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National Farmers Union

Testimony of Jeff LaFleur

**Before the:**

**U.S. House of Representatives**

**Subcommittee on Conservation, Credit, Energy, and Research**

**Concerning a Review of USDA Farm Bill Conservation Programs**

# Thursday, April 19, 2007

**Washington, D.C.**

# 

**STATEMENT OF JEFF LAFLEUR**

**PRESIDENT, NEW ENGLAND FARMERS UNION**

**BEFORE THE U.S. HOUSE OF REPRESENTATIVES**

**SUBCOMMITTEE ON CONSERVATION, CREDIT, ENERGY AND RESEARCH**

**CONCERNING A REVIEW OF USDA FARM BILL CONSERVATION PROGRAMS**

# APRIL 19, 2007

Chairman Holden, Congressman Lucas, and members of the subcommittee,
thank you for the opportunity to testify today. My name is Jeff LaFleur,
and I am the president of the New England Farmers Union (NEFU), the most
recently formed chapter within National Farmers Union (NFU). I am here
on behalf of NFU, a nationwide organization representing more than
250,000 farmers, ranchers, fishermen and rural residents. I also serve
as the executive director of the Cape Cod Cranberry Growers' Association
(CCCGA). Established in 1888 to standardize the measures by which
cranberries were sold (the 100 lb. barrel), CCCGA has become one of the
leading agricultural organizations in Massachusetts. Cranberries are now
Massachusetts' number one food crop, and the state produces nearly 30
percent of the nation's cranberry crop. I am grateful for the
opportunity to review with you conservation programs outlined in the
USDA Farm Bill conservation title. I will submit my full testimony for
the record and focus my oral testimony on highlighting NFU's
conservation priorities for the next Farm Bill.

NFU supports the conservation programs established in the 2002 Farm Bill
and continues to call for full funding of each program. Full and
adequate funding of all conservation programs ensures the continued
protection of our soil and water resources and wildlife habitats. The
2007 Farm Bill should build upon existing programs, while encouraging
further investment in new programs that benefit the environment, family
farmers and ranchers, and rural America. By coupling the environmental
needs of our fragile farm lands, with the socioeconomic goals of our
farming communities, the new Farm Bill could do even more to create the
opportunity to reward stewardship, discourage speculative development of
fragile land resources and strengthen family farming and rural
communities.

Rewarding family farmers for making good environmental choices should be
a top priority in farm policy, since society as a whole benefits from
producers who adopt farming practices that enhance water quality,
wildlife habitat, energy conservation, biodiversity and carbon
sequestration. Financing should be on a long-term basis, providing
federal commitments for a minimum of five years. Levels of conservation
assistance should reflect the standards set forth in the federal land
conservation inventory, the appraisals under the Resource Conservation
and Recovery Act of 1976 and other federal studies.

**Conservation Security Program and Environmental Quality Incentives
Program**

The Conservation Security Program (CSP), one of the most innovative
attempts to reward producers for conservation practices on working
lands, should be fully funded in the 2007 Farm Bill and continue to
offer incentives for producers to adopt additional conservation
practices on their operations. For the limited number of producers who
have been eligible to participate in CSP, it has come to light that USDA
has not held up its end of the contracts. If the department is permitted
to not fulfill its contractual obligations to participants, then the
option to void the contract should be granted to the producer. NFU's
carbon credit program and national buffer strip initiative, which I
explain later in my testimony, could be adopted to work within the tier
system of CSP.

The Environmental Quality Incentives Program (EQIP) also needs full
funding in the next Farm Bill, with all funds directed to family farmers
and ranchers. States should be permitted to set EQIP priorities based
upon local environmental challenges. Numerous variables contribute to
the soil and water composition of landscapes throughout the country, and
we need to recognize that these unique conditions dictate distinct
conservation needs. States are best equipped to identify where and how
limited conservation funding can produce maximum benefits to both the
producer and the environment.

**Conservation Plans and Technical Assistance**

NFU supports the development of a one-stop conservation planning system
for agriculture through the Natural Resources Conservation Service
(NRCS). The plan should be supervised and approved by the USDA committee
process, with the technical assistance of NRCS. We recommend a single
conservation plan that is developed by the farm operator, in conjunction
with NRCS, in order to assure compliance with the myriad of land and
water regulations established by various government agencies. The
producer's conservation plan should specifically address relevant,
locally-identified priority problems. Objectives of the conservation
plan should aim to reduce and control wind and water erosion, prevent
nonpoint source pollution and enhance the soil and water capacities of
the land. It is necessary to designate which highly erodible soils
should not be tilled and which may be tilled with approved conservation
practices. Lastly, a thorough mapping and documentation of both existing
and drained wetlands, as well as any drains and channels, needs to be
completed. The plan should outline the conservation of wetlands, as well
as the maintenance of drains and channels.

Once a plan is filed with NRCS and implemented, a producer should be
deemed to be in compliance with all federal agencies. Producers should
be allowed to remedy inadvertent or unavoidable failures to carry out
conservation plan practices, and penalties should be based on the degree
of the violation. If a producer is working with a government agency to
resolve a specific environmental problem, the producer should not be
penalized for any other obstacles that are discovered, but rather, the
agency should work with the producer to correct the problems.

Farmers who have a conservation plan should be eligible for stewardship
payments. Payments should compensate farmers who have achieved a high
level of resource protection in their farming operation. Incentives
should reward both new and existing conservation practices. We support a
payment system that moves toward an outcome-based approach, where real
changes and environmental benefits are tracked and rewarded. All farms
and ranches, regardless of what they produce, should be eligible to
benefit from incentives to implement conservation minded practices.
Programs should be based on voluntary automatic signup and preclude the
use of a bidding system.

Loss of full federal farm program benefits should be imposed only in
cases of purposeful abdication of agreed upon conservation practices.
Current conservation compliance requirements allow too few options to
account for local involvement, climatic conditions and geography, which
are beyond the control of the producer.

Across the nation, approximately 3,000 conservation districts coordinate
assistance from a variety of sources including both the public and
private sectors, local, state and federal governments in an effort to
develop locally-driven solutions to natural resource concerns. In my own
state of Massachusetts, producers rely upon local conservation districts
to provide the delivery system for federal technical assistance programs
established by the NRCS. Conservation districts are often confined by
strict budgets and thus are not always able to meet their conservation
goals. Recognizing that conservation districts are most qualified to
continually adapt to newly emerging environmental changes on the local
level, NFU strongly encourages increased funding for the services they
provide.

Availability of technical assistance is the key to success for NRCS
programs. Individual producers rely upon technical assistance from NRCS
staff or third party vendors in order to receive scientifically sound
guidance on how to conserve, maintain and improve their natural
resources. The 2007 Farm Bill should provide the financial resources
necessary to increase technical assistance within conservation
districts. Competitive bidding and multi-year contracts should be
authorized in order to provide technical assistance to producers.
Furthermore, technical service provider payment rates should be
consistent with the prevailing regional market for similar services
supplied to other industries.

We remain concerned that engineers who are normally tasked with
designing field plans are now responsible for completing the paperwork
associated with delivering payments to producers. Such excessive
assignments divert the specialist's attention away from his/her
expertise. All payment paperwork should return to the domain of the Farm
Service Agency (FSA), namely the agency that excels at delivering
payments to producers. FSA recognizes the needs of farmers and can
accurately and efficiently meet their financial needs.

We are concerned about the repeal of Section 1241(d) of the 2002 Farm
Bill, namely the regional equity provision. First established in the
1985 Food Security Act, the provision requires that, "Before April 1 of
each fiscal year, the Secretary of Agriculture shall give priority for
funding under the conservation programs under subtitle D to approved
applications in any State that has not received, for the fiscal year, an
aggregate amount of at least \$12,000,000 for those conservation
programs." In FY2005, the provision was fully implemented and allowed
producers in 13 states to participate in additional conservation
programs. The merits of sound conservation practices in the agriculture
sector should be available to as many producers as possible, despite
their geographic location. The regional equity provision creates a level
playing field for regions of the country that may otherwise go unnoticed
or underfunded in their environmental efforts.

**Conservation Reserve Program**

The Conservation Reserve Program (CRP) is one of the most successful
programs in our nation's history. Designed to address soil erosion,
water quality and wildlife habitat, CRP needs to continue to serve as a
tool for producers to protect the land throughout the nation. NFU is
concerned with any effort to reduce the maximum CRP acreage of 39.2
million acres or reduce funding for the program.

Contracts should be extended for periods of not less than 10 years, and
ownership of CRP lands should remain in the hands of resident family
farm and ranch operators. The enrollment of whole farms into CRP should
be prohibited, due to the detrimental effects on rural communities.

Incentives to aid beginning farm and ranch families should be offered on
land that was previously enrolled in CRP, but is not deemed
environmentally sensitive under new rules and not eligible for
re-enrollment. The local Farm Security Administration (FSA) committee
should maintain the authority to allow producers more time to pay for
their portion of the seeding costs when financial hardship is proven.

Financial and technical assistance should be provided to producers to
prepare CRP acreages for sustainable agricultural systems that will meet
established conservation standards. In addition, land managed with
appropriate organic standards while enrolled in CRP should be eligible
for organic certification upon termination of the contract.

In times of extended drought conditions or other weather disasters,
haying or grazing on CRP acres should be allocated to all livestock
producers based on need, with up to one-third of CRP acres being used to
replenish feed supplies. Haying and grazing of CRP by a producer in a
disaster-declared county should not be restricted to land in the
disaster-declared county or state. The FSA farmer-elected county
committees should be given authority to set the date of harvest in order
to maximize the feed value of hay and forage. These regulations should
be in place so the procedures are documented in advance of a disaster.
The maximum landowner income from the haying and grazing should not
exceed the annual CRP contract amount for that farm.

NFU supports the following recommendations regarding CRP:

-   Careful setting of the NRCS Erodibility Index (EI), which would
    reflect an emphasis on sensitive land, including land that impacts
    water quality;

-   Re-enrollment funding to enforce contract requirements for adequate
    weed and insect control;

-   Land-owner rights' to collect hunting or recreational use fees;

-   High priority on long-term timber and forestry conservation projects
    for re-enrollment;

-   Planting of shelterbelts or other measures if shelterbelts and/or
    wooded areas are destroyed. New trees should be required for a
    minimum of 10 years on equivalent acreage; and

-   Continuation of the 25 percent per county acreage limit for CRP and
    related conservation programs.

In addition to the CRP, we support developing a short-term conservation
land diversion program to allow producers to take land out of production
for one to three years in times of surplus. Participants would be
required to use Best Management Land Practices and be compensated based
upon a percentage of the county rental rate for the land. The amount of
land placed in the program would be limited to an established percentage
per farm. Land would be eligible to be cropped or put back into the
diversion program after the contract period.

Wetlands

The federal government should consult with state and local governments
to develop a unified, mutually agreeable management program to protect
our nation's wetlands and individual property rights.

We encourage Congress to study the impacts of current and forthcoming
wetlands proposals on agricultural producers, family timber operations
and rural communities, giving careful consideration to identifying and
separately regulating any artificially created wetlands. Induced
wetlands should be exempt from wetland restrictions. Requiring
recertification of wetlands at five-year intervals creates a moving
target for producers in their compliance efforts. While we support a
single, coordinated approach to wetlands protection, producers must be
provided full opportunity to participate in the development and review
of regulations.

We reaffirm our support for making the NRCS and FSA the lead agencies in
wetlands delineation on agricultural lands. All wetlands determinations
throughout the United States should rely on the presence of the
following three mandatory criteria simultaneously appearing on the same
site year round: 1) hydrology; 2) a predominance of hydric soil; and 3)
a prevalence of hydrophytic vegetation. Any leaseholder, renter or owner
should be compensated equitably for the taking of lands through the
classification of wetlands. Landowners should be able to move water
within the contiguous boundaries of their own property without
regulation, interference or easements. Lastly, water outside the
boundary of a wetland should be considered sheetwater and not subject to
jurisdiction by state or federal agencies.

**NFU's Carbon Credit Program**

There is growing public concern that global climate change may be
responsible for more severe hurricanes, shrinking polar ice and
glaciers, droughts, floods and other disruptions in our climate.
Increasing energy prices are also peaking the public's interest in
renewable fuels, alternative energy sources, energy conservation and
other practices that reduce greenhouse gas emissions. As stewards of the
land, Farmers Union members want to help protect the environment and our
natural resources.

The newly established Farmers Union's Carbon Credit Program is a
voluntary, private-sector approach to conservation. The program allows
agriculture producers and landowners to earn income by storing carbon in
their soil through no-till crop production, longterm grass seeding
practices, native rangeland and forestry**.** For two years, North
Dakota Farmers Union (NDFU) and NFU worked to gain approval from the
Chicago Climate Exchange (CCX) to aggregate carbon credits and enroll
producer acreages of carbon into blocks of credits that are traded on
the CCX.

Converting to no-till crop production and long-term grass seeding
practices results in higher levels of carbon stored in the soil.
Producers can now earn income in the carbon credit market for storing
carbon, thereby reducing greenhouse gas emissions.

Immediately after the end of the calendar year, carbon credits are
placed in the Farmers Union trading account and sold. The individual
producer receives a share of the sale proceeds (less a 10 percent
administrative fee to NDFU) immediately after the credits are sold. The
concept of carbon credits trading is similar to dealing with any other
agricultural commodity exchange such as the Minneapolis Grain Exchange
or the Chicago Board of Trade.

Producers are credited with 0.2-0.6 metric ton of carbon for each acre
of eligible no-till cropping and 0.75 ton per acre for qualifying grass
stands each year of the contract. The price per ton on CCX varies every
trading day, but current prices are about \$3.70 per ton. That equates
to about \$1.50 per acre for no-till and \$2.50 per acre for grass
stands, less the aggregation fee.

In addition, each year 20 percent of the proceeds due are placed in an
escrow account, or carbon bank, that is paid in a lump sum at the end of
the contract. This provides an incentive for producers to complete all
terms of the contract. There are also penalties for early termination of
land management practices.

In the greenhouse gas debate, the concept of emissions caps and higher
costs of carbon offsets may eventually provide the incentives to more
efficiently use energy. A similar cap and trade market developed
regarding sulfur dioxide emissions in the acid rain debate a number of
years ago. Over time, the cost of credits or offsets became high enough
to force companies to place scrubbers on smokestacks, replace the
highest emission plants and build newer low-emission facilities. Lowered
emissions resulted from the market-based sulfur dioxide allowances
trading, and acid rain and its damage were lessened. That may hold true
for carbon emissions as well.

In the meantime, if agricultural producers can adopt economically
successful and environmentally sound land management practices that
reduce or offset carbon emissions, and can get paid for it, it creates a
"win-win" scenario for all involved.

**New Buffer Strip Initiative**

Buffer strips play a key role in maintaining healthy, productive farms,
as well as protecting fragile and vital waterways throughout the
country. When designated appropriately, buffer strips help producers
maintain their best land in crop production and make good use of
marginal land. Conservation buffers, which remain permanently vegetated,
help control pollutants and manage environmental problems; other
practices considered as buffers or closely associated to them are
hedgerow plantings, grassed waterways and streambank protection
measures.

NFU proposes a new buffer strip practice for inclusion in the 2007 Farm
Bill; the program would build upon the proven success of past buffer
strip initiatives by rewarding producers for planting no-till perennial
vegetation on production lands adjacent to waterways and beyond the
already designated conservation buffers strips. Lands located close to
water sources are amongst the most fertile agriculture lands and are
often the most lucrative in terms of production and return on
investment. If farmers were fairly compensated for planting no-till
perennial vegetation that could be harvested for the production of
biofuels, used for hunting purposes, hayed/grazed for livestock,
capturing carbon or other non-disruptive purposes, then producers, the
environment and the American public all stand to reap the rewards.

This undertaking requires significant collaborations among various
agencies within USDA, as well as the expertise of researchers who could
identify regions of the country in which this program could be most
successful. In order for this program to succeed, it must be developed
in the best financial interest of the producer. Therefore, funding
levels per acre must at least equal the value of the land if it had been
left in crop production.

Some would say this would be an expensive endeavor. We challenge those
to look at the total overall cost of cleaning our waterways; significant
costs that are born by federal, state and local agencies. NFU believes
paying for cleanup in retrospect of a situation is much more costly than
preventative measures. Current clean up, related to the dead zone in the
Gulf, drinking water resources, restocking marine life or others, could
be significantly reduced with expanded buffer strips. Addressing this
challenge will most likely be beyond the purview of the agriculture
committees, but we must end the piecemeal approach and begin a
comprehensive approach to protecting our water resources.

As mentioned earlier in my statement, I believe both the carbon credit
program and buffer strip initiative could be established to work within
the existing tier system of CSP or adopted as new tiers of
participation.

The goals of the programs are not impossible, but it will take the will
of Congress to make these initiatives a reality.

Interactions with our nation's natural resources do not need to set
agricultural producers in opposition to the environment. As NFU members
have demonstrated for many generations, farmers, ranchers and fishermen
are our best environmental stewards and their astute understanding of
the natural world deserves to be recognized and rewarded.

With that Mr. Chairman, I thank you again for the opportunity to
testify. I would be pleased to take any questions and thank all of the
members of the subcommittee for their support of and work on these
important issues.