U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001

34–244 PDF 2007

S. HRG. 110–18

WORKING LAND CONSERVATION: CONSERVATION

SECURITY PROGRAM AND ENVIRONMENTAL

QUALITY INCENTIVES PROGRAM

HEARING

BEFORE THE

COMMITTEE ON AGRICULTURE, 

NUTRITION, AND FORESTRY

UNITED STATES SENATE

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

JANUARY 17, 2007

Printed for the use of the 

Committee on Agriculture, Nutrition, and Forestry

(

Available via the World Wide Web: http://www.agriculture.senate.gov 

COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY

TOM HARKIN, Iowa, Chairman 

PATRICK J. LEAHY, Vermont 

KENT CONRAD, North Dakota 

MAX BAUCUS, Montana 

BLANCHE L. LINCOLN, Arkansas 

DEBBIE A. STABENOW, Michigan 

E. BENJAMIN NELSON, Nebraska 

KEN SALAZAR, Colorado 

SHERROD BROWN, Ohio 

ROBERT CASEY, Jr., Pennsylvania 

AMY KLOBUCHAR, Minnesota 

SAXBY CHAMBLISS, Georgia 

RICHARD G. LUGAR, Indiana 

THAD COCHRAN, Mississippi 

MITCH MCCONNELL, Kentucky 

PAT ROBERTS, Kansas 

LINDSEY GRAHAM, South Carolina 

NORM COLEMAN, Minnesota 

MICHEAL D. CRAPO, Idaho 

JOHN THUNE, South Dakota 

CHARLES E. GRASSLEY, Iowa

MARK HALVERSON, Majority Staff Director 

ROBERT E. STURM, Chief Clerk 

MARTHA SCOTT POINDEXTER, Minority Staff Director 

VERNIE HUBERT, Minority General Counsel 

(II) 

(III)

C O N T E N T S 

Page

HEARING(S):

Working Land Conservation: Conservation Security Program and Environmental Quality Incentives Program ................................................................... 1

Wednesday, January 17, 2007

STATEMENTS PRESENTED BY SENATORS 

Harkin, Hon. Tom, a U.S. Senator from Iowa, Chairman, Committee on 

Agriculture, Nutrition and Forestry ................................................................... 1

Chambliss, Hon. Saxby, a U.S. Senator from Georgia ......................................... 4

Panel I 

Lancaster, Arlen, Chief, Natural Resources Conservation Service, U.S. Department of Agriculture, Washington, DC ......................................................... 6

Shames, Lisa, Acting Director, Natural Resources and Environment, U.S. 

Government Accountability Office, Washington, DC ........................................ 8

Panel II 

Cox, Craig, Executive Director, Soil and Water Conservation Service, Ankeny, 

Iowa ....................................................................................................................... 31

Ham, Jim, President, Georgia Association of Conservation District Supervisors, on behalf of Georgia Association of Conservation District Supervisors, and the National Association of Conservation Districts, Smarr, Georgia .......................................................................................................................... 36

Hovorka, Duane, Farm Bill Outreach Coordinator, National Wildlife Federation, on Behalf of the National Wildlife Federation, Sustainable Agriculture 

Coalition, and Izaak Walton League of America, Elmwood, Nebraska ........... 35

Merrigan, Kathleen A., Director and Assistant Professor, Agriculture, Food 

and Environment Program, Tufts University, Boston, Massachusetts ........... 33

APPENDIX 

PREPARED STATEMENTS: 

Cochran, Hon. Thad ......................................................................................... 50

Cox, Craig .......................................................................................................... 53

Ham, Jim ........................................................................................................... 63

Hovorka, Duane ................................................................................................ 67

Lancaster, Arlen ............................................................................................... 75

Merrigan, Kathleen A. ..................................................................................... 89

Shames, Lisa ..................................................................................................... 100

DOCUMENT(S) SUBMITTED FOR THE RECORD: 

‘‘Rewards and Challenges for New England Farmers’’, The Conservation Security Program ......................................................................................................... 116

‘‘Hidden Treasures’’, The Conservation Security Program and Wildlife ............. 208

QUESTION(S) AND ANSWER(S): 

Lincoln, Hon. Blanche L.: 

Written questions for Arlen Lancaster ........................................................... 250

Lancaster, Arlen: 

Written response to questions from Hon. Blanche L. Lincoln ...................... 251

(1)

WORKING LAND CONSERVATION: CONSERVATION SECURITY PROGRAM AND ENVIRONMENTAL QUALITY INCENTIVES PROGRAM 

Wednesday, January 17, 2007

U.S. SENATE, 

COMMITTEE ON AGRICULTURE, 

NUTRITION, AND FORESTRY, 

Washington, DC 

The Committee met, pursuant to notice, at 9:30 a.m., in room 

SR–328, Russell Senate Office Building, Hon. Tom Harkin, Chairman of the Committee, presiding. 

Present or submitting a statement: Senators Harkin, Leahy, Nelson, Salazar, Brown, Casey, Klobuchar, Chambliss, Crapo, and 

Thune. 

STATEMENT OF HON. TOM HARKIN, A U.S. SENATOR FROM 

IOWA, CHAIRMAN, COMMITTEE ON AGRICULTURE, NUTRITION AND FORESTRY 

Chairman HARKIN. The Senate Committee on Agriculture, Nutrition, and Forestry will come to order. 

Today’s hearing covers the implementation of two programs that 

promote conservation on lands that are in agricultural production, 

the Conservation Security Program and the Environmental Quality 

Incentives Program, otherwise known as CSP and EQIP. 

This hearing will examine the choices that have been made in 

implementing these programs and whether they are working as intended and delivering maximum environmental benefits. 

The Conservation Security Program was one of my initiatives in 

the 2002 Farm Bill. Now, the objective is to pay farmers and ranchers for the environmental goods they produce; to pay them not for 

what they grow but for the benefits of how they grow it. Conservation and environmental benefits produced from land in production 

have value to society just like commodities do. 

On the positive side, CSP is up and running in all 50 States with 

a high level of producer interest. On the other hand, CSP has been 

compromised in at least two ways. Dedicated funding has been 

taken away in appropriations and budget reconciliation bills, and 

USDA regulations, I believe, have distorted what we enacted in a 

way that excludes many of the producers we intended the program 

to benefit and fails to maximize the conservation benefits that CSP 

has the potential to provide. 

For the first time ever in 2003, Congress offset the cost of a natural disaster. I want to repeat that. For the first time ever in 2003, 

2

Congress offset the cost of a natural disaster by cutting a mandatory program in the Farm Bill. Never been done before. 

We would never consider telling Louisiana that the cost of recovery for New Orleans would come out of their State’s highway funds, 

or tell California that rebuilding after an earthquake would mean 

we just reduce other Federal spending in their State. 

We must never accept taking conservation funds to pay for disaster assistance. A disaster is a disaster, whether it is a hurricane, 

a tornado, an earthquake, a fire, a flood, a drought, and it should 

be paid for out of the overall budget of the Federal Government 

just like we pay for every disaster and we always have until 2003. 

So rather than the nationwide program that we enacted, the program has been limited to just 12.6 percent of the watersheds in the 

continental United States. Even in those watersheds, many producers who would be willing to adopt better conservation practices 

are largely excluded. 

NRCS has chosen to give priority to farmers who have already 

adopted conserving practices and exclude those who need cost 

share and transitional funding in order to adopt those practices. 

And we will have more discussion about that with Mr. Lancaster. 

This hearing will examine whether these choices by NRCS are 

consistent with the program created in the 2002 Farm Bill, and 

whether they are the best way to achieve the maximum conservation benefits for the available funds for the program. 

We will also examine the Environmental Quality Incentives Program, EQIP, which provides cost-share and incentive payments for 

conservation. 

A September 2006 report by GAO identified significant questions 

about the funding allocation formula used to allocate the annual 

funding to the States, particularly whether the factors in the allocation formula are closely tied to the program objectives, which are 

improving conservation on land in agricultural production and also 

supported by the best available data. 

It is important that these EQIP funds are allocated to match the 

conservation needs that our country faces, yet the backlog of applications for this program varies widely from State to State. 

In 2005, the last year for which figures are available, according 

to NRCS, the percentage of unfunded applications for EQIP varied 

from 7.4 percent in Hawaii to over 73 percent in New Jersey. In 

my own State of Iowa, 60 percent of all applications were turned 

down. Georgia had over 38 percent of all applications go unfunded. 

To me this suggests that the problems identified with the allocation formula may be resulting in many good conservation projects 

going unfunded. So this hearing will consider the allocation issue 

and look at how both of these programs are functioning to promote 

good conservation practices on working lands. 

I will reserve time for when the ranking member, when Senator 

Chambliss gets here for his opening statement. I will reserve that 

time for him. Before we turn to our first two witnesses, I would recognize the Senator from Vermont for the purposes of an introduction. 

Senator LEAHY. Mr. Chairman, thank you very much for the opportunity to make a brief opening statement. The Judiciary ComVerDate 0ct 09 2002 14:57 Apr 13, 2007 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 C:\DOCS\34244.TXT SAG2 PsN: SAG2
3

mittee is about to begin an important hearing on prescription drug 

pricing, so I am going to have to leave for that. 

I do want to congratulate the Chairman on his ascension to the 

Agriculture Committee Chair for the second time. 

Actually, for the third time. 

Wasn’t there about 2 weeks in there somewhere? 

Chairman HARKIN. Oh, that is right, we bounced up. 

Senator LEAHY. Third time. 

Chairman HARKIN. That is right. That is right. 

Senator LEAHY. So I have been five or six times majority, five or 

six times a minority. They go back and forth. 

Chairman HARKIN. Right. 

Senator LEAHY. I say that as an encouragement to everybody 

here. I also pointed out to the new Majority Leader that he is the 

ninth Majority Leader I have served with, so those things change, 

too. I do like the artwork here in the Committee room, however. 

[Laughter.] 

Senator LEAHY. Sorry about that. 

Mr. Chairman, under your leadership we wrote a tremendously 

successful Farm Bill in 2002. I look forward to working with you 

and Senator Chambliss on the 2007 Farm Bill. 

I would like to briefly welcome Kathleen Merrigan back before 

the Committee. She is sitting back there. She will be testifying. 

She worked on my staff when I chaired this Committee. She has 

had a long and distinguished career. 

I appreciate the work she gave me in helping me to write and 

pass the Organic Foods Production Act of 1990. And Senator Luger 

was ranking in that. We worked very closely, as did you, Mr. 

Chairman. 

Chairman HARKIN. I remember we were there. 

Senator LEAHY. One of the most successful laws enacted during 

that time, and we needed Kathleen’s hard work to make it possible. 

Today we are having a hearing on the Conservation Security Program, the Environmental Quality Incentive Program. I think those 

are going to be very important to this Committee as you write a 

new Farm Bill. 

The boost in EQIP funding from the 2002 Farm Bill, the Regional Equity requirement has been particularly helpful to hundreds of Vermont dairies working to restore water quality in the 

Champlain Basin and elsewhere in Vermont. So if we can continue 

to provide additional funding for EQIP and expand the Regional 

Equity requirement this year, something that helps not just farmers but it helps everybody looking for clean water, looking for a 

clean environment. 

The CSP has been underutilized in Vermont, but I look forward 

to testimony today on how to strengthen this innovative program 

during the re-authorization process. 

We went a long way to pass this 2002 Farm Bill. I think it has 

made a real difference in rural America, but we have to continue 

these programs to help America’s farmers and ranchers. 

And again, Mr. Chairman, I thank you very much for your courtesy and the courtesy of my fellow members in letting me interject 

in here. 

4

Chairman HARKIN. Well, Senator Leahy, thank you again for 

being such a great member of this Committee, and I was here and 

you were Chairman at the time when we passed a lot of that, and 

for always being a stalwart supporter of agriculture in all of its 

forms all over America. You have just been a great leader in this 

area. I know you have got to go do Judiciary Committee work. 

Senator LEAHY. If you would indulge me just a tiny bit, the Committee has changed considerably since I first came here. I was telling Senator Casey of Pennsylvania the story about sitting down, 

Senator Lugar and I were the two most junior members way down 

where Ms. Shames and Mr. Lancaster are sitting. And Senator Talmadge, who is portrayed up there, was Chairman. He would sit 

here in a wreath of cigar smoke. And Senator Eastland, who would 

rarely ever come here, but as Chairman of the Senate Judiciary 

Committee would show up just when he had an amendment. He 

was the senior-most member of the Senate, President Pro Tem. 

One day he comes in there and they mutter back and forth so 

nobody could understand it. It appeared that Senator Eastland 

hand a very large amendment, hands it to Chairman Talmadge, 

and Talmadge says, ‘‘Without objection, it is accepted.’’

And Lugar and I both say, ‘‘Well, wait a minute. Can we ask 

what is in that amendment?’’ They kind of look down. They try to 

figure who the hell we are. Talmadge takes the gavel and says, 

‘‘We are adjourned.’’ And on the way out, Senator Klobuchar, you 

should know that Senator Humphrey, Hubert Humphrey of your 

State turns to me and says, ‘‘Now do you understand the amendment?’’

[Laughter.] 

Chairman HARKIN. That is great history there. We will move on 

now with our two witnesses. 

First we will recognize Arlen Lancaster, Head of the Natural Resources Conservation Service, the primary agency for voluntary 

conservation on working lands. Before joining NRCS, Mr. Lancaster served as USDA Deputy Assistant Secretary for Congressional Relations. We got to know him well there. 

Previously, he worked for Congress in a variety of positions including Senior Policy Advisor for Senator Mike Crapo here, a valued member of our Committee and a good friend, Staff Director of 

the Senate Subcommittee on Forestry Conservation and Rural Revitalization, and also a staff member for Senator Robert Bennett, 

and was also very key in working on the Conversation Title in the 

2002 Farm Bill. 

Before I get to you, Mr. Lancaster, just a couple of notes. No. 1, 

we will recognize all the witnesses for 6–minute statements, hope 

you do not read them but just give us the highlights. And then we 

will engage in rounds of questions of 8 minutes each, for Senators 

for each round of 8 minutes each. 

I will recognize our ranking member, our former Chairman, Senator Chambliss, for any statement he might want to make. 

STATEMENT OF HON. SAXBY CHAMBLISS, A U.S. SENATOR 

FROM GEORGIA 

Senator CHAMBLISS. Thank you very much, Mr. Chairman, and 

thank you for holding this hearing to continue the Committee’s 

5

oversight of two key conservation programs, Conservation Security 

Program and the Environmental Quality Incentives Program. 

Last June the Committee held an oversight hearing on all of our 

conservation programs including these. At that time, our goal was 

to ensure the programs were working as effectively as possible. Today’s hearing will allow us to dig a little deeper into CSP and 

EQIP. 

Without a doubt, CSP has had a difficult time since 2002. Difficulties in implementation and lack of funding have kept it from 

becoming what it was intended. CSP raises questions such as, 

What is the WTO status, green or amber box? Should we pay producers for conservation they have already achieved? With limited 

conservation dollars and serious environmental challenges, 

shouldn’t we be focusing on where we can make the biggest environmental gains? 

While not the topic of this hearing, I look forward to discussing 

these issues as the Committee develops the 2007 Farm Bill. 

EQIP may not be perfect as we will hear today from the Government Accountability Office, but it is doing an excellent job of helping to solve agriculture’s environmental challenges, especially in 

my home State of Georgia. Perhaps I am biased, but my State truly 

is doing a great job of using Farm Bill programs to put conservation on the ground and keep producers on the land. 

For those States having trouble with conservation, look to Georgia. It is a model of cooperation, science-based decision making, 

and tangible conservation results. 

In large part, Georgia’s success is due to the efforts of one of our 

witnesses today, Mr. Jim Ham, in his work in cooperation with our 

Natural Resource Conservation Service, State Conservationist, the 

Georgia Soil and Water Conservation Commission and the Georgia 

Department of Natural Resources. 

Mr. Chairman, I would like to go ahead and just make an introduction of Jim right now as opposed to when he testifies. 

Chairman HARKIN. Please. 

Senator CHAMBLISS. Jim’s family has been friends of mine for I 

guess about 30 or 35 years or so and I know them well and I am 

very proud that he is here. 

Jim is a fifth-generation farmer from Monroe County, Georgia, 

and he operates a 300–head cattle operation with his brother on 

about 1,400 acres of pasture and forest land. Jim is a member of 

the Board of County Commissioners for Monroe County, the 

Towaliga Soil and Water Conservation District and the Georgia Association of Conservation District Supervisors. He has served as 

president of this association for the past 2 years. 

This is Jim’s second time testifying before the Committee. His 

first was at the Farm Bill field hearing last June in Albany, Georgia. As always, Jim, we appreciate your input as a farmer and conservationist. 

And in closing, I would just like to thank all of our witnesses for 

appearing today and look forward to their testimony. 

Chairman HARKIN. Thank you very much, Senator Chambliss. 

We will now recognize Mr. Lancaster before we go to Ms. Shames. 

Please proceed, and welcome again to the Committee. 

6

STATEMENT OF ARLEN LANCASTER, CHIEF, NATURAL RESOURCES CONSERVATION SERVICE, U.S. DEPARTMENT OF 

AGRICULTURE, WASHINGTON, DC 

Mr. LANCASTER. Thank you, Mr. Chairman, and members of the 

Committee, thank you for the opportunity to be here today to discuss working lands conservation activities. My full testimony has 

been submitted for the record, and so I will summarize. 

In my initial months as Chief of the Natural Resources Conservation Service, I have been fortunate to be able to get out into 

the field and view the conservation work the farmers and ranchers 

are achieving. I can attest that the conservation accomplishments 

taking place across the country are as important as they are diverse. 

In a single year landowners with NRCS and our partners such 

as State agencies and conservation districts have planned conservation systems on 50 million acres, representing a 60 percent increase over 2001. We have reduced soil erosion by more than 75 

million tons, created, restored and enhanced 318,000 acres of wetlands and improved irrigation water management on 1.1 million 

acres. 

And that is just a sample of things that we and our partnership 

brought to the Nation in 1 year. 

Mr. Chairman, these actions did not come about on their own. 

The focus of NRCS is centered on working lands and ensuring that 

these lands continue to produce valuable agricultural commodities 

and contribute to local economies. 

If you visit any county in the U.S., you will likely find that the 

landowners have a relationship with our local NRCS staff founded 

on the technical knowledge and resources that are available 

through our field offices. 

Everything that happens begins with our basic conservation technical assistance, and as producers decide to adopt specific plans or 

practices, they may build on that technical assistance by utilizing 

the financial assistance available from the suite of Farm Bill programs. 

In turning to the two programs the Committee has interest in 

today, the Environmental Quality Incentives Program is the flagship of our portfolio. The increased funding for EQIP in the 2002 

Farm Bill greatly expanded program availability including funding 

obligated between fiscal year 2002 and fiscal year 2006, almost 3.1 

billion dollars. EQIP will benefit close to 185,000 participants. 

Producer demand continues to be high for EQIP. In fiscal year 

2002, the agency was able to fund one in every five requests. In 

fiscal year 2005, we funded one in every two requests for a total 

of 49,406 producers receiving contracts through this program. 

While EQIP remains an extremely popular program, NRCS continues to make ongoing improvements to the program and the 

methodology by which EQIP resources are allocated. For example, 

the EQIP allocation formula is under review and potential update. 

As part of its review process, NRCS has awarded a competitive 

contract for an independent review of all NRCS conservation program formulas, including the EQIP formula. We have also planned 

to reassess the EQIP financial assistance formula to take place 

after the results of that independent review is established. 

7

As my written testimony describes, unfortunately, the meritbased resource allocation formula is not always allowed to function 

properly. Nevertheless, we believe that overall, EQIP is providing 

unparalleled conservation results, and the increased program flexibility and improved program features will continue to make EQIP 

one of the most popular and effective conservation programs of the 

Federal Government. 

And while we have numerous other working lands conservation 

programs, I understand the Committee wants to focus on only one 

other effort this morning, the Conservation Security Program. CSP 

provides payments to producers who practice good stewardship on 

their agricultural lands with incentives for those who want to do 

more. 

In its first 3 years, CSP has generated strong interest across our 

Nation among out Nation’s producers. 

The first sign-up was held in July of 2004 in 18 priority watersheds within 22 States. In 2005 and 2006, CSP was expanded and 

implemented in a total of 280 watersheds nationwide, including 

watersheds in every State as well as Puerto Rico and Guam. 

Including the most recent sign-up, CSP has invested in the operations of nearly 19,400 stewards on 15.5 million acres of working 

agricultural land. 

Regarding program financial management, NRCS has implemented a number of management measures to prioritize program 

spending primarily by delivering the program in priority watersheds, targeting enrollment to include good conservation stewards, 

and concentrating payments on conservation enhancement activities that generate additional resource benefits. 

Additionally, NRCS has instituted several internal controls. I 

would note that out of more that 2,100 initial 2004 CSP contracts 

reviewed by the GAO, only 12 have been found to contain deficiencies. This is an outstanding record and a testimony to the ability NRCS field staff to implement a complex program with excellent results. We feel we have made significant improvements to 

CSP and are pleased with the results of the program thus far. 

In closing, I am very proud of the accomplishments of NRCS and 

its partners on working lands conservation. While we have focused 

today on just a few of the working lands programs that NRCS offers, there is a broad portfolio of work happening out in the field. 

Under tight time constraints and given a multitude of demands 

and pressures, I believe our agency’s implementation record is impressive. 

Since 2002, NRCS has provided assistance to 1 million farmers 

and ranchers. Together we have applied conservation on more than 

130 million acres of working farm and ranch land. We have also 

invested $6.6 billion of the taxpayers’ funds directly with farmers 

and ranchers to produce environmental improvements that will 

benefit us all. 

I believe we have conservation in the right order of priority beginning with sound conservation planning, allocating resources 

based on sound natural resources factors, enabling local leadership 

to set priorities and recognize that everything comes back to the 

voluntary decisions of farmers, ranchers and landowners. If this 

8

process is allowed to work, there is no limit to what can be 

achieved in conservation for our natural resources. 

Thank you again for this opportunity to appear here today, and 

I look forward to responding to any questions the members of the 

Committee might have. 

[The prepared statement of Mr. Lancaster can be found on page 

75 in the appendix.] 

Chairman HARKIN. Thank you very much, Mr. Lancaster. Now 

we turn to Lisa Shames, Acting Director at GAO, responsible for 

GAO’s work on food and agricultural issues. 

I hope you have all gotten a copy of the GAO’s testimony today 

on conservation. It should have been made available to you. 

Ms. Shames, welcome to the Committee and please proceed. 

STATEMENT OF LISA SHAMES, ACTING DIRECTOR, NATURAL 

RESOURCES AND ENVIRONMENT, U.S. GOVERNMENT ACCOUNTABILITY OFFICE, WASHINGTON, DC 

Ms. SHAMES. Thank you. Chairman Harkin, Senator Chambliss, 

and members of the Committee, I am pleased to be here today as 

part of your oversight of conservation programs to ensure that they 

promote environmental goals and benefit the agricultural sector. 

GAO’s full statement has been submitted for the record, so what 

I would like to do now is just highlight two of our reports that we 

have issued recently on EQIP and CSP. 

These programs are substantial. In fiscal year 2006 alone, EQIP provided $1 billion and CSP $260 million in financial and technical 

assistance to farmers and ranchers. That is why it is critical that 

EQIP and CSP program benefits help address their intended environmental benefits. 

Our work identified opportunities where NRCS can better demonstrate that this was happening. First, regarding EQIP’s general 

financial assistance formula. NRCS has periodically modified the 

formula’s, factors and weights that determine how much each State 

is to receive. 

The most recent update was in fiscal year 2004 following passage 

of the Farm Bill; however, we found no documented rationale or explanatory information for the 31 factors. For example, the formula 

included a factor addressing impaired rivers and streams, but it 

was not clear whether or not this factor is based on general water 

quality concerns or specific concerns caused by agricultural production. 

In addition, some data sources used to weight the factors were 

questionable or outdated. For example, of 29 data sources, we 

found that five were used more than once, six were not the most 

currently available, and ten could not be verified. 

These factors and weights affect the amount of money each State 

receives. For example, we determined that if the weight for a given 

factor were increased by 1 percent, $6.5 million would have been 

allocated to one factor at the expense of another. Consequently, the 

financial assistance allocated to individual States would have been 

affected. We recommended that NRCS document the rationale for 

its choice of factors and weights and use accurate and current data. 

Second, regarding EQIP’s performance measures, NRCS has 

begun to develop long-term, outcome-oriented performance measVerDate 0ct 09 2002 14:57 Apr 13, 2007 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 C:\DOCS\34244.TXT SAG2 PsN: SAG2
9

ures for EQIP along with numeric targets to be achieved by 2010. 

These measures can provide valuable performance information to 

NRCS on the progress being made toward these targets. 

As a next step, NRCS can use this performance information to 

refine its assistance formula and link EQIP program payments to 

the most significant environmental concerns; however, while NRCS 

agreed that they might eventually make this link, at the time of 

our report they had no plans to do so. We recommended that NRCS 

continue to analyze and use performance information so this link 

can be made. 

Third, regarding duplicate payments, as you know because of 

limited funding, duplicate payments may result in some producers 

not receiving program benefits for which they are entitled. 

Our analysis found examples of duplicate payments, as Mr. Lancaster mentioned, between CSP and EQIP because of similar conservation actions these programs finance. For example, we found a 

producer received a CSP payment of over $9,000 and an EQIP payment for almost $800 for the same action, crop rotation. 

While NRCS has the authority to recover duplicate payments, it 

did not have a comprehensive process to preclude or identify them. 

We recommended that NRCS develop such a process to review both 

incoming applications and existing contracts and take action to recover any duplicate payments that are found. 

In conclusion, EQIP and CSP can play valuable roles to encourage farmers and ranchers to act as stewards of the Nation’s natural 

resources; however, as you are well aware, the Nation is faced with 

a current deficit and long-term fiscal challenges. 

Because we cannot continue business as usual, NRCS must be 

able to better demonstrate that EQIP and CSP payments are addressing the most significant environmental concerns and benefiting the agricultural sector. 

Mr. Chairman, this concludes my statement. I will be pleased to 

respond to any questions that you or members of the Committee 

may have. 

[The prepared statement of Ms. Shames can be found on page 

100 in the appendix.] 

Chairman HARKIN. Ms. Shames, thank you. We will now begin 

a round of 8 minutes each for Senators. 

Mr. Lancaster, again, thank you and congratulations on your 

new position. I think you have got one of the best jobs there is in 

terms of environment, and I am joined, I am sure, with your old 

boss here in wishing you the best in your new position. 

I just want to take you through several aspects of the Conservation Security Program as implemented. I probably will not get 

them all through in my first 8 minutes, but I will finish in my second round. 

NRCS has created a self-assessment workbook for prospective 

applicants. As I understand it, this workbook assesses the existing 

practices on the applicant’s farm or ranch to determine whether 

they have achieved the, quote, ‘‘minimum treatment level’’ for their 

operation. 

My question is: Does the self-assessment process allow producers 

willing to adopt conservation practices that would achieve the, 

quote, ‘‘minimum treatment level’’ to enroll in the program? 

10

Does this assessment process that you have allow producers who 

are willing to adopt conservation practices to achieve the minimum 

treatment level that would allow them to enroll in the program? 

Mr. LANCASTER. Mr. Chairman, as you know, clearly the CSP 

program is offered in three tiers. The first tier, that lowest bar requires that a producer meet at least two national priorities to the 

sustainable level. Based on that, they do have the opportunity to 

improve their other resource concerns to that sustainable level. 

Given the nature of the funding for the program, as we prioritize 

and as we look at those applicants that are applying for the program, we have the Tier 3, which again is addressing all those resource concerns to the sustainable level. 

Tier 2, which is addressing those and again with that option to 

or with that requirement that they increase their level of conservation on a national priority to a level of sustainability. 

There is a tier available for producers who apply to the program, 

get in and intend to do more. With limited funding, we have focused on rewarding those producers who really have demonstrated 

that they are conservation producers and by that create the incentive for producers to increase their level of conservation. 

Chairman HARKIN. Well, Okay. That is my point. You have this 

assessment, you have this workbook. Let’s say a rancher fills it out 

and they want to adopt conservation practices that would get them 

to the minimum treatment level. 

Under the rules of NRCS now is they are not allowed in the program. They are shifted and sent over to EQIP or some other, quote, 

‘‘appropriate conservation program.’’

Now, again, there is a reason for my asking that question, and 

I think your answer elucidated a little bit there, and that is when 

we set this up for Tier 1, 2 and 3, it was really our expectation that 

in the initial years of this program that the bulk would be in Tier 

1, getting everybody in, less in Tier 2, less in Tier 3 and that might 

shift over a period of time as you got more and more farmers enrolled. 

It has sort of become topsy-turvy. I am quite surprised, as a matter of fact, at the bulk of those that are now in Tier 3, but not in 

Tier 1, which indicates to me that it is not quite working as intended. 

The statute does not provide for the exclusion of farmers from 

eligibility for not having adopted practices without the program’s 

incentive payments and cost share, does it? 

There is a statute here, and it does not exclude any farmers or 

ranchers who have not adopted practices without the program’s incentive payments and cost share. In other words, it does not say, 

‘‘You have got to do all these things first, and then you get in the 

program.’’

The statute does not say that. So again, the reason I am pointing 

this out is that more and more it is becoming more and more difficult for farmers with limited means maybe to get into this program until they have first adopted some practices. 

Now, basing eligibility on an assessment of the current conservation status of an operation rather than on the willingness of an applicant to commit to achieving a higher level of conservation performance than they currently have provides little incentive to proVerDate 0ct 09 2002 14:57 Apr 13, 2007 Jkt 000000 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 C:\DOCS\34244.TXT SAG2 PsN: SAG2
11

ducers who need the program’s cost share or enhancement payments to improve their conservation efforts. 

I just want to know if you have a comment on that or not. I 

mean, do you understand the import of what I just said? 

Mr. LANCASTER. Yes, Mr. Chairman. When I look at the needs 

of conservation producers or when I look at the needs of producers 

to reach their conservation goals, it is important that we have a 

suite of programs, different tools to help them reach their goals, 

cost-share programs like EQIP. And I also believe that a stewardship program like CSP is an important part of helping landowners 

reach their conservation goals. 

As GAO indicated and as you have indicated, the funding for the 

CSP program has changed I think six times in the history of this 

program. 

If you are going to have a program that would be available to everyone so that you can reach those producers who are not performing at those higher levels of conservation, that would be one 

thing. We have a program, though, that is capped, that is limited. 

In looking at the suite of programs, we have a stewardship program, which I think has been effective in creating an incentive for 

folks to increase the level of conservation so that they can enter 

into the program. We also have a suite of programs that help producers meet their conservation goals, increase their level of conservation. 

With limited funding, I think it is appropriate to divert those 

folks who have not reached that bar of being the best who are at 

that higher level of stewardship to a program that can help them 

get there. 

And so with limited funds, Mr. Chairman, I think what NRCS 

has done in rewarding the best is the most effective use of that program. 

Chairman HARKIN. That is just a value judgment that you are 

placing on it. I do not think the statute intended it to be that way. 

Now, you are right about the limitation on funds and stuff; Congress did that, you did not do that. And we have to get through 

that one, but even with these limitations, it seems to me a skewing 

of the program to just say that we are just going to take care of 

those who have already done these practices. 

Now, again, and this will be my last question before my time 

runs out, a key feature of CSP is equitable treatment of those who 

have previously adopted conservation practices. They are to receive 

enough of an incentive so they continue those practices and are not 

placed at a competitive disadvantage versus those who later adopt 

the practice with assistance from the program. But CSP also specifically provides incentives for adopting new practices, delivering 

new conservation benefits. 

In his written testimony, which I read last night, Craig Cox, who 

is on the next panel, asserts that CSP as currently structured is 

spending nearly all of its funding to reward producers for their, 

quote, ‘‘benchmark conservation practices’’; that is, the conservation practices that were already in place on the farm or ranch for 

2 years before the producer signed up for CSP. 

Now, is Mr. Cox correct in this? 

12

Mr. LANCASTER. I think when you look at the structure of payments, a big part of those payments are for activities that have occurred. Again, you are rewarding those producers who have proven 

that they are good stewards to create an incentive for other producers to enter into the program. But a large portion as well of the 

CSP program is for enhancements, which are those practices that 

are occurring above the sustainable level. 

Chairman HARKIN. Well, my last statement is it is my understanding that NRCS will not compensate for any new practices in 

the initial CSP contract, but that payment for new practices can 

only happen after the producer signs a second modified contract. So 

I think you can see why some would question whether NRCS is 

getting the maximum environmental benefit out of the CSP regulations. 

Now, these are regulations, not the law, so I will come back to 

that in my second round and my time is up and I would yield to 

my friend from Georgia, Senator Chambliss. 

Senator CHAMBLISS. Thank you, Mr. Chairman, and, Arlen, it is 

good to have you back up here. I guess the third hat you have worn 

on the Hill here in recent years. It is always a pleasure to have 

you, and I am pleased that you are in a position of NRCS Chief 

here. 

Georgia farmers and conservationists continue to remind me of 

the need for technical assistance. You addressed that somewhat in 

your opening comments. But what is NRCS doing to ensure that 

it is available even as funding for it declines and does Congress 

need to address technical assistance as it develops the 2007 Farm 

Bill? 

Mr. LANCASTER. Mr. Chairman, I appreciate that question. When 

you look at technical assistance, I really believe that that is the 

backbone of our conservation delivery system. In this country, we 

have many producers and what they are seeking is that technical 

assistance, and the financial assistance is an added benefit to their 

efforts. 

When you look at technical assistance, as an agency, I don not 

believe NRCS can do it alone. We work closely with our partners, 

State agencies, with conservation districts and with RC&D Councils to deliver this technical assistance to landowners. 

And as you look at our discretionary account, I think a growing 

percentage of our conservation operations, our conservation technical assistance account, it is earmarked, and so those dollars are 

not going directly to our personnel to deliver technical assistance 

in the field. Many of that is going through pass-through projects or 

in directed activities. 

As you look at the next Farm Bill, we do have the ability to deliver technical assistance through our financial assistance programs. 

The Committee held a hearing on TSPs recently, or last year, 

and that is an opportunity I think again to increase the level of 

technical assistance that is available to landowners. 

But I think you hit it right on the head that the focus of our 

agency is on that technical assistance. That is the key part of the 

delivery of these conservation programs. And as Congress looks at 

these programs and they look at our discretionary accounts, I cerVerDate 0ct 09 2002 14:57 Apr 13, 2007 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 C:\DOCS\34244.TXT SAG2 PsN: SAG2
13

tainly believe that that is the key to effectively delivering these 

conservation programs is to have landowners who have sound technical assistance, who have given the effort to develop a conservation plan so that these other programs fit within the context of 

their goals that they have outlined. 

Senator CHAMBLISS. Does the 2002 Farm Bill’s prohibition on 

bidding down make it more difficult for NRCS to optimize environmental benefits as required by EQIP? 

Mr. LANCASTER. In 2002 when Congress looked at the bid-down 

authorities, the concern was the impact to limited resource producers, that if you allow individuals to bid down to get into the program, you are going to disadvantage those who do not have the financial resources to pay a higher percentage of the cost share in 

those practices. 

As an agency, when you look at EQIP, I think the increased 

funding has reduced the backlog that we have in the program, but 

we are also able to create separate pools of funding for different 

producers. 

To answer your question directly, I think that there are opportunities to look at price discovery that may not necessarily require 

producers to compete with one another on what percentage cost 

share that they are willing to accept for a program. If you have better price discovery on what those payments are, we are able to address those TA needs without necessarily going to a bid-down system. 

Senator CHAMBLISS. What does the Administration believe it 

costs to fully implement CSP per year? 

Mr. LANCASTER. There are a lot of assumptions when you look 

at CSP in total funding, but if you do a quick, back-of- the-envelope 

penciling out of the program, with 930 million acres of non-forested 

agricultural land, if you assume 50 percent of that land was to enroll in the program, our average cost per acre is running $17, $20. 

So you take 450 million acres, $20 per acre, you are about $9 billion a year for the program. 

Senator CHAMBLISS. Ms. Shames, are there any legislative impediments to NRCS implementing your recommendations for 

EQIP? 

Ms. SHAMES. No, Senator, there are no legislative impediments. 

What we have recommended are management improvements that 

can help NRCS better demonstrate how its program payments are 

achieving the environmental outcomes. 

Senator CHAMBLISS. I am pleased with NRCS’ efforts to better 

understand and quantify the benefits from conservation programs. 

Many others in this room, including Craig Cox, who will testify on 

the second panel, have aided in this effort. 

Optimizing environmental benefits or quantifying environmental 

effects of conservation programs are not as easy as it might seem. 

Has GAO done any work on the difficult but important task of 

assessing the environmental benefits of conservation programs, and 

does GAO have any insight or advice on this issue? 

Ms. SHAMES. What I can tell you based on the work that we have 

seen Government-wide is that outcomes that take a long time, including conservation improvement. So setting outcome-oriented 

14

goals is a good step to becoming more results oriented. We do rely 

on the subject matter expertise of the agencies. 

When GAO looks at programs such as EQIP or CSP, we are really looking at the management to make sure that what they are 

doing is as efficient and as effective as possible. 

Senator CHAMBLISS. Arlen, I continue to be concerned about the 

looming deadline of July 31 for livestock operations to have the 

necessary permits and nutrient management plans as required by 

the Concentrated Animal Feeding Operation Regulation. 

EPA estimates there are about 18,800 large CAFOs that must 

have a nutrient management plan in place by that date. By NRCS’ 

figures, 14,300 plans have been applied. 

What is NRCS doing to ensure the others are prepared for that 

deadline? 

Mr. LANCASTER. Mr. Chairman, Comprehensive Nutrient Management Plans are, like conservation plans, an important, integral 

base part of an operation. 

We are currently looking at our TSP program, and, as you recall 

from the hearing earlier, there have been questions about the effectiveness of that program. 

As we look at our not-to-exceed rates and how we really pay an 

effective and accurate cost share for those TSPs, it is important to 

recognize, one, that the not-to-exceed rates are not the maximum 

that a producer could pay a TSP to carry out that work. But the 

point is we are looking at our TSP program to make sure that it 

is as effective as possible so that that is a tool that landowners can 

utilize to address to reach their CNMPs. 

Additionally, Congress has given us the authority, and it is something I am pursuing, to pay for CNMPs out of the financial assistance program within EQIP. So we recognize that deadline as well, 

and we are working closing with industries to develop those programs that can address the need for Comprehensive Nutrient Management Plans. 

Senator CHAMBLISS. Thank you, Mr. Chairman. 

Chairman HARKIN. Thank you very much, Senator Chambliss. 

Now I will recognize in order, we will go like this: Senator Crapo, 

Senator Casey, Senator Klobuchar, Senator Nelson, Senator Brown 

and Senator Thune. Senator Crapo. 

Senator CRAPO. Thank you very much, Mr. Chairman, and I welcome this opportunity to welcome Arlen Lancaster here before the 

Committee. As has already been said, he is a tremendous hard 

worker. He has been on my staff and did super work there. We 

hated to lose him, and now he is doing great work for the NRCS, 

and we are looking forward to working with him. 

I also want to indicate that we have a mark-up in the Finance 

Committee on the minimum wage bill that I am going to have to 

leave to momentarily so I will probably have to cut my questions 

short. I apologize for that. 

I did have two questions I wanted to try to get in, and Arlen, the 

first one was for you. As you know, an issue that I have been interested in is how the Farm Bill conservation programs can work in 

conjunction with Endangered Species Act objectives in terms of recovering species. 

15

And we need to use the protection and promotion of species as 

a recovery objective, in my opinion, for Farm Bill programs as 

much as possible without violating or leaving the original objectives 

of those programs. 

In your testimony, you mention that NRCS’ efforts have been engaged in addressing species recovery in some context, including 

sage-grouse habitat in Idaho and in other western States. Could 

you tell us just quickly what work the NRCS is involved in that 

is helping to improve and utilize land conservation programs to address threatened and endangered species? 

Mr. LANCASTER. Mr. Chairman, as you talk about reaching goals 

for species conservation and wildlife, we cannot miss the fact that 

the majority of this country is in private landownership, and it is 

those private landowners and their conservation efforts that will 

really address wildlife needs and habitat. 

And as an agency that works with those landowners across the 

suite of our programs from CSP to EQIP to the Wildlife Habitat Incentives Improvement Program, we are addressing those needs of 

landowners to implement habitat needs. 

Specific to the Sage Grouse, I think that that is a demonstration 

how effectively private landowners with the help of NRCS can work 

with State agencies, can work with cooperators to demonstrate the 

habitat improvements they are making to address the need for the 

Fish & Wildlife Service to look at a potential listing of species. 

We work very closely with the Fish & Wildlife Service on our 

programs. I have worked closely with the Director of the Fish & 

Wildlife Service as we try and get some programmatic agreements 

on our practices. 

When we are implementing practices that provide a net benefit 

to species, we can work closely with the Agency, with the Fish & 

Wildlife Agency to streamline that process so that we can get those 

practices on the ground and those habitat improvements implemented. 

And so I think to answer your question, it is hard to pin down 

one thing because when I look at wildlife habitat and I look at our 

programs and as we focus on water quality and water quantity and 

soil quality and air quality, all of those measures to improve those 

resource concerns directly benefit species. 

But we are also able to I think target our programs within States 

toward specific species. In Idaho, we have worked closely with the 

State to address Sage-Grouse, to address Bull Trout and other 

issues. In Montana, I know we have worked on the Grayling. 

Other parts of the country we have worked on species specific by 

utilizing our State Technical Committee in how we target those resources. 

Senator CRAPO. And that can be done without abandoning the 

original objectives of the various conservation programs? 

Mr. LANCASTER. Absolutely. Again, I think as you optimize the 

environmental benefits, you are providing a direct benefit to wildlife. 

Senator CRAPO. Well, thank you. I do have a number of other 

questions. I might just submit those to you because of my time constraints. But, Ms. Shames, I did have one question I wanted to ask 

you. In your testimony you indicated that there was identification 

16

of eight cases of duplicate payments between CSP and other programs that was in violation of the law. And the recommendation 

I believe is that a very strong new program to identify these overpayments be adopted by NRCS, and I certainly agree with that objective. 

The question I have is this: As I do the math, it appears that, 

depending on how you interpret the numbers that you have come 

up with, NRCS is about 96 to 97 percent effective in avoiding those 

duplicate payments, which I think is a pretty good record, and we 

are talking about how to get that last 3 to 4 percent. Even if you 

make all the assumptions in favor of that, it might even be down 

to maybe 1 percent of payments that are duplicate stopped. 

And the question that obviously comes to my mind is how costly 

will it be to put a program in place to find that last couple of percentage points versus what we are losing in the current system 

even given the fact that the NRCS has indicated they have even 

added additional programs now to try to address this? Did you 

study that? 

Ms. SHAMES. There is always a tradeoff between what a program 

is going to cost and what the outcome is going to be. What we recommended, in fact, was that there be an automated system put in 

place for NRCS to better identify incoming applications that may 

potentially have duplicate payments and also to review existing 

contracts. So we are talking about building a management tool to 

help NRCS do that. 

Senator CRAPO. And you think that can be done without a significant increase in administrative cost? 

Ms. SHAMES. We did not examine the administrative costs, but 

surely that is one of the factors that should be considered. 

Senator CRAPO. All right. Thank you. I apologize, Mr. Chairman, 

I am going to have to run to that Finance Committee meeting, but 

thank you for holding this hearing. 

Chairman HARKIN. You have set an example; you are yielding 

back 2 minutes of your time. 

Senator CRAPO. I am yielding back 2 minutes. Can I get it some 

other time in another hearing? 

[Laughter.] 

Chairman HARKIN. Right, exactly, bank it. Thank you very much, 

Senator Crapo. 

Now we welcome a new member of our Committee, the Senator 

from the great Keystone State of Pennsylvania, Senator Casey. 

Welcome to our Committee, Senator Casey, and please proceed. 

Senator CASEY. Thank you, Mr. Chairman. I appreciate this opportunity to question these witnesses, and I appreciate your leadership of this Committee and we are honored to be here. 

I was somewhat surprised that Senator Leahy told in a public 

setting the story that he told me in private about Senators from 

long ago, but I appreciate his openness on that. 

Just a couple of questions, and I may reserve some time for later, 

but the interaction between the two of you, and we appreciate your 

testimony and the expertise you bring to these issues. It reminds 

a great deal about the work I did in State Government. 

I spent 10 years there, eight of those ten as the Auditor General 

of Pennsylvania, kind of a GAO-type public official in that sense. 

17

And I was always struck by in State Government, and I think it 

has application to what we do in the Federal Government, as to 

what happens when a report like this is submitted, what happens 

on the end of the scale where the GAO is focused on an issue and 

provides recommendations and findings, but also what the Government does in response to that. 

And I guess my first question was more along the lines of the 

process in terms of how that benefits taxpayers, and I guess my 

first question is this, and I guess, Ms. Shames, this would be addressed to you: How does this normally transpire if GAO, as it is 

done here, and I guess your report is dated today, I guess. What 

happens from here after you have submitted your report after the 

Government agency has a chance to respond, what is the timeframe there in terms of how they respond and how you deal with 

that and how that is made part of the public record? 

Ms. SHAMES. Agencies are to provide a letter within 60 days in 

terms of how they are going to follow up with GAO recommendations. That letter is what we use then as a basis for whether or not 

agencies have been responsive to what we have suggested. 

GAO has its own tracking process, so we do follow recommendations to see, in fact, if they have been taken care of, and if they 

have, we do write that up as an Accomplishment Report. 

We have found based on tracking these recommendations over 

the years that if agencies have not implemented the recommendation within 4 years, that it is not likely that the recommendation 

will ever been implemented. 

Senator CASEY. How quickly between the time you have reported 

and the time that you have a sense of implementation or at least 

a process to begin implementation, what is the timeframe within 

which the public would know that? In other words, do you do a 6–

month review or a 1–year review or how does that——

Ms. SHAMES. We do an ongoing review in terms of the recommendations, and ultimately that does become part of the public 

record. When we have decided that the recommendation has been 

followed, there is an Accomplishment Report. That is publicly available. 

Senator CASEY. It is called an Accomplishment Report? 

Ms. SHAMES. Yes. 

Senator CASEY. Mr. Lancaster, one question I had because it was 

cited early in the report about performance measures, would you 

just tell us a little bit about that in terms of even apart from what 

GAO is reporting on today, how do you and the team you work 

with monitor and keep track of and try to be cognizant of performance measures with regard to CSP or really any other program 

that you administer? 

Mr. LANCASTER. As was alluded to, when you are talking about 

conservation practices and deriving the actual outcomes of those 

practices, it can often be difficult. You are talking about resonance 

times of nutrients in the soils, you are talking about measures that 

are oftentimes difficult to capture. 

We have a process underway, the Conservation Effects Assessment Project, to really to determine the outcomes of those programs. 

18

But specific to performance of our programs and how we are implementing them, we have included within our business lines and 

within our strategic plan outcome-based goals for our programs so 

that we can measure those things that are easily quantifiable in 

terms of numbers of acres with conservation plans applied or numbers of acres with irrigation practices applied or acre feet that we 

are addressing through specific practices. 

Again, we are building that into our business alliances as an 

agency, and so we do measure ourselves against that performance 

level. It is something that I closely look at throughout the course 

of the year to see where we are at in reaching those goals. 

In terms of GAO, I find their reports constructive, and what we 

have done with these recommendations in many cases has been to 

implement them. There are some points that we may disagree on, 

but those that we agree on we implement. 

One of their recommendations was to take those outcome-based 

measures, those performance measures and integrate them into our 

factors of our allocations. That is something we intend to do once 

we have good confidence in those numbers and that data as well 

as understand the effects of that on that allocation process. 

Senator CASEY. I know I am almost out of time, but I guess my 

last question, I may reserve some time, would be when you look at 

these findings today in this report and you hear some of the dialog 

and the question and the answer today, where do you believe there 

is the most significant conflict between what GAO is saying today 

and what you believe to be the case in terms of how you measure 

your performance? 

I realize you may agree in some areas, what area or what finding 

creates the most conflict between what you believe you are doing 

and what GAO is finding, if you can? 

Mr. LANCASTER. The point that we would disagree with is that 

we are not optimizing the benefits of the EQIP program. I think 

if you look at our factors, those are resource-based factors so we are 

addressing those resource concerns, as well as the entire process 

for distribution of those dollars. 

I do not think GAO is saying that the projects that are being 

funded are not optimized, that we are not addressing those resource concerns within a State. So when you look at the allocation 

formulas to the States, the State evaluation and ranking process, 

the State Technical Committee in their role in making recommendations on how we rank and look at those projects, I think 

the projects that are occurring, the landowners that are getting 

funded, we really are optimizing the program and we are addressing the program purposes. 

Senator CASEY. Thank you. I may reserve some time, but I will 

move one. 

Chairman HARKIN. This is great. This is setting great examples 

here. Next was Senator Leahy, who has gone, Senator Klobuchar, 

who is not here, and Senator Nelson. Senator Nelson. 

Senator NELSON. Thank you, Mr. Chairman. With the concurrence of the Chair, I would like to make an introduction of someone 

who is going to be in the next panel from Nebraska because my 

schedule is not going to permit me to be here. 

19

It is really a pleasure for me to introduce Duane Hovorka from 

Elmwood, Nebraska. He is the Farm Bill Outreach Coordinator for 

the National Wildlife Federation. He also serves on the NRCS 

State Technical Committee for Nebraska and on the University of 

Nebraska Center for Grassland Studies Advisory Board. 

He has been involved in the analysis and development of Farm 

Bill proposals dating back to the 1990 Farm Bill. Today he will be 

testifying on behalf of the National Wildlife Federation, the Sustainable Agriculture Coalition and the Isaac Walton League of 

America. 

Duane has 25 years of experience in public policy analysis, and 

he recently joined the National Wildlife Action Federation after 10 

years as a consultant doing public policy work for wildlife and agricultural organizations including the National Wildlife Federation, 

the Sustainable Agriculture Coalition, the Center for Rural Affairs, 

which is located in Nebraska and the Nebraska Wildlife Federation. So it is my pleasure. I am sorry that I will not be able to be 

here for his presentation, but I know I am looking forward to reading it. 

Mr. Lancaster, is it possible for two farms in the same eligible 

watershed to receive the same grade or ranking on their CSP applications but have one of them not receive a contract based solely on 

the lack of funding for all eligible farms in the watershed? 

In other words, were any farms eligible for CSP contracts but not 

awarded a contract for no other reason than inadequate funding, 

and if that is the case, is it fair, and what should we be doing to 

achieve the goals for CSP? Is there a way to prorate funding or 

what are your suggestions? 

Mr. LANCASTER. If there are two equal operations——

Senator NELSON. Equal opportunities. 

Mr. LANCASTER [continuing] Equal rankings, they would be included in the program. The difficulty we have is when you have operations that are not equal, again with limited funds, and certainly, 

when you are looking at fairness in the program, one of the criticisms I have heard across the country is folks are saying, ‘‘It is a 

have or have not program, that I would otherwise be eligible, I 

have met the criteria when you look at the Self-Assessment but 

there is not funding available to me.’’

In our ability to go with a strict ranking system like we do in 

the EQIP program prohibits our ability to give someone a clear delineation of who would be in and who would be out of the program. 

But if all things are equal, those individuals would be in the program. 

Senator NELSON. Both at the same level? 

Mr. LANCASTER. At the same level. 

Senator NELSON. You would not have one kicked out because you 

did not have enough money and you could not prorate, right? 

Mr. LANCASTER. If the resource concerns are similar or if they 

are addressing the same resource concerns, if they have the same 

score in their assessments and if they have the same score on their 

SEI and those resource concerns, Senator, I believe they would be 

in the program. 

20

Senator NELSON. All right. I think we may have an example 

where that was not the case, which we will bring to you with follow-up correspondence. 

Now, recently I learned that a Nebraska farmer failed to achieve 

a funded level because he was told that he, quote, ‘‘performed one 

too many tillage operations’’ on his ridge-planted land, even though 

ridge planting has long been the conservation standard for gravity 

irrigated in flat land farming and it has allowed him to use half 

the residual corn herbicide in his crop rotation. 

It is my understanding there are no credits given in the grading 

for using less pesticide, and is that in fact accurate and what would 

be the explanation? 

Mr. LANCASTER. In trying to implement the program as equitably 

as possible, we are trying to find scientifically valid standards that 

we can measure against. And in many cases, that is your Soil Conditioning Index, and a big part of that is the tillage that occurs. 

Again, in some cases folks my disagree whether or not it is fair, 

but what we need to do is we need to have a criteria that we can 

measure applicants against that are apples to apples. 

Senator NELSON. Well, you can have it for fairness, but doesn’t 

it have to be valid? 

Mr. LANCASTER. Yes. And I believe when you look at our tools, 

our erosion tools and our Soil Conditioning Index, those are scientifically based tools that when you look at what is out there and 

what has been proven, those are programs and tools, models with 

a long track record. 

Senator NELSON. Will you take a look at this, because it seems 

to me that one of the valuable things that you would want to 

achieve is less chemicals. 

Mr. LANCASTER. That certainly is a factor. I would be happy to 

sit down with you and take a look at this. But again, when you 

look at the program, a lot of those measurements are on the soil 

quality and there are a lot of other issues in addition to chemical 

use that we want to try and address. 

Senator NELSON. I think they all ought to be considered and the 

ranking of them should be clearly considered. 

Ms. Shames, you testified that GAO found instances where producers received duplicate payments from EQIP and CSP for similar 

related conservation actions, and you noted the number of producers that may have received duplicate payments, but do you or 

GAO or Mr. Lancaster have an estimate of the dollar amount as 

opposed to just the number of instances that was paid out under 

these programs that would be duplicate payments? 

Ms. SHAMES. We do not have an aggregate figure for either the 

total dollar value for the duplicate payments nor the number of 

cases. When we asked NRCS, they could not provide an aggregate 

figure either. 

So while we do not know what the total is, we do know that the 

possibility exists and that duplicate payments have happened and 

we also note that the possibility can increase as CSP is extended 

to other watersheds and also the possibility can increase because 

the contracts are multiple years, so the duplicate payment would 

happen not only in the first year but in successive years. 

21

Senator NELSON. Now, does GAO recommend that this be taken 

care of or does GAO in recommending that it be taken care of provide a management tool for the department to avoid having it happen in the future? 

Ms. SHAMES. We recommended that NRCS put in such a management tool that you are referring to, an automated process that 

eventually would be able to help identify incoming applications for 

possible duplicate payments as well as review existing contracts 

and then to take follow-up action. 

Senator NELSON. Mr. Lancaster, do you have some idea of what 

kind of money we are talking about here? Are we talking millions 

or are we talking hundreds of thousands or is there any way of 

knowing? 

Mr. LANCASTER. Senator, we have introduced in our contract 

management software tools that will prevent those duplicate payments between our contracts. We have created a bright-line distinction between practices that we may get some push back on because 

that is there. Based on that, we can address those prospective payments. 

When you look at previous payments, we are undertaking an effort to review duplicate payments, based on those 12 found in 2004, 

we are really talking about tens of thousands of dollars rather than 

hundred thousands or millions of dollars, and we are going back to 

get that number. 

Senator NELSON. I commend you for doing that. I think that it 

is important that we not have any waste of taxpayers’ funds but 

we do not want to make a mountain out of a molehill in the process 

either. We just need to have a process in place to correct it and 

avoid it in the future. So thank you, Mr. Chairman. 

Chairman HARKIN. Thank you, Senator Nelson. Senator Brown. 

Senator BROWN. Thank you, Mr. Chairman. I first want to follow 

up on Senator Casey’s questions on not so much process but you 

talked about optimizing programs, setting priorities, all of that. 

In Ohio in the last 10 years, maybe 20 years but especially 10 

years, an acceleration of the number of factory farms in Ohio, and 

would you sort of talk to us, if you would. It seems to me that 

EQIP is disproportionately reaching factory farms to the exclusion 

of smaller family farms. 

Could you talk about any data you could give us about that and 

which farms are most likely and if you have by size or if you see 

any trends there? I am understanding the factory farms have more 

needs by definition of their size, but if you could shed some light 

on that for us. 

Ms. SHAMES. Addressed to GAO, Senator? 

Senator BROWN. Addressed to either of you actually, probably 

Mr. Lancaster. 

Mr. LANCASTER. Senator, I can respond to you in writing or afterwards. We do keep data on the type of applications or the type of 

projects that are funded. 

I can tell you anecdotally when we look at the projects, when you 

look at how we are distributing those funds, it is based on resource 

concern. How are we addressing those resource concerns in a given 

watershed? Where is the impact? 

22

This is one issue when we look at our factors in terms of water 

quality, agriculture can make a contribution to improving our 

water quality, our wildlife habitat, our air quality, and so when we 

look at those funds, we target those concerns. And so I have not 

seen that distinction necessarily between again whether or not we 

are excluding small farmers to the benefit of large farmers, but I 

can get that data for you. 

Senator BROWN. Ms. Shames, do you have any thoughts on that 

that you have been able to see from GAO? 

Ms. SHAMES. We did not review that data. 

Senator BROWN. The second question, and I am new to this Committee, obviously, and new to some of these issues, and we just did 

sort of a cursory survey of watersheds in Ohio and from what we 

could find, there are 300–plus watersheds and there was only one, 

Sandusky in northern Ohio, not far from Lake Erie, that was funded that was at least added to the mix recently. 

What should that tell me that others were added to the mix earlier and ongoing, Sandusky is just now, or that a lower proportion 

of these watersheds are getting into the program? 

Mr. LANCASTER. I think when you look at the selection of our watersheds, we have a two-tiered system essentially. We have a system within the State to look at our national criteria for the program to see which watersheds would most benefit from the program being in those watersheds. 

At the national level, based on limited amount of funding, we 

need to determine how best can we get regional diversity, nationwide diversity, crop diversity as well as reach the largest number 

of producers in that selection process. 

If a watershed was recently added, it is a process of where do 

those watersheds stand relative to need versus others. 

Senator BROWN. Does that number of 1 out of 300, should that 

concern me? I mean, when Sandusky was added to the mix, many 

of those others are already in the mix at an earlier time in an ongoing way? 

Mr. LANCASTER. When you look at our programs, and I do not 

have the number in front of me, but there is a limited number of 

watersheds overall that have entered in the program. 

The Greater Miami Watershed from last year was the largest to 

date in terms of enrollment in the program. But again, with limited 

funds, what we are trying to do is stretch those dollars so that we 

can address diversity across the Nation, across program crops, and 

get as many folks into the program as possible. 

Senator BROWN. And partly following Senator Nelson’s question, 

there are criteria that are met with no real, I mean, I know it is 

not an ‘‘entitlement program,’’ so-called, but if the point levels or 

however the criteria are met, that gets you admission into the program without other kinds of factors typically? 

Mr. LANCASTER. The difficulty we have is again the bar for the 

program is such that there are a number of folks who are eligible 

but with limited funding we cannot possibly reach all those producers that might otherwise be eligible for Tier 1, Tier 2 or Tier 

3, and therefore we need to prioritize how we are going to enroll 

those individuals. 

23

I would be happy to share with you as well a map on the program scope of the watersheds that are involved in the CSP program. 

Senator BROWN. Okay. 

Mr. LANCASTER. It appears there are couple of others within Ohio 

that have pretty good coverage. 

Senator BROWN. When you hear those numbers in Ohio, is that 

unusual, are you surprised by that that it is that relative small 

number? 

Mr. LANCASTER. If that were the case and depending on the size 

of the watershed, clearly there would be concern, but the map I am 

looking at, Ohio actually has relatively large coverage within the 

State. 

Senator BROWN. Okay. Thank you. Thank you, Mr. Chairman. 

Chairman HARKIN. Senator Thune. 

Senator THUNE. Thank you, Mr. Chairman, and I want to commend you for holding this hearing and also note that this is going 

to be an important subject in the next Farm Bill debate, and I look 

forward to working with my colleagues to ensure that we get producers the tools they need to achieve economic success at the same 

time that they are achieving critical conservation measures. 

I think the challenge for us is going to be how do we strike that 

balance between making sure that we have got the food and fiber 

and homegrown renewable energy demands of the country met at 

the same time that we are seeing that the most vulnerable lands 

are protected from erosion and that we are promoting and 

strengthening wildlife habitat. 

I know that any Farm Bill is a balance that we have to strike 

and this certainly will not be any exception, and also at the same 

time looking at what we can do to strike the balance between retirement of land as well as conservation of working lands. 

In the 2002 Farm Bill we made an effort, I think a much stronger effort, in the Conservation Title, and as a member of the House 

at that time, I actually was the author of the CSP program that 

the Chairman authored over here in the Senate, and like you have 

been disappointed that it has not been implemented or has not 

achieved the level of application that we had hoped it would when 

it was initially proposed and adopted back in 2002. 

But I think the challenge before us now is to figure out how do 

we best achieve those results and further the development of working lands conservation programs, including the EQIP program, 

which I think has been a big success. 

I know it is not the subject of this hearing, but the conservation 

programs that have achieved a high level of success in my State 

include CRP, WRP, some of the set aside programs, and in many 

respects have made South Dakota the envy of other States like 

Iowa when it comes to pheasant production. That has become a 

very big part of our economic success in South Dakota, and more 

and more producers have put lands aside and been able to benefit 

from the commercial benefit that comes with pheasant operations. 

So that is another subject that I am very interested in this whole 

debate and how do we continue to promote that type of wildlife production and everything that is attendant to it. So I suspect we will 

get into the CRP discussion of that program as well at some point. 

24

But I do have a couple of questions with regard to the subject 

of the hearing today, primarily dealing with the EQIP program. 

And I know that in the 2002 Farm Bill, that was always one of the 

big successes. EQIP was one of the big winners in the 2002 Farm 

Bill in terms of the additional funding that went into the program. 

But I would like to have our panelists, if they would, comment 

on the issue of some of the backlog in EQIP applications because 

that was originally the issue was we do not have enough funding. 

We put more funding into it and I am interested in knowing what 

can be done in the next Farm Bill in addition to funding to help 

streamline the application approval process and increase the success rate of EQIP applications. 

Mr. LANCASTER. Senator, one of my goals in looking at our programs is to make conservation easier. I truly believe that landowners when given the information, given the resources want to 

make good decisions on those lands. I mean, after all they are there 

to pass those operations on to future generations. 

So as I look at the EQIP program, we have reduced the backlog 

from 5 to 1 to about 2 to 1 in terms of applicants into the program, 

which is great success but it also demonstrates based on the almost 

tenfold increase in the program that there is great demand for the 

EQIP program in the Nation. 

I think as we make the process easier, as we make the applications easier, as we look at opportunities for potential price discovery we can make those dollars stretch. One of the things that 

I do is look at our cost share rates within the program. 

Within our regional equity States, many of those cost-share rates 

are up near the cap. They are near 75 percent. Other States, the 

cost-share rate again is dipping down to 50 percent or more. 

There are many instances where producers would accept a lower 

level of cost share to implement those practices and we can allow 

those dollars to stretch further as well. 

Senator THUNE. Well, even if let’s assume it is down and you get 

50 percent of the applications are accepted and the remaining 50 

percent go unfunded, what you are saying though with the costshare issue that this still is an issue of funding, or are a lot of 

these folks who are applying into the EQIP program, how many of 

them just do not meet the eligibility requirements? 

Mr. LANCASTER. I cannot give you that. 

Senator THUNE. I know you have reduced the backlog, but that 

still seems like when you are only getting 1 out of 2 who are applying to the program that are actually getting funded, that does not 

seem like a real good rate of success. 

Mr. LANCASTER. I cannot give you the specific number on how 

many of those would otherwise be eligible for the program or if that 

entire amount is eligible for the program. 

But when you look at these programs, I think there will always 

be more demand than there is available. We have 930 million acres 

of non-forested agricultural land where producers, I think given the 

tools, would want to access those funds, and so in many cases it 

is a matter of prioritizing what resource concerns are you trying to 

address. 

As you look at those land ownership patterns, you look at those 

watersheds, I think every State has areas of specific concern to the 

25

State and others where one operation may not make a difference 

in that stream quality or other issues. 

So as we look at the program, I think it is important to again 

look at that prioritization of funds and whether or not EQIP is a 

program that everyone is entitled to 50 percent of implementing 

conservation practices, or if it is one where we need to target those 

resource concerns that are most concerned to those within a State. 

Senator THUNE. In the 2002 Bill there were some sub-programs 

created within EQIP focusing on particular regions or specific environmental concerns, and I know there are some groups who are advocating additional subgroups. Does that make sense in terms of 

your notion of targeting? 

Mr. LANCASTER. I will say even within the EQIP program there 

is a carve-out for the Klamath Basin. The application backlog exists within that program as well, and so it is one of those that I 

think you could create a number of sub-parts, but you will probably 

always have that backlog. Because with that 130 million acres of 

eligible land, not to mention forest land, and if you really are trying to address resource concerns, every acre counts, there will always be a backlog within those programs. 

Senator THUNE. It is the one program in the Farm Bill that livestock producers can benefit from. They never have wanted really 

to be in the other parts of the farm program, so it is the one thing 

that we can do that gives them access to a source of funding that 

can help them with their operations. So I want to make sure we 

have got the best program possible that is available to livestock 

producers. 

One final question very quickly and it is a little bit back to the 

whole question of CRP but it could become a working lands issue. 

If CRP acres are put into grasses that might be used for energy 

production, native grasses, bluestems, switchgrass, that sort of 

thing, can that accomplish the wildlife production, conservation, all 

the things that we want to see that are benefits in addition to 

being used or harvested for energy production? Can all those things 

compliment each other? 

Mr. LANCASTER. First, let me say in terms of EQIP, it is our most 

flexible program. It is kind of the flagship for our programs, and 

I agree with you with the need to include a program that has that 

flexibility to address livestock producers, crop producers and others. 

In terms of CRP, NRCS provides technical assistance to landowners engaged in that program through the Farm Service Agency. 

When you look at perennials and the ability to harvest those, I 

think a lot of the wildlife benefit would be in those management 

systems of when you are harvesting, how you are harvesting those 

perennials. 

Senator THUNE. But those objectives are not mutually exclusive. 

You could accomplish an energy production objective as well as continue to promote conservation, wildlife production, all those things. 

Mr. LANCASTER. Based on the data I have seen, I think that that 

is an accurate statement. I would reserve the right to talk with our 

technical staff to talk about what really could be done there and 

what those impacts are. But based on the data that I have seen 

26

in the literature I have read, I do not believe it is mutually exclusive. 

Senator THUNE. Thank you, Mr. Chairman. 

Chairman HARKIN. Thank you, Senator Thune. I look forward to 

working with you. I thought that last question you asked was very 

probative. 

That is as we are going to try to use the Farm Bill to move more 

incentives for cellulosic production for ethanol biomass production, 

what programs do we have out there that would enable farmers to 

switch to do that and still give them the incentives so that they are 

not losing their productive capacity and not losing payments that 

they would normally get on a program crop or something like that. 

I just think you have hit on something that we really are going 

to have to spend some time and examine here in this next Farm 

Bill. I do not know which program would be the best. There is the 

grasslands program, there is CRP, CSP, figure out which is the 

best one or a combination that we can use together, so I look forward to working with you on that. 

It has got to be a big part of this Farm Bill, some way to moving 

to more cellulosic production for energy production for energy use. 

So I thought that was a very probative question and I appreciate 

it very much. And I will follow up on that with more questions 

about energy production some other time. 

Mr. Lancaster, my friend from Georgia had asked you about how 

much this would cost, CSP would cost, and you said, and I wrote 

this down, back-of-the-envelope is 930 million acres, 50 percent enrollment, average cost 20 an acre, $9 billion a year. 

How much has OMB estimated the cost of this program if uncapped? 

Mr. LANCASTER. I do not know that answer, Senator. I can certainly sit down with them. Part of the issue is that the program 

is capped and——

Chairman HARKIN. Yes, but I think it is about one-ninth of that, 

to tell you the truth, so I think that $9 billion is really a bogus 

number. I saw all the reporters writing very furiously when you 

mentioned that number there. 

I mean, first of all, 450 million acres, some of that is in the 

Grassland Reserve Program, some of that is in CRP. I do not know 

if you were counting CRP or not. Some of that is in EQIP. So right 

away you have got to start thinking about all these other programs, and we do not want to have duplication, so you have to 

carve that out. 

Second, I do not know how you assume 50 percent. What has 

been your history in the watersheds? As far as I know, you have 

not had 50 percent signed up in the watersheds. Have you? 

Mr. LANCASTER. No, Senator. 

Chairman HARKIN. No. 

Mr. LANCASTER. Certainly, when you look at the program, you 

are talking about 930 million acres of land and so you would back 

out the 36 million of CRP land, you would back out the EQIP 

lands. 

As you have indicated a preference to have a program that allows folks to enter into the program with the intent to increase 

their level of conservation so that they would benefit from the proVerDate 0ct 09 2002 14:57 Apr 13, 2007 Jkt 000000 PO 00000 Frm 00030 Fmt 6633 Sfmt 6633 C:\DOCS\34244.TXT SAG2 PsN: SAG2
27

gram, you are really lowering that bar so that regardless of what 

level of conservation is currently on your farm, you can get into the 

program and we would then help you reach that higher level of 

conservation. 

Currently, the bar is set higher than that for entry into the program and so I do not know if you can say, ‘‘What is your percentage of acceptance into the program now within a watershed,’’ and 

extrapolate that to what an estimate might be of the program. 

Chairman HARKIN. I do believe that you need more Tier 1 involvement, and I do not think that you are getting that right now. 

Again, this is a balancing thing. One of the reasons we did CSP 

the way we did was I am sure that every one of us at this table, 

all the Senators who are here or Congressmen on the other side 

have heard more than once from farmers who say, ‘‘You know, I 

have been a good steward. I have practiced good conservation. My 

neighbor down the road, he plants up and down the hillside, does 

not do anything, and then they get the money.’’

Or they have had some land they had to go out and plow it up 

in order to qualify for a conservation program. So we have heard 

these stories for years. So one of the things was to say to those 

farmers who had been good stewards, ‘‘You can get in this program.’’

You know that ‘‘reward the best, incentivize the rest,’’ I do not 

mind that as far as that goes, but if you are just going to reward 

the best and keep people out who need the incentive to get into 

Tier 1 so you can build them up to Tier 3, that was the whole idea 

of it. So there has to be a balance, and I think, quite frankly, it 

has gotten out of balance. 

Mr. LANCASTER. Senator, I believe the CSP is a good program. 

I think again, as you are looking at conservation needs of landowners, you need to have a variety of tools, a stewardship tool and 

a cost-share tool like we have with EQIP. 

When you are talking about building up, I have seen an increased level of applicants for Tier 3 over the course of the program, and part of what that is telling me is that landowners recognize the benefit to being in the program. They are increasing their 

level of conservation so that they can get into the program, and 

therefore this policy of rewarding the best really is motivating 

other producers to increase their level of conservation because we 

are looking at those producers who have been good stewards, who 

have addressed their resource concerns. If they are in the program 

it is creating incentive. 

I have seen that across the country where folks are increasing 

their level of conservation because they anticipate the availability 

of the program someday coming to their watershed so that they 

will be prepared to enter into the program. 

I think the CSP program has been a success from that perspective. 

Chairman HARKIN. I agree with you on that. I agree with you except that yes and no. The watershed-based program, of course, I 

cannot find it anywhere in the statute that we set up a watershedbased program, so we have some anomalies out there. 

We have a watershed, for example, where you have a farmer that 

is in the watershed and they are doing certain conservation pracVerDate 0ct 09 2002 14:57 Apr 13, 2007 Jkt 000000 PO 00000 Frm 00031 Fmt 6633 Sfmt 6633 C:\DOCS\34244.TXT SAG2 PsN: SAG2
28

tices. They are eligible for CSP. A farmer five miles down the road 

outside the watershed doing equally as good, if not better, conservation practices cannot get in. That is having a depressing effect 

on people. 

And the fact that if you are in a watershed and you are eligible 

and you do get in the program on the first round, and then you say, 

‘‘Well, Okay, I want to then do better conservation practices, when 

is the next time around that that watershed will come around?’’ 

Something like 90 years? 

I do not know what it is, but it is something that is so far that 

not in their lifetime will they ever be able to get back in the program, so I cannot see that that is any kind of an incentive. Do you 

see what I mean? 

Mr. LANCASTER. Mr. Chairman, those members that are in the 

program or those participants that are in the program have the opportunity to modify their contracts and increase their level of conservation. 

Chairman HARKIN. That are in the program. I am talking about 

people in the watershed who did not get in the program because 

they did not quite meet it. Now they say, ‘‘Oh, I see my neighbor 

is doing this. I want to get in that program. I will increase my conservation.’’ But the next time that that watershed will be eligible, 

how many years? 

I was told it was 8 years, but I think it is much, much longer 

than that. 

Mr. LANCASTER. Chairman, our original plan was an 8–year rotation again with a capped program and with that percentage of TA, 

we really needed to find a way to offer the program. I think that 

the watershed approach was an attempt to allow for a program 

that would have nationwide reach. 

Certainly, what I have seen for producers that are not in the program, they do recognize, ‘‘My neighbor is in the program, I see 

some benefits, I am going to increase my level of conservation so 

that when I have the opportunity to enroll, I will be eligible.’’ And 

I am seeing that across the country. 

Chairman HARKIN. Well, maybe. I would like to know more about 

that, because what I have heard is that people in a watershed who 

did not qualify say, ‘‘Well, gosh, I will not be eligible.’’ I said 90 

years. I do not know where I picked that figure up, but it is a long 

time. It is more than 8 years now, maybe double that. 

They say, ‘‘Well, I will do something else.’’ So I do not know that 

that is much of an incentive. But this is not your problem. That 

is our problem because we capped the program. I do not say me, 

but Congress did. 

And that is why this program was designed as an uncapped entitlement program. CSP is just like a commodity program, just like 

corn and cotton and wheat and beans and rice and everything else, 

it was a commodity program. 

Because conservation should be looked up as having a value, a 

producing value, a value to society. All of the programs in conservation in the past have always been dealing with how you get 

land out of production but for the EQIP program. They have been 

good programs, but we needed to do some environmental stuff on 

producing lands and put a value on that. 

29

It was wrong to take money out of the program for disaster payments. As I mentioned in my opening statement, that has never 

been done before. Hopefully, it will never be done again. And then 

to cap the program as was capped, there would be a howl from 

around the country if we capped a commodity program. 

We say, ‘‘Okay. You are eligible for a target price, loan rate, deficiency payments, LDPs, but there is only so much money available,’’ and first come first serve or you set up some kind of a 

scheme to reward farmers. 

That was the intention of this CSP was to make it like that so 

that if you did certain things and met certain things and you were 

eligible, you got in the program. 

But again, that is more of a problem for Congress overcome, not 

yours. In fact, I would just say publicly, Mr. Lancaster, that with 

the constraints that we have had on it, you have done a great job 

in implementing the program, so I do not want you to misinterpret 

what I am saying here. I am just trying to for the public’s benefit 

and for the hearing benefit is to point out that the CSP is not operating as was envisioned in the law as was set down in statute. 

Now, again, part of that is because we capped it. Then when you 

cap it and you limit it, then you are forced to do certain things to 

make it try to work. 

Our job I think in the Farm Bill is going to be to see how we 

can modify that and perhaps make it a little better and more fair. 

One of the things I think is going to big is what Senator Thune 

just mentioned and how we couple that with providing incentives 

for energy production in a conserving way. Because most of these 

energy crops that we are talking about are very conserving in nature, and so this seems to me a great place to look for that kind 

of an incentive. 

Mr. LANCASTER. Mr. Chairman, I would share I absolutely agree 

with you one hundred percent that conservation has value, and I 

think there are opportunities in the marketplace to reward that 

value. 

We have entered into a memoranda agreement with the Environmental Protection Agency on a water quality credit trading opportunity. We are looking at similar agreements with the Fish & Wildlife Service on habitat credit trading agreements and that is a market-based incentive, market-based opportunity to inject private capital into conservation. 

Even with the Conservation Security Program, I have seen Tier 

3 producers who are marketing their product as a Tier–3–grown 

commodity, and they are getting a premium in the marketplace for 

again placing a value on conservation. 

Chairman HARKIN. You are absolutely right. One last thing before I yield to Ms. Shames is I want to follow up on Senator Nelson’s point. 

Now, I have heard from a lot of organic farmers who practice 

good conservation. They have no runoff, they do their ridge tilling, 

they plow back in manure in the ground, they do it in an environmentally sound way, they cannot get in the program. 

Now, again at the outset I want to say perhaps my history is one 

of being a very strong supporter of no-till farming. I believe in that 

without exception. Well, not without exceptions, maybe there are 

30

exceptions, and that is for certain organic farmers, for certain people who have an environmentally sound practice but do not put on 

herbicides, pesticides, things like that, so we need to examine how 

we change this so that they are eligible. 

And I am open for any suggestions that you might have from 

your agency what we might do in the Farm Bill to accomplish that. 

Mr. LANCASTER. I would be happy to share thoughts with you. 

When I do look at organic producers and I do look at how they are 

qualifying, they are qualifying in similar ratios to other producers 

in the watersheds. 

Because you are an organic producer does not necessarily mean 

that you are farming in a conservation-oriented manner in terms 

of tillage. In many cases, you have to till, which disturbs the soil, 

and you have to apply some type of manure or fertilizer for that 

opportunity. But, again, I want to make conservation easier. I want 

to look at our programs to see how we can make sure that we are 

not disadvantaging any one sector. Because agricultural in this 

County is very diverse. We need to have opportunities for organic 

producers, for row-crop producers, for livestock producers, all to 

participate in our conservation programs. 

Because again, I believe they have a built-in incentive to operate 

in a sustainable manner, and we want to find the tools to help 

them do that. 

Chairman HARKIN. I appreciate that. Last, just keep in mind 

that as we proceed in this Farm Bill and as we try to build in incentives for the production of energy crops, cellulosic crops, we can 

marry that up with conservation I think in a very, very beneficial 

way for farmers and for our national security. 

Ms. Shames, I have not asked you anything, but the only thing 

I ask is both of you on this idea of duplicate payments, we do need 

to know what is happening out there and as I have heard, we do 

not really know. We know it is happening, but we do not really 

have a handle on it. 

Do I have your assurance, Mr. Lancaster, that we are going to 

try to implement the recommendations that the GAO gave you on 

that? 

Mr. LANCASTER. Mr. Chairman, we have already begun implementation of those recommendations. 

Chairman HARKIN. Then I would like to follow up on that. Let 

me know what you have done on that down the pike. 

Mr. LANCASTER. Absolutely. 

Chairman HARKIN. Senator Chambliss. 

Senator CHAMBLISS. Just one question, Mr. Chairman. Arlen, is 

there any general consensus within the Administration as to which 

box the CSP program falls in within the WTO? 

Mr. LANCASTER. Chairman, there are a number of different payments within the CSP program. I do not think that there has been 

any final determination on where each of those payments would 

fall in terms of WTO. I can certainly look into that and get back 

to you. 

Mr. Chairman, we have a number of programs or a number of 

payment structures within the CSP program, the stewardship payment, the enhancement payment, the incentive payment. Each of 

those would have to face its own review in terms of whether or not 

31

that would meet tests in terms of WTO and which box that might 

be placed in. 

So I do not believe that we have looked closely at those programs 

individually or those payments individually to see where that 

would be categorized. 

Senator CHAMBLISS. As we move forward with the consideration 

of the Farm Bill, we are going to need some guidance on that because that is obviously going to be critical to us in our deliberations, so we will look forward to staying in touch with you on that 

issue. Thank you. 

Chairman HARKIN. A very good point. Thank you, Senator 

Chambliss. I thank this panel. Is there any last thing before I dismiss you and bring up the second panel? 

Mr. LANCASTER. Senator Chambliss, the staff notifies me we are 

currently notifying WTO, so we are working with them on which 

categories those would be in. 

Chairman HARKIN. Thank you again, Mr. Lancaster. Thank you, 

Ms. Shames. Thank you both for appearing here, and we will follow 

up on some of these things with both of you. Thank you, Mr. Lancaster. 

Now we will call our second panel. Mr. Craig Cox, the Executive 

Vice President of the Soil & Water Conservation Society; Ms. Kathleen Merrigan, Director of the Agriculture Food and Environment 

Program for the Center for Agriculture Food and Environment in 

Winchester, Massachusetts; Mr. Duane Hovorka, Farm Bill Outreach Coordinator of the National Wildlife Federation from Nebraska; Mr. James Ham, President of the Georgia Association of 

Conservation District Supervisors from Smarr, Georgia. 

We welcome our second panel, and again, 6–minute statements 

each. If you can cut them shorter than that, we would be most appreciative, and then we will open it up for 8–minute round questions. 

First we have Mr. Craig Cox, Executive Director of the Soil & 

Water Conservation Society. Mr. Cox, welcome again to the Committee and we look forward to your testimony. 

STATEMENT OF CRAIG COX, EXECUTIVE DIRECTOR, SOIL AND 

WATER CONSERVATION SERVICE, ANKENY, IOWA 

Mr. COX. Thank you, Mr. Chairman, Senator Chambliss, members of the Committee, for the opportunity to appear here today. 

I would like to applaud you for holding this hearing on working 

land conservation. It is imperative that we have an effective working land conservation effort on our Nation’s working lands. In 

many respects, the viability of agriculture, the health of our resources and the quality of our environment depends on the effectiveness of that effort. 

I would first like to echo comments that have been made already 

about the importance of technical assistance to our working land 

conservation effort. I have no doubt that the administrative tasks 

of writing contracts and cutting checks to get money out the door 

will in fact be accomplished in both EQIP and the Conservation Security Program, but I have serious and growing doubts about 

whether the scientific and technical support will be there to make 

those checks meaningful for both producers and the environment. 

32

At the end of the day, it is the skills, knowledge, creativity and 

commitment of people, both our producers and the professionals 

that they work with, that will determine whether we achieve the 

goals of working land conservation or not. 

In 2002 this Committee and Congress took important steps to 

strengthen our technical assistance network. In my testimony, I 

outline additional steps I would recommend, but at the end of the 

day I truly believe the most fundamental Federal role in working 

lands conservation is to build and support the technical assistance 

network that we need. I think in the long term that effort will be 

more important than EQIP or CSP in driving effective working 

lands conservation. 

Now, about EQIP. EQIP has emerged as the most important financial assistance program in our working lands conservation effort. Overall, our past and ongoing assessments of EQIP have indicated mixed results in terms of the performance of EQIP, but with 

reasons for optimism that the program is performing effectively. 

I have outlined a number of opportunities in my written statement that I think would ramp up the performance of EQIP. Let me 

just mention one, which I think is far and away the most promising 

opportunity and this is to focus more of EQIP’s resources through 

special projects. 

Now, let me be clear about what I am saying here. What I am 

not recommending is going back to the bad old days where we drew 

arbitrary lines on maps and told people you were in or out depending on which side of the line you are on. 

What I am talking about is focusing technical and financial resources on projects like, Mr. Chairman, Lake Rathbun in Iowa that 

are designed to strategically and effectively address conservation 

issues of great importance to local communities. The scientific, the 

technical, the political advantages of this kind of focus on high 

value resources through special projects is remarkable. 

And if you think about it, we could mandate 30 percent of EQIP 

dollars be spent on special projects, either alone or through a 

strengthened partnership and cooperation section of the 2002 Bill, 

and still leave us the capability to operate a base program in every 

county of this country at funding levels that are unprecedented in 

recent history. 

I think striking a better balance between special projects and a 

more diffuse allocation of dollars is far and away the biggest opportunity we confront in EQIP. 

I have reserved CSP for the last not because it is least important 

but just the opposite. I was going to start my remarks on CSP by 

trying to make the case that urgent action is required to fully realize the promise of CSP, but frankly, the earlier session has, I think, 

made that case more compellingly and more articulately than I 

could have done. 

So let me just skip to the two big issues I think we confront, both 

of which have been raised already in the previous session, and 

those are money and environmental performance. 

As has already been discussed, the statute envisions a stewardship entitlement, but the reality has been strict funding caps. Trying to match vision to reality has created a number of compromises 

33

in the implementation of the program that have created serious 

criticism, much of which has been echoed today. 

The problem we face is we cannot fix those problems, we cannot 

reverse those compromises, without a substantial increase in funding. In fact, CSP has to grow in funding every year just to maintain the current limited program. Whatever we come out with in 

2007, we either have to adjust the vision to the funding or make 

sure the funding matches the vision. We simply cannot go forward 

in the current situation without doing serious damage to the program. 

On environmental performance, the biggest concern of conservationists is: how much money can we afford to pay to reward the 

status quo when we so desperately need to change the status quo? 

As I mention in my written statement, most of CSP funds to date 

are going to benchmark payments that reward the status quo. We 

simply have to strike a better balance between rewarding the status quo and changing the status quo. If we can deal with the funding and deal with this balance, I think we can recover the promise 

of CSP, and, frankly, we must accomplish that. 

So thank you very much for the opportunity to be here, and I 

look forward to working with the Committee. 

[The prepared statement of Mr. Cox can be found on page 53 in 

the appendix.] 

Chairman HARKIN. Thank you very much, Mr. Cox. Now we turn 

to Kathleen Merrigan, who was earlier introduced by Senator 

Leahy. Again, Ms. Merrigan has worked as Administrator of USDA 

Agriculture Marketing Service, prior to that was Senior Analyst at 

the Henry A. Wallace Institute for Alternative Agriculture. She 

holds a BA from Williams College, a Master’s in Public Affairs from 

the LBJ School in Texas, and a Ph.D. in Environmental Planning 

and Policy from MIT. 

Ms. Merrigan, welcome to the Committee. Please proceed. 

STATEMENT OF KATHLEEN A. MERRIGAN, DIRECTOR AND ASSISTANT PROFESSOR, AGRICULTURE, FOOD AND ENVIRONMENT PROGRAM, TUFTS UNIVERSITY, BOSTON, MASSACHUSETTS 

Ms. MERRIGAN. Thank you, Mr. Chairman. Thank you all. It is 

an honor to be here and a pleasure to see so many old friends and 

colleagues. 

Let me first say behind every successful professor stands dedicated hard working graduate students, many of whom are here 

today. This is a group effort that I am presenting on in which we 

studied farms in New England. We asked the question: Does CSP 

work for farmers in our region? 

Although based upon a small number of case studies, our study 

nevertheless revealed several interesting things. I want to highlight eight recommendations from our report here today. 

First, the funding issue: previous speakers have covered this. We 

need more money. The program is not living up to what we would 

hoped it would be, because of insufficient resources. 

Second, all the bureaucracy that has been created by NRCS necessarily because of the limited funds has made the program less 

than farmer-friendly, to say in the least. 

34

Third, NRCS does great fieldwork and our farmers want and 

need more of it. The cap on technical assistance is making this program unworkable. We need more technical assistance. 

Fourth, there is an over-reliance on this program in using the 

Soil Conditioning Index as a threshold criterion for eligibility of the 

program. It is fundamentally flawed not so much that it should be 

thrown out all together but it should only be one tool in a toolbox 

for NRCS assessments. 

Fifth, the effort for small farmers and for NRCS staff to put together CSP contracts is significant. We recommend that there be 

a minimum payment for small farmers of the amount of $500 a 

year for farms 50 acres or less, $1,000 for farms greater in size so 

that it makes it worthwhile to participate in the program. 

Sixth, one-stop shopping always has great appeal. We heard from 

a number of NRCS agents and farmers that they would like to see 

a universal application for all NRCS programs. They would not 

have to go through this paperwork and that paperwork but they 

could sit down and do whole farm planning with NRCS through a 

universal application. 

Seventh, new practice payments under this program are confusing. Do they really exist? They are there on paper, but they do 

not seem to be offered, at least in our region, and there are questions that our study raises about the complementary with the 

EQIP program and the program payments there, which are much 

more sizable. 

Finally, the question some farmers face is to plant or to apply. 

The timing of the money coming through the program and when 

the sign-ups are has had an unfortunate collision with planting 

times for farmers making it difficult for them to go through the 

program. 

So those are some issues that I get into more depth in my testimony. We have also provided full copies of our study for the Committee’s review. 

We think Green payments are the way to go. We think the CSP 

program is exciting. It does work. It can work much better with 

some serious fine tuning, and I appreciate all the Committee’s 

work and attention to this program that is the future of farm policy 

in this country. Thank you. 

[The prepared statement of Ms. Merrigan can be found on page 

89 in the appendix.] 

Chairman HARKIN. Thank you very much, Ms. Merrigan, and we 

will definitely have some questions for you but great testimony. 

Duane Hovorka from Elmwood, Nebraska, the Farm Bill Outreach Coordinator for the National Wildlife Federation, and today 

Duane is testifying on behalf of the National Wildlife Federation, 

the Sustainable Agriculture Coalition and the Izaak Walton League 

of America. Mr. Hovorka, welcome. 

35

STATEMENT OF DUANE HOVORKA, FARM BILL OUTREACH COORDINATOR, NATIONAL WILDLIFE FEDERATION, ON BEHALF OF THE NATIONAL WILDLIFE FEDERATION, SUSTAINABLE AGRICULTURE COALITION, AND IZAAK WALTON 

LEAGUE OF AMERICA, ELMWOOD, NEBRASKA 

Mr. HOVORKA. Thank you and good morning. Over the past, year 

I coordinated a project sponsored by those three organizations to 

try to better understand the USDA Conservation Security Program 

and the benefits for fish and wildlife. 

We interviewed a variety of State and Federal officials, nonprofit 

organizations and others who have on-the-ground experience and 

knowledge about the program. USDA also gave us summary data 

about contracts that resulted from the 2006 sign-up for enhancement practices that appear to us to provide either direct wildlife 

habitat benefits or that reduce pesticide use in ways that should 

benefit some wildlife. 

That data is reflected in the State case studies that are included 

in the report that you should have before you which is, ‘‘Hidden 

Treasures: the Conservation Security Program and Wildlife.’’

Our analysis focused on the enhancement payments because as 

USDA has implemented the program, those have represented about 

four-fifths of all the payments that have actually gone to farmers. 

So here are our key findings: First, the Conservation Security 

Program does provide substantial benefits for wildlife. Based on 

our analysis of the USDA data, it appears roughly one-half of all 

program payments that resulted from that 2006 sign-up are for 

practices that either provide wildlife habitat benefits or that will 

reduce pesticide use in ways that should benefit some wildlife. 

In most cases, we are buying those wildlife benefits with practices that deliver multiple benefits for multiple resources, such as 

grazing management, pest and nutrient management. Only a small 

portion of the payments are actually for practices that are designed 

primarily as wildlife habitat management practices. 

Second, the program benefits for wildlife vary considerably from 

State to State. In Missouri, about 88 percent of the CSP payments 

from those 2006 contracts sign-ups are for practices that benefit 

wildlife. In Nebraska, just 26 percent of payments resulting from 

those 2006 contracts met that same test, and it appears some 

States are even lower than that. 

Third, the Conservation Security Program could provide even 

greater wildlife benefits, and here is how: We offer eight recommendations in the report that taken together would substantially boost the wildlife value and the wildlife benefits provided by 

the program, and we think improve the program overall. 

Three of those are things Congress can and should do as it considers the 2007 Farm Bill and as it looks at appropriations bills 

this year. 

One, Congress should substantially increase funding for the Conservation Security Program so that farmers and ranchers on a nationwide basis have timely enrollment opportunities, and I think 

you have heard that again and again today. 

Two, Congress should direct USDA to provide cost share for new 

practices under the Conservation Security Program at the same 

rate as provided for other USDA programs. USDA is authorized to 

36

provide cost share to install new practices under current law, but 

as you have heard, they have not used that authority very often. 

And, three, Congress should require that all Tier 2 and Tier 3 

contracts address wildlife habitat as a resource of concern and the 

emphasis on wildlife should be increased in Tier 1 contracts. Currently, just Tier 3 contracts require that wildlife be addressed as 

a resource. 

Our recommendations for USDA: One, USDA should expand the 

number and variety of wildlife conservation practices available to 

farmers in each watershed, and they should continue to find new 

wildlife-related practices. 

Two, USDA should encourage, not discourage, wildlife professionals from helping landowners who are contemplating a CSP contract by getting out there early in the process and helping them 

understand their options. 

Three, USDA should continue to review enhancement payment 

rates to ensure that they are fair both for farmers and ranchers 

and for taxpayers. 

No. 4, USDA should ensure that all NRCS State Conservationists set standards at the State level that provide a consistently 

high level of wildlife benefits. 

And, five, USDA working with partners should establish a more 

robust monitoring and evaluation program to measure the actual 

outcomes of those conservation practices, and Congress should fund 

that initiative. 

With these important changes, we believe the Conservation Security Program could and should play an even bigger role in the future in ensuring high quality wildlife habitat and bountiful fish 

and wildlife populations on America’s privately owned farms and 

ranches. 

Thank you for the opportunity to be here today. 

[The prepared statement of Mr. Hovorka can be found on page 

67 in the appendix.] 

Chairman HARKIN. Thank you very much, Mr. Hovorka, for your 

very concise recommendations. Very good. 

Next we turn to Mr. Jim Ham on behalf of the Georgia Association of Conservation District Supervisors and the National Association of Conservation Districts. Mr. Ham, welcome to the Committee. 

STATEMENT OF JIM HAM, PRESIDENT, GEORGIA ASSOCIATION 

OF CONSERVATION DISTRICT SUPERVISORS, ON BEHALF OF 

GEORGIA ASSOCIATION OF CONSERVATION DISTRICT SUPERVISORS, AND THE NATIONAL ASSOCIATION OF CONSERVATION DISTRICTS, SMARR, GEORGIA 

Mr. HAM. Thank you, Mr. Chairman, for having me. Good morning. I am Jim Ham, a middle Georgia farmer, a County Commissioner, President of the Georgia Association of Conservation Districts, recently elected Farm Bureau Director for the State of Georgia and a charter member of the Two Rivers RC&D Council. 

That is a lot, but the one thing I want you to pick up on is fulltime farmer, Mr. Chairman. I think I am the only full-time farmer 

to speak today, so I think I am where the rubber meets the road, 

if you will. 

37

I farm in an area that is changing. The rural/urban interface is 

outside of my front door. I also have an EQIP conservation contract 

that has allowed me to cross-fence pastures, better utilize my 

grass, fence out ponds and streams to protect water quality, install 

stream crossings and renovate heavy-use areas to prevent soil erosion and manage animal waste. 

According to the 2002 census in Georgia, while the number of 

farms is about the same as in 1997, the number of acres in farming 

has decreased by about 500,000 acres. Changes in land use such 

as fragmentation due to new friends from the city moving into the 

country adds pressure to farms and services that conservation districts and NRCS personnel provide through conservation programs. 

In many ways, conservation programs and policies help keep me 

on the farm while I get other support from commodity programs. 

The conservation tools, both technical and financial, have helped 

me and many others avoid regulations and allow me to continue 

farming in an ever-changing environment. 

Today we are discussing the needs and updates or additions to 

EQIP and the CSP Programs as well as all the programs in the 

Conservation Title. We hope the Committee will look into increasing access to EQIP and other programs, evaluate whether consolidation of numerous conservation programs makes sense or streamlining the application process provides for smoother, more efficient 

program participation on the ground. 

We do, however, hope that any streamlining does not result in 

taking funding away from conservation programs. The next Farm 

Bill must balance programs focusing on land retirement with working land programs such as EQIP and CSP. 

EQIP is a very popular program in Georgia. In the fiscal year 

2004, we funded 1,175 contracts; in 2005, we funded 1,281 contracts; and in 2006, 1,084 contracts; all totaling over $42 million. 

For these 3 years, there were 3,619 unfunded contracts. I want to 

say that again: We had 3,619 unfunded contracts for these 3 years. 

As you can see in Georgia with the EQIP program alone, there 

is a high demand and we only see that demand for conservation assistance increasing. EQIP funding in Georgia has been put to use 

supporting manure management, water quality and water quality 

issues. 

Our growing poultry industry has utilized EQIP cost-share dollars to create stack houses to ensure that manure does not create 

a water quality problem in the local community. Without these 

cost-share dollars, these facilities would not have been built, resulting in inadequate storage. 

There is also a growing need in Georgia for funding to address 

forestry concerns. Due to previous conservation programs, there is 

an overabundance of timber that needs to be thinned in order to 

keep the land productive and in order to improve wildlife habitat. 

EQIP dollars have been used in Georgia to meet some of these 

needs, but the needs outweigh the assistance currently available. 

The CSP program that resulted from the 2002 Farm Bill is a little different than we expected. We hoped for a program that was 

easy for producers across the country to understand resulting in 

graduated support for increasing adoption of conservation pracVerDate 0ct 09 2002 14:57 Apr 13, 2007 Jkt 000000 PO 00000 Frm 00041 Fmt 6633 Sfmt 6633 C:\DOCS\34244.TXT SAG2 PsN: SAG2
38

tices. Unfortunately, the result was an extremely targeted program 

with complex implementation. 

The program is too complicated both for general understanding 

of the program design and application complexity by the producer, 

coupled with limited watershed- based availability and lack of additional assistance on the ground needed to implement the program. 

The watersheds selected in Georgia were very small with limited 

agricultural production, which has resulted in 37 contracts in 2004, 

111 contracts in 2005, and 58 contracts in 2006, all totaling $62 

million, if you consider the lifetime of the contract, the 10 year contract, if the contract was funded every year. 

Although we only had 31 unfunded contracts, I feel with greater 

education and understanding of the recordkeeping requirements, 

we would have move applications for CSP programs. 

The CSP self-assessment tool is a step in the right direction to 

further improve this program. Due to the complexity of the CSP 

application process, USDA should place some emphasis on educating producers about recordkeeping and information required 

prior to the application process beginning. 

While CSP has been well-received in Georgia, EQIP continues to 

reach more landowners. This is perhaps due to EQIP being an established program and having the flexibility to meet the needs of 

landowners. 

Conservation financial assistance provided through the Farm Bill 

programs is an important component in achieving agricultural sustainability, both economically and environmentally. But in addition 

to talking about EQIP and CSP, I must stress the importance of 

technical assistance. Technical assistance allows the NRCS staff at 

the local level to work with districts, we do a lot of work with districts in Georgia, landowners and State and local agencies to address local resource concerns. 

Technical assistance is utilized to work with landowners on conservation plans. Funding for technical assistance allow NRCS employees to meet face-to-face with landowners, visit their operation 

and help them design strategies for the resource needs of individual agricultural operations. 

Technical assistance must continue to be a fundamental element 

of the next Farm Bill, both as a stand-alone program and built into 

the delivery of every individual conservation program. 

We all have a great opportunity in this 2007 Farm Bill to build 

on the good programs and policies that were advanced in 2002. 

Georgia Conservation Districts and those across the country want 

to be a constructive and active player in the development of the 

2007 Farm Bill. 

We want to work with the Committee to make sure the next 

Conservation Title provides meaningful assistance to producers and 

results the taxpayers can also appreciate and enjoy. 

In doing so, we believe that programs should balance efforts to 

achieve soil, water, air, plant, animal and wildlife goals necessary 

to address the Nation’s agricultural and natural resource needs. 

Thank you, Mr. Chairman, for bearing with me. 

[The prepared statement of Mr. Ham can be found on page 63 

in the appendix.] 

39

Chairman HARKIN. All right, Mr. Ham, thank you very much for 

a great testimony. 

I think one thing I got through every one of your testimonies is 

that we need more technical assistance, No. 1, and No. 2, we need 

to reduce the complexity of the program. Both of those came 

through in all of your testimonies, and in your written testimonies, 

which I had read previously, that CSP does hold great promise for 

the future. 

I will start with Mr. Cox. Again, getting to the technical assistance, I am encouraged by your support for strengthening the partnerships in cooperation section. I believe this section has great 

promise for increasing the reach of our conservation efforts. It 

would also fit well with this Administration’s stated desire to foster 

cooperative conservation efforts, so my specific question is related 

to both of these topics. 

If Congress were to do as you suggest and strengthen and clarify 

the partners in cooperation section, would doing so provide any opportunities to address the shortfall in technical assistance? 

Mr. COX. Mr. Chairman, I believe the answer to that is yes. As 

you well know, the notion behind the partnerships in cooperation 

section was to provide the opportunity to integrate Federal, State, 

and local programs at the local level in an effective way to get at 

important conservation programs at the local level. 

If the partnerships in cooperation section allowed us to use Federal program funding including the technical assistance dollars 

that flow with EQIP and CSP and other programs as part of those 

Partnership in Cooperation agreements, then I think I does provide 

an opportunity to build a more dense infrastructure at that project 

level. 

Chairman HARKIN. Let me ask Mr. Ham. I was reading your 

final statement and you said that the ‘‘CSP program did not work 

out like we expected it to.’’ Join the chorus here. Being the author 

of it, it never turned out like we intended it either. 

But through all of your testimony, it seems to me you are saying 

that we need to get off of this watershed basis that we are on because it is inequitable, it is unfair, it is not what we intended, it 

was never in the legislation in the statute. 

And all of you seem to indicate that there should be a better system. It should be like a nationwide-type sign-up system. I guess my 

question is: Is it possible to have a nationwide sign-up system but 

with limited funding? 

I mean, I am a realist. I see what we have got out there, and 

I do not know how long this limited funding is going to last, but 

if we have the limited funding, is it possible to have something 

other than this watershed basis on a national sign-up that would 

be simpler, more transparent, more clear-cut? Is that possible, and 

if so, how? 

So I am just opening it to anyone who grabs a mic down there 

if you have got any ideas about this. Ms. Merrigan, you talked a 

lot about that in your statement about the complexity; of course, 

Mr. Ham did too. 

Ms. MERRIGAN. And certainly we saw farmers in New England 

where their farm might be in three different watersheds at the 

same time, and so the watershed approach is different from the 

40

traditional NRCS program approach, which means then you have 

to rely more upon NRCS staff to walk you through what to do. You 

are eligible if the majority of your farm, whatever watershed that 

is in, but it does add another layer of confusion. 

But without more resources, Mr. Chairman, I am not sure what 

NRCS is to do. Much of the program complexity, and that was the 

No. 1 complaint certainly that we heard from farmers in our work, 

layers have been put on to have a program that meets the financial 

constraints that they are working with. 

Chairman HARKIN. But even with those financial constraints, 

Mr. Hovorka, again, is there a system where we could have a national system without having it watershed- based with limited 

funding, any thoughts on that? 

Mr. HOVORKA. I do think it is going to be extremely difficult to 

do that with the current funding base. So if you increase the funding base, even if you do not provide all the money that we hope 

will be available, that would certainly help a lot. 

I do think there are some things that NRCS could do to simplify 

the program, but I think the key to the farmer is knowing that it 

is coming around. Even if you do not get it this year, if you know 

that within say the next 3 years it is coming to your watershed so 

you can plan ahead on it so you can get up to speed, do your recordkeeping and be ready when it comes. But you have that certainty that it is coming soon and not that certainty that it could 

be 15 or 20 years before they get around to you. 

Because I think that is a problem for farmers is knowing that it 

is coming and knowing when it is coming and having some reasonable certainty that it is coming soon. 

Chairman HARKIN. Yes. Again for your benefit, I am sure you 

probably already know this figure, and I think one of you mentioned it in your testimony, we are now $4.3 billion less in the CSP 

program than what was passed in law and the funding that was 

supposed to be allocated to this Committee. 

Again, I say this only for the record again that when we passed 

the Farm Bill in 2002, we met all the budgetary guidelines. We 

met the budgetary guidelines. Within those guidelines, it was envisioned that so much would be spent on CSP. Out of that we have 

lost $4.3 billion. 

So I can only say what do you think the program might look like had we had that extra $4.3 billion in there? So again, you are all 

correct in talking about the funding aspect of it. 

Mr. COX. Mr. Chairman? 

Chairman HARKIN. Yes. 

Mr. COX. Could I try to answer your question? 

Chairman HARKIN. On? 

Mr. COX. On how to touch more producers under funding caps. 

Chairman HARKIN. Sure. Go ahead. 

Mr. COX. I think there are two possible opportunities I would 

suggest. One is that if we focus the program on rewarding and 

incentivizing what I would call management-intensive conservation 

systems rather than capital-intensive conservation systems. By 

that I mean grazing management, nutrient management, soil management, irrigation water management, where the real issues are 

risk and knowledge. Those systems can produce tremendous enviVerDate 0ct 09 2002 14:57 Apr 13, 2007 Jkt 000000 PO 00000 Frm 00044 Fmt 6633 Sfmt 6633 C:\DOCS\34244.TXT SAG2 PsN: SAG2
41

ronmental benefits at relatively low cost. And if we focus CSP in 

that fashion, we could touch more producers even under existing 

funding caps. 

And sort of a subset of that approach, it seems to me that there 

is a tremendous opportunity in 2007 and beyond to focus CSP on 

sustainable biomass production systems for biofuels and other alternative energies. 

As you well know, biomass production for energy can have tremendous conservation and environmental benefits, but there is also 

significant risk involved in intensifying that production. 

I think there is a tremendous opportunity to create a real niche 

for CSP as the program that is focused on developing, testing, demonstrating, implementing innovative, sustainable approaches to 

producing biomass to help us reach our energy independence goals. 

Chairman HARKIN. So the two approaches, one is to use a management-based rather than a capital-based program? 

Mr. COX. Correct. 

Chairman HARKIN. Second, looking at biomass production? 

Mr. COX. Correct. 

Chairman HARKIN. Of course, that fits in a lot with energy production, too, obviously. 

Mr. COX. Correct. 

Chairman HARKIN. Those are good recommendations. Use those 

as a basis maybe for allocating or for deciding who falls where on 

the scale, and you could do that nationwide because obviously the 

management base is applicable to any State, any region. 

Biomass production, I assume that is applicable to most every 

State, too, I guess. It might be different kinds of crops. 

Mr. COX. Correct. 

Chairman HARKIN. Different kinds of practices, but it would still 

be biomass production. That is a good suggestion. We are going to 

have to follow up on that, and if you have any more insight into 

that, I would like to know because that rings a bell with me, so 

I appreciate that. 

One last thing. I have only got 29 seconds left. Ms. Merrigan, 

Soil Conditioning Index. We heard Senator Nelson talk about that 

with the earlier panel, and I am concerned about that also. 

Are you familiar with the term ‘‘soil tilth’’? We have a National 

Soil Tilth Laboratory in Ames, Iowa, at Iowa State, to measure the 

tilth of soil, the health of the soil, the bugs, the things that are in 

the soil that make it productive. 

Might that be something used, could we use that? How do we get 

off the Soil Conditioning Index that we have been using for the 

CSP program? 

Ms. MERRIGAN. It is a great question. Certainly, the Soil Conditioning Index is a tool, but it is a computer-based model. It is not 

actually going to the farm and seeing what is there and it only 

measures organic matter of the soil and there are other aspects of 

soil quality that are not being evaluated. 

So we really need to look at that and deal with it because your 

earlier question about the organic farmers, they do till more. 

Chairman HARKIN. Yes. 

Ms. MERRIGAN. In our experience in New England, some organic 

farmers were knocked out because of little shifts in their Soil ConVerDate 0ct 09 2002 14:57 Apr 13, 2007 Jkt 000000 PO 00000 Frm 00045 Fmt 6633 Sfmt 6633 C:\DOCS\34244.TXT SAG2 PsN: SAG2
42

ditioning Index that made what NRCS agents and American Farmland Trust considered to be exemplary, conservation-oriented farms 

yet they were losing out on the Soil Conditioning Index. Crazy, 

really. 

In New England where we have a farm that might be 200 acres, 

you could have so many different slopes and so many different 

kinds of fields that also it is a bureaucratic nightmare for NRCS 

to actually do the index appropriately for a farm. 

One NRCS agent told us if you send 25 guys out to a particular 

field, you will get 25 different SCI measurements. So it is a tool 

that really needs to be reevaluated. 

Chairman HARKIN. Thank you very much. I thank all the panel. 

I will yield now to my colleague from Georgia, Senator Chambliss. 

Senator CHAMBLISS. Thank you, Mr. Chairman. I hear a common 

theme coming from all of you relative to funding. And it is not unusual to hear that in these days and times around Washington because we are running some significant deficits now as compared to 

the surpluses that we were in in 2002. 

With that being the case, we are not going to have more money, 

we are going to have in all probability less money to work with. 

So we have got to figure out what the proper balance is not only 

between commodity, conservation, and nutrition programs, but 

within those respective titles, we have got to try to figure out what 

is the proper balance. So it is going to be a challenge for every 

member of this Committee to try to figure out what that balance 

ought to be and how we are going to be able to accomplish all the 

good things that you all have talked about. 

The good news is that you do see some positive results of existing 

programs. We have just got to figure out a way to be able to manage those existing programs and hopefully expand them somehow. 

Mr. Cox, why do you think that technical assistance has less support and funding even though it has been the foundation of our 

conservation programs, and what can we as policymakers do to 

change that course? 

Mr. COX. A couple of comments, Senator Chambliss, and Senator, 

I think in some ways we have lost our way. We have forgotten that 

in the olden days, when I was actually working in the field some 

30 years ago, the purpose of conservation was to enable producers 

to gain knowledge, understanding in the ability to themselves manage their farms and ranches in ways that protected resources and 

sustained the environment. 

I think the advent of such large financial assistance programs 

has been in a sense a double-edged sword. It has given us money 

we never could have dreamed of 20 years ago when I was in the 

field. 

But the financial assistance has tended to overshadow the fundamental importance of technical resources and science and technology and technical assistance and knowledge, and most of our 

policy attention has followed that focus toward talking about financial assistance programs. 

I think that has been reinforced by the laudable switch of financial assistance programs to the CCC account, but that has also 

tended to distract attention from the all-important discretionary accounts that fund most of our technical assistance functions. 

43

I think that you, Senator, and others are clearly trying to reverse 

that last five or 10 years of lack of attention to technical assistance 

and its value, and I think there are opportunities to do that. 

One, which I suggest in my testimony, is why don’t we allow producers to sign up for a technical-assistance-only contract under 

some of our financial assistance programs where we could really 

demonstrate the cost effectiveness of technical assistance alone. 

But that would be my contribution. 

It is very frustrating to us because conservation science and technology has evolved at an incredibly rapid pace in the last five or 

10 years, and we simply are using day to day much less than we 

know scientifically and technically about conservation, and as a result, we are missing opportunities on a daily basis, and it is extremely frustrating. 

The payoff from relatively small investments in the technical 

services network would be tremendous if we could make that happen. 

Senator CHAMBLISS. I am afraid as policymakers we tend to feel 

and react to that pressure from the farmer in the field from a financial perspective sometimes more so maybe, not that we should 

or should not, but that we ought to be paying more attention sometimes to those technical aspects than what we do, so I appreciate 

your comments. 

Mr. Ham, the GAO provided testimony that the shortcomings in 

EQIP’s funding allocation process hinder it from optimizing environmental benefits. 

Please describe how we in Georgia allocate our EQIP funds, and 

do you believe that on the State level EQIP achieves the greatest 

environmental benefits and does it respond to our greatest environmental challenges? 

Mr. HAM. Senator, in Georgia, we have our State Technical Committee, who is not an inactive committee. It is a very active committee. We meet often and we are able to make decisions. We also 

work with our districts, our local districts. 

We have a new Conservationist in Georgia, James Tillman, who 

has been on the job about 2 years. And he believes very strongly 

and has brought some of the openness from, I think, Arkansas 

where he is from to share and move some of the responsibilities 

that others had to bring it back to the local level. I think this helps 

us put good practices on the ground that local directors can be 

happy with. 

Senator CHAMBLISS. Are there changes that this Committee 

should make in the 2007 Farm Bill to improve conservation programs in the Southeast? 

Mr. HAM. Are there changes that need to be made? 

Senator CHAMBLISS. Right. 

Mr. HAM. I think simplifying, especially with CSP, if it is going 

to stay around. To be able to qualify has got to be simplified. We 

talked a little bit about getting off river basins. I am not sure how 

I personally feel about that because I think that is a good idea to 

use river basins where that basin starts and where it comes 

through your State. We have 52 basis, as you know, in Georgia. 

It is a pretty good idea because what is affecting that basin at 

the middle of the State comes all the way through the State, and 

44

what is being done in the middle part of the State could have a 

dramatic effect in South Georgia, and I am not sure we need to get 

away from that totally. 

That is a change that I am not sure we want to make so quick. 

We need to remember that CRP in Georgia is a lot different from 

CRP in the Midwest. When we signed up for CRP in 1985, it was 

really a 40–year program and not a 10 or 15–year program. 

Once that land went into timber, Senator, even though we could 

get out in 15 years, it did not make sense to get out because that 

timber was finally approaching the size that we might see a little 

profit from. 

Where in the Midwest, you can get out of CRP tomorrow. If you 

are out, you can set a fire, burn off and you are ready to till and 

have a crop. We cannot do that. 

Please keep that in mind when you are working on the Farm 

Bill, when you are working on the biomass aspect of it, if there is 

a way to get some of this timber that is now just approaching chipping-saw size, if there is an incentive to move that timber out so 

it could be replanted to produce a pulp biomass. 

Those are options and there are many more, and I will be glad 

to try to get you up a good long list, and I am sure that you will 

review it. 

Senator CHAMBLISS. I am sure between you and David you all 

will do that. 

Mr. HAM. Yes, sir. 

Senator CHAMBLISS. Okay. Thank you. Thank you, Mr. Chairman. 

Chairman HARKIN. Thank you, Senator Chambliss. Normally, I 

would recognize Senator Klobuchar but, Senator Salazar is expected on the floor. He has to go over to the floor right away and 

he asked if he could just have a minute prior to Senator Klobuchar. 

So I recognize Senator Salazar. 

Senator SALAZAR. Thank you, Senator Klobuchar, and thank you, 

Chairman Harkin. I look very much forward working with you as 

chairman and, Senator Chambliss, I very much enjoyed our working relationship in the past and look forward to working on farm 

issues together this year. 

I have just a very quick comment. First on the EQIP program, 

Senator Harkin, it has been a great program for Colorado. In the 

ten listening sessions that I had with Colorado farmers this last 

year around the State, there was tremendous support for the EQIP 

program. We receive some $35 million and it is distributed throughout the 

State of Colorado. Very, very popular among our agricultural community. 

And second, the CSP program, I want to commend you for your 

efforts and creativity and pushing that program forward. What I 

hear from my farmers in Colorado is that our problem is that we 

just do not have enough CSP, that we would like to be able to do 

a lot more and I know that that is a shared view from all the agricultural organizations. So I look forward to working with you to improve upon and see how we can expand both of these programs. 

Thank you very much, Mr. Chairman, and thank you for yielding 

to me, Senator Klobuchar. 

45

Chairman HARKIN. Thank you, Senator Salazar. Senator 

Klobuchar. 

Senator KLOBUCHAR. Thank you and thank you, Mr. Chairman, 

for convening this hearing on this important topic and also for the 

work that you did to create the CSP in the last Farm Bill. 

CSP has generated a lot of interest in Minnesota, and there are 

many producers eager to enroll and get involved; however, I have 

seen that interest turn to disappointment as Mr. Ham was talking 

about. 

Mr. Ham, I have to note that you have one of the best names 

for a farmer that I have ever heard, and I was hoping that maybe, 

Chairman Harkin, if I can find Mr. Bacon in Minnesota that he 

could come testify. 

[Laughter.] 

Senator KLOBUCHAR. But in any case, it is very similar to some 

of the issues that raised how the program has been limited to a 

small fraction of the farmers and ranchers in our State. 

The 2006 CSP sign-up added just one new watershed to Minnesota’s eligible areas, for a total of seven watersheds. Roughly 

seven-eighths of the land in our State is not eligible for CSP enrollments and yet Minnesota is a leading agriculture State. It is the 

sixth in the Nation. 

In 2006, there were just 712 CSP contracts in Minnesota and 

206,000 acres of farmland enrolled in the program. Minnesota 

farmers received $6.25 million in CSP payments for their conservation practices. 

And by contrast, 86 of our 87 counties are enrolled in EQIP, and 

Minnesota farmers were able to receive $26 million in payments 

under EQIP last year. 

I actually looked into what was going on with our CSP applications, and in 2006, 73 percent of the eligible CSP applications in 

Minnesota were rejected. With EQIP in 2006, roughly one-third of 

eligible EQIP applications in Minnesota were rejected. 

So my questions are along those lines. I guess I would first ask 

Dr. Merrigan. You talked about the complexity of CSP, in fact, all 

the witnesses did, and how that has deterred farmers from enrolling, and I just mentioned our disappointing sign-up in Minnesota. 

What do you think would be in a little more detail in what would 

be the most valuable changes that NRCS could make to the way 

the program is administered to make it easier for farmers to enroll? 

Ms. MERRIGAN. Thank you for that question. First of all, it is so 

frustrating for farmers to go through that self-assessment workbook and the whole application process and be deemed eligible, 

wait around to find out what the money game is and ultimately 

find out that they are in some sub-category of some tier. There are 

so many different caps and reduction rates that they do not know 

from the get-go whether all of their effort and the effort of the 

NRCS is going to be worth their while. 

So we need to remove all of those caps on these different kinds 

of payments. That would go a long way to helping things out. 

The second thing is because of the program complexity and all 

the kinds of information that needs to be inputted to come up with 

the CSP eligibility, NRCS understandably tends to favor farmers 

46

who are already in the NRCS family, so to speak. People who are 

already beneficiaries of NRCS programs are more likely to be successful in CSP because the data is already there. And if you have 

the cap on technical assistance and you have to amass all this information on the farm, well, then we should expect that the winners will always be winners. 

If we really want to have this program really penetrate into the 

farm community, have the kind of reach that the Committee hoped 

it would have in 2002, then we really need to remove that cap on 

technical assistance and we really want to consider the idea of a 

universal application. 

Senator KLOBUCHAR. Okay. Thank you. And then, Dr. Cox, you 

were just talking about the questions from Senator Harkin about 

the biomass development and how this could be a major focus of 

the program, and our State is a leader, of course, in corn and soybean crops. 

I wondered if you could elaborate on the kind of conservation 

practices you see as particularly suited to renewable fuels production? 

Mr. COX. Thank you, Senator. Some of us think Iowa are leaders 

in corn and soybean production as well. 

Senator KLOBUCHAR. I think they are one above us for soybeans, 

maybe two, maybe three. 

Mr. COX. I have to amend that remark by saying that I grew up 

in Minnesota and my mother voted for you. 

Senator KLOBUCHAR. Well, then, Dr. Cox, all my remaining questions will be for you. 

[Laughter.] 

Mr. COX. She will be thrilled to know that I actually met you. 

I think intensification of corn production to feed ethanol plants 

could be, if poorly managed, a real negative for the environment for 

soil and water and wildlife. So I think the first thing we need to 

do is that intensification of corn production needs to go hand-inhand with intensive working land conservation. 

So a lot of our traditional practices that we already are trying 

to encourage, reduce tillage, diverse rotations, buffers, contour 

grass strips, I mean, a lot of what is basic in the conservation toolbox could be employed through CSP to make sure as we intensify 

corn production that we do it in a way that pays off for our soil 

and water and wildlife as well as for our energy budget. 

Then in the longer term, there is a lot of really interesting work 

going on about incorporating additional crops into traditional corn 

and soybean rotations that increase biomass production overall, 

cover crops, nurse crops, strip cropping. 

This is sort of a new and advancing field of conservation science 

and technology, and CSP could really be employed I think to expand that or to take that innovation from the lab to the field, and 

with really tremendous long-term promise for both dealing with the 

biomass production but also solving a lot of the soil and water 

problems we currently have with intensive row crop production. 

So both the basics we understand today and the things that are 

emerging in universities could be promoted by CSP. 

Senator KLOBUCHAR. Thank you. One last question for Dr. 

Hovorka. In your written testimony, you talked about how 85 perVerDate 0ct 09 2002 14:57 Apr 13, 2007 Jkt 000000 PO 00000 Frm 00050 Fmt 6633 Sfmt 6633 C:\DOCS\34244.TXT SAG2 PsN: SAG2
47

cent of Minnesota’s CSP payments from 2006 enrollment are for 

practices that benefit wildlife either by providing habitat or reducing pesticide use. 

Has your research found measurable benefits to wildlife populations in Minnesota or other States as a result of the CSP practices? 

Mr. HOVORKA. That is a good question. Thanks for the compliment, but I am not a Doctor. 

Senator KLOBUCHAR. That is fine. Did your mom vote for me 

though? 

[Laughter.] 

Mr. HOVORKA. She would have had she lived in Minnesota. 

In fact, that is a really good question, and the answer is not yet. 

Because what we mostly measure is acres and dollars through 

USDA programs. And what USDA is trying to get better at and 

what we are encouraging to get much better at is measuring those 

actual outcomes. 

So we can measure not only just the practices and how many 

acres we have, but what is the actual change in water quality in 

that stream, what is the actual change in populations in terms of 

wildlife. 

So we cannot give you numbers and say, ‘‘We have created this 

many pheasants,’’ but we think that USDA needs to move further 

toward measuring those outcomes not just on a local basis but also 

so at a program level we have a better understanding of what we 

are buying with the dollars. 

Senator KLOBUCHAR. Thank you. 

Chairman HARKIN. Senator Klobuchar, thank you, and thank you 

all very much to this panel and the previous panel. Great testimony, great written statements. 

Again, I am going to follow up or our staff will with you for any 

ideas, suggestions you have on how we might do a ranking system 

or a national kind of a system not based on watersheds. 

Mr. Cox gave us some ideas. Maybe some of you have other ideas 

from the standpoint of an actual hands-on farmer to others, but we 

need that kind of advice and input for that, and as we move ahead 

in the Farm Bill, we will look forward to your continued input, advice and consultation. 

Thank you all very much. The Committee will stand adjourned. 

[Whereupon, at 12:02 p.m., the Committee was adjourned.] 

(49)

A P P E N D I X

JANUARY 17, 2007

50


34244.001
51


34244.002
52


34244.003
53


34244.004
54


34244.005
55


34244.006
56


34244.007
57


34244.008
58


34244.009
59


34244.010
60


34244.011
61


34244.012
62


34244.013
63


34244.014
64


34244.015
65


34244.016
66


34244.017
67


34244.018
68


34244.019
69


34244.020
70


34244.021
71


34244.022
72


34244.023
73


34244.024
74


34244.025
75


34244.026
76


34244.027
77


34244.028
78


34244.029
79


34244.030
80


34244.031
81


34244.032
82


34244.033
83


34244.034
84


34244.035
85


34244.036
86


34244.037
87


34244.038
88


34244.039
89


34244.040
90


34244.041
91


34244.042
92


34244.043
93


34244.044
94


34244.045
95


34244.046
96


34244.047
97


34244.048
98


34244.049
99


34244.050
100


34244.051
101


34244.052
102


34244.053
103


34244.054
104


34244.055
105


34244.056
106


34244.057
107


34244.058
108


34244.059
109


34244.060
110


34244.061
111


34244.062
112


34244.063
113


34244.064
(115)

DOCUMENTS SUBMITTED FOR THE RECORD

JANUARY 17, 2007

116


34244.065
117


34244.066
118


34244.067
119


34244.068
120


34244.069
121


34244.070
122


34244.071
123


34244.072
124


34244.073
125


34244.074
126


34244.075
127


34244.076
128


34244.077
129


34244.078
130


34244.079
131


34244.080
132


34244.081
133


34244.082
134


34244.083
135


34244.084
136


34244.085
137


34244.086
138


34244.087
139


34244.088
140


34244.089
141


34244.090
142


34244.091
143


34244.092
144


34244.093
145


34244.094
146


34244.095
147


34244.096
148


34244.097
149


34244.098
150


34244.099
151


34244.100
152


34244.101
153


34244.102
154


34244.103
155


34244.104
156


34244.105
157


34244.106
158


34244.107
159


34244.108
160


34244.109
161


34244.110
162


34244.111
163


34244.112
164


34244.113
165


34244.114
166


34244.115
167


34244.116
168


34244.117
169


34244.118
170


34244.119
171


34244.120
172


34244.121
173


34244.122
174


34244.123
175


34244.124
176


34244.125
177


34244.126
178


34244.127
179


34244.128
180


34244.129
181


34244.130
182


34244.131
183


34244.132
184


34244.133
185


34244.134
186


34244.135
187


34244.136
188


34244.137
189


34244.138
190


34244.139
191


34244.140
192


34244.141
193


34244.142
194


34244.143
195


34244.144
196


34244.145
197


34244.146
198


34244.147
199


34244.148
200


34244.149
201


34244.150
202


34244.151
203


34244.152
204


34244.153
205


34244.154
206


34244.155
207


34244.156
208


34244.157
209


34244.158
210


34244.159
211


34244.160
212


34244.161
213


34244.162
214


34244.163
215


34244.164
216


34244.165
217


34244.166
218


34244.167
219


34244.168
220


34244.169
221


34244.170
222


34244.171
223


34244.172
224


34244.173
225


34244.174
226


34244.175
227


34244.176
228


34244.177
229


34244.178
230


34244.179
231


34244.180
232


34244.181
233


34244.182
234


34244.183
235


34244.184
236


34244.185
237


34244.186
238


34244.187
239


34244.188
240


34244.189
241


34244.190
242


34244.191
243


34244.192
244


34244.193
245


34244.194
246


34244.195
247


34244.196
248


34244.197
(249)

QUESTIONS AND ANSWERS

JANUARY 17, 2007

250


34244.198
251


34244.199
252


34244.200
253


34244.201
254


34244.202
255


34244.203
256

Æ