unfunded
applications are unclear, they nonetheless suggest continuing
substantial unmet demand for conservation program participation. Program
consolidation and simplification, as well as refining conservation and
environmental priority concerns, may increase program efficiency and
increase environmental benefits. Energy and air quality are areas of
concern receiving the least funding and may merit greater attention in
future programs.

The distribution of program participation between rural residence,
intermediate, and commercial farms also suggests that movement toward
working lands programs could alter the distribution of payments across
farm types. If the distribution of conservation program participation
shifts toward intermediate and commercial farms, conservation programs
may be more effective in addressing some environmental problems such as
nutrient runoff, because these farms control a large share of
agricultural land and livestock production. It may also mean that the
distribution of participation and payments across farms will be less
uniform, at least in terms of payments per farm.

**Economic and Market Effects**

The economic and market effects of conservation programs are also
difficult to measure. There may be direct effects on farm income and on
commodity markets due to the receipt of a payment if programs induce
changes in crop or livestock production. Conservation programs also
improve producers' economic performance by providing the technical and
financial means to help avoid or minimize potential production and
regulatory risks. Conservation measures such as water-conserving
irrigation systems can reduce production risk, comprehensive nutrient
management plans can help avoid regulatory risk, and grazing land
management can reduce risks related to drought and the associated income
risk.

Programs that place land in conserving uses, such as the CRP and WRP,
have a range of economic, market, and risk reduction impacts. By
compensating landowners for placing eligible fragile lands into a
long-term conservation cover, participants receive a guaranteed annual
income, contributing to income stability and reduced production risk.
Moreover, as large amounts of cropland are removed from production, crop
production is reduced, increasing crop prices. A 2004 examination of the
effect of enrolling an additional 2.8 million acres in the CRP (less
than 1 percent of typically planted acreage) estimated crop price
increases averaged \$0.02 per bushel for wheat, \$0.02 for corn, \$0.01
to \$0.02 for other feed grains, and \$0.06 for soybeans. The analysis
estimated that an additional 2.8 million acres in the CRP would decrease
government costs by a net of \$0.2 billion over 2003-12, with commodity
program payments reduced by \$1.7 billion while CRP payments increased
by \$1.5 billion over the period. In a freer global market, effects of
removing U.S. land from production may be offset to a large degree by
increased production in competitor countries.

Local economies may also be affected as additional acreage is enrolled
in the CRP. As crop production is reduced, use of inputs such as
fertilizer, hired labor, farm equipment, pesticides, and energy
decreases. A 2004 congressionally mandated study of the CRP by USDA's
Economic Research Service found that the negative effects of the CRP on
rural economies tend to be small and transitory. The study did not find
impacts on the rural population, government services, or tax burden. One
explanation of these results may be that the increase in conservation
payments to producers as additional acreage is enrolled in the CRP are
invested locally supporting the rural economy. Agricultural producers
and others may also benefit from the provision of environmental goods
and services that generate recreation or tourism. The reduction in
erosion or greenhouse gas concentrations or the increase in wetland
values and functions and wildlife habitat increase environmental
quality.

Financial assistance programs on working lands generally provide
conservation payments to producers that may not cover the full cost of
implementing conservation practices. However, producers may implement
conservation practices because, with the conservation payment or
know-how from technical assistance, they can meet environmental
regulatory requirements, or the environmental and economic benefits the
producer receives exceed the costs, or because of their conservation
ethic. In some cases, market incentives may be enough for many producers
to undertake conservation measures because producers expect the measures
alone will result in a positive net return. Research indicates that land
degradation causes productivity losses and market incentives are often
sufficient to limit productivity-reducing degradation.

Conservation compliance programs require implementation of conservation
measures in order to receive farm price and income support payments and
other program benefits. While only 39 percent of farms receive
government payments, farm price and income support covers over 265
million base acres as well as farms producing milk, sugar, wool and
mohair, and other products that do not have base acres. While
conservation compliance reduced the effective level of support received
by some producers from price and income support programs, research also
suggests that it was effective in reducing soil erosion.

**Key issues for future programs.** Conservation policy needs to balance
a variety of concerns ranging from meeting regulatory requirements to
farm viability. The economic impacts on individual producers and their
communities must be considered along with environmental quality. In a
practical sense, this need for balance raises questions about the type
of policy tools that are used to encourage better environmental
performance on the part of agricultural producers. Programs on working
lands or lands put into conservation uses may differ in their economic
impact on producers, rural communities, and the environment. Voluntary
measures, such as EQIP or CRP, must also be weighed against less
voluntary and compulsory actions for improving environmental
performance.

Limited work has been done to develop private sector markets for
environmental goods and services and use these markets to allocate more
efficiently and effectively Federal and private sector funding for
conservation programs. The emerging private markets for greenhouse gas
offsets and mitigation banks suggest that conservation programs may
become more efficient by incorporating activities that use or facilitate
environmental market mechanisms, such as credit trading, mitigation
banking, and green labeling and using market mechanisms such as auctions
and bidding for more effective implementation.

**WTO Implications of Conservation and Environmental Programs**

The Uruguay Round Agreement on Agriculture (URAA) of the World Trade
Organization (WTO) sets out criteria for classifying domestic farm
programs by their level of production and trade distortion. This
classification is important because programs that are deemed to be
minimally or non-trade distorting (so-called green box) are not subject
to annual limits on support, as are programs that are classified as
trade-distorting (referred to as amber box). To be classified as
minimally or non-trade distorting, a program must meet specific criteria
spelled out in the URAA.

To be classified as green box support, a program must meet two sets of
criteria. The first are fundamental requirements that the program must
be publicly funded, not involve transfers from consumers, and not have
the effect of providing price support to producers. In addition to these
fundamental requirements, a program has to meet specific policy
criteria. Annex 2 to the URAA contains policy-specific green box
criteria, several of which are relevant to conservation and
environmental programs. The United States already reports to (or
"notifies") the WTO several conservation programs under these
policy-specific criteria:

-   **Paragraph 2: General services.** This paragraph covers a wide
    range of government activities, and several relate to the provision
    of conservation and environmental services. One is research relating
    to environmental programs, and another is infrastructural work
    associated with environmental programs. Support cannot be extended
    for on-farm facilities or inputs, such as provision of irrigation
    water. Under this paragraph, the United States has reported to the
    WTO as green box the Conservation Operations and Resource
    Conservation and Development programs under NRCS, and payments under
    Conservation Program Technical Assistance.

-   **Paragraph 6: Decoupled income support.** To be eligible for green
    box status, payments must be determined by clearly defined criteria
    such as income, landowner, use of production inputs, or production
    level in a defined and fixed base period. Payments cannot be related
    to any production, prices, or factor of production after the base
    period. Finally, no production can be required to receive a payment.
    The United States has not notified any conservation or environmental
    programs as green box under this paragraph.

-   **Paragraph 10: Structural adjustment provided through resource
    retirement programs.** To be eligible for green box status, payments
    must be part of a well-defined government program that removes land
    or other resources from marketable agricultural production for a
    minimum of three years (permanently for livestock). Payments shall
    not require or specify an alternative use for the retired resources
    that involves the production of marketable agricultural products.
    The main program notified as green box by the United States in this
    category has been the Conservation Reserve Program.

-   **Paragraph 12: Payments under environmental programs.** To be
    eligible for green box status under this paragraph, payments must be
    part of a clearly-defined government environmental or conservation
    program and must fulfill specific conditions under the program,
    including those related to production or inputs. In addition,
    payments must be limited to the extra costs or loss of income
    involved in complying with the program. In 2001, the latest year in
    which the United States notified its programs to the WTO, several
    conservation programs under this paragraph were notified as green
    box, including the Agricultural Conservation Program, the Emergency
    Conservation Program, the Great Plains Conservation Program, the
    Colorado River Basin Salinity Program, the Wetlands Reserve Program,
    the Wildlife Habitat Incentives Program, the Farm and Ranch Lands
    Protection Program, and the Environmental Quality Incentives
    Program.

**Key issues for future programs.** Current and future programs should
strive for consistency between conservation and environmental programs
and WTO green box criteria. Issues in achieving this consistency can be
illustrated by examining several USDA programs, including one, CSP,
which has not yet been notified to the WTO.

For example, cost-share payments under current conservation programs fit
the criteria under Paragraph 12 and are considered to be green box
because payments are limited to less than the full cost of implementing
conservation practices. Paragraph 12 does not apply if conservation
program payments plus any additional payments provided to producers as
an incentive to participate in conservation programs exceed the full
cost or loss of income in implementing conservation practices. EQIP's
incentive payments relate to increased costs or potential loss of income
as a producer adopts a new practice and are consistent with paragraph
12.

The CSP has four separate payments. The stewardship payment, which is
the product of the number of acres in each land use category times the
payment rate, could also qualify as a decoupled payment under Paragraph
6, recalling that payments cannot be linked to a factor of production
after a fixed and defined base period. For the stewardship payment,
acres are fixed at an historical level. But if payment rates are
adjusted upward over the life of a contract, this feature could be seen
as inconsistent with Paragraph 6 criteria. Some CSP enhancement payments
may be consistent with paragraph 12 if they reflect costs. However,
performance-based enhancement payments may exceed the cost incurred to
implement conservation practices. In this instance, such payments would
not meet the criteria under Paragraph 12 for a green box program.
However, performance-based enhancement payments could meet the paragraph
6 criteria as decoupled income support, provided they are independent of
production, price, and factor use.

For programs like CRP in which land is devoted to conserving uses,
Paragraph 10 requires that enrolled land must be removed from marketable
agricultural production for a minimum of three years to be considered a
green box program. Some have advocated allowing the production and
harvesting of energy crops on land enrolled in the CRP. Such use would
have to be reconciled with the criteria contained in Paragraph 10 for a
green box program. However, the CRP rental payment could also be viewed
as an environmental program payment that compensates for loss of income
under paragraph 12.

**VI. Generalized Alternative Approaches to Current Programs**

This section considers four broad alternatives to the existing USDA Farm
Bill conservation programs that would address some of the concerns
raised in the previous section under "Key issues for future programs."
These approaches are not specific farm bill proposals that are being
advocated. Neither are they mutually exclusive. Instead, they are
presented to help focus further public discussion regarding the 2007
Farm Bill. Each alternative is discussed using the four criteria from
Section V.

Conservation programs seek to maintain productive agriculture in harmony
with clean air and water, healthy soils, healthy wildlife and fish
populations, and sustainable rural communities. Conservation programs
arose because tillage increases erosion and reduces soil organic matter;
fertilizing crops can increase nutrient runoff and leaching; irrigation
limits water available for other uses; and agricultural practices can
affect wildlife habitat. Providing landowners with technical assistance
and economic incentives to adopt conservation measures can increase
environmental benefits.

Although there are many alternative ways to structure programs to
increase environmental benefits, implementing conservation-based
performance goals could increase program effectiveness. USDA has been
developing tools to estimate the effects of conservation practices on
nutrient runoff and leaching, greenhouse gas emissions, irrigation water
savings, and certain targeted wildlife habitat. These measures could be
adapted to provide performance-based conservation program compensation.
The CSP has developed performance-based enhancement payments that set
payment levels based on a farmer's level of environmental performance as
measured by environmental indices.

A performance-based approach to conservation could provide incentives
for undertaking greater conservation efforts and a means to measure USDA
progress towards meeting broad national conservation priorities. Where
possible, addressing these priorities could be measured quantitatively,
such as the amount of erosion reduction per year, the decline in
nitrogen and phosphorous leaving farms and adversely affecting water
quality per year; the increase in the number of acres of wetlands and
buffers per year; the reduction in water use per year; and the increase
named species habitat per year.

**Alternative 1: Improve Existing Conservation Programs**

Statements made by farmers, ranchers, and the public during the
Secretary's Farm Bill Forums indicated stakeholders are generally
satisfied with current USDA conservation programs. One of the underlying
features of conservation programs---especially the working lands
programs---that engenders broad support is the widespread distribution
of program participants across the United States. This alternative
examines four significant changes that could help improve the
effectiveness and efficiency of current USDA conservation programs. The
more substantial modifications include: (1) making programs more
targeted and increasing the use of market mechanisms; (2) consolidating
programs that share common purposes and incentives; (3) rebalancing
conservation investments among programs and purposes; and (4) enhancing
the support of farm and ranch energy management and development of
alternative energy sources.

-   **Increase Environmental Returns on Conservation Investments.**
    Increasing environmental returns on Federal conservation program
    investments requires focusing conservation funding on those
    locations, such as watersheds or basins, or natural resource
    problems, such as wetland or habitat losses, that maximize the
    environmental benefit of Federal investments. A strategy for
    maximizing the environmental benefit of the Federal investment would
    need to consider both (1) the way USDA identifies the potential for
    environmental gain from addressing various resource problems in
    various locations and (2) the balance between environmental gain and
    the cost of achieving those gains. A number of strategies could be
    employed:

    -   Adopt a watershed or landscape approach to program delivery,
        focusing effort on watersheds or landscapes where environmental
        gains are most likely;

    -   Improve program applicant ranking criteria, including
        replacement of the current regional equity provision with
        natural resource based strategies for allocation of program
        funds;

    -   Make greater use of competitive bidding to lower the cost of
        conservation program contracts;

    -   Use information or indices underlying applicant ranking criteria
        to vary payments in a way that is commensurate with the
        potential for environmental benefits, i.e., expand the use of
        performance-based payments; and

    -   Reconsider paying for already implemented practices (stewardship
        payments) in the overall mix of conservation program tools.

-   **Consolidate Programs and Delivery Mechanisms.** Consolidation of
    current cost-share, rental payment, easement purchase, and incentive
    programs would likely achieve administrative efficiencies as well as
    improve the effectiveness of program delivery. The current suite of
    programs could be replaced with a single, streamlined, comprehensive
    system of financial incentives, supported by technical assistance.
    Changes to be considered include incorporating the policy tools of
    conservation-use programs (CRP) and cost-share programs (EQIP, WHIP,
    and AMA) into a single conservation program and creating a single,
    multipurpose easement program that would combine WRP, FRPP, and GRP.

-   **Rebalance the Conservation Program Portfolio.** The 2002 Farm Bill
    began the process of balancing conservation program funding by
    increasing the portion of funding allocated for working lands
    programs, primarily EQIP. Increasingly, CRP has moved away from
    putting entire fields into conservation uses toward funding the
    installation of high-priority "buffer" practices (e.g., filter
    strips, grassed waterways) that support working lands by reducing
    the environmental implications of on-going agricultural production.
    At the beginning of 2006, about 20 percent of CRP funding was
    devoted to these practices, up from about 10 percent at the
    beginning of 2002. Even with the 2002 Farm Bill's expanded funding
    for working lands conservation programs, and changes in CRP funding,
    over half of USDA conservation payments are devoted to retiring land
    from commodity production. This modification would continue the
    trend of increasing the proportion of funding for working lands
    programs and reducing the proportion for putting land into
    conservation uses. With the large number of CRP contracts expiring
    in 2007 and 2008, there may be a unique opportunity to extend
    benefits on working lands, making additional funding available to a
    greater number of producers and applicable to a broader array of
    agricultural lands. In addition, the 39-million-acre cap for CRP may
    not be appropriate for the longer term given tools available under
    other conservation programs and concerns about capacity constraints
    in feedstock production for bioenergy.

-   **Encourage Energy Conservation and Production.** Many conservation
    practices not only conserve natural resources, they also save
    energy. Recent increases in energy prices have significantly
    affected farm and ranch production costs, This option could add
    specific energy conserving practices to financial and technical
    assistance programs, including authorities and funding for: on-farm
    energy audits, activities which improve on-farm energy efficiency,
    and assistance in developing on-farm energy production and
    bio-energy feedstocks, including allowing, where appropriate, the
    use CRP and WRP land intermittently for bioenergy purposes with an
    accompanying reduction in rental payments.

**Conservation and Environmental Benefits.** The current allocation of
conservation resources to rural areas and across landscapes where there
are substantial natural resource problems may not be optimal. More
direct consideration of environmental performance and comparison of
benefits and costs could possibly improve the effectiveness of current
conservation programs.

The way program payment and eligibility criteria are structured also
affects the efficiency with which these programs deliver environmental
gains. Current programs, such as EQIP and CRP, use prospective program
costs and environmental benefits to select enrollees. Producer
incentives to apply for cost-based payments are roughly the same for
everyone and do not depend on the level of environmental benefit a given
producer may offer. Thus, cost-based payments are typically used with
environmental benefit-cost indices or other targeting devices to ensure
that the producers selected for participation can deliver relatively
large environmental benefits per dollar of program expenditure. A key
question is whether existing environmental benefit-cost indices, such as
the Environmental Benefits Index (EBI) used to rank proposed CRP
contracts for acceptance in a general sign up, can be improved to more
accurately reflect the potential benefits and costs of withdrawing land
from commodity production.

Unlike EQIP or CRP, CSP bases a large portion of program payments on
environmental performance, as measured by environmental indices. The key
advantage of this approach is that producers who can deliver
environmental benefits, especially those who can do so at a low cost,
have a larger participation incentive. Some producers, who can deliver
substantial environmental benefits but would not sign up for an
environmental program that only reimburses the cost (or a portion of the
cost) may be induced to signup for a performance-based payment. On the
downside, these incentives could increase the cost of achieving
environmental gains, to the extent that payments exceed cost. Thus,
programs with cost-based or bid-based payments (e.g., EQIP and CRP) may
deliver more environmental gain per dollar of Federal investment, even
without enrolling some producers who could deliver significant benefits.
Performance-based payments must also be carefully designed to limit
distortions of production incentives. If payments are too large, they
may encourage the expansion of crop production onto marginal land.

With EQIP, the 2002 Farm Bill prohibited "bidding down" of the cost
share out of concern that economies of size would result in most funds
going to large farms that could agree to undertake conservation
practices at lower costs. On the other hand, the use of auctions and
bidding for at least a portion of the programs could stretch program
dollars by encouraging producers to reveal the minimum payment they
would be willing to accept for retiring land or installing conservation
practices.

Finally, payments for prior implementation of conservation measures,
such as so-called "good actor" payments, may help maintain conservation
measures but can be costly with limited additional environmental
benefit. Current programs focusing on land in agricultural production
provide such payments as only a small portion of total program payments,
such as the CSP stewardship payment. Analysis indicates more
conservation benefits per dollar spent may be obtained by basing
payments on performance targets rather than past actions or specific
practices. Rebalancing the CSP funding between stewardship payments and
enhancement payments could increase environmental benefits by
encouraging additional new conservation actions on the part of
producers.

Creating a single financial assistance conservation program would allow
the program implementation process, which is sensitive to local
conservation needs, to allocate funding to those conservation purposes
and mechanisms that can create the greatest environmental benefit. A
single program with expanded authorities for conservation performance
payments has the potential to enhance the level of conservation and
create new, innovative approaches to conservation. If the balance
between rental programs and working lands programs changed toward
working lands, some land now in conserving uses could be brought into
commodity production. More land in working lands programs may bring
fragile land into production that would not otherwise be there. While
working lands conservation program tools could preserve many
environmental benefits, some benefits on these lands, such as wildlife
habitat, would be reduced, lost, or changed with respect to the species
benefiting.

**Program Costs and Distribution of Program Assistance.** With
competition for Federal funding, implementing the modifications in this
alternative would likely enable the programs to operate with greater
efficiency and thus stretch program dollars to achieve conservation
objectives.

Taken as a whole, conservation participation and payments---on a
per-farm basis---are relatively evenly distributed across the county and
across farm size, farm type, and farm income level. The EQIP and CSP
programs are somewhat uniform in their geographic distribution, and to
the extent that the above modifications shift funding from rental and
easement programs toward working lands programs, conservation program
distribution would likely be made more geographically uniform. However,
environmental concerns are not necessarily spread evenly geographically.
Thus, program distribution under performance-based conservation programs
tied to environmental goals would reflect areas of greatest resource
concern.

**Economic and Market Impacts.** The financial assistance and easement
programs are widely dispersed across the Nation and tend to have nominal
impacts on local economies. The above modifications would not likely
have significantly different commodity market effects from current
programs, unless the balance between rental programs and working lands
programs changed sharply. Land brought back into production would
increase the demand for farm-related goods and services leading to job
growth in farm support service industries and marginally increase
agricultural production. However, if recreational opportunities are
reduced, then there could be an off-setting reduction in
recreation-oriented enterprises. Expanding the GRP could be one option
for providing incentives to keep expiring CRP land in grass and thereby
mitigate any potential losses in recreational opportunities. This land
could also shift directly to the CSP with cost share available to add
fencing and livestock water.

Many of the conservation practices supported by USDA conservation
programs conserve the use of fossil fuel-based inputs like diesel fuel,
nitrogen, and electricity. In addition, there are programs that support
bio-energy production like EQIP, CSP, and CRP. Expansion of these
program initiatives could contribute to farm profitability and rural
economies while providing environmental benefits.

**WTO Implications.** The changes under this alternative would employ
the current suite of conservation program tools but in different ways.
Thus, the programs are expected to be consistent with WTO obligations
for green box programs. Two concerns are expanded energy production and
greater use of enhancement payments. Care must be taken to ensure energy
incentives are not coupled payments that are tied to production, price,
or input use of energy crops. Enhancement payments must compensate only
for costs incurred or income foregone or qualify as decoupled income
support, an issue discussed in more detail in the next alternative.

**Alternative 2: Provide "green payments" to enhance environmental
benefits and provide income support.**

Many Farm Bill Forum participants were interested in programs that would
reward producers for environmental performance. These so-called "green
payment" programs have been touted by some as an alternative way to
provide income support to producers in a manner that is consistent with
WTO domestic support constraints, while providing substantial
environmental benefits.

There are numerous approaches to providing green payments for income
support. One approach would be incentive payments to producers to
undertake a broad range of conservation practices. Another approach
would be performance-based payments, which would be commensurate with
the environmental benefit of adopting and maintaining appropriate
conservation practices, not the cost of installing or adopting the
practices. In effect, the government would create a market for
environmental gain, and producers would decide whether to produce those
gains in much the same way as they decide to produce commodities: if the
payment they receive exceeds the costs of their conservation activities,
the producer would make a profit, or have their income supported, by
"producing" environmental gain. To support incomes of most producers,
including those currently receiving price and income support payments,
most cropland and grazing land could be made eligible to participate.

**Conservation and Environmental Benefits.** The environmental impact of
"green payments" would depend largely the program structure, and in
particular, the degree to which a payment is tied to environmental
performance. Enhancement payments, with their focus on the potential for
environmental gain, could increase environmental benefits by encouraging
additional new conservation actions by producers. However, if payments
are structured largely for income support (albeit with the condition
that recipients must meet some environmental standards), a given level
of conservation program funding is likely to produce less environmental
gain.

**Program Costs and Distribution of Program Assistance.** If stewardship
payments were focused on current recipients of farm income support, as
for example, through expanded conservation compliance or other criteria,
the payments would likely not address the same environmental issues or
direct funds to the same producers as current conservation payments. For
example, in 2003, only 43 percent of conservation payments went to farms
that also received commodity payments. If commodity payments were to
serve as the basis of a new green payment program, environmental
benefits would focus more heavily on resource concerns related to crop
production and less on resource concerns related to livestock producers.

By contrast, current conservation payments tend to be more broadly
available to non-program crop and livestock producers. If green payments
were focused on current recipients of conservation payments, producers
of non-program crops and livestock producers would likely gain, perhaps
at the expense of current program crop producers. Green payments funded
from reductions in spending from current commodity programs could also
have negative implications for asset values of current commodity program
beneficiaries and may jeopardize the accomplishments of conservation
compliance.

**Economic and Market Impacts.** While this alternative is an appealing
approach on many levels, caution is in order. When environmental gain is
equated with the application of certain practices through the use of an
environmental benefit index or other means of estimation, producers may
be encouraged to bring additional marginal land into production,
possibly offsetting environmental gains. Unfortunately, it is not yet
possible to monitor the conservation performance of a specific farm at a
reasonable cost. Safeguards against expanding production would be
needed.

Nearly every farm faces some type of environmental concern. However,
unless payments are targeted to increased environmental performance, the
marginal costs of increasing environmental benefits through green
payments may be high. Performance-based payments could be more
cost-efficient at providing environmental benefits than payments tied to
practices or prior actions. For example, a practice-based program that
pays out regardless of location or other field characteristics could be
funding many practices of marginal environmental benefit.

**WTO Implications.** Another caution with this alternative is the
inherent tension between the objectives of using green payments as
income support and using them to produce environmental benefits as
evidenced by examining the consistency of green payments with WTO
criteria. If conservation payments only compensate producers for cost or
income foregone, and are consistent with Annex 2, paragraph 12, then
there is no income support. If the payments are for environmental
benefits but exceed the producer's costs or income foregone, then to be
green box, the payments must be decoupled income support and consistent
with Annex 2 paragraph 6. However, to be decoupled income support, the
payments must not be related to input use, and it is often by changing
input use that conservation payments achieve environmental gains. Thus,
if the conservation practices undertaken by the producer are restricted
to ensure WTO consistency, the environmental gains may be limited. A
conservation program that enhances net farm income, is environmentally
effective, and is green box for WTO purposes would be a challenge to
design and require careful development.

A green payment program is not necessarily green box and thus exempt
from reduction commitments in the context of the WTO. For example, to
the extent conservation payments exceed the cost of implementing
environmental practices, such payments are ineligible for inclusion
under paragraph 12, environmental payments. However, such payments may
still be consistent with paragraph 6 criteria as decoupled direct
support, provided the payments are not linked to current prices,
production, or input use.

**Alternative 3: Encourage Private Sector Markets for Environmental
Services**

There is increasing interest in the role agriculture and forestry
practices can play in providing environmental goods and services to
private sector markets. New private sector environmental markets could
complement or in some cases potentially replace existing federally
supported conservation efforts. Environmental markets offer an
alternative way to achieve the goals of traditional environmental
regulations. For example, industrial firms could meet regulatory
obligations by purchasing pollution abatement services (offsets) from
lower-cost providers and achieve pollution reductions at lower cost to
society. Environmental markets offer financial opportunities for
agricultural producers and landowners. Agricultural operations that are
subject to environmental regulations could benefit from the improved
efficiency provided by environmental markets, and earn income by
providing offsets in cases where they are either not subject to
regulatory requirements or can exceed the required environmental
performance.

Agriculture and forestry can be low-cost providers of a number of
environmental goods and services. Environmental markets with relevance
to agriculture and forestry include: water quality, air quality,
wetlands, endangered species, greenhouse gases, and development rights.

Private environmental markets could supplement federal efforts for
conservation and environmental protection, allowing federal funds to
reach more farms. To accomplish this, federal conservation programs
would need to contain provisions that allow private and federal funds to
complement each other. First, programs need to allow the private sale of
environmental credits produced as a result of federal support (this is
currently permissible under EQIP and CRP and under WRP in some
instances). Second, the programs would need to be structured to foster
competition so that farmers receiving revenue from private environmental
markets would have an incentive to reduce requests for federal aid.

The ability of agriculture and forestry to provide environmental credits
has been hampered by several barriers, including: high transaction
costs, the small quantity of benefits that can be provided by individual
farmers or landowners, performance risks and liability, a lack of
information, and uncertainties in quantifying benefits. New authorities
could possibly enable USDA to overcome these barriers and promote the
establishment of environmental markets for agricultural and forestry
conservation activities. It is likely that development of these markets
would take time.

-   **Establish Market Confidence and Validity:** Generating substantial
    demand for environmental goods and services hinges on the ability to
    use environmental credits to offset regulatory requirements.
    Congress could authorize USDA and Federal regulatory agencies to
    cooperate to ensure that environmental goods produced by agriculture
    can be used to offset their regulatory requirements in other
    sectors.

-   **Develop Uniform Standards:** Environmental markets require
    standard units of environmental benefits. USDA could be authorized
    to develop consistent standards for estimating environmental goods
    and services provided by agriculture and forestry. Uniform rules,
    including standards for data quality, verification, reporting, and
    estimation methods could help ensure credible and fair ecosystem
    service markets.

-   **Foster Emerging Markets:** USDA could be authorized to provide
    investment capital, such as loans and grants to stimulate markets.
    Funds could be used for projects and to support States,
    cooperatives, and others that could work to address barriers such as
    risk, liability, lack of information, and scale of benefits.

    **Conservation and Environmental Benefits.** Traditional
    environmental regulations require firms to reduce pollution to a set
    level or to install specific technologies and practices. While
    fairly straightforward, this approach can be costly both to the
    firms and to society because firms with high costs of pollution
    reduction and those with low costs are required to meet the same
    requirements, which may waste resources. Private sector
    environmental markets can offer efficiency improvements over
    traditional regulations and could result in overall increases in
    environmental and conservation benefits. For example, a firm that is
    a point source of water pollution could pay a farmer to establish
    buffer strips to reduce nutrient runoff. These buffer strips would
    also sequester carbon and provide wildlife habitat.

**Program Costs and Distribution of Benefits.** The Federal costs of
promoting private sector environmental markets may be less than the
costs of direct payments and cost-sharing. Federal costs would be
limited to the costs associated with rule-making, research and
development of methods for quantifying benefits, and investments in
activities to foster emerging markets. The private sector would bear the
major costs of implementing actions. Moreover, the costs to firms of
purchasing environmental benefits under market systems would be lower
than their costs under traditional command-and-control approaches.

The distribution of benefits would be driven by market forces. The
distribution of benefits would also vary by the type of environmental
market---reflecting differences in the underlying environmental goals
and objectives. For example, water quality goals are specific and
localized within watersheds and in some cases, localized to particular
points within watersheds. The value of the offsets would be tied to the
location of the action.

The case of regional or global air pollutants provide greater
flexibility. Effective markets can exist based on the average benefits
provided by actions. The estimates may over- or under-estimate the
benefits of a specific action or at a specific location. However, if the
estimates are unbiased in their structure and application, they should
reflect the benefits when aggregated at a larger scale. Benefits in
regional and global air pollutant environmental markets would tend to
accrue in regions that can provide low cost offsets.

**Economic and Market Effects.** The application of environmental
markets to agriculture could provide economic and environmental benefits
to the sector. The cost of providing environmental services, such as
improved water quality, reduced air pollution, and carbon sequestration
are often lower in agriculture than in other sectors. As a consequence,
the implementation of environmental markets could result in increases in
the actions to improve environmental quality and an influx of revenue
from sectors with high environmental compliance costs.

The magnitude of these benefits would vary depending on the type of
environmental good or service. For example, wetland mitigation banks
have been set up in many States to allow private developers to purchase
wetland conversion rights from farmers who have established or restored
wetlands. The prices of wetlands banked depend on location,
establishment costs, and/or expected environmental benefits. For
example, in Minnesota, wetland credits to public transportation
authorities ranged from \$4,000 to \$35,000 per acre, depending on
proximity to the Twin Cities metro area.

In cases where controls are not costly or regulations are not binding,
the value of offsets is often low. Private markets for greenhouse gas
reductions have emerged in the absence of regulatory requirements in the
United States. The value of greenhouse gas reductions in these voluntary
markets is low, on the order of \$1 to \$2 per ton of carbon dioxide.

**WTO Implications.** Market mechanisms are largely private sector
transfers and should have negligible implications for WTO compliance.
Ultimately, whether a program that involves any payments to producers is
consistent with Annex 2 criteria will depend on whether payments exceed
costs incurred or income foregone from implementing a particular
practice (as in Annex 2, paragraph 12) or whether payments are tied to
current production, prices, or input use (as in Annex 2, paragraph 6).

**Alternative 4: Expand Conservation Compliance or Establish a Standard
of Care**

A way to strengthen the linkage between price and income support and
conservation is to expand conservation compliance requirements. The
effectiveness and enforceability of compliance mechanisms in achieving
environmental gains, compared with a conservation payment program, would
depend on the size and distribution of other types of USDA payments. The
experience with current conservation compliance provisions is that the
estimated level of farm program payments per acre of HEL cropland varies
widely across farms as do compliance costs.

With price and income support programs centered on major field crops,
environmental problems associated with cropland are likely candidates
for compliance. For example, the overlap between farm program payments
and areas with a high potential for nitrogen runoff would yield
significant benefits if compliance requirements included some aspect of
nutrient management.

One option is to recast the current compliance provisions and
incorporate a "standard of care" approach to managing natural resources.
For example, the standard of care could be the same as the conservation
requirements associated with CSP Tier I eligibility, which require the
producer to address soil and water quality to a minimum level of
treatment on part of the farm. The advantage of this approach would be
that there are existing tools available to determine compliance and
these standards already have acceptance as eligibility criteria in the
CSP program. USDA program participants would be required to meet the
standard of care in order to continue to receive price and income
support. Or, program participants could be required to reduce erosion on
all land, not just HEL. Such approaches move farm program payments in
the direction of "green payments" as discussed in Alternative 2.

Compliance could be expanded not only in terms of environmental
requirements but also by linkage to other USDA programs and the extent
of land covered by compliance provisions. Linkages to other USDA
programs could be expanded several ways, such as linking disaster
payment eligibility to implementation of a conservation system that
meets some minimum level of treatment or standard of care, or creating a
sliding scale of commodity payments based on the level of conservation
treatment, or prohibiting producers who bring certain grasslands into
crop production from obtaining subsidized crop insurance for some
period.

**Conservation and Environmental Benefits.** The erosion reductions
under conservation compliance suggest that extending HEL compliance
provisions to non-HEL could produce additional on-site and off-site
environmental benefits. Incorporating additional criteria for the
receipt of farm program benefits, such as CSP Tier I, would add to
conservation benefits. For example, there are indications that non-HEL
grassland is being converted to cropland in the prairie pothole region
and adversely affecting critical duck habitat. Expanding sodbusting
compliance provisions to non-HEL land could help protect this habitat.
Additional water quality benefits could be obtained by adding some
aspect of nutrient management in crop production to the list of
compliance requirements.

**Program Costs and Distribution of Program Assistance.** One of the
advantages of compliance programs is that they do not require additional
program funding other than technical assistance to help farmers comply
with the requirements of the compliance provision. However, technical
assistance costs could be high and farmers would likely incur costs that
are not offset by cost-share programs like EQIP. Moreover, these costs
are not likely to be evenly distributed across producers. Expanding
compliance beyond highly erodible land and wetlands by incorporating a
standard of care for soil quality and water quality may substantially
alter the distribution of farm types and increase the number of farms
and acres affected by conservation compliance. Also, if farm program
benefits were reduced in the future, there would be less incentive for
producers to expand or maintain existing conservation practices to
comply with conservation compliance.

**Economic and Market Impacts.** Properly designed, the economic and
market impacts of expanded conservation compliance could be limited. A
key element in minimizing the effects is the availability of
cost-effective technology that can not only help farmers comply with the
compliance provisions, but also reduce their production costs, reduce
weather related risks, or enhance yields. To minimize adverse economic
impacts to farmers and ranchers, a significant phase-in period would be
needed, much like the 1985 compliance provisions. This would allow time
for enterprise changes, timely equipment purchases, the development of
technology, and would help stimulate innovation on the part of
agri-businesses.

**WTO Implications.** Expanded conservation compliance requirements as a
condition for receiving program payments does not raise any specific
issue relating to WTO rules. To maintain a payment's green box status,
linkage between a compliance requirement and a payment must not be tied
to current price, production, or input use. But, compliance provisions,
however useful for improving environmental benefits, cannot turn an
amber box payment into a green box payment.

**VI. Suggestions for Further Reading**

Aillery, Marcel. *Contrasting Working-Land and Land Retirement
Programs.* Economic Research Service, USDA, Economic Brief No. (EB4) 6
pp, March 2006. <http://www.ers.usda.gov/Publications/EB4/>

Cattaneo, Andrea, Roger Claassen, Robert Johansson, and Marca Weinberg.
*Flexible Conservation Measures on Working Land: What Challenges Lie
Ahead*? Economic Research Service, USDA, Economic Research Report No.
(ERR5) 79 pp, June 2005.

<http://www.ers.usda.gov/publications/ERR5/>

Claassen, Roger, LeRoy Hansen, Mark Peters, Vince Breneman, Marca
Weinberg, Andrea Cattaneo, Peter Feather, Dwight Gadsby, Daniel
Hellerstein, Jeff Hopkins, Paul Johnston, Mitch Morehart, Mark Smith.
*Agri-Environmental Policy at the Crossroads: Guideposts on a Changing
Landscape.* Economic Research Service, USDA, Agricultural Economic
Report No. (AER794) 72 pp, January 2001.
<http://www.ers.usda.gov/Publications/aer794/>

Claasen, Roger and Mitch Morehart. *Greening Income Support and
Supporting Green*, Economic Research Service, USDA, Economic Brief No.
(EB1) 6 pp, March 2006. <http://www.ers.usda.gov/Publications/EB1/>

Claassen, Roger, Vince Breneman, Shawn Bucholtz, Andrea Cattaneo, Robert
Johansson, and Mitch Morehart. *Environmental Compliance in U.S.
Agricultural Policy: Past Performance and Future Potential.* Economic
Research Service, USDA, Agricultural Economic Report No. (AER832) 52 pp,
May 2004. <http://www.ers.usda.gov/Publications/aer832/>

# Hansen, LeRoy and Daniel Hellerstein. *Better Targeting, Better Outcomes*. Economic Research Service, USDA, Economic Brief No. (EB2) 6 pp, March 2006. [**http://www.ers.usda.gov/Publications/EB2/**](http://www.ers.usda.gov/Publications/EB2/)

# Johansson, Robert. *Participant Bidding Enhances Cost Effectiveness.* Economic Research Service, USDA, Economic Brief No. (EB3) 6 pp, March 2006. [**http://www.ers.usda.gov/Publications/EB3/**](http://www.ers.usda.gov/Publications/EB3/)

Lambert, Dayton, Patrick Sullivan, Roger Claassen, and Linda Foreman.
*Conservation-Compatible Practices and Programs: Who Participates?*
Economic Research Service, USDA, Economic Research Report No. (ERR14) 48
pp, February 2006. <http://www.ers.usda.gov/Publications/err14/>

Sullivan, Patrick, Daniel Hellerstein, LeRoy Hansen, Robert Johansson,
Steven Koening, Ruben Lubowski, William McBride, David McGranahan,
Michael Roberts, Stephen Vogel, and Shawn Bucholtz. *The Conservation
Reserve Program: Economic Implications for Rural America.* Agricultural
Economic Report No. (AER 834) 106 pp, September 2004.
<http://www.ers.usda.gov/Publications/aer834/>

Sullivan, Patrick, Daniel Hellerstein, David McGranahan, and Stephen
Vogel. "Farmland Retirement's Impact on Rural Growth." *Amber Waves*.
Economic Research Service, USDA

Weinberg, Marca and Roger Claassen. *Rewarding Farm Practices versus
Environmental Performance.* Economic Brief No. (EB5) 6 pp, March 2006.
<http://www.ers.usda.gov/Publications/EB5/>

**Appendix Table 1. Policy Tools for Addressing Environmental Effects of
A**griculture

+---------+---------+-------------------------+------------------+----+
| ## Poli | ##      | # Government Role       | # Represe        |    |
| cy Tool |  Partic |                         | ntative Programs |    |
|         | ipation |                         |                  |    |
+---------+---------+-------------------------+------------------+----+
|         |         |                         | Program title    | A  |
|         |         |                         |                  | cr |
|         |         |                         |                  | on |
|         |         |                         |                  | ym |
+---------+---------+-------------------------+------------------+----+
| **Educa | Vo      | Provide farmers with    | Conservation     | C  |
| tion/** | luntary | information and         | Technical        | TA |
|         |         | training to plan and    | Assistance       |    |
| **Te    |         | implement practices     |                  |    |
| chnical |         |                         |                  |    |
| Assis   |         |                         |                  |    |
| tance** |         |                         |                  |    |
+---------+---------+-------------------------+------------------+----+
|         |         |                         |                  |    |
+---------+---------+-------------------------+------------------+----+
| **E     | Vo      | Annual payments for     | Conservation     | C  |
| conomic | luntary | placing cropland in     | Reserve Program  | RP |
| Ince    |         | conserving uses for     | -- General       |    |
| ntives: |         | contract duration or    | Signup           |    |
| Place   |         | long term easements;    |                  |    |
| C       |         | contracts generally     |                  |    |
| ropland |         | long term (10 years --  |                  |    |
| in      |         | permanent)              |                  |    |
| Con     |         |                         |                  |    |
| serving |         |                         |                  |    |
| Use**   |         |                         |                  |    |
+---------+---------+-------------------------+------------------+----+
|         |         |                         | Wetland Reserve  | W  |
|         |         |                         | Program and      | RP |
+---------+---------+-------------------------+------------------+----+
| **E     | Vo      | Payments to offset the  | Environmental    | EQ |
| conomic | luntary | cost of adopting        | Quality          | IP |
| Ince    |         | specified management    | Incentives       |    |
| ntives: |         | structural practices;   | Program          |    |
| Working |         | contracts are for 1-10  |                  |    |
| Lands** |         | years                   |                  |    |
+---------+---------+-------------------------+------------------+----+
|         |         |                         | Conservation     | C  |
|         |         |                         | Security Program | SP |
+---------+---------+-------------------------+------------------+----+
|         |         |                         | Wildlife Habitat | WH |
|         |         |                         | Incentives       | IP |
|         |         |                         | Program          |    |
+---------+---------+-------------------------+------------------+----+
|         |         |                         | Conservation     | No |
|         |         |                         | Reserve Program  | ne |
|         |         |                         | -- Continuous    |    |
|         |         |                         | signup           | CR |
|         |         |                         |                  | EP |
|         |         |                         | Conservation     |    |
|         |         |                         | Reserve          |    |
|         |         |                         | Enhancement      |    |
|         |         |                         | Program          |    |
+---------+---------+-------------------------+------------------+----+
| **E     | Vo      | Purchase of easement on | Farm and         | FR |
| conomic | luntary | developments rights     | Ranchland        | PP |
| Incen   |         |                         | Protection       |    |
| tive:** |         |                         | Program          |    |
|         |         |                         |                  |    |
| **Agric |         |                         |                  |    |
| ultural |         |                         |                  |    |
| land    |         |                         |                  |    |
| preserv |         |                         |                  |    |
| ation** |         |                         |                  |    |
+---------+---------+-------------------------+------------------+----+
| **Com   | Invol   | Sets standards for      | Conservation     | No |
| pliance | untary, | environmental           | Compliance       | ne |
| Mecha   |         | performance and         |                  |    |
| nisms** | after   | determines whether      |                  |    |
|         | opt-in  | requirements are met    |                  |    |
|         | to Farm | before releasing        |                  |    |
|         | Program | payments                |                  |    |
+---------+---------+-------------------------+------------------+----+
|         |         |                         | Sodbuster        | No |
|         |         |                         |                  | ne |
+---------+---------+-------------------------+------------------+----+
|         |         |                         | Swampbuster      | No |
|         |         |                         |                  | ne |
+---------+---------+-------------------------+------------------+----+
| **Reg   | Invo    | Large livestock subject | Clean Water Act  | C  |
| ulatory | luntary | to permit requirements  |                  | WA |
| Require |         |                         |                  |    |
| ments** |         |                         |                  |    |
+---------+---------+-------------------------+------------------+----+
|         |         | Use restrictions and    | Federal          | F  |
|         |         | bans on certain         | Insecticide,     | IF |
|         |         | pesticides              | Fungicide and    | RA |
|         |         |                         | Rodenticide Act  |    |
+---------+---------+-------------------------+------------------+----+
|         |         | Farmers may not "take"  | Endangered       | E  |
|         |         | a member of a listed    | Species Act      | SA |
|         |         | species; Agencies must  |                  |    |
|         |         | protect and restore     |                  |    |
|         |         | species and their       |                  |    |
|         |         | habitats                |                  |    |
+---------+---------+-------------------------+------------------+----+

**Appendix Table 2. Summary of USDA Conservation Programs**

+----------+---------------------------+-------------+----+------+----+
| **P      | **Purpose / Priorities**  | **El        | ** |      |    |
| rogram** |                           | igibility** | Po |      |    |
|          |                           |             | li |      |    |
|          |                           |             | cy |      |    |
|          |                           |             | T  |      |    |
|          |                           |             | oo |      |    |
|          |                           |             | ls |      |    |
|          |                           |             | ** |      |    |
+==========+===========================+=============+====+======+====+
|          |                           |             | >  | >    | >  |
|          |                           |             |  T | Econ | Co |
|          |                           |             | ec | omic | mp |
|          |                           |             | hn | > In | li |
|          |                           |             | ic | cent | an |
|          |                           |             | al | ives | ce |
|          |                           |             | >  |      | >  |
|          |                           |             |  & |      | >  |
|          |                           |             | >  |      | \[ |
|          |                           |             |  E |      | op |
|          |                           |             | du |      | t- |
|          |                           |             | ca |      | in |
|          |                           |             | ti |      | >  |
|          |                           |             | on |      | to |
|          |                           |             | >  |      | >  |
|          |                           |             | As |      | Fa |
|          |                           |             | si |      | rm |
|          |                           |             | st |      | >  |
|          |                           |             | an |      |  P |
|          |                           |             | ce |      | ro |
|          |                           |             |    |      | gr |
|          |                           |             |    |      | am |
|          |                           |             |    |      | \] |
+----------+---------------------------+-------------+----+------+----+
| **Agri   | Water management, water   |             |    | in   |    |
| cultural | quality, and erosion      |             |    | cent |    |
| Ma       | control and mitigate risk |             |    | ive, |    |
| nagement | through production        |             |    | cost |    |
| As       | diversification or        |             |    | s    |    |
| sistance | resource conservation     |             |    | hare |    |
| Program  | practices, including      |             |    |      |    |
| (AMA)**  | transition to organic     |             |    |      |    |
|          | farming. Priorities       |             |    |      |    |
|          | include: 1) Reduce        |             |    |      |    |
|          | non-point source          |             |    |      |    |
|          | pollution in impaired     |             |    |      |    |
|          | watersheds consistent     |             |    |      |    |
|          | with Total Daily Maximum  |             |    |      |    |
|          | Loads (TMDLs), where      |             |    |      |    |
|          | available, as well as the |             |    |      |    |
|          | reduction of groundwater  |             |    |      |    |
|          | contamination; 2) Promote |             |    |      |    |
|          | conservation of ground    |             |    |      |    |
|          | and surface water         |             |    |      |    |
|          | resources; 3) Reduce      |             |    |      |    |
|          | emissions that contribute |             |    |      |    |
|          | to air quality impairment |             |    |      |    |
|          | violations of National    |             |    |      |    |
|          | Ambient Air Quality       |             |    |      |    |
|          | Standards; 4) Reduce soil |             |    |      |    |
|          | erosion and               |             |    |      |    |
|          | sedimentation; 5) Promote |             |    |      |    |
|          | at-risk species habitat   |             |    |      |    |
|          | conservation.             |             |    |      |    |
+----------+---------------------------+-------------+----+------+----+
| **Cons   | Retires land from crop    | Owners/     |    | cos  |    |
| ervation | production to provide     | operators   |    | t-sh |    |
| Reserve  | specific environmental    | for at      |    | are, |    |
| Program  | benefits. Priorities      | least 1     |    | re   |    |
| --       | include soil erosion      | year and    |    | ntal |    |
| General  | control, water quality,   | control     |    |      |    |
| Signup   | air quality, and wildlife | during      |    |      |    |
| (CRP)**  |                           | contract    |    |      |    |
|          |                           | period      |    |      |    |
+----------+---------------------------+-------------+----+------+----+
| **Cons   | Installs certain          | Owners/     |    | in   |    |
| ervation | conservation practices    | operators   |    | cent |    |
| Reserve  | that provide large        | for at      |    | ive, |    |
| Program  | benefits (such as         | least 1     |    | cos  |    |
| --       | riparian buffers and      | year and    |    | t-sh |    |
| Co       | grass filters, bottomland | control     |    | are, |    |
| ntinuous | hardwood reforestation,   | during      |    | re   |    |
| signup** | and wetland restoration)  | contract    |    | ntal |    |
|          |                           | period      |    |      |    |
| **       |                           |             |    |      |    |
| (CCRP)** |                           |             |    |      |    |
+----------+---------------------------+-------------+----+------+----+
| **Cons   | Specific conservation     | Owners/     |    | cos  |    |
| ervation | needs as defined by state | operators   |    | t-sh |    |
| Reserve  | and federal partnership   | for at      |    | are, |    |
| Enh      | (such as sediment, and    | least 1     |    | e    |    |
| ancement | nutrient containing       | year and    |    | asem |    |
| Program  | runoff into the           | control     |    | ent, |    |
| (CREP)** | Chesapeake Bay, the       | during      |    | re   |    |
|          | Everglades, and the       | contract    |    | ntal |    |
|          | Illinois, Ohio, and       | period      |    |      |    |
|          | Minnesota River           |             |    |      |    |
|          | watersheds)               |             |    |      |    |
+----------+---------------------------+-------------+----+------+----+
| **CRP    | Retires small wetlands on | Owners/     |    | re   |    |
| Farmable | cropland to provide       | operators   |    | ntal |    |
| Wetlands | wildlife benefits         | for at      |    |      |    |
| P        |                           | least 1     |    |      |    |
| rogram** |                           | year and    |    |      |    |
|          |                           | control     |    |      |    |
|          |                           | during      |    |      |    |
|          |                           | contract    |    |      |    |
|          |                           | period      |    |      |    |
+----------+---------------------------+-------------+----+------+----+
| **Cons   | Promote the conservation  | Privately   |    | stew |    |
| ervation | and improvement of soil,  | owned &     |    | ards |    |
| Security | water, air, energy, plant | tribal      |    | hip, |    |
| Program  | and animal life, and      | land;       |    | enh  |    |
| (CSP)**  | other conservation        | a           |    | ance |    |
|          | purposes. Meeting minimum | gricultural |    | ment |    |
|          | standards for water       | producers   |    |      |    |
|          | quality and soil quality  |             |    |      |    |
|          | as basic eligibility      |             |    |      |    |
|          | requirements              |             |    |      |    |
+----------+---------------------------+-------------+----+------+----+
| **Envir  | Foster adoption of        | A           |    | in   |    |
| onmental | specified management and  | gricultural |    | cent |    |
| Quality  | structural measures to    | producers   |    | ive, |    |
| In       | address specific resource |             |    | co   |    |
| centives | quality problems.         |             |    | st-s |    |
| Program  | National priorities       |             |    | hare |    |
| (EQIP)** | include erosion, at-risk  |             |    |      |    |
|          | species habitat, air      |             |    |      |    |
|          | quality, water quality    |             |    |      |    |
|          | and conservation, and     |             |    |      |    |
|          | state and local resource  |             |    |      |    |
|          | concerns.                 |             |    |      |    |
+----------+---------------------------+-------------+----+------+----+
| *        | Conserve ground and       | A           |    | in   |    |
| **Ground | surface water on          | gricultural |    | cent |    |
| and      | agricultural operations   | producers   |    | ive, |    |
| Surface  |                           |             |    | co   |    |
| Water    |                           |             |    | st-s |    |
| Cons     |                           |             |    | hare |    |
| ervation |                           |             |    |      |    |
| (        |                           |             |    |      |    |
| GSWC)*** |                           |             |    |      |    |
+----------+---------------------------+-------------+----+------+----+
| **       | Conservation planning and | A           |    | in   |    |
| *Klamath | on-farm conservation      | gricultural |    | cent |    |
| Basin    | implementation in         | producers   |    | ive, |    |
| (KB)***  | California and Oregon     | in Klamath  |    | co   |    |
|          |                           | Basin       |    | st-s |    |
|          |                           |             |    | hare |    |
+----------+---------------------------+-------------+----+------+----+
| ***Cons  | Stimulate development and | Non-Federal |    |      |    |
| ervation | adoption of innovative    | government  |    |      |    |
| In       | conservation approaches   | or          |    |      |    |
| novation | and technologies while    | non         |    |      |    |
| Grants   | leveraging Federal        | -government |    |      |    |
| (CIG)*** | investment in             | org         |    |      |    |
|          | environmental enhancement | anizations, |    |      |    |
|          | and protection            | Tribes, or  |    |      |    |
|          |                           | individuals |    |      |    |
+----------+---------------------------+-------------+----+------+----+
| **Farm   | Protect important farm    | Landowners  |    | ease |    |
| and      | and ranchland from        | who apply   |    | ment |    |
| Ranch    | conversion and retain in  | cooperating |    |      |    |
| Land     | agricultural uses.        | entities    |    |      |    |
| Pr       | Resource concerns         |             |    |      |    |
| otection | include: soils of prime,  |             |    |      |    |
| Program  | unique, locally important |             |    |      |    |
| (FRPP)** | or statewide significance |             |    |      |    |
|          | or land with significant  |             |    |      |    |
|          | archeological or historic |             |    |      |    |
|          | resources.                |             |    |      |    |
+----------+---------------------------+-------------+----+------+----+
| **G      | Conserve vulnerable       | Easements   |    | e    |    |
| rassland | grasslands from           | --          |    | asem |    |
| Reserve  | conversion to other uses  | privately   |    | ent, |    |
| Program  | and conserve valuable     | owned &     |    | re   |    |
| (GRP)**  | grasslands by helping     | tribal      |    | ntal |    |
|          | maintain viable ranching  | grasslands; |    |      |    |
|          | operations. Resource      |             |    |      |    |
|          | concerns include: animal  | Contracts   |    |      |    |
|          | and plant populations of  | -- owners   |    |      |    |
|          | significant ecological    | with        |    |      |    |
|          | value, grazing land       | long-term   |    |      |    |
|          | health                    | control of  |    |      |    |
|          |                           | land        |    |      |    |
+----------+---------------------------+-------------+----+------+----+
| *        | Restore and enhance       |             |    | ease |    |
| *Healthy | forest ecosystems to: 1)  |             |    | ment |    |
| Forest   | promote the recovery of   |             |    |      |    |
| Reserve  | threatened and endangered |             |    |      |    |
| Program  | species, 2) improve       |             |    |      |    |
| (HFRP)** | biodiversity; and 3)      |             |    |      |    |
|          | enhance carbon            |             |    |      |    |
|          | sequestration             |             |    |      |    |
+----------+---------------------------+-------------+----+------+----+
| *        | Restore and protect       | Owners of   |    | cos  |    |
| *Wetland | wetlands and associated   | restored or |    | t-sh |    |
| Reserve  | upland resources, and the | restorable  |    | are, |    |
| Program  | plant and animal          | wetlands    |    | ren  |    |
| (WRP)**  | populations they support; | and uplands |    | tal, |    |
|          | contribute to improved    | for at      |    | ease |    |
|          | water supply and quality; | least 1     |    | ment |    |
|          | and mitigate flooding     | year        |    |      |    |
+----------+---------------------------+-------------+----+------+----+
| **       | Establish and improve     | I           |    | co   |    |
| Wildlife | fish and wildlife         | ndividuals, |    | st-s |    |
| Habitat  | habitat. Priorities       | groups,     |    | hare |    |
| In       | include: Promote the      | entities,   |    |      |    |
| centives | restoration of declining  | non         |    |      |    |
| Program  | or important native       | -government |    |      |    |
| (WHIP)** | wildlife habitats;        | org         |    |      |    |
|          | Protect, restore, develop | anizations, |    |      |    |
|          | or enhance wildlife       | tribe,      |    |      |    |
|          | habitat of at-risk        | nonfederal  |    |      |    |
|          | species (candidate        | government  |    |      |    |
|          | species, and State and    |             |    |      |    |
|          | Federally listed          |             |    |      |    |
|          | threatened and endangered |             |    |      |    |
|          | species); Reduce the      |             |    |      |    |
|          | impacts of invasive       |             |    |      |    |
|          | species on wildlife       |             |    |      |    |
|          | habitats; and Protect,    |             |    |      |    |
|          | restore, develop or       |             |    |      |    |
|          | enhance declining or      |             |    |      |    |
|          | important aquatic         |             |    |      |    |
|          | wildlife species'         |             |    |      |    |
|          | habitats.                 |             |    |      |    |
+----------+---------------------------+-------------+----+------+----+
| **Cons   | Technical assistance for  | All         |    |      |    |
| ervation | conservation planning,    | non-federal |    |      |    |
| T        | design, and               | lands       |    |      |    |
| echnical | implementation;           |             |    |      |    |
| As       | technology development    |             |    |      |    |
| sistance | and transfer; resource    |             |    |      |    |
| (CTA)**  | inventory and assessment; |             |    |      |    |
|          | conservation compliance   |             |    |      |    |
|          | activities. National      |             |    |      |    |
|          | priorities include: 1)    |             |    |      |    |
|          | CNMP planning to assist   |             |    |      |    |
|          | animal feeding operation  |             |    |      |    |
|          | owners and operators to   |             |    |      |    |
|          | address their             |             |    |      |    |
|          | conservation needs, and   |             |    |      |    |
|          | where appropriate to      |             |    |      |    |
|          | comply under the EPA's    |             |    |      |    |
|          | Concentrated Animal       |             |    |      |    |
|          | Feeding Operation rule;   |             |    |      |    |
|          | 2) Reduce nonpoint source |             |    |      |    |
|          | pollution in impaired     |             |    |      |    |
|          | watersheds consistent     |             |    |      |    |
|          | with TMDLs where          |             |    |      |    |
|          | available and reduce      |             |    |      |    |
|          | groundwater contamination |             |    |      |    |
|          | and point sources         |             |    |      |    |
|          | contamination from        |             |    |      |    |
|          | confined animal feeding   |             |    |      |    |
|          | operations; 3) Conserve   |             |    |      |    |
|          | ground and surface water  |             |    |      |    |
|          | resources; 4) Reduce      |             |    |      |    |
|          | emissions that contribute |             |    |      |    |
|          | to air quality impairment |             |    |      |    |
|          | violations of National    |             |    |      |    |
|          | Ambient Air Quality       |             |    |      |    |
|          | Standards; 5) Reduce soil |             |    |      |    |
|          | erosion and               |             |    |      |    |
|          | sedimentation; and 6)     |             |    |      |    |
|          | Promote at-risk species   |             |    |      |    |
|          | habitat conservation.     |             |    |      |    |
+----------+---------------------------+-------------+----+------+----+
| ***Coo   | Conservation priorities   | State and   |    | co   |    |
| perative | in watersheds and         | local       |    | st-s |    |
| Cons     | airsheds of special       | governments |    | hare |    |
| ervation | significance              | and         |    |      |    |
| Part     |                           | agencies;   |    |      |    |
| nerships |                           | Indian      |    |      |    |
| In       |                           | tribes; and |    |      |    |
| itiative |                           | non-g       |    |      |    |
| (        |                           | overnmental |    |      |    |
| CCPI)*** |                           | or          |    |      |    |
|          |                           | ganizations |    |      |    |
|          |                           | that have a |    |      |    |
|          |                           | history of  |    |      |    |
|          |                           | working     |    |      |    |
|          |                           | with        |    |      |    |
|          |                           | a           |    |      |    |
|          |                           | gricultural |    |      |    |
|          |                           | producers   |    |      |    |
+----------+---------------------------+-------------+----+------+----+
| ***      | Statistically reliable    |             |    |      |    |
| National | data and information on   |             |    |      |    |
| R        | natural resource status   |             |    |      |    |
| esources | and trends on non-federal |             |    |      |    |
| I        | lands to support policy,  |             |    |      |    |
| nventory | planning, and program     |             |    |      |    |
| (NRI)*** | development and           |             |    |      |    |
|          | implementation            |             |    |      |    |
+----------+---------------------------+-------------+----+------+----+
| **E      | Emergency response to     |             |    | cos  |    |
| mergency | watershed impairments     |             |    | t-sh |    |
| W        | from fire, flood or other |             |    | are, |    |
| atershed | natural occurrence;       |             |    |      |    |
| Pr       | prevent development in    |             |    | ease |    |
| otection | vulnerable flood plains   |             |    | ment |    |
| (EWP)**  |                           |             |    |      |    |
+----------+---------------------------+-------------+----+------+----+
| **E      | Emergency response to     |             |    | co   |    |
| mergency | rehabilitate farmland     |             |    | st-s |    |
| Cons     | damaged by wind erosion,  |             |    | hare |    |
| ervation | floods, hurricanes, or    |             |    |      |    |
| Program  | other natural disasters;  |             |    |      |    |
| (ECP)**  | emergency water           |             |    |      |    |
|          | conservation measures     |             |    |      |    |
|          | during severe drought     |             |    |      |    |
+----------+---------------------------+-------------+----+------+----+
| **Flood  | Watershed improvement     |             |    | cost |    |
| Pr       | measures to reduce flood, |             |    | s    |    |
| evention | sedimentation, and        |             |    | hare |    |
| Op       | erosion damages; further  |             |    |      |    |
| erations | the conservation,         |             |    |      |    |
| (        | development, utilization, |             |    |      |    |
| WF-03)** | and disposal of water;    |             |    |      |    |
|          | and conservation and      |             |    |      |    |
|          | proper land use           |             |    |      |    |
+----------+---------------------------+-------------+----+------+----+
| **       | Conservation, development |             |    | \[   |    |
| Resource | and utilization of        |             |    | cost |    |
| Cons     | natural resources to      |             |    | s    |    |
| ervation | improve the general level |             |    | hare |    |
| and      | of economic activity, and |             |    | auth |    |
| Dev      | to enhance the            |             |    | orit |    |
| elopment | environment and standard  |             |    | y?\] |    |
| (RC&D)** | of living in designated   |             |    |      |    |
|          | RC&D areas                |             |    |      |    |
+----------+---------------------------+-------------+----+------+----+
| **W      | Investigations and        |             |    |      |    |
| atershed | surveys of river basins   |             |    |      |    |
| Surveys  | with other Federal,       |             |    |      |    |
| and      | State, and local agencies |             |    |      |    |
| Planning | as a basis for the        |             |    |      |    |
| (P       | development of            |             |    |      |    |
| L-566)** | coordinated water         |             |    |      |    |
|          | resource programs,        |             |    |      |    |
|          | floodplain management     |             |    |      |    |
|          | studies, and flood        |             |    |      |    |
|          | insurance studies;        |             |    |      |    |
|          | assists public sponsors   |             |    |      |    |
|          | to develop watershed      |             |    |      |    |
|          | plans to mitigate flood   |             |    |      |    |
|          | damages; conservation,    |             |    |      |    |
|          | development, utilization  |             |    |      |    |
|          | and disposal of water;    |             |    |      |    |
|          | and conservation and      |             |    |      |    |
|          | proper land use           |             |    |      |    |
+----------+---------------------------+-------------+----+------+----+
| **W      | Rehabilitate dams         |             |    | cost |    |
| atershed | critical to ensure        |             |    | s    |    |
| Rehabi   | community public health   |             |    | hare |    |
| litation | and safety                |             |    |      |    |
| Program  |                           |             |    |      |    |
| (        |                           |             |    |      |    |
| REHAB)** |                           |             |    |      |    |
+----------+---------------------------+-------------+----+------+----+
| **W      | Implement authorized      |             |    | cost |    |
| atershed | watershed project plans   |             |    | s    |    |
| Op       | through local sponsoring  |             |    | hare |    |
| erations | entities for the purpose  |             |    |      |    |
| (P       | of watershed protection;  |             |    |      |    |
| L-534)** | flood mitigation; water   |             |    |      |    |
|          | quality improvements;     |             |    |      |    |
|          | soil erosion reduction;   |             |    |      |    |
|          | rural, municipal and      |             |    |      |    |
|          | industrial water supply;  |             |    |      |    |
|          | irrigation water          |             |    |      |    |
|          | management; sediment      |             |    |      |    |
|          | control; fish and         |             |    |      |    |
|          | wildlife enhancement; and |             |    |      |    |
|          | wetlands and wetland      |             |    |      |    |
|          | function creation and     |             |    |      |    |
|          | restoration               |             |    |      |    |
+----------+---------------------------+-------------+----+------+----+
| **Forest | Statistically reliable    |             |    |      |    |
| I        | data and information on   |             |    |      |    |
| nventory | forest resource status    |             |    |      |    |
| and      | and trends on federal and |             |    |      |    |
| Analysis | non-federal lands         |             |    |      |    |
| (FIA)**  |                           |             |    |      |    |
+----------+---------------------------+-------------+----+------+----+
| **Plant  | Native plants to address  |             |    |      |    |
| Mat      | specific natural resource |             |    |      |    |
| erials** | problems                  |             |    |      |    |
+----------+---------------------------+-------------+----+------+----+
| **Snow   | Information on western    |             |    |      |    |
| Survey   | states and Alaska water   |             |    |      |    |
| and      | supplies to support       |             |    |      |    |
| Water    | decisions on agricultural |             |    |      |    |
| Forec    | production, fish and      |             |    |      |    |
| asting** | wildlife management,      |             |    |      |    |
|          | municipal and industrial  |             |    |      |    |
|          | water supply, urban       |             |    |      |    |
|          | development, flood        |             |    |      |    |
|          | control, recreation power |             |    |      |    |
|          | generation, and water     |             |    |      |    |
|          | quality                   |             |    |      |    |
+----------+---------------------------+-------------+----+------+----+
| **Soil   | Soil information          |             |    |      |    |
| Survey** | necessary for             |             |    |      |    |
|          | understanding, managing,  |             |    |      |    |
|          | conserving and sustaining |             |    |      |    |
|          | the nation\'s soil        |             |    |      |    |
|          | resources                 |             |    |      |    |
+----------+---------------------------+-------------+----+------+----+

+----------+------+-----+-----+-----+--------+--------+-----+------+
| **       |      |     |     |     |        |        |     |      |
| Appendix |      |     |     |     |        |        |     |      |
| Table 3. |      |     |     |     |        |        |     |      |
| Cons     |      |     |     |     |        |        |     |      |
| ervation |      |     |     |     |        |        |     |      |
| Payments |      |     |     |     |        |        |     |      |
| by       |      |     |     |     |        |        |     |      |
| Program, |      |     |     |     |        |        |     |      |
| E        |      |     |     |     |        |        |     |      |
| stimated |      |     |     |     |        |        |     |      |
| Calendar |      |     |     |     |        |        |     |      |
| Year     |      |     |     |     |        |        |     |      |
| 2005     |      |     |     |     |        |        |     |      |
| (1,      |      |     |     |     |        |        |     |      |
| 000\$)** |      |     |     |     |        |        |     |      |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| State    | CRP  | WRP | E   | CSP | Eme    | Fa     | Ot  | T    |
|          |      |     | QIP |     | rgency | rmland | her | otal |
|          |      |     |     |     |        |        |     |      |
|          |      |     |     |     | Conser | Prot   |     | Paym |
|          |      |     |     |     | vation | ection |     | ents |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Alabama  | 22   | 22  | 7,  | 941 | 7,764  | 338    | 300 | 38   |
|          | ,474 |     | 143 |     |        |        |     | ,982 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Alaska   | 991  | 23  | 1,  | 12  | 0      | 0      | 245 | 2    |
|          |      |     | 178 |     |        |        |     | ,448 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Arizona  | 0    | 3   | 8,  | 243 | 419    | 135    | 78  | 9    |
|          |      |     | 803 |     |        |        |     | ,680 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Arkansas | 12   | 14, | 10, | 15, | 499    | 0      | 366 | 53   |
|          | ,811 | 149 | 065 | 620 |        |        |     | ,509 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Ca       | 4    | 10, | 27, | 7,  | 1,837  | 2,341  | 715 | 54   |
| lifornia | ,513 | 367 | 285 | 348 |        |        |     | ,406 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Colorado | 72   | 2,  | 17, | 2,  | 615    | 3,239  | 520 | 99   |
|          | ,906 | 068 | 135 | 634 |        |        |     | ,118 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Con      | 27   | 30  | 1,  | 3   | 11     | 1,945  | 252 | 3    |
| necticut |      |     | 530 |     |        |        |     | ,798 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Delaware | 810  | 0   | 3,  | 501 | 0      | 2,293  | 418 | 7    |
|          |      |     | 727 |     |        |        |     | ,750 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Florida  | 2    | 1,  | 5,  | 551 | 15,527 | 850    | 322 | 26   |
|          | ,661 | 256 | 395 |     |        |        |     | ,563 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Georgia  | 12   | 624 | 7,  | 3,  | 7,784  | 0      | 340 | 31   |
|          | ,127 |     | 227 | 893 |        |        |     | ,996 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Hawaii   | 4    | 61  | 789 | 91  | 621    | 0      | 512 | 2    |
|          |      |     |     |     |        |        |     | ,078 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Idaho    | 31   | 263 | 8,  | 5,  | 80     | 403    | 260 | 46   |
|          | ,506 |     | 882 | 204 |        |        |     | ,598 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Illinois | 120  | 9,  | 6,  | 9,  | 68     | 0      | 197 | 145  |
|          | ,265 | 523 | 107 | 420 |        |        |     | ,579 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Indiana  | 42   | 11, | 5,  | 7,  | 185    | 999    | 267 | 68   |
|          | ,816 | 242 | 343 | 328 |        |        |     | ,180 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Iowa     | 217  | 13, | 13, | 18, | 1,093  | 0      | 390 | 264  |
|          | ,543 | 320 | 064 | 651 |        |        |     | ,061 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Kansas   | 116  | 776 | 14, | 10, | 15     | 468    | 542 | 142  |
|          | ,004 |     | 763 | 108 |        |        |     | ,676 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Kentucky | 30   | 3,  | 7,  | 532 | 171    | 2,846  | 210 | 45   |
|          | ,396 | 631 | 624 |     |        |        |     | ,410 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| L        | 15   | 5,  | 7,  | 488 | 1,609  | 0      | 511 | 31   |
| ouisiana | ,145 | 877 | 802 |     |        |        |     | ,432 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Maine    | 1    | 28  | 3,  | 37  | 25     | 674    | 729 | 6    |
|          | ,205 |     | 967 |     |        |        |     | ,665 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Maryland | 10   | 211 | 2,  | 5,  | 3      | 4,290  | 538 | 23   |
|          | ,784 |     | 152 | 132 |        |        |     | ,110 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Massa    | 14   | 180 | 1,  | 35  | 16     | 3,556  | 515 | 5    |
| chusetts |      |     | 506 |     |        |        |     | ,823 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Michigan | 20   | 5,  | 6,  | 6,  | 56     | 1,829  | 202 | 41   |
|          | ,759 | 748 | 450 | 859 |        |        |     | ,904 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| M        | 110  | 15, | 14, | 5,  | 225    | 0      | 367 | 147  |
| innesota | ,631 | 440 | 764 | 688 |        |        |     | ,115 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Mis      | 42   | 7,  | 12, | 538 | 1,201  | 0      | 775 | 65   |
| sissippi | ,561 | 435 | 876 |     |        |        |     | ,385 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Missouri | 105  | 10, | 9,  | 19, | 1,655  | 0      | 605 | 146  |
|          | ,354 | 519 | 184 | 092 |        |        |     | ,409 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Montana  | 113  | 455 | 15, | 11, | 681    | 800    | 257 | 142  |
|          | ,501 |     | 681 | 249 |        |        |     | ,624 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Nebraska | 71   | 4,  | 20, | 7,  | 477    | 211    | 483 | 104  |
|          | ,264 | 437 | 254 | 071 |        |        |     | ,196 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Nevada   | 3    | 3   | 2,  | 813 | 1,047  | 0      | 424 | 4    |
|          |      |     | 147 |     |        |        |     | ,437 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| New      | 11   | 111 | 1,  | 67  | 0      | 3,819  | 161 | 5    |
| H        |      |     | 340 |     |        |        |     | ,508 |
| ampshire |      |     |     |     |        |        |     |      |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| New      | 139  | 4,  | 1,  | 75  | 809    | 4,707  | 284 | 12   |
| Jersey   |      | 456 | 768 |     |        |        |     | ,237 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| New      | 19   | 420 | 12, | 1,  | 192    | 1,516  | 175 | 35   |
| Mexico   | ,209 |     | 168 | 789 |        |        |     | ,469 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| New York | 4    | 1,  | 3,  | 1,  | 1,308  | 1,771  | 1,  | 15   |
|          | ,777 | 761 | 991 | 278 |        |        | 032 | ,918 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| North    | 8    | 3,  | 10, | 1,  | 5,730  | 1,320  | 141 | 31   |
| Carolina | ,600 | 249 | 450 | 857 |        |        |     | ,347 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| North    | 110  | 2,  | 10, | 5,  | 3      | 438    | 336 | 128  |
| Dakota   | ,029 | 141 | 088 | 685 |        |        |     | ,720 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Ohio     | 36   | 3,  | 6,  | 8,  | 1,492  | 1,954  | 361 | 58   |
|          | ,095 | 123 | 828 | 694 |        |        |     | ,548 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Oklahoma | 33   | 3,  | 10, | 1,  | 49     | 288    | 544 | 51   |
|          | ,622 | 803 | 936 | 802 |        |        |     | ,045 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Oregon   | 30   | 6,  | 13, | 23, | 250    | 0      | 548 | 73   |
|          | ,340 | 649 | 023 | 152 |        |        |     | ,963 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Penn     | 23   | 53  | 6,  | 1,  | 719    | 2,051  | 704 | 34   |
| sylvania | ,369 |     | 274 | 442 |        |        |     | ,610 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Rhode    | 2    | 52  | 1,  | 13  | 0      | 2,862  | 410 | 4    |
| Island   |      |     | 002 |     |        |        |     | ,340 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| South    | 8    | 5,  | 4,  | 2,  | 645    | 2,396  | 325 | 22   |
| Carolina | ,054 | 207 | 152 | 121 |        |        |     | ,901 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| South    | 67   | 516 | 10, | 785 | 3,796  | 0      | 884 | 83   |
| Dakota   | ,235 |     | 484 |     |        |        |     | ,700 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| T        | 16   | 1,  | 5,  | 132 | 237    | 870    | 351 | 26   |
| ennessee | ,880 | 592 | 972 |     |        |        |     | ,034 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Texas    | 140  | 614 | 47, | 2,  | 238    | 1,529  | 424 | 193  |
|          | ,449 |     | 810 | 350 |        |        |     | ,414 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Utah     | 6    | 108 | 11, | 1,  | 590    | 0      | 542 | 20   |
|          | ,170 |     | 661 | 624 |        |        |     | ,694 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Vermont  | 460  | 15  | 2,  | 122 | 21     | 1,304  | 732 | 5    |
|          |      |     | 648 |     |        |        |     | ,304 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Virginia | 6    | 190 | 5,  | 1,  | 2,607  | 879    | 288 | 17   |
|          | ,350 |     | 849 | 358 |        |        |     | ,521 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Wa       | 78   | 2,  | 9,  | 6,  | 1,889  | 1,159  | 357 | 101  |
| shington | ,574 | 998 | 751 | 420 |        |        |     | ,148 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| West     | 693  | 12  | 2,  | 21  | 632    | 784    | 447 | 5    |
| Virginia |      |     | 788 |     |        |        |     | ,377 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| W        | 44   | 5,  | 11, | 4,  | 0      | 0      | 334 | 66   |
| isconsin | ,452 | 865 | 677 | 214 |        |        |     | ,540 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| Wyoming  | 8    | 62  | 10, | 972 | 586    | 55,580 | 992 | 76   |
|          | ,092 |     | 426 |     |        |        |     | ,710 |
+----------+------+-----+-----+-----+--------+--------+-----+------+
|          |      |     |     |     |        |        |     |      |
+----------+------+-----+-----+-----+--------+--------+-----+------+
| United   | 1    | 1   | 4   | 2   | 65,478 | 1      | 21, | 2    |
| States   | ,822 | 60, | 43, | 06, |        | 12,442 | 711 | ,832 |
|          | ,680 | 682 | 929 | 053 |        |        |     | ,975 |
+----------+------+-----+-----+-----+--------+--------+-----+------+