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REVIEW OF THE CONSERVATION TITLE

OF THE FARM SECURITY AND RURAL

INVESTMENT ACT

HEARING

BEFORE THE

SUBCOMMITTEE ON CONSERVATION, CREDIT,

RURAL DEVELOPMENT, AND RESEARCH

OF THE

COMMITTEE ON AGRICULTURE

HOUSE OF REPRESENTATIVES

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

JUNE 4, 2003

Serial No. 108–7

(

Printed for the use of the Committee on Agriculture

agriculture.house.gov

COMMITTEE ON AGRICULTURE

BOB GOODLATTE, Virginia, Chairman

JOHN A. BOEHNER, Ohio

Vice Chairman

RICHARD W. POMBO, California

NICK SMITH, Michigan

TERRY EVERETT, Alabama

FRANK D. LUCAS, Oklahoma

JERRY MORAN, Kansas

WILLIAM L. JENKINS, Tennessee

GIL GUTKNECHT, Minnesota

DOUG OSE, California

ROBIN HAYES, North Carolina

CHARLES W. ‘‘CHIP’’ PICKERING,

Mississippi

TIMOTHY V. JOHNSON, Illinois

TOM OSBORNE, Nebraska

MIKE PENCE, Indiana

DENNIS R. REHBERG, Montana

SAM GRAVES, Missouri

ADAM H. PUTNAM, Florida

WILLIAM J. JANKLOW, South Dakota

MAX BURNS, Georgia

JO BONNER, Alabama

MIKE ROGERS, Alabama

STEVE KING, Iowa

CHRIS CHOCOLA, Indiana

MARILYN N. MUSGRAVE, Colorado

DEVIN NUNES, California

——— ———

CHARLES W. STENHOLM, Texas,

Ranking Minority Member

COLLIN C. PETERSON, Minnesota

CALVIN M. DOOLEY, California

TIM HOLDEN, Pennsylvania

BENNIE G. THOMPSON, Mississippi

MIKE MCINTYRE, North Carolina

BOB ETHERIDGE, North Carolina

BARON P. HILL, Indiana

JOE BACA, California

RICK LARSEN, Washington

MIKE ROSS, Arkansas

ANI ́BAL ACEVEDO-VILA ́ , Puerto Rico

ED CASE, Hawaii

RODNEY ALEXANDER, Louisiana

FRANK W. BALLANCE, JR., NORTH

CAROLINA

DENNIS A. CARDOZA, California

DAVID SCOTT, Georgia

JIM MARSHALL, Georgia

EARL POMEROY, North Dakota

LEONARD L. BOSWELL, Iowa

KEN LUCAS, Kentucky

MIKE THOMPSON, California

MARK UDALL, Colorado

RICK LARSEN, Washington

LINCOLN DAVIS, Tennessee

PROFESSIONAL STAFF

WILLIAM E. O’CONNER, JR., Staff Director

KEVIN KRAMP, Chief Counsel

STEPHEN HATERIUS, Minority Staff Director

ELYSE BAUER, Communications Director

SUBCOMMITTEE ON CONSERVATION, CREDIT, RURAL DEVELOPMENT, AND RESEARCH

FRANK D. LUCAS, Oklahoma, Chairman

JERRY MORAN, Kansas

TOM OSBORNE, Nebraska

Vice Chairman

SAM GRAVES, Missouri

ADAM K. PUTNAM, Florida

MAX BURNS, Georgia

JO BONNER, Alabama

MIKE ROGERS, Alabama

STEVE KING, Iowa

——— ———

TIM HOLDEN, Pennsylvania

Ranking Minority Member

ED CASE, Hawaii

FRANK W. BALLANCE, JR., NORTH

CAROLINA

COLLIN C. PETERSON, Minnesota

CALVIN M. DOOLEY, California

BOB ETHERIDGE, North Carolina

ANI ́BAL ACEVEDO-VILA ́ , Puerto Rico

JIM MARSHALL, Georgia

MIKE MCINTYRE, North Carolina

RYAN E. WESTON, Subcommittee Staff Director

(II)

(III)

C O N T E N T S

Page

Lucas, Hon. Frank, a Representative in Congress from the State of Oklahoma, opening statement .................................................................................... 1

Holden, Hon. Tim, a Representative in Congress from the Commonwealth

of Pennsylvania, opening statement ................................................................... 3

WITNESSES

Curtis, Marc, producer, Leland, MS, on behalf of the National Association

of Wheat Growers, the National Cotton Council, the American Soybean

Association, the National Corn Growers Association and the USA Rice

Federation ............................................................................................................. 29

Prepared statement .......................................................................................... 69

Detrick, Terry, vice president, Oklahoma Farmers Union, Ames, OK, on behalf of the National Farmers Union ................................................................... 32

Prepared statement .......................................................................................... 63

Moseley, James, Deputy Secretary, U.S. Department of Agriculture ................. 4

Prepared statement .......................................................................................... 49

Faber, Scott, policy analyst, Environmental Defense, Washington, DC on behalf of the Environmental Defense, National Audubon Society, Defenders

of Wildlife, Land Trust Alliance, Sustainable Agriculture Coalition, and

the National Wildlife Federation ........................................................................ 42

Prepared statement .......................................................................................... 67

Sutherland, Scott, director of governmental affairs, Ducks Unlimited, Washington, DC ............................................................................................................. 44

Prepared statement .......................................................................................... 56

Vail, Nita C., executive director, California Rangeland Trust, National Cattlemen’s Beef Association, Sacramento, CA, on behalf of National Cattlemen’s

Beef Association, National Milk Producers Federation, National Pork Producers Council, Southeast Dairy Farmers Association, and Western United

Dairymen .............................................................................................................. 26

Prepared statement .......................................................................................... 58

Watkins, Rosemarie, senior director of congressional relations, American

Farm Bureau Federation, Washington, DC ....................................................... 33

Prepared statement .......................................................................................... 53

Wilson, Bill, first vice president, National Association of Conservation Districts, Kinta, OK ................................................................................................... 40

Prepared statement .......................................................................................... 61

SUBMITTED MATERIAL

McGovern, Hon. Jmes P., a Representative in Congress from the Commonwealth of Massachusetts, submitted statement ................................................ 48

(1)

REVIEW OF THE CONSERVATION TITLE OF

THE FARM SECURITY AND RURAL INVESTMENT ACT

WEDNESDAY, JUNE 4, 2003

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON CONSERVATION, CREDIT,

RURAL DEVELOPMENT, AND RESEARCH

COMMITTEE ON AGRICULTURE,

Washington, DC.

The subcommittee met, pursuant to call, at 10:03 a.m., in room

1300 of the Longworth House Office Building, Hon. Frank D. Lucas

(chairman of the subcommittee) presiding.

Present: Representatives Moran, Osborne, Putnam, Burns, Rogers, Holden, Case, Ballance, Peterson, Etheridge and Stenholm.

Staff present: Ryan Weston, subcommittee staff director; Dave

Ebersole, Alan Mackey, Anne Hazlett, Callista Gingrich, clerk;

Kellie Rogers, Elyse Bauer, Jon Hixson, Claire Folbre, and Anne

Simmons.

OPENING STATEMENT OF HON. FRANK D. LUCAS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OKLAHOMA

Mr. LUCAS. This hearing of the Subcommittee on Conservation,

Credit, Rural Development and Research to review conservation

technical assistance and the implementation of the Conservation

Title of the 2002 farm bill will come to order.

I’m very pleased that we’re here today to have a hearing on one

of the very most important topics I can think of. It is hard to believe that it has been 1 year since the farm bill was signed into

law. The 80 percent increase in conservation spending provided last

year is a fantastic feat for which I thank all of the subcommittee

members, Members of Congress, and the conservation supporters

out there. You should all be extremely proud. However, we cannot

rest on our laurels. The time has come for the subcommittee to become active and aggressive in its oversight responsibilities. The implementation process has proven that not everyone can agree on

congressional intent, or on the meaning of certain provisions in the

law.

It up to this subcommittee to keep the implementation process

on track. Another famous Oklahoman who I’m extremely fond of

quoting, Will Rogers, once pointed out that ‘‘Memories are what

you get when you put down the good things you ought to have

done, and you leave out the bad things you did do.’’

2

I want this subcommittee’s legislative history to show that we

did do what we ought to have done, and we will make sure that

the implementation process is fair and equitable.

USDA has taken enormous steps to implement all 10 farm bill

titles. Employees in the local and State offices and here in Washington have been putting in many hours to get the rules and regulations written, and to get the necessary training out of the way

so that producers can sign up for all of the programs.

Today’s hearing will focus on two main issues: technical assistance for farm bill conservation programs and implementation of the

Conservation Title.

I have asked all of the witnesses other than the Department to

answer three questions in their testimony:

(1) Is the current funding for technical assistance sound and

equitable?

(2) If not, what would you propose as a solution to the funding

system?

(3) Does your solution result in a score for the agricultural

baseline?

I think that I would be remiss if I did not point out that every

piece of testimony we received in advance for today concluded that

the current technical funding is not equitable.

The farm bill made it quite clear that the Commodity Credit Corporation should be used to fund technical assistance for USDA conservation programs. CCC is not an endless supply of free money.

The Congressional Budget Office score for the farm bill accounted

for technical assistance for all programs from both CCC and appropriated funds.

After the farm bill was signed into law, it did not take long for

legal opinions and legislative language to start changing the intent

of the 2002 farm bill. OMB and GAO could not agree on where

funds for technical assistance should or even could be expended.

The most aggravating factor, and I say this with the greatest of

caution and thought, the most aggravating factor is that of all the

Department lawyers and the Member and staff meetings during

the conference negotiations on the farm bill, I was not aware of any

concerns regarding technical assistance language being raised by

the Department during those meetings. And I would note that either my good friends at USDA perhaps were not paying sufficient

attention to the language when it was being developed, or maybe

we need to have a course in communication between the attorneys

at USDA and OMB so that they can communicate with one another

regarding how legislative language should be interpreted.

Legislative language was included in this year’s omnibus appropriation bill that prohibited USDA from using appropriated accounts for technical assistance for farm bill programs. Then the

supplemental bill included language that prevented the Conservation Security Program, CSP, from paying for technical assistance

for conservation programs other than itself.

The combination of legislative changes from Congress and differing legal opinions created a terrible situation. When USDA went

forward with CRP and WRP signups, the working land programs

such as EQIP and Farmland Protection and GRP and the Wildlife

3

Habitat Incentives programs were forced to pay for the technical

assistance to implement CRP and WRP.

This decision resulted in 15.5 percent, or $107 million of EQIP

being taken out of the EQIP program to pay for technical assistance costs for CRP and WRP and other programs. Literally 27.5

percent of farmland protection money, 17.2 percent of GRP, 28.7

percent of the WHIP funds were shuffled around—or are shuffled

around, I should say, to provide technical assistance to other USDA

programs.

CRP and WRP are not paying one cent of their own or other programs’ technical assistance provided by the Natural Resources Conservation Service.

All conservation programs should be implemented this year, but

not if some programs have to donate their funds to other programs’

technical assistance. CRP and WRP are acreage programs that will

not lose funding if they are not implemented this year. But the

other working lands programs do have yearly dollar amounts that

need to be expended.

We need to correct this problem, and while this situation was

created by numerous events, it is up to Congress and the administration to get it fixed, before millions of dollars are redirected at

the expense of four programs. This idea Mr. Holden and I have

come up with in the form of H.R. 1907 is very simple. Programs

can only pay for the technical assistance costs associated for their

specific program costs. In other words, EQIP could only pay for

EQIP technical assistance, Farmland Protection only for Farmland

Protection technical assistance, and so forth. We both feel that it

will be important to include WHIP in any final version of our bill.

As I mentioned before, the Senate has already walled off CSP.

Therefore, there should not be an objection to walling off the other

working lands programs too.

This hearing is also the subcommittee’s opportunity to determine

how well the implementation process is going for all of USDA’s conservation programs.

I look forward to the Department’s update on the rules regarding

EQIP, and GRP, and CSP. And I would note that EQIP is a program vitally important to my home State of Oklahoma. It provides

farmers and ranchers the opportunity to address the most pressing

needs placed upon them by environmental regulation.

The Grasslands Reserve Program may be the newest, and yes, I

would hope the best chance, to ease pressure on CRP enrollments

and to prevent grasslands from turning into farmland or housing

developments. And The Small Watersheds Program, the WHIP Program and CSP also garner a great deal of interest I thing among

all the subcommittee members, and I do look forward to today’s

hearing. And with that, I turn to my ranking member, Mr. Holden

for whatever comments that he may have.

OPENING STATEMENT OF HON. TIM HOLDEN, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

Mr. HOLDEN. Thank you, Mr. Chairman, for holding this very important hearing. All of us worked very hard during last year’s farm

4

bill to secure conservation funding, and we need to make sure both

programs are implemented and funded as we intended. The Conservation Title of the 2002 farm bill dedicated over $17

billion for conservation, an increase of 80 percent. We funded the

most significant programs in order to preserve farmland and to improve water quality and soil conservation on working lands. We addressed environmental concerns and sought to make conservation

a cornerstone of agriculture for producers in all regions.

It is unfortunate we are now witnessing a decrease in financial

assistance for key programs we worked very hard for. During the

farm bill debate, one of the major issues discussed was regional inequity of farm bill programs.

As a Member from Pennsylvania in the Northeast, most farmers

in the region do not benefit from traditional agricultural programs.

They simply do not grow traditional crops. Conservation programs

offered them a way to stay in farming. The substantial increase in

EQIP and Farmland Protection was a signal to those regions that

as we approach this turning point in agriculture, we are not going

to relive the unfair practices of past programs. Yet here we are

again as it currently stands, major parts of the country are in the

position where they will not see money pledged to them by authorizations in the farm bill.

A major factor in this inequity revolves around the issue of how

to fund technical assistance for conservation programs. Our intent

was to allow for farm bill programs to pay for themselves. However, due to different interpretations of the law and congressional

rewriting, we are now in a situation in which major programs are

paying for others. EQIP will decrease by 15 percent, Farmland Protection by 27.5 percent, WHIP by 28.7 percent, and Grassland Reserves by 17.2 percent. Pennsylvania alone stands to lose approximately $3.6 million from those decreases in EQIP and Farmland

Protection.

We must make sure implementation reflects intent. It was never

our intent to have key conservation programs act as donors for others. We need to correct this problem as soon as possible.

I hope the groups representative can help us find a fair and equitable solution, and I look forward to hearing about the progress we

are making on other programs.

Again, Mr. Chairman, thank you for conducting this very important hearing.

Mr. LUCAS. The Chair thanks the ranking member for his insights and his statement, and all of his effort on this mightily important project.

Are there other opening statements from Members? Seeing none,

the Chair now turns to the first panel, and I would like to invite

the Honorable Jim Moseley, Deputy Secretary of Agriculture, U.S.

Department of Agriculture to offer his insights and opening comments. Mr. Deputy Secretary.

STATEMENT OF JAMES R. MOSELEY, DEPUTY SECRETARY, U.S.

DEPARTMENT OF AGRICULTURE

Mr. MOSELEY. Thank you, Mr. Chairman. I would first of all like

to submit my written statement for the record.

Mr. LUCAS. So ordered.

5

Mr. MOSELEY. Thank you.

I also want to acknowledge Jim Little, who is the Administrator

of Farm Service Agency, and Bruce Knight, who is the Chief of the

NRCS, who is with me here today, and I know we are going to get

into a number of technical questions. And these gentleman have

been on the front line every step of the way in the implementation

of this farm bill, and so we are looking forward to them helping us

with many of these technical questions.

It is a pleasure to be here with you today in front of your committee to highlight and improve the Department’s performance in

the implementation of the conservation provisions of the 2002 farm

bill.

We all understand the significant change that the 2002 farm bill

had on conservation efforts in this country. I frequently stated in

my remarks to others that we needed to fully understand the responsibility that we have now as a Department in doing it right,

or the opportunity that will have been lost if we do it wrong.

Quite frankly, doing it wrong is not an option. The burden of

those mistakes would weigh on our shoulders for many years into

the future. None of us expect nor would we tolerate a diminished

effort to carryout the landmark provisions that that piece of legislation brought forward.

Clearly over the past several farm bill iterations since 1985 we

have seen improved opportunity in conservation efforts. And as a

farmer myself, and one that was around here as a member of the

team at USDA when 1990 farm bill was passed, I recall very clearly the expectation that piece of legislation had in terms of improving conservation in this country. But even as good as that was, it

did not come close to what was possible in the 2002 legislation.

I think predominately, because we have finally included the entire landscape that farmers work with, by including the working

lands and livestock operations of this country in the conservation

equation, that was a monumental step forward for those of us and

production agriculture who intuitively knew that the opportunity

for improvement had to rest there as well, in balance with other

programs like CRP and Wetlands Reserve, if we were going to complete the conservation picture across the landscape.

To the credit of Congress, the 2002 farm bill did not disappoint

us in that regard. But we come to this moment of high expectations

with somewhat of a challenge. The resource needs are identified,

the conservation targets and objectives have been determined. The

Agency and the Department along with those of the constituency

that we serve on the land are ready; are willing to begin.

We have identified a new issue; how to pay for technical assistance for implementation that is necessary to meet those needs and

expectations. That has become a question that has caused a lot of

consternation, and it is a challenge, as you know, for the Department.

Allow me to spend just a little bit of time and offer some history

and an explanation. In the 1996 farm bill, conservation programs

that had traditionally been funded in USDA’s discretionary accounts became funded in the CCC mandatory accounts instead. In

addition, a cap was placed on the amount of funds that could be

6

spent under those mandatory accounts. We were limited at the

1995 spending level, or about $36 million.

That cap soon proved to be too limiting, and it was subsequently

raised to 56 million. Now this was the pool of money that was

available for the administration of several conservation programs,

but predominantly for technical assistance of the mandated farm

bill related programs.

It was subsequently recognized to be a limiting factor as we

moved through administering the 1996 Conservation Title, and the

Congress attempted to address the issue in 2002 legislation, and

they believed that they did. However, the language as you pointed

out, Mr. Chairman, was subject to legal interpretation.

GAO determined that the section 11 cap no longer applied and

technical assistance could be funded from mandatory funds, in

other words, from the CCC.

However, the Department of Justice considered the language on

behalf of OMB and the Department and determined it did apply,

and that only existing discretionary fund authorities could be used.

For the Department, the final word had to be the DOJ ruling, just

like the parliamentarian is the final rule for Congress.

At that point, the Department was faced with funding. The technical assistance from discretionary budgets until the 2003 appropriations bill, which addressed and reversed the legal findings of

DOJ. But then it forced all of the technical assistance into four specific accounts; EQIP, GRP, WHIP, Farmland and Ranchlands Protection. Unfortunately, the largest program and account was the

newly authorized levels of spending for EQIP, and it potentially

bore the heaviest burden to pay for these other programs.

This then sets the stage for where we find ourselves today; providing funding for all conservation programs authorized in the

farm bill, from just those four programs, one of which, is the very

popular EQIP Program, that has a heavy demand from the farm

population out there that it serves.

In response to that challenge, the President’s 2004 Budget approaches this issue by establishing a dedicated technical assistance

account specifically for farm bill implementation only, though we

recognize that Budget must make its way through the appropriations process.

We attempted this same methodology in 2003, and we were unsuccessful. The bottom line is that I think that everyone here can

identify the challenge, and I think we can all agree on the need for

some clarity on this issue.

And our goal, Mr. Chairman, today is to work with you and the

members of this committee to try and find that clarity. It is in the

interest of farmers, ranchers, landowners that we all come forward

to resolve the better way to accomplish the objective of getting as

much conservation as possible on the land as what the public dollar

will permit.

We are looking for every possible way to accomplish this including streamlining our administrative process in FSA and NRCS,

using the best available information technologies, and bringing in

line a array of third party technical service providers to assist us

in delivering the conservation objectives of the 2002 bill.

7

For example, in the current fiscal year, we believe we will be

able to show a 3 percent reduction in technical assistance and

EQIP due to measures being implemented currently. But I think

it is an important point to make; we are on a journey and we have

not arrived yet at the destination. I firmly believe that more is possible.

So, Mr. Chairman, we thank you again for calling this hearing

and giving us the opportunity to present the existing challenges we

have in terms of getting conservation on the ground. Challenges

are simply opportunities and we’re close and we are ready to work

with you, because we know we can all do better at this than what

we currently are. I know that you and I share common objectives

of making sure that this is done well and responsibly, and as cost

effective as possible.

So again, we thank you for the opportunity to be here, and look

forward to trying to address the questions that you may have.

Thank you.

Mr. LUCAS. Thank you, Mr. Secretary, and you are so clearly

right. In the 2002 farm bill, conservation, those of us in this room

who care about preserving the natural resources of this great Nation, prevailed in a way above and beyond anyone’s expectations.

But alas, that was one of the battles in the long war. And the question of how to implement, how to move forward in the most expeditious fashion, is what we face today.

Clearly, I personally support efforts to modernize the Department in its delivery of services. It is not the world of slide rulers

and hand held transits of 1935 anymore, mimeograph machines

and multiple copies of paperwork, and we need to do everything we

can to facilitate the efficient delivery of those services in the most

cost effective fashion.

But I would note that from my perspective of working on this

issue with my colleagues on the committee for a good long time

that I am painfully aware of the challenges you face, the language

and the omnibus appropriations bill and the supplemental; all of

those extra burdens and challenges placed upon you. But I must

ask, of course, while those two bills allowed USDA to go forward

with CRP and WRP signups, as I understood the language, it didn’t

require that that be the case.

My first question is these programs would not lose money in this

year because they are acreage based, not dollar based, if they are

not immediately implemented. Would it not be better to slow down

to stop that process until we can sort out the technical assistance

issues? If we go forward, money that is diverted from these other

programs, for instance, to implement the CRP and WRP signup,

would be money lost to those programs since they’re dollar based.

Why did USDA decide to go forth with CRP and WRP signups

before trying to work with us to create a permanent fix to this technical assistance funding problem?

Mr. MOSELEY. Well, Mr. Chairman, I think that is a fair question, and it is one in which we did not limit ourselves in deliberation about this particular issue. But we wanted to go forward, as

we pointed out, with a comprehensive approach to conservation,

and we now have, of course, the working lands component, and we

are very, very committed. I think that is a significant step forward.

8

But we have to look at the entire plate, if you will, of conservation programs. And there was a significant interest out there to engage and enroll individuals in a CRP Program for this fiscal year.

We also have a number of CRP contracts that are going to come

up for renewal, and we wanted to give those people out there an

opportunity to be able to accomplish that. And so it was, I think,

the collective thought and consensus of the two gentleman sitting

on either side of me who sent forward I’m sure a decision memo

and made recommendations that we move forward. And it was in

that consensus spirit that the Secretary considered all of these

issues, and decided that it was important indeed for us to move forward. And we recognize the challenge that that creates in terms of

the potential loss, and I think the number is something around $30

million for this CRP signup and technical assistance.

That clearly is going to come out of those four programs. But it

was a matter of trying to bring forward a very balanced approach

to conservation. I have to say that we are not certain when this

issue is going to be resolved and taken care of. And so, as we

looked at all of the evidence, it seemed important for us to move

ahead with the CRP signup before the end of this fiscal year.

Mr. LUCAS. As I understand the funds and the programs in the

effort, even if we were not going forward with a general CRP

signup, wouldn’t continuous and the CRP acres programs accepting

enrollment process, wouldn’t that burn up a substantial portion of

that money anyway?

Mr. MOSELEY. Yes, and I may have to turn to Bruce to help me

on this particular issue, but my sense is that those existing CRP

contracts that are coming up for renewal would not fit into that

category. Jim, do you want to help us on that?

Mr. LITTLE. The continuous signup would require a good bit of

the technical assistance. It is probably about half of what the regular general signup would cost, but yes, there are substantial costs

related to the continuous and the CRP because they require a lot

more extensive plans on behalf of the NRCS to develop those plans.

Mr. LUCAS. Two quick questions and I will turn to my colleagues.

Number 1, how many acres of general CRP do you envision enrolling this year if you move forward?

Mr. MOSELEY. The number I have heard is $2.8 million.

Mr. LITTLE. We have $2.8 million budgeted for it, but that does

not mean we will accept the full $2.8 million acres. The final decision would be made by the Secretary, based on the environmental

benefits to the cost, and there is no determination then as to how

much we will actually accept.

Mr. LUCAS. One last question. And on a couple of occasions in the

last decade, haven’t we done temporary one year extensions, when

issues were uncertain on funding or program availability? Don’t we

have a track record of doing that temporary one year extension?

Mr. LITTLE. Yes, we did, but I believe that that was legislated,

and we did not have that authority for this year.

Mr. LUCAS. We may improve H.R. 1907.

I now turn to Mr. Holden.

Mr. HOLDEN. Thank you, Mr. Chairman. And thank you, Mr.

Secretary, for your testimony and your pledge to work with us

9

through this problem that we are facing with the technical assistance.

I understand that the conservation operations account has been

used in the past for some technical assistance. Since we now have

a prohibition on using that account, how do you intend to expend

the $119 million that has been allocated?

Mr. MOSELEY. It is related to how we take a look at the conservation operations historically, and the amount that has been considered in the past that would normally go into what we would define

as farm bill implementation. Bruce?

Mr. KNIGHT. With every one of our programs, including the CTA

accounts, we have a backlog of work to be done. When we had the

prohibition and the fire wall now that prevents us from utilizing

as much of the CTA account for farm bill delivery as the administration position would advocate, that then puts the other work in

the CTA account that is in the backlog higher up into the workload

analysis, and that work then starts getting done. And that was a

step that would not have been done, had we been able to take it

and utilize it for the farm bill accounts. So in Pennsylvania, you

would see more work on planning that is associated with non-farm

bill work, more work with the community development work in

Pennsylvania. Those are the kinds of things that are done through

the CTA account, the planning that are not associated directly with

the farm bill cost share programs.

Mr. HOLDEN. OK, thank you. And how is the Department implementing the regional equity language in the farm bill, the minimum $12 million for each State?

Mr. KNIGHT. This has been one of the more challenging provisions to implement in the farm bill. The language, as I recall, stated that we were to look at each of the States if it received less than

$12 million historically and provide priority funding for them early

in the fiscal year. Then look again at the amount of money they

had in those allocations and how that had been invested by April

1, and if it wasn’t going to be utilized and spent, then sweep that

back and allocate it to the other States. Unfortunately, due to how

late the budget circumstances and appropriations worked out this

year, we were past the April 1 deadline for putting it out, sweeping

back before we could even begin to get into implementation.

We have been working very carefully on the regional equity issue

to ensure that our program implementation, the allocations that we

use for each of the programs, fully take into account the criticisms

and concerns that have been raised, that they may have previously

been inordinately biased towards traditional commodities versus

minor crops, and be able to find that full balance. And we are taking that into consideration. We will continue to take that into consideration as we move ahead with program implementation.

One of the other challenges that really made regional equity very

difficult is that it is tied directly to the technical assistance issue

that we find here today. The way the language was written, regional equity focuses on the same four programs that are now the

donor programs for technical assistance. So as there were fewer

dollars to allocate from those donor programs, that in turn meant

fewer dollars to go out to those States that were expecting greater

allocation, due to regional equity. Thank you.

10

Mr. HOLDEN. One last question, Mr. Chairman, that the Pennsylvania Secretary of Agriculture asked me to raise here this morning.

In Pennsylvania, CRP has not been very successful, but the CRP

program has been very popular. Governor Rendell is proposing to

expand CRP to the Ohio River Basin and add 16 counties and

65,000 acres through the CRP Program. Will FSA support this effort, and can we just amend the current agreement that we have?

Mr. LITTLE. We would be more than willing to work with the

State of Pennsylvania on any CRP agreement, whether we would

extend what we have got, we would be able, I believe, to expand

it to include the additional 16, as long as it is within the existing

parameters. If we had to create another agreement, we could do

that as well. But we would be more than willing to work with the

State.

Mr. HOLDEN. OK. Thank you. I yield back, Mr. Chairman.

Mr. LUCAS. The Chair now turns to the gentleman from Minnesota, Mr. Peterson.

Mr. PETERSON. Thank you, Mr. Chairman, and thank you for

calling this hearing, I think. I have got a couple of questions, but

I just want to raise one thing. I brought this up before, but you

folks are new and I don’t think I brought it up to you.

These contracts that are expiring in some areas where I have

been out and actually seen the situation, we are requiring them to

plow down their existing habitat and plant different varieties in

order to get the maximum number of points. And in some cases we

are plowing down perfectly good CRP, it doesn’t have any weeds

and is some of the best stuff I have ever seen, and we are requiring

them to plant varieties that are I guess politically correct or whatever that won’t grow in that area. And we are actually making a

worse situation. And I have talked to your predecessors about

maybe trying to give the local people some kind of discretion in

dealing with that, because we are not really serving conservation

and wildlife in some of these limited areas. And I just would hope

that you would take a look at that because there is still some problems out there.

I am trying to figure out how this is all going to work. Apparently the way you put this forward is that you have just taken 15

percent out of every program, and that is how you allocated the

money or something. In order to fund what you asked for in the

budget this year?

Mr. KNIGHT. Roughly, you do. Sir, you do take 15 percent out of

each of the accounts, as well as a portion of the funds from the conservation technical assistance account in order to be able to resolve

this issue.

Mr. PETERSON. My question is these programs have a lot different complexity in terms of technical assistance, so it would seem

to me that some of these programs are going to use a lot more technical assistance than others. So why are you taking 15 percent

across the board? It just seems to me you are not allocating it. If

that is all we are going to do, that doesn’t seem to have any logic

to me. I don’t know. What is the reasoning behind that?

Mr. MOSELEY. Well, the suggestion I think you are making is

that, for example, EQIP tends to run a little bit higher in terms

of its technical assistance support than some of the other programs.

11

And so the question is how would you vary that from 15 percent?

Because you have EQIP taking a higher TA, do you raise the percent that is taken from EQIP because it has that, or do you actually reduce the amount that is taken from EQIP because it does

have a higher percent? And you try to provide that balance, and

I can’t answer the question specifically for the Chief, in terms of

the rationale. But I do think that it is a question that we would

have to spend a fair amount of time thinking through, about what

is the best alternative here if you don’t use across the board 15 percent and would need some guidance on that.

Mr. PETERSON. Well, and if this did go through and it was successful, does that mean that the CRP has 15 percent less acres that

can be enrolled? Is that the affect of it, or how does that work?

Mr. KNIGHT. The administration proposal that was offered for

2003 and is included in the 2004 budget analysis does not use a

percentage decrease for either WRP or CRP. And that is one of the

things that is very much in keeping with the issue that the chairman has been raising, about how do we find a way to make sure

each program pays its fair share.

Mr. PETERSON. OK. So the 15 percent is not coming out of CRP

or WRP?

Mr. KNIGHT. No, sir.

Mr. PETERSON. OK, I misunderstood. I was just reading this one

part of your testimony. And that is because the Department of Justice said you can’t do this, or——

Mr. KNIGHT. Sir, that had more to do with the challenges of how

you offered a proposal, getting around the acreage, the uniqueness

of those programs being an acreage-capped enrollment versus a

dollar enrollment.

Mr. PETERSON. The House bill at one point had a pot of money

for technical assistance. I don’t know if you are aware of that. And

it was taken out because some groups opposed it that now apparently are for it. I just wanted to say that I think we had an opportunity to try to fix this, at least we tried, as the chairman said, a

lot of people didn’t really step up at that point and deal with it.

And now we are in this situation, so hopefully, we will come up

with a solution that will be fair and supported by everybody.

Mr. LUCAS. Fair and equitable, Mr. Peterson.

The Chair will now turn to the gentleman from North Carolina,

Mr. Ballance.

Mr. BALLANCE. I want to yield to my ranking member, but I will

go ahead. I do have one question. It is a little bit technical. Mr.

Moseley, the North Carolina Department of Agriculture is now trying to get matching funds from the State for farmers who enroll in

the Farmland Protection Program. The USDA took $27,591,000

from the Farmland Protection Program and redirected it elsewhere.

Of course, I believe those people who received that were the programs all over the country. The fact is, the money comes from the

FPP represents a double hit for farmers in North Carolina. And

what I want to know is what criteria were used by USDA when

that decision was made to take those funds?

Mr. MOSELEY. Well, I think what you are suggesting here is the

reason why we are in this hearing today. This was caught up in

this issue of more programs supporting the funding for all of these

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other conservation programs. And as Chief Knight has pointed out,

the decision was made to split that evenly amongst the four programs in terms of percentage. And yes, it is a reduction in each of

those four programs in terms of what is available out there to producers, and that is our concern. Our answer to that is to look at

each of these programs, and as we have presented in the 2004

budget proposal, to assess each program of conservation in terms

of the technical assistance required. So we get to a solution on this,

I think we should fix the issue that you are raising, if I understand

the question correctly.

Mr. KNIGHT. Excuse me. If I could expand a little bit on the Deputy’s statement, we had a real quandary in determining how to

make those allocations this year, given the fact that we had four

donor programs. We had first tried to do an equal formula, taking

off of each of them. That would not come up with enough money

without having taken some of the programs actually below the levels that were authorized or allocated the year previously. So we

had to use what were the best estimates of how to make sure that

you didn’t take any of the programs below their previous accounts,

recognizing full well that we were going to be leaving people disappointed with each of those four programs. And so you see a difference in the percentage if you compare by percentage, and that

is always a dangerous comparison, but you see a different percentage comparison when you compare Farm and Ranchland Protection

programs to WHIP to Grasslands Reserve, as well as EQIP.

Mr. MOSELEY. Let it be noted the Deputy can always be corrected.

Mr. BALLANCE. Just one follow-up, Mr. Chairman. Of course, if

I am out talking to my farmers who may feel like they got hit a

little bit, do you have a recommendation what I can tell them, how

they are going to get fixed?

Mr. MOSELEY. Well, one of the solutions is, as we move through

this fiscal year as we see some extra funding that is available as

a result of not spending it in technical assistance, is to sweep those

accounts, and put that back in the pot or the pool of money available and try to address that issue for 2003 in that manner. But I

think the thing that we are here today about and what we are really looking forward to is a better and longer term solution to this

whole question. And more in line with, quite frankly, the solution

that has been brought forward here by the administration’s proposal for the 2004 budget.

Mr. LUCAS. The gentleman’s time has expired. The Chair turns

to the gentleman from Kansas, Mr. Moran.

Mr. MORAN. Mr. Chairman, thank you very much. Secretary

Moseley, thank you very much for being here. I particularly appreciate the extension of the CRP signup, very much a Kansas Farm

Bureau and Pheasants Forever issue at home and appreciate the

extension from May 30 to June 13.

A series of questions until I run out of time, some of which we

have talked to you about, or most we have talked to you about and

expressed a willingness to work to address. One of the most common questions asked when I am in the district or on the phone is

after folks have been to the FSA offices, a concern about signup of

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mained in grass after that. Apparently you are not considering that

a conservation use, and that doesn’t make a lot of sense to me, and

I wondered if there is a solution or if there is a reason it should

make sense to me?

Mr. MOSELEY. Well, quite frankly, I think that is a good question. I am going to turn to my left and listen to this answer very

carefully.

Mr. LITTLE. This is an issue that we have just realized is it does

put a lot of farmers into a predicament, and it is one that we recognize is an issue, particularly for those contracts who just recently

expired prior to 2000. We have been meeting with both the House

and the Senate staffs in trying to really understand the issue completely, and we are working through the process internally to determine if there is any action that we can take. But we are aware

of it, we are working with the staff to try to see what can be done.

Mr. MORAN. It actually seems to me that this is behavior we

ought to reward not penalize. People who participated in the CRP

Program, left their land and grass after it is not re-enrolled, and

now come back to re-enroll and are told that that is not a conservation practice, which obviously was at one time and should be, it

seems to me, today. Reminder that if you make changes, which I

hope you do, you got a deadline, a signup deadline issue as well

for those individual landowners.

Another CRP issue dealing with coming out of the CRP Program

and base acres being maintained, the question I think arises for

CRP that was enrolled from 1996 to 2001, which will come out during this farm bill, are farmers are being told that they will lose

their base acres.

Mr. MOSELEY. It was my understanding that that had been addressed and that that was not the case, but I am going to have to

turn to Jim.

Mr. MORAN. What we have been told by our farmers is that if

they maintain their base or payment acres on land enrolled in CRP

that are on contracts that are set to expire, and some of the land

has been in the program for 12 years. During that same visit, they

are told that if they enroll the land during the 1996 to 2001 period,

the base history of that land will be lost when the contract expires.

Mr. LITTLE. Our intention is that those acres would not lose their

base. What we have been telling producers is that if they sign up

under this new program, we have no guarantee on what the next

farm bill might have in store. So any base that expires between

now and 2007, we would maintain that base. But we can’t guarantee what the new farm bill is going to look like, so we cannot guarantee any base beyond that.

Mr. MORAN. I will explore this with you further. Another CRP

issue, incidental grazing. Apparently we can graze, and I think Mr.

Johnson has indicated a willingness to work with us on this issue.

But you will allow grazing, incidental grazing of post-harvest crops,

the stocks. But if we are grazing our wheat and there is incidental

grazing of the grass terraces under continuous CRP signup, that is

a violation. It seems to me, we ought to be able to make the grazing of wheat treated similarly to the grazing of corn stocks.

Mr. MOSELEY. Right.

Mr. MORAN. Does that make sense?

14

Mr. MOSELEY. Yes, sir. That is an issue that just recently has

been brought to our attention, and we are going to take a look at

it to see if we can provide relief for those winter seeded crops.

Mr. MORAN. Grassland Reserve Program that Mr. Knight has

been cooperating and trying to be helpful with us, is this program

going to be available nationwide? How will the funds be distributed, and is the signup still scheduled for June 16?

Mr. MOSELEY. We are going to go nationwide. As you indicated,

the Chief and Administrator have been working on this program

for some time. We have taken a lot of comments, a lot of questions

from the outside, and we have been working very closely with those

individuals to make sure that we get this program exactly as it

needs to be to serve the need that is out there. It will be, when

it is released, a nationwide program. I don’t know that the signup

date is locked in yet. Is that correct, Bruce?

Mr. KNIGHT. It is. The signup date has not been finalized.

Mr. MOSELEY. But I can assure you that we are working as diligently as we can to make sure that that particular program is out

there, because we realize that there is a significant amount of interest on behalf of those who may participate in that program in

it, so we want to make sure that it is there and available for them

as soon as we can possibly get it there. So we want to do it, but

we want to get it right. And that is the issue here, and I think we

are to a point where we are there.

Mr. MORAN. I appreciate that. We look forward to working with

you, as we try to explain what we think right is. And I appreciate

the effort that you all have made in implementing a number of conservation programs. When Under Secretary Penn was here, I complimented him on the efforts in the farm bill and its implementation, and I appreciate the efforts that you and the staff across the

country are making, and we look forward to working with you.

Thank you for your testimony today.

Mr. MOSELEY. Thank you.

Mr. LUCAS. The Chair now turns to the gentleman from Hawaii,

Mr. Case.

Mr. CASE. Thank you, Mr. Chairman. Thank you, Mr. Secretary.

I represent the rural areas of Hawaii, all of the agriculture in Hawaii. And our concerns tend to focus very much on regional equity.

I am looking at what I understand at least to be the allocations,

noting that the allocations for Hawaii are somewhere in the range

of $3 million total, if I am not mistaken, if my information is correct. And that it is in the face of what I understand to be a fair

number of unfunded applications from the prior year, as well as in

specific areas such as Wildlife Habitat, where I think we have one

of the largest unfunded application acreage-wise of the entire country, which reflects the fact that we have a significant endangered

species problems and we certainly have the same endangered farmlands as the rest of the country. What explains that allocation, or

allocations of similar States, that are significantly kind of below

the median, even when you take into account acreage and devotion

of portions of the State, the farmland? And then let me just throw

it all on the table for you.

Farmland,ranchland actually has no allocation. And there’s about

seven locations that don’t have any allocations, zero allocation for

15

2003. What explains that? I don’t think that is a matter of no applications, but it is, I guess I would like to know it. And then finally, is one of the possible explanations just outreach, just advising people of the availability of the programs, or is it your feeling

that you are doing everything you can and should be doing to get

the word out about these programs? And is that in any way related

to really the primary subject of the hearing, the technical assistance programs?

Mr. MOSELEY. Let me respond to that to start with, and then I

am going to have Bruce explain the process, I think there is 30-

some factors or so that goes into the decisions that are made there.

And I think it is a very objective process, and it was designed to

be objective.

First of all, I have been in your fair State and realized—have

been on the ground and met with some of your producers, and I

do realize the significant resource issues that are there. And so I

understand the concern that you share with us today about trying

to meet those needs there in Hawaii. In terms of outreach, I suppose we could always be criticized that we don’t spend enough effort and time sharing with every producer, landowner out there

what the provisions of these programs are. At the same time, and

I am going to kind of look at this from a farmer now, which is

where I come from. I think the Department has made significant

strides in terms of making available to the public out there, to the

person that has some interest in these programs through the Internet technologies, through openness with NRCS staff at the ground

level, programs, educational programs, and so forth. I know that if

you go to any County Fair, State Fair, any gathering of that kind

in the country, you will see NRCS there, and they have the whole

range of program explanations available. And so I think we have

done a lot in terms of outreach. Can we do more? I suppose we

probably could. The issue is how much are we going to invest in

that, what is the most efficient way to reach those individuals? And

we are encouraging in a significant way, because it is every cost

effective where people have the availability to try and access

through the Internet technologies, because it really is a system

that works very well. But I am going to have Bruce explain to you

in some detail here the State allocations and perhaps that will help

address the questions that you have raised.

Mr. KNIGHT. Each of the programs have their own allocation formula. In the case of EQIP, some 29 factors that go into that that

take into account the resource degradation needs, the land area,

the amount of area under cultivation in the case of EQIP. Have a

different set of formulas in the case of WHIP, another set of formulas in the case of the Farm and Ranchland Protection programs.

It cascades down through each of the programs.

In the case of the overall funding for Hawaii, from 2002 to 2003,

Hawaii received a 42 percent increase in its allocation, which was

a significant jump and quite a bit larger than some other States.

But as I look at what I know as far as an existing backlog for Hawaii, it would continue to have a not insignificant backlog for the

programs. Your understanding of the WHIP Program appears fairly

accurate in that Hawaii is a State that has a large utilization of

WHIP in probably the top 10 States as I peruse it very quickly.

16

But we would be very willing to sit down with yourself and your

staff and go through the allocation formulas in detail and look at

how we make sure that we are taking care of things for Hawaii.

The last point I might make, as the regional equity provision was

constructed, it only bears on four programs and doesn’t take into

all of the programs that are part of conservation, including the

CTA account, which is the account from which we would do much

of the outreach work. And so it is very significant to understand

that additional efforts on outreach wouldn’t show up in the current

formula and calculation for regional equity.

Mr. CASE. Thank you very much, and I will take you up on your

offer to sit down outside this committee hearing to go over Hawaii’s

issues. Thanks.

Mr. LUCAS. The Chair turns to the gentleman from North Carolina, Mr. Etheridge.

Mr. ETHERIDGE. Thank you, Mr. Chairman, and thank you for

being here this morning.

Mr. Secretary, I have noticed in USDA’s notice of availability of

funds, EQIP’s ground and surface water conservation provisions is

only being implemented in 17 western States. Can you share with

us, if I am correct on this, any indication as to when or if the eastern half of the United States is going to be allowed to participate

in this program? Because you just talked about EQIP and talking

about regional fairness, and I thought maybe it would be a good

time to raise that issue.

Mr. MOSELEY. Yes, and we appreciate that. And I am going to

let Bruce handle that detailed question.

Mr. KNIGHT. The first year we implemented the Ground and Surface Water Conservation Program was in 2002, and it was part of

the special additional funds that came from 2002, as a result of the

congressional action of the farm bill. At that time, we only implemented it pursuant to the language in the report language. Those

States that were under the Ogallala aquifer , which was the real

impetus for that. In pursuant to the direction and feedback we received, we expanded it now to the 17 western States that were

roughly most impacted by drought, in the drought that we are coming out of. And we have a real need right now to save as much

water in 2003 as we possibly can in order to make sure that we

are able as we are recovering from those droughts—and some folks

are still very much in them. As we are recovering from those

droughts, ensure that we have adequate stream flows for the fish

and wildlife. That we have adequate water resources to maintain

irrigation in the economic viability in those communities, as well

as adequate water resources for those communities. And that was

why the decision to make that this year, only on 2003, we are quite

cognizant as we move along with this program that we need to look

beyond just the arid West to the water scarcity problems nationwide, including the scarcity problems that you have in the humid

East, which may not just be about drought, and drought recovery,

but about a expanding population base competing for those limited

water resources. So we will continue to look at how to expand that

program.

In the meanwhile, every practice, every water efficiency practice

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gram, is also eligible for funding under EQIP. The Ground and

Surface Water Conservation Program is a special program within

the larger umbrella of EQIP. And so a State in its prioritization

process, the State Technical Committee in any State at this time

can determine to allocate some of its money towards irrigation efficiencies, water efficiencies, all of those sorts of things. So even

though the Ground and Surface Water Conservation Program is

not available in every State, the practices that would be funded in

it are available in each and every State in the Nation.

Mr. ETHERIDGE. I thank you, and let me go back to my original

question. You gave me a good, broad answer, but you didn’t answer

my question. You said you can take some of the funds they have

now. I am talking about the funds that are allocated for this purpose. And given that the Southeast has been through a horrible

drought over the last several years, Northeast and previous years

existed, my question was if and when?

Mr. KNIGHT. I would be very willing as we go through the—we

will be reviewing our allocation formulas this fall and be very willing to take a look at how to make any further expansion decisions

at that time, as we go through the allocation formulas themselves.

Mr. ETHERIDGE. I would like the opportunity to sit down and discuss that, because I think that is an important issue as we look at

agriculture all across the country, and certainly the southeast has

been through some very tough times. I might say being part of

that, over the last—really 3 out of the last 4 years. We hope that

it has been broken now with all the rain, but there is no guarantees. So I would hope we would——

Mr. KNIGHT. I was in North Carolina yesterday, sir, and nobody

was complaining about not enough rain.

Mr. ETHERIDGE. Now they are trying to get in the fields to plant.

You know, one or the other.

One final question, if I have a little time, Mr. Chairman, is that

currently the administration is posing to fund technical assistance,

we have talked about here, through a 15 percent cut in funding on

the dollar, limited conservation programs as the transfer of the

money from the conservation account plus new money that comes

on top of that. And let us assume that Congress will agree and

those things happen. My question to will be when the Appropriations Committee, which they tend to be prone to do, decides that

they are going to make cuts in these spending accounts, how do

you foresee the remaining part of money for technical assistance

being divided among the various programs? Because we do our

part, but they always tend to be the 800-pound gorilla.

Mr. MOSELEY. That is the reason why the effort is going to have

to be on our part, and we hope on your part to try to make sure

that the Appropriations Committee does understand the very difficult situation that we are in. I am sure that they have their valid

reasons. I am also sure that if we sit down and if we work through

this and talk about it, that we can come to a resolution on this because it truly is putting the Agencies in a box and it is very difficult for us to continue to operate under the circumstances. That

is the reason why the chairman felt strongly that we needed to

have this hearing, and why we were more than willing to come up

and make sure that we illuminated these issues very clearly.

18

Mr. ETHERIDGE. Thank you, Mr. Chairman. Thank you, Mr. Secretary. I was just to an FSA office on Monday, and I can tell you

they are under tremendous pressure, and I got an earful.

Mr. LUCAS. Yes.

Mr. ETHERIDGE. I just shared with you part of it. Thank you.

Mr. LUCAS. The gentleman from North Carolina is entirely right,

and it is one of those things I believe to be an ongoing responsibility of this committee. We worked hard, we built a good farm bill.

We met all of the funding requests from all of the different entities

within the Department and without the Department. We did our

work, now as authorizers, we have a responsibility to shed enough

light on the process that some of our friends in other areas may

be a little timid about ignoring our good work.

Mr. PETERSON. Mr. Chairman, could I just ask one question?

Mr. LUCAS. I was going to point out to the Secretary that I

thought that that was a relatively painless round of questioning,

and I would assume his schedule would permit us to have another

round. So let us just inquire a little bit more of our friends.

And in that area and having the privilege of the gavel at this

particular moment, let me ask the Secretary the following. The

technical assistance account will not, of course, as we have discussed here, be possible if the prohibition on the CO account is not

lifted. So for just a moment, Secretary, provide us with a little insight. Is the Department discussing this issue with our good

friends, the insightful folks on the Appropriations Committee? And/

or are you discussing the possibility of finding funding sources

other than the Working Land programs? That is a nice, wide open

question. It should be an interesting answer.

Mr. MOSELEY. Yes, I know. And I am going to ask for backup

here very quickly. But the fact is we are very well aware, and quite

frankly, sir, your initiative to hold this hearing has stimulated this

issue at this point in time, and we fully recognize. Because we are

going through our 2005 budget process, and we would like to get

this resolved so that we don’t have to deal with this 2005, 2006 and

2007. So we will very shortly initiate some discussions with the appropriators, and this is an issue that it is difficult clearly, but we

need to just sit down simply and talk with those individuals, and

make sure that we do understand the difficult situation we are in.

And I have to have some confidence and faith that if we present

it very clearly and there is an understanding of the difficulty, that

we will be able to come to some kind of resolution. So we will be

engaging with them, as I am sure that you will as well, to try to

make sure that we do present the case very clearly.

Mr. LUCAS. Just in case we together cannot enlighten our friends

on the Appropriations Committee, you are discussing among yourselves all possible alternatives, I would hope, for ways to fund

these programs reviewing every conceivable option?

Mr. MOSELEY. Yes, and Bruce, do you have any further light that

you can shed? He says no, OK.

Mr. LUCAS. Mr. Secretary, I am curious about what the Department’s opinion is of Mr. Holden’s and my bill H.R. 1907? I know

the committee has requested an executive comment on the bill and

that has not been forthcoming yet. I know you are a very busy

bunch of folks down there, but can you share any insights?

19

Mr. MOSELY. Well, as we look at the bill and compare side by

side with our 2004 budget process, what you are laying out on that

bill and what you have suggested to us here is that you want each

conservation account to pay for its own technical assistance, and

that is the same direction that we are taking at the Department.

So I would say in that regard, we are extremely compatible in the

concept of the bill, and that provides a great groundwork for us to

then work forward from.

Mr. LUCAS. Because clearly, Mr. Secretary, as you have heard

comments from my colleagues who are very concerned about resources being available in different parts of the country, we had a

heck of a time fine-crafting a very, I think, balanced bill in the very

beginning, and the gyrations that this process in reallocating funds

has put us all through is just causing torment all over the countryside. And when our rank and file constituents out there in the

countryside, for instance, in programs like EQIP, come to the real

realization there is a dramatic reduction in the number of dollars

available.

We had a lot of lovely discussions in front of the FSA offices for

all of us as Members of Congress. I would just note one more time,

before I turn to my colleague, Mr. Holden, that I truly believe that

it is important that this subcommittee focus on its responsibilities

of oversight, working to make sure that a good piece of legislation

is implemented in the fashion that it was intended to be implemented. And that we pursue that, whether it is legislatively, or

across the floor on some other piece of legislation, to make that

happen. We have to, I think, work hard to take a different track

than has been traditionally been the legislative process, at least for

the last 20 or 30 years in this body, of good work being done, and

then undone by a 1,000 little cuts over the life of a bill. And that

is not just the farm bill, that is all pieces of legislation.

With that, I appreciate your time and your insights, and I turn

to the ranking member from Pennsylvania, Mr. Holden.

Mr. HOLDEN. Thank you, Mr. Chairman. Mr. Secretary, just a

few final questions on the CSP Program. What is your timetable

for implementation, and does the fact that you have transferred

money for technical assistance out of other programs for CSP mean

that landowners and operators will be able to signup and receive

checks before the end of the fiscal year?

Mr. MOSELY. I think we are going to be right on the margin. The

most recent discussions I have had with the Chief here, and since

he is sitting here, he can either confirm or deny this. First of all,

let me say that this is a very complicated, complex piece of legislation. Tremendous opportunity, also some risk. And we have taken

extraordinary measures to collect public input on this, and my understanding is that we had some 4,500 comments that were made

on this piece of legislation, or the rules as we were trying to lay

them out. So we have moved slowly, cautiously to make sure that

we get this one right. And I know that there is some concern out

there when is it going to happen, but I will take responsibility for

that because of the opportunity that this piece of legislation presents to us. Now I can’t—I am not sure what exact point of the

process we are in, but Chief Knight has—and I have been talking

about this and my understanding is that by August or September

20

we may be able, depending on, of course, other folks and their

clearance process, we may be able to get something out there. That

would be the hope at this point in time, and I would ask Bruce either to confirm or deny what I have suggested.

Mr. KNIGHT. In the case of the Conservation Security Program,

we went out with a—because it is an entirely new program, we are

really venturing into new areas. We went out with what was

known as an advanced notice of proposed rulemaking. And we had

15 some questions that we sought comment from the public on, and

we are currently in the process of evaluating that. We had 700 individual replies that were submitted. When you take 700 replies,

look at all of those answering 15 questions, you get into 4,500 or

so comments as a result of that. But we are evaluating those. We

are very close to the process of having completed that evaluation,

being able to take and transfer that now into the rulemaking process. We will then go out with a proposed rule this summer in very

short order, seek comments on that, finalize that rule with every

intent of being able to meet the timeline that the Deputy has laid

out before you. Thank you.

Mr. HOLDEN. Thank you, Mr. Chairman.

Mr. LUCAS. The Chair now turns to Mr. Peterson.

Mr. PETERSON. Thank you, Mr. Chairman. Maybe I should have

asked this question different the last time when I was trying to get

at this. If this bill that has been proposed by the chairman and Mr.

Holden passes, it apparently takes us back to February 20, prior

to the 2003 appropriation bill. And what impact would that have

on this process if this passed, and you had to abide by it? Does it

change what you allocated for the States, and would it have some

impact on the 26th signup? Would it somehow or another limit the

acreage that you could bring into the signup?

Mr. KNIGHT. As most of you know, I was, in a prior life, a lobbyist, and I learned the dangers of predicting the outcomes of the legislative process. So your question, sir, causes me a great deal of

trepidation. There is a challenge associated with the legislation in

that it would require the funding, make sure that it comes from

each of those appropriate programs. In the case of EQIP, Farmland

Protection, WHIP, we have fairly healthy reserves and I think we

may be able to manage appropriately, depending on when in this

process a piece of legislation would come through. The real challenge lies with the legislation as it is currently drafted on the impact on CRP and WRP, because we are—FSA is in the implementation stage of CRP, we are in an implementation stage of WRP. And

that, in turn, has a challenge there. But I am very confident that

knowing that, as you move forward with any legislative fix, those

sorts of things would be taken into consideration, as you worked

on the language itself.

Mr. PETERSON. But can you—I mean, right now you are talking

about taking some money from the general fund and using that to

do this. But if that was eliminated, and I guess what I am getting

at is, do you have the authority to reduce the acreage in CRP and

WRP if that is the only way that you can do this, or do you not

have the authority? That was what I was trying to get at. I mean,

in other words, take the money out of there and thereby reducing

the amount of availability in the future?

21

Mr. MOSELEY. Well, I am, first of all, the——

Mr. PETERSON. It is limited by acres, not by dollars. So if you

take dollars out of there, I guess what I am trying to ask you, do

you then have to reduce the acres to make up for those dollars or

not?

Mr. MOSELEY. The answer is, I guess, I just simply don’t know.

It is an interesting question; one that I think we would have to

spend some time exploring. Of course, the limit on the CRP is statutory, but the actual decisions that we make about how much acreage we may signup is driven by dollar availability.

Mr. PETERSON. Right.

Mr. MOSELEY. It is a question that——

Mr. PETERSON. You don’t have to answer this right now. But the

other issue is how much of it will come out of the continuous and

how much would come out of the general. We still have a considerable amount of continuous authority there that has been kind of

set aside that has been a concern to some of my constituents. So

you don’t have to answer right now, but I guess I am just—if this

actually happened, I am trying to figure out exactly what impact

it would have on CRP and WRP. That is what I was trying to get

at earlier with my question.

Mr. MOSELEY. Well, I think that is a reasonable question that he

wouldn’t——

Mr. PETERSON. And the other—before my time runs out, the

other thing, apparently you have allocated $106 million to the—

under what you did here on your April 26 announcement to CRP,

according to this sheet I have got. Is that right? But when I look

at what the technical assistance was for CRP in 1998, according to

the staff here, it is $48.2 million in 1999, with $67.6 million in

2000. It was $32.8 million, and in 2001, it was $29.8 million. And

we had some signups during that time, so I am curious as to why

it is $106 million now versus these other numbers which are like

half or less than half of that?

Mr. KNIGHT. The numbers you see today, sir, are the estimates

that we have based off of actual costs. The fact of the matter is at

that time, there was a practice underway that had the costs for

several of the farm bill programs being absorbed within the CTA

account or the CO account. And we are now in a position where

we are coming forward to you with actual cost numbers. We had

to move to these actual costs in order to be able to get reasonable

cost control underway, in order to be able to bring the cost of delivery for CRP and every one of the programs down.

And so now we have these numbers from which we can do as a

baseline and be able to bring additional costs lower. The $106 million that you see that we have allocated for the technical assistance

costs for CRP would be the absolute high water mark for this year.

We would already anticipate from what we have learned, and we

have made many changes, both within FSA and NRCS, that we

think are going to generate considerable cost savings that may exceed what we anticipate. In that instance, we will actually spend

less than $106 million. Whatever that actual amount is on TA we

will be able to estimate that mid to late summer. We will then

sweep those accounts and bring that money back, ask to have that

22

converted to financial assistance and be able to allocate that to

the—back to the donor programs.

Mr. PETERSON. Thank you.

Mr. LUCAS. The bottom line I think remains, Mr. Peterson, if we

don’t take action, the custom that will be established in the process

of using Working Lands programs to fund CRP and WRP will move

forward, and before very long, they literally will be sucked dry of

all of their resources. So this is something that must be addressed.

And with that, the Chair is very pleased to turn to the ranking

member of the full House Agriculture Committee, the gentleman

from Texas, for whatever comments or questions he may have. Mr.

Stenholm, sir.

Mr. STENHOLM. Thank you, Mr. Chairman. And thank you for

scheduling this hearing today and for all of your hard work, and

the other ranking members in ensuring that all of the efforts we

undertook over the last 2 years in crafting a Conservation Title are

not frustrated. I have looked forward to today’s testimony, but I am

a little disappointed in terms of the solutions or lack of solutions

put forward by some of the witnesses you will hear later today.

I also would have thought that groups following the farm bill

would have learned their lesson. There isn’t any additional money

out there to fix this problem. Remember what happened to the new

hope for conservation? The Conservation Security Program which

was meant to be operated as an open-ended funding? Since we kept

up the political pressure and said we really needed a Disaster Assistance Program, we finally got it, but at what price? A limitation

on the spending of the CSP and a potential short-changing of conservation funding for years to come. Now we are going to have to

work out some compromises ourselves and take care of this problem. That may involve some actions that aren’t particularly liked

by everyone involved in this debate. However, we, meaning all of

you here to testify today, as well, owe it to the landowners and operators that we represent to carry through on that promise we

made in the farm bill to ensure that all conservation programs included in the farm bill can be carried out.

I thank you for this hearing, Mr. Chairman. I have one question

that I want to ask of Deputy Secretary Moseley. What do your projections for workload for the conservation technical assistance not

involved the use of any farm bill programs show for the coming

years? Are there really that many folks who come into our offices

anymore asking for assistance that doesn’t involve a mandatory

funded Conservation Program?

Mr. MOSELEY. There are still demands upon NRCS that is beyond just farm bill implementation. I am going to ask Bruce to explain those in some detail, but my understanding just personally

at the ground level living in Tippecanoe County, Indiana, and making observations is that our local zoning for example requires everything that happens in that county to have some soils work done.

And NRCS is the resident expert in terms of soils, and so we as

then a citizen, a resident of that county will engage with the NRCS

Office to acquire that information. As a farmer, that makes perfect

sense, but of course, when you are in the fringe areas of Lafayette

and you are into building construction and so forth, those individuals needs soils information as well. They need it for design, conVerDate 11-SEP-98 11:25 Jul 16, 2003 Jkt 088313 PO 00000 Frm 00025 Fmt 6633 Sfmt 6633 F:\DOCS\1087 HAGRI PsN: HAGRI
23

struction. They need it for septic systems and so forth. So there are

demands that remain with NRCS in that broad conservation operations. Just also in terms of farm planning, that they are there.

farm bill came along and clearly has added to that. Now there are

elements of what is needed in the farm bill to carry out those provisions, and what is kind of the core competency or the core responsibility of NRCS, and I am going to ask Bruce to kind of explain

the steps in the program that they have been developing. But there

are things that you do within the core component of NRCS that

also are necessary to make sure that we meet the provisions of

what needs to happen in the farm bill process.

Mr. STENHOLM. Bruce, before you answer, I would just like to

ask a rhetorical question. But I wonder how many of those folks

you just described are the same ones that believe that the tax cuts

that we just passed are good for them, and therefore, the squeezing

of expenditures means everything other than the expenditures of

which you are talking about, that we still need to provide the services for?

Bruce, I don’t expect you to answer that question. I just posed

that as a rhetorical question.

Mr. KNIGHT. Thank you. To get back to the previous question,

the workload in the workload analysis that comes from the conservation technical assistance account is one of the most difficult

ones to be able to put a beat on. And now that we are moving to

outcome-based budgeting, we are going to have a better means of

being able to tie each of those things back to the goals and objectives that are laid out nationally by the Department.

One of the challenges that the CTA needs are different from

State to State because of the locally led process, and rightly so. So

in Texas, we provide a great deal of planning assistance, as it pertains to grazing lands management and brush control, out of the

CTA account with farmers and ranchers who quite honestly don’t—

aren’t looking for cost share assistance. Simply the planning to be

able to put together the grazing plan and be able to move forward

on that. In Hawaii, that is going to look very differently, because

we are talking about the outreach needs that we may have that are

very unique in a tropical climate, and how you put forth some of

the most recent work we did, which was a plants identification

booklet for tropical climates. And that is the kind of thing that

again would come out of the CTA account. Then you come to one

of the most important things, actually the reason I was in North

Carolina just yesterday, was standards in practices. We have been

doing a comprehensive review of all the standards, which we are

used to implement each of these programs, and that is largely done

through the CTA account. What we were doing yesterday was a

methane digester summit to look at how we have bring on this cutting edge technology, transfer it from a dream to something that

is in practice. We announced three practice standards changes that

we were making yesterday as a result of that. And so you have

such a diffuse number of legitimate needs that are done within

CTA, is what makes it very difficult to estimate how these interplay with these other programs.

Mr. STENHOLM. Mr. Chairman, you and this subcommittee got a

real interesting challenge with the letter that I have seen that

24

the—we are going to reopen the farm bill with the budget that we

are dealing with now. And as we do, I think the solution that you

and the others here are trying to work out that we can find a solution in this, but it is going to be considerably different than what

I think the overwhelming majority of the folks in this audience

think that is going to be possible here. But I commend you for taking this on. You are right on target, and we look forward to working with you when you get your bill to the full committee.

Mr. LUCAS. The challenges lie ahead of us, you are exactly right,

Mr. Stenholm, but that is why the good folks sent us here. Forward

we will move.

I will turn to Mr. Moran and then Mr. Case to conclude questions.

Mr. MORAN. Mr. Chairman, thank you. I appreciate you have a

second round of questions because it gives me the opportunity to

reiterate the number of times I have heard from landowners about

this issue of not a conserving use on signup of CRP. And I failed

to mention that I have been told that our local employees were

trained that this land would be included. And then subsequent, in

May, a decision was made reversing it. So it seems to me it was—

what confuses me now is my assumption was this was an inadvertent decision, or an inadvertent result. But now I am told that

USDA actually made the decision that these acres would not be eligible, because it is not a conserving use to—and again, this conserving use is land in CRP enrolled comes out of CRP in the year

2000, continues in its grass State, and now we are told it is not

a conservation or conserving use. I reiterate a couple of things.

One, if this was a decision by USDA as compared to just something that happened by error, I would like an explanation for

how—what I thought we agreed was a silly result is the position

of the Department. And then second, that again reiterate the importance of this signup date. It is inadequate, it seems to me, if you

decide that this is a mistake, that you have made an error or it

wasn’t given adequate thought, that then we might tell landowners

come back next signup. We don’t know when that would be, we

don’t know what the acres would be eligible, we don’t know what

the new requirements would be. And so I would again reiterate the

importance of having that either extended, although I assume you

know who all of these people are. They have been rejected at the

USDA Office. So I assume there is a button you can push on your

computer and say, oh, we made a mistake, come back and see us.

Mr. MOSELEY. That seems very logical to me.

Mr. MORAN. I thank you for your answer, Mr. Secretary. I have

a second question if that——

Mr. MOSELEY. Well, but, there is a ‘‘but’’ on the end of this, as

you know. I think you have raised what is quite frankly a question

in my mind, and I was frankly unaware—I knew that there was

some question over this, but I was unaware of the circumstances.

What I will commit to you is that we will take this issue on yet

this afternoon and we will try to sort out the real answer for you,

and we will back to you by Friday with an explanation of the circumstances and try to find a potential solution to this.

25

Mr. MORAN. I thank you, and at this point couldn’t ask for anything more, other than if you would have stopped your sentence before the ‘‘but’’.

One additional thought is it seems to me from a habitat perspective that we ought to be utilizing circle pivot corners for continuous

CRP signup. And I have pushed this idea for a long time, for most

of the time I have been in Congress. Is there any hope that this

idea has merit at USDA?

Mr. MOSELEY. Well, again, now I am speaking as a farmer here

for a second. That seems perfectly logical, but there may be a reason legally why that is not an issue that is on the table. And I

would ask for Jim or Bruce—I think that is Jim’s question, to respond to that.

Mr. LITTLE. There are only so many acres that we are going to

be able to enroll under the new eligibility from the 36.4 million to

the 39.2 million. We have 1.6 millionexpiring this year. And as we

go through the remainder of the farm bill per say, we just don’t believe that we are going to have that much capability. We have got

almost 7 to 8 million acres that we believe would be—perhaps may

be eligible, if we were to take in the corners of the center pivots.

So it is something that we have looked at. It is something that we

are really kind of in a quandary as to how we would be able to

really determine the environmental benefit when we only have so

many limited acres to enroll.

Mr. MORAN. I appreciate your comments. I do know that we

pushed to include language in the farm bill that made one of the

goals of CRP restoring habitat, and my hopes in part in pushing

that language to be included was that we would send you another

message about the priority of this aspect of CRP.

Mr. LITTLE. But we do believe that WHIP is available for that.

Mr. MORAN. I thank you, and Mr. Secretary, thank you for your

response to my earlier question.

Mr. LUCAS. Thank you, Mr. Moran. And I am sure that the executive comment on H.R. 1907 will follow closely behind the answers

to your questions. Mr. Case.

Mr. CASE. Thank you, Mr. Chairman. Just going back to one of

my previous questions, which is not specific to Hawaii. But in one

of the programs, Farmland and Ranchland Protection program, my

understanding again is that seven areas had not received any allocation for 2003. Hawaii was one of them, but others include Nevada and other areas that you would expect to be interested in that

and—had they expressed the interest to get the allocation. What is

the reason, if you understand it, why no allocation was given to

those States? Is it simply a matter of—I am noting that in each one

of those situations, there was not an application in 2002. Is that

the exclusive reason?

Mr. KNIGHT. Yes, sir.

Mr. CASE. Why is that? I mean, I don’t know if it is calling for

you to speculate, but why is it that they weren’t interested?

Mr. KNIGHT. The 2002 farm bill really took the Farm and Ranchland Program forward in a major step in that it expanded the

scope. And prior to the 2002 farm bill, you had to have basically

a State agency that was operating the program and willing to implement it. And so this following 2002 farm bill authorities, Farm

26

and Ranchland Protection Program was expanded exponentially

into many States where you had individual entities were now eligible to be able to apply. And so you see it has expanded greatly, and

many States went from zero to a significant allocation. So some of

the States may in fact have not gotten as far as having a private

land trust that would be in that situation. I believe, if I understand

the situation in Hawaii specifically is we did not receive an application, and that was why there wasn’t subsequent funding. Should

we find interest, that would be taken in consideration, as we move

forward with next year’s allocations.

Mr. CASE. OK. Thank you.

Mr. LITTLE. If I could add just something, we have been working

with the State of Hawaii in coming up with a Conservation Reserve

Enhancement Program, so that might be something that we could

put on the table or something that would be of benefit to Hawaii

for conservation.

Mr. CASE. OK. Thank you.

Mr. LUCAS. The gentleman’s time has expired. The subcommittee

wishes to thank the Deputy Secretary and the Chief and the Administrator for your insights today, and to note that we will be

coming soon to you with wonderful solutions to help you work with

us on. Thank you, gentlemen. You are dismissed.

And the Chair would like to invite to the table our next panel.

Ms. Nita Vail, executive director of the California Rangeland

Trust, National Cattlemen’s Beef Association, Sacramento, CA, on

behalf of the National Cattlemen’s Beef Association, National Milk

Producers Federation, National Pork Producers Council, South

East Dairy Farmers Association, and the Western United Dairymen. Also Mr. Mark Curtis, producer, Leland, MS, on behalf of the

National Association of Wheat Growers, the National Cotton Council, the American Soybean Association, the National Corn Growers

Association and the USA Rice Federation. Also from the third district of Oklahoma, Mr. Terry Detrick, vice president of the Oklahoma Farmers Union, Ames, OK, on behalf of the National Farmers Union, and Ms. Rosemarie Watkins, senior director of congressional relations from the American Farm Bureau Federation here

in DC. And whenever the panel is seated and ready to go, Ms. Vail,

you may begin.

STATEMENT OF MS. NITA C. VAIL, EXECUTIVE DIRECTOR,

CALIFORNIA RANGELAND TRUST, NATONAL CATTLEMEN’S

BEEF ASSOCIATON, SACRAMENTO, CA, ON BEHALF OF NATIONAL CATTLEMEN’S BEEF ASSOCIATION, NATIONAL MILK

PRODUCERS FEDERATION, NATIONAL PORK PRODUCERS

COUNCIL, SOUTHEAST DAIRY FARMERS ASSOCIATION, AND

WESTERN UNITED DAIRYMEN

Ms. VAIL. Good morning, Mr. Chairman. My name is Nita Vail,

and I am a fourth generation rancher, a member of the National

Cattlemen’s Association and a resident of California. I am here

today on NCBA’s behalf, on behalf of the National Pork Producers

Federation, the National Pork Producers Council, the Southeast

Dairy Farmers Association and the Western United Dairymen. And

for the record, Mr. Chairman, we are also being joined by United

Egg Producers, the National Turkey Federation and the National

27

Chicken Council, collectively in this testimony will be referred to

as the livestock groups.

Thank you, Chairman Lucas and ranking member Holden, and

other members of the subcommittee for holding this oversight hearing. The farm bill’s Conservation Title is extremely critical to our

producers, and we welcome this chance to comment on these important programs and issues.

Our written testimony speaks to the many fine provisions in the

farm bill, Conservation Title and our support for them. And in the

interest of time, I am going to limit my stated remarks to the

issues that are of most concern to us, as implementation moves forward.

First, we would like to indicate our grave concern that funds are

going to be diverted in this fiscal year 2003 and beyond from EQIP,

the Grasslands Reserve Program, the Farm and Ranch Land Protection Program and WHIP to support the implementation of the

CRP and the WRP. We support the principle that each of the 2002

farm bill conservation programs pay their own technical assistance

costs. We do not support the use of funds from one set of farm bill

conservation programs to pay for the technical assistance of the

other farm bill conservation programs.

We are deeply concerned about this situation and would very

much like to see it corrected this year in a manner that results in

no harm to the 2002 farm bill. The livestock groups believe that

your recent legislation on this matter, I think this morning referred

to as H.R. 1907, serves as a fine measure to ensure that no funds

are diverted from EQIP, GRP, FRPP and WHIP. We also support

an ultimate solution that preserves the funding for these programs

and allows a strong and effective GRP and WRP to be implemented.

With regard to EQIP, some groups have criticized the administration for faithfully adhering to the farm bill’s language that allows EQIP funds to be used for structural measures for so-called

large livestock operations, including new and expanding operations.

We find criticisms misguided in this regard. EQIP will have the

greatest environmental benefits if it can help those producers responsible for a majority of the animals in this country do a better

job of managing their manure. Removing the large producer prohibition will do just that, and we continue to strongly support the use

of an EQIP payment limitation, because we believe it will help

make EQIP a sound and environmentally successful program.

We are also concerned about the provision in the EQIP final rule

that makes nonpoint sources in the Total Maximum Daily Load or

TMDL watersheds to lead an only national priority focused on

water quality. There are significant potential problems with this

provision, depending on how NRCS implements it. We know that

NRCS had leeway to address any one of several natural—the several natural resource concerns, and we ask for the subcommittee’s

assistance to support NRCS’ implementation of this TMDL provision in a manner that does not otherwise damage the program.

With regard to the implementation of EQIP that is now just getting underway, we are concerned about proposed ranking criteria

that may make the program less effective in helping livestock producers address their most pressing environmental regulations.

28

Many States have proposed giving higher priority to applications

that include a separate soil erosion control component. We fully

support using EQIP for erosion control, but are concerned that producers willing to do a first rate job of managing their manure

might be denied critically needed assistance as a result of this approach. We will be monitoring this aspect of EQIP’s implementation and anticipate having comments on this issue later this year.

We are also concerned that several States with strong livestock

production sectors have not made comprehensive nutrient management plans a practice directly or indirectly eligible for EQIP. Some

States have proposed requiring a nutrient management plan be

prepared without financial assistance in advance of an EQIP application. In our view, this is bad policy and completely unacceptable.

Nutrient management plans are going to be critical to helping livestock producers comply with the new CAFO rule. EQIP must work

with regard to comprehensive nutrient management plans. We will

report back to the committee on this matter once more information

is available.

Another area of great interest to us is the Grasslands Reserve

Program. Prior to the 2002 farm bill, there were no programs that

protected grassland, ranch land, or other land with comparable

high resource value other than wetlands on a national scale. Congress recognized the need to protect all grasslands from development and conversion pressures by enacting the GRP, and it is designed to address the pressures to convert grassland for development by allowing landowners to enroll in grasslands and other

range and pasture lands in short-term contracts.

As a rancher from California, a highly populous State, and which

many of you may not know, we have 20 million acres of privately

owned range lands, so the threats are immense. This program has

incredible opportunity to serve not only the range land industry,

but protect the infrastructure in our local communities and benefit

society and the environment. After more than a year, the administration has yet to propose rules for this program. It is imperative

that this program be implemented as expeditiously as possible. It

is even more critical that the proposed and final program reflect

congressional intent. The language of the farm bill, report language, and the legislative history show that Congress intended the

GRP to be national in nature, and that land for enrollment should

include grassland, including improved rangeland and pastureland.

Implementation of the program that limits eligibility or diverts the

funds to other resource concerns would not reflect congressional intent and would reduce our ability to protect our rapidly disappearing grasslands.

Moving on to the use of third party technical service providers

is going to be critical to the implementation of the Conservation

Title. Our group support NRCS in its role as the top technical assistance provider organization in this country. But we know that

NRCS personnel are not going to be enough and that professionals

in the private sector will be needed to help. We applaud USDA and

NRCS’ effort to implement these provisions. Many livestock groups

have advocated a Federal Advisory Committee on technical TSP

issues to help USDA make this program work. We continue to support this and encourage USDA to move forward.

29

And finally, livestock groups recognize that the Conservation Security Program has potential to provide livestock producers with

important conservation assistance. We encourage USDA to move

forward with implementation of the CSP and look forward to providing comments on the rulemaking once it is published.

In closing, Mr. Chairman, we look forward to working with you

to make sure that the 2002 farm bill works for our producer members in the manner that you and other members of the committee

envisioned when it was passed. Thank you for this hearing, for

your leadership on these important issues that are so important to

livestock producers. I would be happy to answer any questions at

the appropriate time.

[The prepared statement of Ms. Vail appears at the conclusion of

the hearing.]

Mr. LUCAS. Thank you, Ms. Vail. Mr. Curtis.

STATEMENT OF MARC CURTIS, PRODUCER, LELAND, MS, ON

BEHALF OF THE NATIONAL ASSOCIATION OF WHEAT GROWERS, THE NATIONAL COTTON COUNCIL, THE AMERICAN SOYBEAN ASSOCIATION, THE NATIONAL CORN GROWERS ASSOCIATION AND THE USA RICE FEDERATION

Mr. CURTIS. Good morning, Mr. Chairman, other members of

committee, and the whole committee.

I am Marc Curtis, a soybean, rice, corn and wheat farmer from

Leland, Mississippi. I am a past president of the American Soybean

Association, and for the sake of full disclosure, I would like the

committee to know that I am currently serving as secretary-treasurer of the National Association of Conservation Districts. However, today I am representing a group of commodity organizations

that work together on conservation issues and feel strongly about

the issues that we are discussing today. The groups being represented today include the National Association of Wheat Growers,

the National Cotton Council, the National Corn Growers Association, the American Soybean Association and the USA Rice Federation. Our testimony will focus on implementation of the Conservation Title Farm Security and Rural Investment Act of 2002.

I would like to thank you, Mr. Chairman, for your leadership and

the leadership of your committee, in helping to craft a Conservation Title in the 2002 farm bill that represents, in the words of the

Bush administration, ‘‘The single most significant commitment of

resources toward conservation on private lands in the Nation’s history.’’

This was accomplished by greatly expanding existing working

lands programs, such as the Environmental Quality Incentives Program, that expressly directs a percentage share of the program towards non-livestock producers and increasing the acreage cap enrollment of set-aside programs, such as the Conservation Reserve

Program.

You also created promising new programs, such as the Grasslands Reserve Program, which authorizes enrollment of up to 2

million acres of restored, improved or natural grassland, or rangeland and pastureland. And a program in which our members have

enormous interest, the Conservation Security Program, which can

30

provide an unprecedented opportunity to increase conservation on

private working lands.

I say it can provide an unprecedented opportunity, because draft

regulations have yet to be sent out for public comment, and there

are some initial indications, for example, in the advanced notice of

proposed rulemaking recently sent out for public comment, that

USDA is looking for ways to artificially constrain this program.

And while we realize that the Federal Government is not going

to throw open the doors of the Treasury and hand us a pitchfork

to start shoveling out the money, it seemed clear that the intent

of Congress was for the CSP to be a program for all producers on

all working lands addressing one or more resources of concern on

all or part of their farming operation.

Many of our members are also concerned that this program not

simply be targeted to the bad actors who have not been as ambitious in addressing conservation concerns, but also be utilized to

reward those producers who have been very aggressive in addressing conservation needs and could at least qualify for Tier 1 conservation maintenance.

We fully understand the daunting task facing the Department of

Agriculture in implementing these programs, and we understand

that they have been diligently working to get regulations finalized,

funding allocated and to get these programs up and running so

that we can begin to realize conservation benefits on the ground

and out in our fields.

However, the initial optimism which followed passage of the 2002

farm bill has given way to concern in part because the ongoing debate over funding sources for technical assistance. It appears that

interpretation of the provisions of the new farm law and recent language added to the omnibus appropriations commission will erode

program resources as well as the confidence of support of our members.

For example, the EQIP Program was initially authorized at $700 million. It was then reduced to $695 million as a result of Appropriations actions, and now stands at $588 million program as a result of the interpretation that requires EQIP to contribute towards

the technical assistance requirements of the Conservation Reserve

Program and the Wetland Reserve Program.

Some of our members have also been informed that while land

planted anytime in the past to a multi-year grass or legume could

meet the cropping eligibilities for enrollment in CRP, the eligibility

now only applies to lands planted to a multi-grass crop or legume

after 1996. My question is, is highly erodible land in 1995 less valuable to protect than highly erodible land in 1997? These are rules

cooked up by accounting types, not by those who are concerned

about the good conservation stewardship of our land.

We also understand that the 2002 farm bill was drafted and

passed by Congress during a time of budget surplus, while it is

being implemented during a time of budget deficits. Clearly there

are increasing pressures to restrain domestic spending, but the

farm law was written in compliance with the budget resolution in

effect at that time. Therefore, the programs authorized in the farm

bill and signed into law by the President just over a year ago

should be implemented as authorized.

31

Each of our organizations, along with the American Farm Bureau Federation and the National Farmers Union, have corresponded with Congress indicating our strong opposition to any effort to amend, alter or siphon off funding from the Farm Security

and Rural Investment Act of 2002. Our groups will again communicate our opposition to amendments, which alter the balance of

funding for price support, conservation and nutrition, risk management and export promotion. I believe you have a letter that I ask

be included in the record concerning this.

We are aware of the legislation you have introduced, Mr. Chairman, to address the problem of technical assistance funding, and

wish to express our support for your recent efforts to ensure that

each of the 2002 farm bill conservation programs funded by the

Commodity Credit Corporation pay for their own technical assistance costs. We do not support the use of funds from one set of farm

bill conservation programs to pay for the TA of other farm bill conservation programs.

Under current law, as being implemented by the administration

this fiscal year, the TA costs of the Conservation Reserve Program

and the Wetlands Reserve Program will be paid from CCC funds

made available to the Environmental Quality Incentives Program,

the Wildlife Habitat Incentives Program, the Farmland Protection

Program, and the Grassland Reserves Program. In the case of

EQIP in the fiscal year 2003, this will result in the withdrawal of

approximately $107 million. GRP, FPP and WHIP lose a comparable relative share of the total funds needed to pay for CRP and

WRP technical assistance.

We are deeply concerned about this situation, and very much

would like to see it corrected in this fiscal year in a manner that

results in no harm to the 2002 farm bill provisions that have been

supported and embraced by the agricultural community.

In closing, Mr. Chairman, we would like to emphasize several

principles that we feel are important to keep in our collective

minds as we move forward on farm bill implementation. First, we

believe that each conservation program should pay its own technical assistance and that the provisions embodied in the legislation

you have introduced provide positive guidance toward achieving

this objective. However, we sincerely hope that an administrative

solution can be found based on your direction.

Second, we will actively oppose any attempt to amend, alter or

divert funding away from farm bill programs, as authorized by

Congress and signed into law by the President just over a year ago.

Farmers need a consistent, predictable long-term policy in order to

make sound investment, cropping and marketing decisions, and to

compete in a world market replete with subsidies, tariffs and nontariff barriers.

We appreciate this opportunity to present our views, and we are

happy to respond to any questions you may have.

[The prepared statement of Mr. Curtis appears at the conclusion

of the hearing.]

Mr. LUCAS. Thank you, Mr. Curtis. Mr. Detrick.

32

STATEMENT OF TERRY DETRICK, VICE PRESIDENT, OKLAHOMA FARMERS UNION, AMES, OK, ON BEHALF OF THE NATIONAL FARMERS UNION

Mr. DETRICK. Thank you, Chairman Lucas, Ranking Member

Holden, ranking member of the full committee, Mr. Stenholm,

members of this Subcommittee on Conservation. I am Terry

Detrick, a wheat, forage and livestock producer from Ames, Oklahoma. I currently serve as vice president of the Oklahoma Farmers

Union.

Mr. Chairman, from your constituents back home, thank you for

your bold work on conservation issues with dire consequences for

all citizens, not just producers. National Farmers Union represents

300,000 independent, diversified, owner-operated family farms and

ranches across the Nation, and we are grateful to have the opportunity to appear before you today to discuss the crucial issue related to funding for technical assistance for conservation programs included in the 2002 farm bill.

Although this is an intricate budgetary topic, we thank the

Chair, the ranking member, and others for their efforts to rectify

the funding fight that has developed seemingly between the administration and Congress. The issue before us today centers around

the amount and source of the money for the farm bill conservation

programs, and this includes technical assistance provided to farmers and ranchers that must implement very complex conservation

systems on their working lands. We believe the money for technical

assistance should come from the Conservation Program accounts

themselves. We support your bipartisan efforts on H.R. 1907 to address the funding dilemma that has been created for some of these

agricultural conservation programs.

We believe that the OMB decision to not fully fund the technical

components of the Conservation programs because they claim other

funds are available is wrong for Conservation programs, wrong for

farmers and ranchers. We also believe that NRCS should not use

funds from its Conservation Operations account to supplement

these programs. And these funds are crucial for NRCS’ non-farm

bill conservation responsibilities.

Following this approach only encourages a divide and conquer

strategy. It sets up a potential fight among livestock and production agriculture, geographical regions of the country, working lands

conservation versus non-working lands conservation, and is not

healthy for the development of program opportunities meant to

apply to all farmers and ranchers across the country.

To summarize our views in a nutshell, No. 1, the farm bill conservation programs should be fully funded as authorized in the

farm bill, and No. 2, that the discretionary NRCS Conservation Operation fund should not be redirected to support the implementation of the mandatory farm bill conservation programs. The 2002

farm bill has been called the greatest ever, and our members want

the programs that they supported and worked hard for to be included in the farm bill to be implemented the way Congress wrote

the law.

Throughout the farm bill debate, congressional leaders such as

you saw the importance of technical assistance as a key component

in getting conservation programs put into practice on working

33

lands across America. In order that complex conservation systems

be developed and applied, the concept of technical assistance supplied by third-party providers was a key element supported by both

Congress and the administration, and the provisions will be seriously undermined if technical assistance is not fully funded.

The partnership between the NRCS and the local conservation

districts is key to rendering the effective third-party provider technical assistance across the countryside. It appears that the administration supports using a combination of program fund offsets and

redirected discretionary funds, including a large percentage of base

conservation operations funds to fund technical assistance for our

conservation programs. We feel this approach would result in severe reductions in important conservation and rural development

programs, and would restrict the ability of the Appropriations Committees to direct funds to programs it sees as high priority needs

for the country.

We agree with the conclusions reached by the GAO, that the

farm bill specifically provides funding for technical assistance as a

part of the mandatory funding for each and every Conservation

Program in the farm bill. We encourage your efforts and your legislation to be as inclusive as possible, and support your efforts to ensure that the original intent of Congress in writing the 2002 farm

bill will be carried out.

What ranchers and farmers do not want is further delay in implementing the farm bill. We believe passage of H.R. 1907 will help

remedy the situation before us today. We stand ready to work with

you to get it passed and protect the integrity of NRCS, and we

thank you.

[The prepared statement of Mr. Detrick appears at the conclusion of the hearing.]

Mr. LUCAS. Thank you, Mr. Detrick. Ms. Watkins.

STATEMENT OF ROSEMARIE WATKINS, SENIOR DIRECTOR,

CONGRESSIONAL RELATIONS, AMERICAN FARM BUREAU

FEDERATION

Ms. WATKINS. Thank you. I appreciate the opportunity to testify

on behalf of the American Farm Bureau Federation before the subcommittee on the issue of farm bill Conservation Program delivery.

The subcommittee has specifically requested that we address the

issue of conservation program technical assistance funding. We are

extremely concerned about the ongoing shortfall of technical assistance funding for CRP and WRP. In fiscal year 2003, this shortfall

will result in a substantial cut in funding for EQIP and other conservation programs. This comes at a time when EQIP has a significant application backlog. We believe every program must cover its

own technical assistance delivery costs. The chairman’s bill is a

good first step in providing guidance.

In the case of CRP and WRP, we believe USDA should calculate

the delivery cost of program enrollment. Acres available for enrollment should be reduced to a level to fund program delivery and

technical assistance. We are not suggesting a reduction in the statutory cap of 39.2 million acres. CRP has never been fully enrolled,

and WRP yearly acreages have varied. The programs and their

goals would not be sacrificed or jeopardized in any way. The proVerDate 11-SEP-98 11:25 Jul 16, 2003 Jkt 088313 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 F:\DOCS\1087 HAGRI PsN: HAGRI
34

grams would cover their own costs without incurring additional

budget obligations or taxing other programs. We urge the Congress

and the administration to work together to resolve this issue. The

integrity of the Farm Security and Rural Investment Act of 2002

is critical. Resolving this issue in a timely, straightforward manner

is essential. Farm Bureau supports full funding of the farm bill and

opposes any action that would upset that financial balance.

With regard to program delivery and implementation, conservation has increasingly become a priority for our members. Conservation cost-share and incentives are essential to assist producers in

addressing public concerns related to the environment. If farm bill

conservation programs are to be successful, adequate technical assistance will be key. We must be available to—funding must be

available to demonstrate that voluntary incentive based conservation programs can be successful in addressing environmental issues

and serve as an alternative to the more costly and burdensome regulatory approach.

One important component to program delivery will be the utilization of technical service providers. We do have some concern regarding implementation of this program.

The confidentiality of information provided to technical service

providers must be protected. Farmers and ranchers are increasingly concerned regarding the confidentiality of information provided as part of program participation. The farm bill specifically exempted such information from distribution to other agencies of

Government and from disclosure under the Freedom of Information

Act. This protection must be extended to all information made

available to third-party technical service providers.

Additionally, technical service providers must be bonded and

have appropriate liability insurance. We understand that in some

States liability insurance may not be available for some practices

or cost-prohibitive. NRCS should review bonding and insurance

issues on a state-by-state basis to assess availability and consider

some means of providing insurance where none is available. Payment rates for technical service providers are to be based on NRCS

cost of service. When calculating the cost of service, we want to be

sure that actual NRCS costs are complete, including insurance, office and administrative costs.

Additionally, the regulations lay out a complex system for producers to utilize technical service providers. Errors in timing or

contracting procedures could result in producers not being reimbursed for costs. It is essential that NRCS provide a plain English

step-by-step procedure guide for producers.

As far as the EQIP, the EQIP final rule has just been released

making it difficult to assess program delivery. We will be working

with State Farm Bureaus to monitor implementation. We continue

to believe that the Conservation’s Security Program is extremely

important. We believe that agricultural producers must receive assistance to help with the cost of ongoing environmental improvement and regulation. We also believe that the program should be

fully funded and should be implemented nationwide.

In conclusion, conservation financial and technical assistance are

critical tools for assisting farmers and ranchers in addressing resource needs. Adequate conservation planning will be essential for

35

program delivery. The programs encompassed in the farm bill offer

tremendous opportunity for agriculture and for NRCS, but their delivery will be challenging. We must all work together to ensure success.

While we have focused primarily on technical services, EQIP and

CSP, we would be happy to answer questions with regard to other

conservation programs.

And thank you for this opportunity.

[The prepared statement of Ms. Watkins appears at the conclusion of the hearing.]

Mr. LUCAS. Thank you. And I do appreciate everyone’s testimony

today. Clearly we have come to, in a sense, a fork in the road here;

whether we continue down the process of undoing the funding

mechanism that was set up in the 2002 farm bill, or we attempt

to bring this wagon back onto the proper trail. I would note for Mr.

Curtis and my crop friends that I too realize and agree that an administrative proposal to fix this would be the best course of action

for all involved. But if as it appears, the administration is not able

to or perhaps unwilling to take action, then let me ensure you my

goal will be to work on a bill or an amendment that will address

the technical assistance issues, and be the primary focus of that.

To come up with a good fix, as Mr. Curtis pointed out. EQIP which

was supposed to receive $700 million has already been shifted

down to $588 million. That is a rather dramatic move. But focus

on the technical assistance issues.

And I would also note for the record that in the actions we have

seen from the other body on the other side of this building and

from the appropriators on both sides of this building, they have

been in effect rewriting the farm bill since the first day they laid

their hands on a dry copy. So it is not as though we are plowing

a field for the first time. And as the ranking member of the full

committee most accurately points out, there are challenges we are

going to face in this committee that we have to address, and coming to this successful conclusion can be a part of that also.

I guess the question I would now put to the panel is your opinion

about how Congress should proceed until we are able to get the

technical assistance funding issues fixed, or perhaps, maybe the

better question is your opinion about how USDA should proceed?

And I couch that by the point that as these funds are expended in

the fashion they appear to be directed now, at whatever point we

bring this process back to focus, those dollars will be gone. They

will not be refunded back to those endeavors. So I guess my first

question to the panel is how should we proceed until the technical

assistance issues are fixed?

Ms. VAIL. Mr. Chairman, we also would hope to see an administrative fix. We clearly would like to see this corrected for fiscal year

2003. If that cannot happen, I would ask if I could respectfully submit a letter that was sent to you and your committee yesterday

signed by all of the livestock groups and the major row crop groups

supporting your approach.

Mr. LUCAS. So ordered to be added to the record.

Ms. VAIL. Thank you very much.

Mr. CURTIS. Mr. Chairman, it is the groups’ that I represent

strong belief that this problem is to be fixed in the fiscal year 2003.

36

It doesn’t need to be drug out. We believe that under your expert

guidance as Chairman of this committee and the impetus maybe

provided by this hearing that there is the possibility of an administrative fix. Let us continue to keep the pressure on in that manner.

However, if that is not possible, then we have addressed this

problem partially in previous—during the omnibus appropriations

process without having to open up the farm bill, and maybe an approach like that would be the correct course to take. We are very

leery of going back and opening up the farm bill.

Mr. DETRICK. Mr. Chairman, we would concur with Mr. Curtis,

but also would like to add I know it is perilous times. I know in

agriculture through the years, agriculture seems to have the most

common sense approach to every issue that has come up in Washington, DC. And we have given, and we have given, and we have

given, and the 2002 farm bill gave back, thanks to the efforts of

those of you in this room and the full committee. Quite frankly, I

have confidence when I look at the members of the full committee

and this subcommittee, because I have seen you all do some things

before in bringing priorities to the forefront. I think that our situation has to be. This has got to be a priority. It is not just a farmer

thing, as I said in my opening paragraph. This is for the country,

and we have got to find whatever means we can, to get these

funds, get them quick, get them implemented and get this 2002

farm bill underway.

Ms. WATKINS. We too would be very concerned about anything

that would open up the farm bill. We think that perhaps there

could be an administrative solution and we would like the administration to look at our approach, with finding a way for CRP and

WRP to pay their own way without legislation, but this needs to

be fixed. EQIP is extremely important to our members as a CSP,

and we need to move forward with implementation of these programs.

Mr. LUCAS. Thank you. Once again I would just ask my friends

to remember that there will be no, in my opinion, general reopening of the farm bill. But the process of tweaking and adjusting

started the moment the ink was dry, whether it’s the appropriators

and their actions, or the other body with their actions, we have a

responsibility I think to do whatever is necessary to preserve those

very precious resources that are available to us, as Mr. Stenholm

has pointed clearly time and time again on the floor and in this

committee. We have a limited amount of resources available to us.

We must preserve and use those most efficiently. The western

Oklahoma dialect, I believe, with there ain’t going to be no more,

and Mr. Stenholm might disagree with that. But with that, I turn

to the ranking member, Mr. Holden.

Mr. HOLDEN. Thank you, Mr. Chairman, and I thank the panelists for their testimony. I would like to pose a question to Mr. Curtis and to Mr. Detrick.

NFU and several of the commodity organizations lobbied Congress for over a year and a half for disaster assistance, despite

warnings from Members of Congress that such an effort could very

likely be to agriculture having to pay a high price for that assistance later, either in cuts in the farm bill or through budget reconciliation. In your personal opinion, was the cost that agriculture

37

had to pay by moving the entitlement nature of the Conservation

Security Program too high of a price to pay for a disaster assistance, the omnibus appropriations bill, cap CSP at $3.7 million?

Mr. DETRICK. The answer to your question was that too high a

price to pay, I think you can tour through a lot of the country that

has been affected by disaster, and a lot of them are still saying

where’s the beef? There was not enough in that. Was it too much

relevant to everything else? I am not sure that is a possible question to really answer. I think we have done, you all have done the

best with what you had to do with. And yes, we still have people

in agriculture that won’t face another year. And does that affect

the entire country? Yes, sir, it does.

I think and I appreciated Mr. Stenholm’s remarks earlier. There

is priorities out there, and it seems at this point that this administration doesn’t think that this is a priority because they have priorities for other things. We had some tax cuts, we have got some

other things that are out there that they have had priorities for.

There needs to be priorities for agriculture; priorities to keep America’s production line in place for our food security.

Mr. HOLDEN. Curtis.

Mr. CURTIS. You asked for a personal opinion, and representing

a half a dozen groups, I really——

Mr. HOLDEN. Well, even your professional opinion.

Mr. CURTIS. I am really in a quandary here as to how I can express a personal opinion and represent all of these different groups.

Mr. HOLDEN. Well, you can give a professional opinion, sir.

Mr. CURTIS. I will go back and give my personal opinion. It was

too high a price because I didn’t qualify. Outside of that, traditionally Disaster programs in this country have been recognized as

that and important to the country as a whole, and have been treated as such. This one wasn’t. I think only time will tell whether

having to pay for it out of CSP will be the right thing or the wrong

thing. CSP, if it is implemented correctly, certainly is going to be

a very important program for farmers in this country. And I hope

that the Congress will see down the road, and hopefully not the

very long road, that the importance of CSP is going to be such that

the funding cap will be taken off of CSP.

Mr. HOLDEN. Mr. Chairman, I understand that slight bit of hesitation that the gentleman had in answering the question because

that is what we have been struggling with; trying to protect that

record-setting investment that we made in agriculture last year,

particularly the $17 billion in conservation. So with that experiment, I yield back.

Mr. LUCAS. Thank you, Mr. Holden. Mr. Stenholm, sir.

Mr. STENHOLM. Thank you. I thank the witnesses and I appreciate the difficulty you had answering Mr. Holden’s question, because many times I have always suggested be careful of what you

ask us to do, lest we do it for you and it comes to you, and this

budget situation that we are now facing is serious and growing

more serious. When we see that we will borrow somewhere between $400 billion and $500 billion this year, the pressure that is

on this committee and the appropriators is going to be severe.

There are those that do not have the same priority listing that the

four of you do that you have testified here today, and I am not sure

38

where the majority lies, both sides of the aisle regarding this.

When we don’t recognize some of our own actions as being contributing to our problem, it becomes to be a little problem. When we

start pointing the finger at somebody else rather than recognizing

three are pointing back at us, we get into a little trouble, whether

you are at that table or whether we are up here at this side of the

dais.

Chairman Goodlatte has a letter from Chairman Nussle, and I

have got a copy suggesting that we cut $5 billion out of the farm

bill. Now they don’t say it that way. They say cut waste, fraud and

abuse, and I doubt seriously that in any of your testimony that you

have outlined any waste, fraud and abuse in the Conservation Title

of the farm bill. I didn’t hear that because you are asking for more

than what is in the bill in this endeavor. But we have been told—

I do not see, Mr. Chairman, how we can avoid reopening the farm

bill in order to make the kind of cuts that we are going to be asked

to do and required to do under the budget that has passed. I don’t

see how we can do that. I don’t think that is necessarily something

we can’t do. I personally think we can adequately fund technical

assistance, if we go do it and do it the way this committee would

want it done. Realistically, I think we can do it. But we can’t do

it like you want it done. Since 1992, I have been begging and

pleading NRCS, Conservation Districts, et cetera, to try to form

Team USDA and see if we can’t improve the efficiency on delivery

of conservation, and basically, most of you in this audience have

thumbed your nose and said the heck with it, which is your choice.

You whipped me a long time ago. I haven’t fought that battle, and

I am not going to take but 30 seconds on it today. But there are

ways we can efficiently deliver this service if we were willing to do

it. But you are not willing to do it, and you come up here and you

ask us for more money to do it, and that is going to be tough to

do. I am going to continue to suggest that you look back home and

see if there aren’t ways that we can do a better job of delivering

that technical assistance and have Team USDA, and where it is

appropriate, have FFSA and RMA and NRCS and Extension Service and all working together. We have got some great examples

where that has worked, but for the most part, we choose not to do

that.

And I guess one question that I have got. The focus today from

all of you seems to be on the concerns about taking money from

several programs, and not on the fact that we have an entire array

of programs that are designed to meet a number of needs. In the

spirit of Chairman Nussle, is there any waste in any conservation

program that you would suggest that we might save? Any particular conservation program that we might do away with, assuming

it is not somebody else’s conservation. I mean, livestock, the committee said 60/40. Livestock producers in EQIP should get 60 percent of the funding, and that I totally concur with. I suspect some

crop producers would say that was wrong. We ought to have it 50/

50 or 40/60, the other way. But is there any conservation areas

that we are working on today that this committee might look at to

help achieve our 1 percent in waste, fraud and abuse? And if you

can’t think of one, you can it provide it for the record. Maybe it is

a little more rhetorical than an actual question, but I don’t think

39

so. Provide it for the record. My time has expired, unless you have

got a comment.

Mr. DETRICK. Congressman Stenholm, I would make a short comment and allow that to be only a personal opinion, because I have

not conferred with NFU or OFU, or anybody else before I say this.

But I do know that one of the biggest competitors for young

farmers to rent land, and you have heard this before, is CRP and

some of the rates. Those who own that, I am sure think their payments are not high enough. I am one who had my rent increased

150 percent because of the opportunity to go into CRP, and I was

paying the going rate for rent. But the CRP payment was based

upon the possible return, total return of that land, not just the net,

and what the going rate of interest was. That is just a personal

opinion of mine, and I think there are some rates that are probably

being overpaid through some of those things.

I would reply again with a second thought to Congressman

Holden’s question. I think that it is a mistake when we confuse disaster versus conservation. We don’t confuse a hurricane to conservation, and I think that that was a mistake. I have a pie chart

that we put together on the 2002 farm bill, and the total amount

of the agriculture budget compared to the Federal budget is such

a small sliver here that you won’t be able to see it from your distance. But when you look at the bigger one, which is how that farm

bill is divided, over 55 percent goes to welfare and food nutrition

needs. But I see only 8.4 percent conservation, and a lot of that in

order for us to get it, the farmer has to come up with his own

money to help match. And the results and those who reap the benefit from that is John Q. Public in lots and lots of instances, with

cleaner water, cleaner air, conserving our resources for the future.

So if we want to look for cuts, why do we look for so many from

just 8.4 percent of this thing? And if you add commodity support,

you have got about 33 percent. There is another 67 percent of this

thing that we might want to be looking at.

Mr. STENHOLM. Let me just urge a word of caution going down

that road. It was not by accident that we passed this farm bill with

two-thirds vote, both sides of the aisle in both bodies. If you eat,

you are involved in agriculture, and the temptation for all of us in

the committee is to look at the food component as where the waste

and fraud is. That is not where the waste and fraud is any more

than it is in the conservation.

If it is fraud out there, we ought to be prosecuting them under

current law, and I would submit we have got plenty of laws on the

books that prosecute and we have got—that is going on. But from

the standpoint of efficiency of operation, I don’t think it is too much

to ask of those who work with us to do the same thing you had to

do on your farms and ranches. Live in this world and get more efficient and do some of the things that you have been so reluctant to

do, because that is not the way we did it 10 years ago, or we don’t

like dealing with these other organized groups because they are not

doing it the way we ought to have it done. It just shouldn’t be that

way, but I just again urge a little caution. The budget economic

game plan that we are going down is going to require this committee, if we do our job to reopen the farm bill. Now that is not saying

that that is necessarily all of the evil things that happened with

40

it. But if we do our job in meeting the budget restraints, we need

to do this, and that means we are going to need to help to find

where we are going to save $5 billion, 500 million this year. And

I don’t want to take it out of conservation. I was one of these that

said this was going to be the greenest farm bill in the history that

I have been here, and I was going to be supportive. It was, and I

am. But we need some help, and some of you in this audience are

not giving us the help with the testimony that you are giving

today.

Mr. LUCAS. Thank you, Mr. Stenholm. And the subcommittee

wishes to express its appreciation to the panel for rather insightful

and interesting exchange on the topics, and the comments and support in focusing on our conservation resources.

I believe now it is time to invite the third panel to the table. Mr.

Bill Wilson, first vice president of the National Association of Conservation Districts from Kinta, Oklahoma. Mr. Scott Faber, policy

analyst, Environment Defense Fund, Washington, DC, on behalf of

the Environment Defense, National Audubon Society, Defenders of

Wildlife, Land Trust Alliance, Sustainable Agriculture Coalition,

and the National Wildlife Federation. Mr. Scott Sutherland, director of governmental affairs, Ducks Unlimited, Washington, DC, on

behalf of Ducks Unlimited and the Wildlife Management Institute.

And whenever you are ready, Mr. Wilson. The committee looks

with a great enthusiasm towards this panel’s insight.

STATEMENT OF BILL WILSON, FIRST VICE PRESIDENT NATIONAL ASSOCIATION OF CONSERVATION DISTRICTS,

KINTA, OK

Mr. WILSON. Thank you, Mr. Chairman, and members of the subcommittee. I am Billy Wilson, and I am here representing the Conservation Districts across this country, our 3,000 district members

of NACD, and our 21⁄2 million cooperators that we service each day.

I would ask that my statement that I have submitted be included

in the record. And there is a further explanation of who I am there,

so if there is interest, you can read about that. I want to get right

to the issue.

Conservation districts work shoulder to shoulder with the NRCS

in implementing programs. We have for some 70 years. Districts

have always supported our voluntary, incentive-based approaches

to private working lands conservation. A theme repeated throughout the 2002 Act that this committee and you, Mr. Chairman,

worked so hard to make sure that it came to pass, and we appreciate your efforts and the efforts of all of the committee.

The best way to achieve conservation is through local decision

making with input from all stakeholders. Opportunities still exist

to improve communication, coordination and cooperation with State

and Local Governments so that combined resources can be used

more effectively do help producers address conservation objectives.

That is to say that even though we have worked shoulder-toshoulder with NRCS for 70 years, there is still, in my view, some

areas where we can improve. And I wish the ranking member of

the full committee were here to hear me say that, because there

are opportunities I think for us to better work together at the local

level. We appreciate the leadership and vision that the members of

41

this committee provided, and we also want to compliment the administration for striving for full implementation of the programs.

Most but not all of the program rules are out, and we have already

heard some testimony today about that.

The 2003 omnibus bill partially resolved the technical assistance

issue that we are here today to talk about. We need to permanently

resolve that issue. And we have heard to my pleasure the administration, the Under Secretary sat here today at this table, and say

they want to resolve this issue as well. So we are excited about

that. We need to have those programs to pay for their own technical assistance, and we support solving this problem for the life

of this farm bill so that we don’t have to keep dealing with it. And

I believe I heard one of the members of USDA at this table say

something similar to that.

We strongly support not allowing the conservation operations,

the CTA Account, the discretionary technical assistance funds to be

used to implement the farm bill programs. I believe you heard

Chief Knight sat at this table and say there is a huge backlog in

that program, the conservation operations account. I would add

that it is a program. It is not—it is reviewed by some folks as just

a payroll and expense account, but it is a program. It is the original Conservation Program that got conservation on the land. This

started, Mr. Chairman, when the dust bowl happened, where you

and I live, and that was the original Conservation Program. It still

is a viable program, it still works well out there in the countryside,

and it does in fact have a backlog of people that walk into the office

every day asking for assistance from conservation districts and

NRCS, not related to any cost share or farm bill Program.

We urge you to help us ensure that this fire wall that is in this

omnibus bill remains in place in the future, so that the millions of

farmers, ranchers and other cooperators can get the conservation

help they need and want.

Districts supported the concept behind the new CSP program for

25 years. It finally came to fruition in this farm bill, and we are

excited about that. We need to ensure that it is a nationwide program, available to all producers on all agricultural lands, and we

need to ensure that the program if fully funded. We urge the administration to expedite the CSP rulemaking process in order to

get a rule in place and begin implementing this innovative new

program this fiscal year.

We have offered comments to their advanced rule making, as

many other people have, and we appreciate the effort and the large

task that they have in writing rules for a new program. But we

urge that to help—or to continue. We fully support the expanded

technical service provider initiative to increase delivery of technical

assistance to producers. I believe you called it third-party vendor

in the law. Even with TSP with the critical—will be critical that

we maintain a strong and fully funded NRCS cadre of field technical staff and the infrastructure needed to fully support it.

Mr. Chairman, I was talking to your and my State Conservationist last week, and he said on a different issue, but the President’s

management initiative, the positions of geologist were being looked

at as to being out-sourced. He said I only have one geologist in the

whole State. So if I lose one geologist, I don’t have anybody on

42

staff. So he needs at least somebody there to monitor the work of

the out-sourced technical service providers, and I think that it is

important that we maintain—or that we remain cognizant of that.

We very much support the regional equity, Mr. Holden, provision

of the 2002 act. It will help ensure that all States will be able to

take advantage of the tremendous funding increases and not just

those big commodity States, so we support that.

I would conclude by saying that conservation districts work closely with this subcommittee to make this farm bill a reality, this

Conservation Title. Full funding of the Conservation Title provisions will be critical to their success. Notwithstanding the conversation that we just had, that was just had with Mr. Stenholm,

we still think that what is authorized in this Conservation Title is

very appropriate and that it should be funded. All of the programs

should be implemented in ways to ensure that stringent standards

are adhered to in order to make sure that the program funds are

well spent and fully accounted for. Conservation accomplishments

as a result of your work will go a long way toward providing more

productive soils, cleaner water and air, and abundant wildlife. The

American public will benefit from these efforts.

And I would like to take this opportunity to thank the committee, the subcommittee, and say how much I appreciate the invitation to be here and to offer our comments, and would certainly attempt to answer any questions at the appropriate time. Thank you,

Mr. Chairman.

[The prepared statement of Mr. Wilson appears at the conclusion

of the hearing.]

Mr. LUCAS. Thank you, Mr. Wilson. Mr. Faber.

STATEMENT OF SCOTT FABER, POLICY ANALYST, ENVIRONMENTAL DEFENSE, ON BEHALF OF ENVIRONMENTAL DEFENSE, NATIONAL AUDUBON SOCIETY, DEFENDERS OF

WILDLIFE, LAND TRUST ALLIANCE, SUSTAINABLE AGRICULTURE COALITION, AND NATIONAL WILDLIFE FEDERATION

Mr. FABER. Thank you, Mr. Chairman. I would like to thank you

for holding this hearing today, and especially for introducing H.R.

1907, you and Mr. Holden, and for taking quick action to try and

solve this problem.

The organizations I am speaking on behalf of today strongly oppose diverting funds from working lands incentive programs to pay

for technical assistance costs of the CRP, WRP, and the two EQIP

subprograms. And we share the principles that you laid out in your

opening statement, that technical assistance should be mandatory

funding from the CCC, that each program should essentially pay

for itself, and that the technical assistance costs of CRP and WRP

should be over and above those financial assistance costs provided

in the farm bill.

And we think it is very clear that those principles were embodied

in the 2002 farm bill based on the very clear statutory language,

the legislative history, colloquies, the GAO report, and we are disappointed that the administration has not honored the intent of the

2002 farm bill, and we hope we can work with you to somehow persuade the administration to immediately release the CCC funds for

43

CRP and WRP technical assistance. If we cannot prevail upon the

administration to do that, and we do think that despite the passage

of the omnibus and section 213 of the omnibus, that the administration still has ample authority to release the CCC funds. If we

can’t prevail upon them to agree with our opinion, we think it is

very important that we seek the funds necessary to implement

CRP and WRP in a supplemental appropriation, or whatever the

appropriate legislative vehicle is, as soon as possible.

We recognize that that opportunity may not arise for many

months, and we think there are three important interim steps that

we urge the committee to take as quickly as possible. One is quick

passage of H.R. 1907. We are reaching out to many of your colleagues in the Senate to see if we can’t have a companion bill introduced as quickly as possible, and get a bill before the President in

a matter of days and weeks, not months. Two, we would like to

work with you to persuade USDA to reserve 5 million new CRP

acres for continuous enrollment options like buffers and CRP. We

think that has two advantages. One is that it spreads out the cost

of CRP technical assistance over many years. And two, it focuses

CRP acres on lands that are typically marginal lands and that

should perhaps not be farmed, and preserve the working lands that

were really a focus of the 2002 farm bill. And three, we think it

is very important to immediately persuade USDA and the administration to pay for the—to compensate third party technical service

providers, private technical service providers from section 4 of the

CCC Charter Act. There is no reason that EQIP funds are being

diverted to pay for private third parties when the Statute clearly

permits USDA to seek and receive section 4 CCC funds for that

purpose.

No one knows better than you how long the lines are that farmers were facing for EQIP funding and WHIP funding and other

working lands incentives. Oklahoma has the largest WHIP backlog

in the country. Pennsylvania also has a very large backlog. And

those lines will only grow longer if we divert funds from these programs to pay for CRP and WRP technical assistance.

We can’t realistically expect farmers to bear the costs and risks

of helping to meet our environmental challenges on their own. We

have to share those costs, and every dollar that we take away from

these working lands programs is simply a dollar that won’t be

available for those good stewards, and that is why it is so important that we stop these programs from being treated like organ donors, and protect them so that they serve the purpose that the

chairman and this committee intended in the 2002 farm bill.

So again, I would like to thank you and urge you to work with

us to continue to put pressure on the administration to immediately release the CCC funds. We think they still have ample discretion, despite section 213 of the omnibus, to make those funds

available, and hope we can work with you to persuade them to do

so. Thank you.

[The prepared statement of Mr. Faber appears at the conclusion

of the hearing.]

Mr. LUCAS. Thank you, Mr. Faber. Mr. Sutherland.

44

STATEMENT OF SCOTT SUTHERLAND, DIRECTOR OF GOVERNMENTAL AFFAIRS, DUCKS UNLIMITED, ON BEHALF OF

DUCKS UNLIMITED AND WILDLIFE MANAGEMENT INSTITUTE

Mr. SUTHERLAND. Thank you, Mr. Chairman, Mr. Holden. I am

the last witness. I am going to—I hope I won’t make you unhappy

and hopefully make you happy by making a very short statement.

You have a copy of our written statement, and we ask it be admitted for the record, put into the record. It provides the bulk of

our thoughts. But just to recap very briefly, some of what we think

are the major points that need to be made.

I think that all of us agree—I don’t think I heard any witness

today or any statement disagree that there is a significant number

of producers that value, want and need these agricultural conservation programs, and that includes CRP and WRP. The producers

have an expectation that the Congress and the White House and

indeed all of us helped create, that the acres that were approved

in this farm bill will be delivered.

We think that the most important point as you go forward in facing this problem is to look under every rock, to really not just seize

on one idea in terms of solving it. We think that actually there may

be a blending of possible solutions which lead to the ultimate solutions. We specifically talk about dipping into the C01 Account, as

has been done in the past, to help pay for TA. We don’t disagree

with ED’s idea about going back to the administration and pressing

again for CCC money. There are some payments being made under

some of the current programs that may be possibly right for reexamination in terms of are we getting the best bang for our buck,

that sort of thing, some cost savings, efficiency. Bruce Knight

talked about that. He’s talked about that with us before. It may be

a variety. As a matter-of-fact, I will mention one other thing, and

that was that a colleague, certainly not Ducks Unlimited, a wise

colleague suggested that there may be an opportunity to go back

and look at section 4 as an opportunity to try to do more to deliver

some of these programs through other partners. That is other

money outside of the traditional TA.

All of those things, and Ducks Unlimited is very willing to work

with you, Mr. Chairman, Mr. Holden, and others to come around

the table, put the numbers on the table, see how much we—come

to a number we agree on that is needed for the TA, and then figure

out where we can borrow from this pot and that pot and that pot

to get some. And reducing acreage, while it is very, very unattractive to us philosophically, we may all need to give something in

this deal to get where we need to be.

So we thank you for the opportunity to testify, we thank you for

bringing this, and this has been obviously an issue that has been

festering. You guys have the courage to bring it up and put it up

on the table, and we thank you for that.

[The prepared statement of Mr. Sutherland appears at the conclusion of the hearing.]

Mr. LUCAS. Thank you, Mr. Sutherland.

Billy, from your perspective having been involved in these programs for a good long time, where do you think the TA money

should come from for CRP and WRP?

45

Mr. WILSON. Well, I think it ought to come from the programs.

And part of the excuse has been that they are acreage based and

not dollar based programs. But there would be a way, there is a

way to figure out how to do that, and we thought it made—the

farm bill itself, the language in that law made it pretty clear that

that was the intent. We support working that out with the administration. I heard Mr. Moseley say today that they were willing to

sit down and work with us. I hope by that statement he meant that

if his ideas don’t necessarily prevail that he would agree with what

the consensus is, and that the administration would follow the

agreement.

So I would encourage you to take the lead of this subcommittee

to begin that dialog, and we will offer any assistance we can to

help that along.

Mr. LUCAS. I promise you Mr. Holden and I are going to try to

bring them into focus, so to speak, down at the Department.

Mr. Faber, certainly Mr. Holden and I appreciate the support you

voiced for H.R. 1907. You mentioned the potential of adding another 5 million acres of CRP as one of the goals of ED. What do

you think that would cost? Just—I can’t help but ask the question.

Mr. FABER. Well, to clarify, what we would propose is to reserve

of the new acres that you authorized 5 million acres for continuous

enrollment. That would ultimately limit the size of the signup that

is going on right now so that the costs of—the administrative costs

of the signup, the immediate administrative costs of the signup

would be reduced. There are about approximately 7 million new

acres available between now and the next farm bill. If you set aside

5 million for buffers and other high value lands, then that would

essentially put a break on the scope of this signup; 23 Senators, including 11 Republicans, recently sent a letter suggesting something

like that.

And it is hard to predict what the costs, the additional TA costs

of all of that continuous enrollment would be, as you heard earlier.

Continuous enrollment TA costs are a little bit higher than general

signup TA costs, and I could try to get an exact number from you.

You know how hard it is to get an exact number from our friends

at NRCS and FSA, but I will try to do that.

Mr. LUCAS. Absolutely. Mr. Sutherland, you made comments

about potentially using the CO Accounts and other potential appropriated sources of funding. Have you all had conversations with the

Department on these topics? What kind of response have you had

back, if you have, and how have they responded to your positive

encouragement?

Mr. SUTHERLAND. Well, any discussion we have had, I am sure

they wouldn’t appreciate me putting them on the record. But unofficially, there has been willingness to look creatively at solutions

from down at the Department. On an unofficial basis, which is usually the way I talk to those folks, they haven’t rejected anything

out of hand really. They seemed willing to talk, so—and if I might,

while I appreciate my good friend here, Mr. Faber, I will say that

Ducks Unlimited has a diametrically opposed view to the 5 million,

reserving 5 million acres of the current CRP allocation for continuous signup. Ducks Unlimited uses continuous signup, CRP, et

cetera, around the country in many States. We have two biologists

46

on the ground in Pennsylvania working on implementing CRP right

now.

But that said, this idea was floated during the consideration of

the farm bill. As an old friend from Tennessee used to say, that dog

didn’t hunt then, and we don’t—Rosemarie Watkins sat in the

chair I am sitting in a little bit ago and talked about the remaining

acres in CRP, and it not being used. We think that was part of the

problem. The last administration did reserve a large number of

acres for the continuous signup. The demand wasn’t there at that

time, and when we came to reauthorization of the bill, I remember

the chairman of the full committee looking at us in the eye and

saying you haven’t used all of the CRP you have, why do you need

more? We couldn’t use it, was the answer. I am afraid I just don’t

want to get back into that trap again.

Mr. LUCAS. Understood. And in all fairness from past experiences, continuous in CRP tend to be more expensive than the traditional CRP acres as far as TA, just for background.

Well, I appreciate the insights and the observations and support

of all of you, and I now turn to Mr. Holden.

Mr. HOLDEN. Thank you, Mr. Chairman. I thank the panel for

their testimony.

Mr. Wilson, I want to ask you the same question that Mr. Stenholm asked the Deputy Secretary a little earlier this morning. Do

we know how many landlords and operators are coming into local

NRCS offices and aren’t doing any work or planning that is related

to a mandatory funded conservation program?

Mr. WILSON. Last year, we served over 3 million cooperators in

our 3,000 district offices across the country, and we anticipate it be

at least that many this year. Now some of those obviously are related to farm bill, but a vast majority of them, especially in certain

parts of the country, are not related to farm bill or cost share programs.

Mr. HOLDEN. OK. Thank you. And then finally, gentleman, again

a question that Mr. Stenholm asked earlier. Due to the budget instruction, this committee has recently received, do you believe that

all of our conservation programs are necessary and have a role to

play in helping our producers protect and enhance our soil, water

and wildlife resources, or is there areas that should be on the table

for cuts?

Mr. WILSON. OK. I will go first. We believe that this farm bill

with this Conservation Title has a cadre of programs that will address the natural resource needs on the working lands in this country. And while you could argue all day that you could combine programs and maybe get the same result, when you look at the entire

Nation, you can’t write one program fits all. It doesn’t work that

way. Some of these programs are obviously more useful in some

parts of the country than they are others. So I don’t see any problems with the number of programs that we have right now. I think

if we can get those programs and get them implemented, it is going

to be a long ways to go a long ways towards addressing the backlog

that we have needed, and I believe Terry Detrick pointed out that

agriculture has given and given and given over the past history,

and this farm bill gave some back. Well, that is certainly true in

the Conservation Title, I think. So maybe I am not the right person

47

to answer this question. But I don’t see anyplace where there is

any fraud or waste or anything. As I said in my statement, there

are some opportunities I feel like, for better communication and

better working relationships in some areas between Government

agencies and partners, but by and large, it is high time the citizens

in this country in this farm bill, working through you, the Congress, stated that they are willing to put their resources toward the

preservation and the conservation on the working lands in this

country. And I believe they made a pretty loud statement, and I

think we ought to listen to that.

Mr. FABER. OK. Let me try to answer that question in this way.

When you began to write the 2002 farm bill, farmers were facing

approximately a $4 billion backlog of unmet need for working lands

and easement programs. This year will provide slightly less than

$3 billion. So just based on the current backlog, we are still going

to continue to reject about 1 in 4 farmers and ranchers who are offering to help meet our environmental challenges, but are facing

some new costs and risks when they do so. The size of the backlog,

according to many folks in NRCS, is going to grow even more, in

part because of all of the new money you have provided in the farm

bill. Demand will be greater than we could have ever imagined.

And I think it is safe to say, that half or more of the farmers who

will be seeking financial assistance and technical assistance over

the next few years will continue to be turned away, despite the significant increase that was provided in the 2002 farm bill. So I

think the answer is really how much more should we be providing,

not how much less can we provide. And the fact that one Justice

Department lawyer has essentially said it is perfectly fine to take

$150 odd million away from those farmers is really troubling to

most of us.

Mr. HOLDEN. Thank you. Mr. Sutherland.

Mr. SUTHERLAND. Well, I would echo Scott’s thought that the

guys—the folks who are over subscribing these programs are the

producers, and certainly the demand is out there.

The part of your question you asked whether these programs are

necessary and good, certainly they are. They are good programs.

They are delivering. We are looking forward to having some of

these new ones begin to deliver. But frankly, CRP for whole field,

for big grass as we call it, is the most productive program for water

fowl in the history of the United States. It is the most productive

Government program for producing water fowl. And pardon me,

but that is the hat I wear.

There was a question similar to this to the last panel, and the

gentleman from Oklahoma talked about CRP and the rates and

things like that. One point that might be at least examined is that

in the EVI for CRP right now, you can accrue more points by—you

can lower your bid and accrue more points. That idea might be

looked at for other conservation programs. You might be able to

score more points, some of these other things, and ultimately

achieve a cost savings for the Department as a result of that kind

of a thing. Let people be a little creative, take the head a little on

their own in order to get in.

Mr. HOLDEN. Thank you. And thank you, Mr. Chairman.

48

Mr. LUCAS. Thank you, Mr. Holden. Clearly we accomplished

great things in 2002. And as all of the panels have made it very

clear, we have an obligation to the resources of this great Nation

to continue to build on those successes from 2002 the farm bill.

Without objection the record of today’s hearing will remain open

for 10 days to receive additional material and supplemental written

responses from witnesses to any question posed by a member of the

panel. This hearing of the Subcommittee on Conservation, Credit,

Rural Development and Research is adjourned.

[Whereupon, at 12:53 p.m., the subcommittee was adjourned.]

[Material submitted for inclusion in the record follows:]

STATEMENT OF THE HON. JAMES P. MCGOVERN, A REPRESENTATIVE IN CONGRESS

FROM THE COMMONWEALTH OF MASSACHUSETTS

Chairman Lucas, Ranking Member Holden, and members of the subcommittee,

Thank you for allowing me to testify before you today. I offer my testimony on

behalf of the 6,100 farmers located in my home State of Massachusetts.

When people think of agriculture, they don’t usually think of Massachusetts. But

contrary to popular belief, Massachusetts has one of the most diverse agricultural

sectors in North America. From its status as a leading producer of cranberries to

greenhouse and nursery crops, Massachusetts farmers rank second nationally in

total value of direct sales to consumers. More than 80 percent of Massachusetts’s

farms are family owned and over 93 percent fit the category of ‘‘small farms’’ according to the U.S. Department of Agriculture.

If these successes weren’t enough, Massachusetts farmers produce these results

in the third most densely populated State in the country. Clearly this agricultural

sector can benefit from the conservation programs found in the Farm Security and

Rural Investment Act of 2002.

Although I had some misgivings about a few provisions in the Farm Security and

Rural Investment Act, I voted for the bill and for the conference report because I

believed the good provisions outweighed the others. I am deeply disappointed to

learn that the U.S. Department of Agriculture has failed to implement the regional

equity language found in the Farm Security and Rural Investment Act of 2002.

As you all may know, section 2701 was included in the Farm Security and Rural

Investment Act to assure that all States would be treated fairly when it came to

the distribution of conservation funds. According to section 2071, if a State receives

less than $12 million in total funding in any given fiscal year for conservation programs subject to regional equity, the State should receive priority for any approved

applications it may have for these programs on April 1 of that year, up to $12 million. Programs subject to this regional equity provision include:

• Environmental Quality Incentives Program (EQIP)

• Wildlife Habitat Incentives Program (WHIP)

• Farm and Ranch Land Protection Program (FRPP)

• Grassland Reserve Program (GRP)

• Conservation of Private Grazing Land Program (CPGL)

• Great Lakes Basin Program

• Grassroots Source Water Protection Program

Of the programs subject to the regional equity provision, EQIP, FRPP and WHIP

are the only programs currently applicable in Massachusetts.

Massachusetts has a significant backlog of applications for each of these three

programs. The amount of funding for the applications that the Natural Resource

Conservation Service at USDA had on file for each of the programs, as of statutory

deadline of April 1, was in excess of $23 million. Despite this considerable backlog

of applications, the fiscal year 2003 allocation received for these three programs totaled merely $4.3 million.

Despite the clear legislative direction from Congress, as stated in the Farm Security and Rural Investment Act, USDA has not implemented the regional equity provision for the current fiscal year. This could have potentially devastating effects for

the farmers in my State.

Of course, I have not received any prior notice that USDA had chosen this course

of action. As I understand their position, officials at USDA do not believe that they

are under any obligation to comply with the regional equity provision because NRCS

did not receive an allocation from the Office of Management and Budget until after

April 1. Yet there is no language about the allocation process written in the regional

49

equity provision. It is clear to me that it was not the intent of Congress for the administration to avoid regional equity by delaying the allocation of conservation

funds.

Simply, Mr. Chairman, USDA had full knowledge of the millions of dollars of

pending conservation applications from Massachusetts and should have used the regional equity provision to reduce these backlogs.

It is my understanding that USDA has not yet allocated all conservation funds.

I look forward to working with the members of this committee and with the officials

at USDA to rectify this mistake. I respectfully ask that the committee request that

USDA allocate remaining conservation funds to fully comply with the regional equity language found in section 2701 of the Farm Security and Rural Investment Act

of 2002.

Mr. Chairman, this is of great importance to the livelihoods of many farmers in

Massachusetts. Farms in Iowa may be larger than those of their counterparts in

Massachusetts in terms of size and farms in Nebraska may eclipse the overall production of similar farms in Massachusetts, but no farmer is more important than

another. I believe that the committee tried to do the right thing by helping to enact

the Farm Security and Rural Investment Act into law. Now I hope the committee

will do the right thing and help free these funds for farmers like those in Massachusetts who really need the assistance Congress originally intended for them.

Thank you, Mr. Chairman and members of the committee, for the opportunity to

testify before you today. I look forward to working with you on this important matter.

STATEMENT OF JAMES R. MOSELEY

Thank you for the opportunity to appear before you today to discuss implementation of the Conservation Title of the Farm Security and Rural Investment Act of

2002. I would like to focus the thrust of my statement regarding the various issues

surrounding technical assistance, however, I would like to first take a moment to

emphasize the importance of private lands conservation by our Nation’s farmers and

ranchers. I want to thank Members of this Subcommittee for their continued strong

support of conservation, which largely resulted in the innovative provisions in the

2002 farm bill.

One year ago, we witnessed enactment of one of the most important pieces of conservation policy in the 2002 farm bill. The President supported and welcomed a

strong conservation title in the farm bill, as he recognizes that for farmers every

day is Earth Day, and that the effective conservation programs included in the bill

enables farmers to be better stewards of our Nation’s natural resources. The legislation responds to a broad range of emerging conservation challenges faced by farmers

and ranchers, including soil erosion, wetlands conservation, wildlife habitat improvement, and farm and ranchland protection. Private landowners will benefit from

a portfolio of voluntary assistance, including cost-share, land rental, incentive payments, and technical assistance. The farm bill places a strong emphasis on the conservation of working lands—ensuring that lands remain both healthy and productive. The legislation has also placed tremendous responsibilities upon the Department, especially the Natural Resources Conservation Service and Farm Service

Agency.

The men and women of the Department have made impressive progress in one

year on implementation of the farm bill Conservation Title. To date, we have published final rules for six programs, and have proposed rules out for public comment

on several others. Staff have worked hard to prepare and update technical standards and specifications and ensure that as much information as possible is available

in electronic format and user-friendly for our customers.

FUND AVAILABILITY

A little more than 1 month ago, we released the funding allocations to States for

the NRCS conservation programs. Through these allocations, more than $1.8 billion

has been made available to conduct programs where we provide technical and financial assistance to farmers and ranchers. An additional $1.6 billion has been issued

to farmers and ranchers under the Conservation Reserve Program. And beyond allocating the funds, we have been working expeditiously to set in place the program

guidelines and technical tools needed to implement these conservation opportunities

on the ground. Given the widespread provisions and complexity of the farm bill, I

think this record is a testament to the hard work and dedication of our staff and

50

I am proud of what we have accomplished. One year after enactment, we are open

for business, and ready to meet the needs of farmers and ranchers.

Unfortunately, the issue of funding for technical assistance has not been resolved

through passage of the 2002 farm bill or the subsequent Omnibus and Emergency

Supplemental appropriations bills. We understand and fully share the frustration

that Members of Congress have expressed over this long-standing issue. This issue

has roots that are nearly a decade old. In order to gain a better understanding on

which to base our discussions, I would like to provide an historic overview of the

technical assistance issue.

WHAT IS TECHNICAL ASSISTANCE?

When boiled down to the most simple terms, conservation assistance is comprised

of two components: financial and technical. In the case of USDA programs, financial

assistance takes the form of cost-share payments, land rental payments, or easement acquisition purchases. Technical assistance, on the other hand, represents inperson advice and consultation from conservation experts in the field. In addition

to FSA’s Agricultural Conservation Program providing funding for installation of

conservation practices, technical assistance has been the basis of USDA’s mission

in conservation, since 1935, when the Soil Conservation Service was first formed.

Field staff analyze soil types, gain an understanding of the farmer or rancher’s

goals, and provides a conservation plan and assistance in implementing the plan.

NRCS has a specific line-item in its budget called ‘‘Conservation Operations Technical Assistance’’ which for nearly 60 years has represented this ongoing effort of

providing conservation technical assistance to farmers and ranchers.

Over the years, as agriculture and conservation issues have gained complexity,

conservation technical assistance has become more involved. The field conservationist considers natural resource factors, including soil, water, air, plant, and animals

when providing conservation assistance. Conservation technical assistance might involve providing advice on a crop rotation, implementing conservation tillage, or helping to implement a nutrient management plan. On the more complex side, conservation technical assistance might include developing an entire animal waste system,

including design, engineering of containment structures and distribution systems.

Looking at an historic timeline, financial assistance evolved as a means of helping

producers cover the cost of applying conservation measures to their land. Cost for

constructing fences, developing livestock watering systems, making irrigation improvements, constructing terraces, or removing environmentally sensitive lands

from production are just a few examples of the kinds of conservation improvements

that USDA funding helps farmers implement.

How Does the Conservation Technical Assistance Program Relate to Financial Assistance Programs? As conservation cost-share, land retirement, and easement programs were developed, funding for a corresponding technical and financial assistance component was included as well. That is to say, while a producer might have

a conservation plan in place with production and conservation goals and strategies

established in the plan, the specific design and implementation of the funded project

would be funded by the program. In short, Conservation Operations provided an important part of the technical assistance cost for farm bill conservation programs,

while the financial assistance programs provided both cost share assistance to help

producers finance projects and technical assistance funding for the design and implementation work that producers needed as well.

WHAT WENT WRONG?

The major shift in program structure that produced the current problem occurred

in the 1996 farm bill. Essentially, new and revised conservation programs, which

had been previously funded through discretionary appropriated accounts became

‘‘mandatory spending’’ under the Commodity Credit Corporation (CCC). While this

would not have been a problem in and of itself, a provision of the 1996 farm bill

caused major ramifications.

Section 161 of the Federal Agriculture Improvement and Reform Act of 1996

(1996 farm bill) amended section 11 of the CCC Charter Act. This section allows

Federal and State government agencies to be reimbursed for service provided to implement the CCC programs. The 1996 farm bill capped the amount of money which

can be reimbursed to agencies under section 11. This amount was the sum total

spent under section 11 authority by the CCC on various USDA programs in fiscal

year 1995, before the CCC was given the expanded conservation program responsibility. The cap does not provide sufficient funding to adequately implement the

technical assistance under conservation programs authorized in the 1996 farm bill.

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Although modest amounts of funding under section 11 authority has been used,

most needs were met with carry-over appropriated funding balances remaining from

previous spending authority—the carry-over funds have since been depleted. A limited amount of new funds were also appropriated by the Congress to reimburse

NRCS for technical assistance to implement the CCC-funded conservation programs.

In addition, as discussed above, a significant portion of NRCS’s Conservation Operations account was also used to pay the technical assistance costs needed to deliver

the farm bill conservation programs. In fiscal year 2002, over $100 million was used

to provide technical assistance to producers for farm bill programs.

THE 2002 FARM BILL AND OMNIBUS APPROPRIATIONS BILL

The 2002 farm bill included language regarding the funding of technical assistance, but this language resulted in varying interpretations. The language was added

during the Conference committee’s consideration of the farm bill. The conference

committee also deleted a Senate provision that would have amended section 11 by

‘‘excluding transfers and allotments for conservation technical assistance’’ from the

section 11 limitation. Congress made these changes in Conference in order to avoid

the Congressional Budget Office (CBO) scoring the 2002 farm bill at a substantially

higher amount. In the face of Congress adding this new technical assistance language and dropping the Senate amendment to section 11, the General Counsels for

USDA, CBO, and the Office of Management and Budget (OMB) concluded that Congress kept in place the section 11 limitation on the CCC’s technical assistance

spending for the conservation programs. USDA and OMB also concluded NRCS’s

Conservation Operations account was available to fund technical assistance activities under the farm bill programs.

The General Accounting Office (GAO), however, disagreed with USDA, CBO, and

OMB and concluded that the section 11 cap no longer applied and that the 2002

farm bill provided authority to fund technical assistance from mandatory funds.

GAO also concluded that appropriated funds could not be used to implement the

farm bill programs.

On January 3, 2003, the Justice Department Office of Legal Counsel (OLC) issued

a legal opinion that concluded that the section 11 cap did apply, and that existing

appropriated funds from the Conservation Operations account could be used to fund

technical assistance for the farm bill conservation programs. Because OLC is the ultimate arbiter for the executive branch on legal issues, the OLC opinion is binding

on the Department.

In response to the opinion and to ensure effective implementation of the conservation programs, the President proposed in a budget amendment to the fiscal year

2003 Omnibus Appropriations bill and in the fiscal year 2004 Budget a new mechanism for funding farm bill conservation technical assistance costs. The proposal

would have created a dedicated, discretionary account in NRCS’s budget that funded

all of the farm bill conservation programs’ technical assistance needs.

The Consolidated Appropriations Resolution of 2003 (Omnibus Appropriations

Act) did not, however, incorporate the administration’s proposal. Instead, the Act directed that technical assistance activities be funded from four programs: the Environmental Quality Incentives program (EQIP), Wildlife Habitat Incentives program

(WHIP), Grassland Reserve Program (GRP), and Farm and Ranchlands Protection

program (FRPP) to support technical assistance needs of these programs, as well as

the Wetlands Reserve Program (WRP) and Conservation Reserve Program (CRP).

The Omnibus Appropriations Act also prohibits NRCS from using appropriated

funding from the Conservation Operations account to support farm bill conservation

programs.

The following two graphics display how the Omnibus Appropriations Act technical

assistance approach functions:

Current Status. USDA is implementing the law and providing funding in accordance with the directives provided by the Omnibus Appropriations Act. This approach has resulted in less financial assistance being available for the four donating

programs in carrying out conservation projects and conservation practices than

many producers had expected. The total level of financial and technical assistance

funding under this arrangement, however, still exceeds the total conservation

spending under the 1996 farm bill.

In contrast, the President’s Budget Amendment for fiscal year 2003 and subsequent Budget submission for fiscal year 2004 proposed a dedicated technical assistance account that would fund all activities associated with the farm bill conservation program implementation.

We believe that the President’s Budget proposal for a dedicated technical assistance account for farm bill implementation would be the best approach and we urge

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its adoption. The 2004 Budget proposal maximizes the amount of financial assistance dollars to help producers install conservation projects while also ensuring that

there will be adequate technical assistance funding to deliver the programs. It also

increases the level of accountability and transparency of the conservation programs’

cost of delivery-all of the necessary technical assistance funding is provided through

one account. Importantly, the 2004 Budget proposes to use a portion of NRCS’s Conservation Operations account, as has been done historically, to help deliver the farm

bill programs. This allows for more mandatory dollars to be used for financial assistance to producers to install conservation projects. In fiscal year 2004, the budget requests $432 million for this new account and it

would be funded through a combination of sources. The budget proposes reducing

the farm bill programs’ funding levels by 15 percent and then appropriating this

total amount into the new discretionary technical assistance account. In this way,

all of the dollar-limited programs provide an equitable share of their resources to

fund technical assistance. The budget also follows historical precedent and transfers

a portion of the Conservation Operations account to the new technical assistance account. Finally, the budget provides additional resources to the new account through

a general appropriation increase in order to help cover the technical assistance of

the non-dollar-limited programs, such as the Conservation Reserve Program and

Wetlands Reserve Program.

Streamlining. While the debate on this issue has evolved into a discussion of

which accounts should cover the cost of technical assistance, both NRCS and FSA

have been making concerted efforts this year to improve and streamline business

processes where possible. I am very proud of the gains that have been made to

strengthen service to customers, and to speed planning at the local level including

deployment of the customer service toolkit—a computer-based conservation planning

system. For fiscal year 2003, NRCS has reduced technical assistance needs required

for the EQIP program and continues to make improvements.Technical Assistance

costs have been reduced by $2.7 million for fiscal year 2003 and $3.7 million for fiscal year 2004. We are looking at reduced cost opportunities for each of our programs. By mid-summer we will assess the technical assistance needs and funding

available and sweep accounts in order to convert any unused technical assistance

funding back into program dollars.

We have also recently proposed rule changes for the Conservation Reserve Program (CRP) and continue to make streamlining and implementation improvements.

For this signup, the Farm Service Agency will develop and rank eligible CRP offers

using the Environmental Benefits Index (EBI) for environmental benefits to be

gained from enrolling the land in CRP. Decisions on the EBI cutoff will be made

after the sign-up ends following analysis of EBI numbers of all the offers. We believe that landowners and our field staff will benefit from the improved process. In addition to the time savings, an estimated $8 million in technical assistance

costs will also be saved with an expected Environmental Benefits Index error rate

reduction from over 40 percent to less than 5 percent.

Beyond savings in time and technical assistance costs, we have also seen substantial improvement in accuracy using common computing environment technologies.

CRP is the first program with widespread use of GIS. In addition, FSA also developed a personal computing tool that utilizes new national data bases. FSA has replaced the error-prone manual process of previous general signups with automated

land eligibility, acreage determination, rental rate calculation, forms preparation,

and environmental benefits index calculations. The new offer process reduces county

office entries by over 90 percent while increasing the accuracy of the determination.

In the near term, FSA’s goal is to expand the CCE software to include continuous

signup and farmable wetlands program functionality and, ultimately, to enable producers to make offers online using their home PC.

Increasing Third-Party Technical Assistance. With the historic increase in conservation funding made available by the 2002 farm bill, NRCS will look to non-Federal partners to supply much of the technical assistance needed to plan and oversee

the installation of conservation practices. NRCS will use the new Technical Service

Provider (TSP) system authorized in the farm bill to facilitate this technical assistance delivery. The TSP system ensures that producers have the maximum flexibility

for choosing a third-party provider to work on their land, while also ensuring that

TSP providers are properly certified and meet NRCS standards.

Interest in the program has been impressive, and NRCS also continues to sign

MOU’s with outside organizations to assist with these efforts. But we know that

while TSP’s will greatly enhance our work, they will not take the place of our

trained field conservationists.

In addition to this administration’s strong commitment to conservation, I would

like to leave you with the following:

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Technical Assistance is important, both in helping producers plan and apply noncost shared measures through the NRCS Conservation Technical Assistance Program AND as a component of each of our farm bill Conservation Programs.

Through a series of events over the past decade, technical assistance funding

mechanisms have become increasingly convoluted.

Funding procedures for technical assistance under current law result in inequities

as only a few programs provide a disproportionate share of the technical assistance

funding needs for all conservation programs.

The President’s Budget Proposal for an appropriated, dedicated farm bill Technical Assistance account is the best approach and should be enacted.

As we look ahead, it is clear that the challenge before us will require dedication

of all available resources—the skills and expertise of the FSA and NRCS staff, the

contributions of volunteers, and continued collaboration with partners. Conservation

Districts, Resource Conservation and Development Councils, FSA farmer-elected

county committees, and many valuable partners continue to make immeasurable

contributions to the conservation movement. It is this partnership at the local level

that makes a real difference to farmers and ranchers. As we move forward, we will

accelerate the use of third-party sources of technical assistance and make every effort toward improving efficiencies. We recognize that the workload posed by future

demand for conservation will continue to be strong and seek to complement our resources with an appropriate system of qualified expertise. We will continue to do

our best to provide quality conservation programs for America’s farmers and ranchers.The enactment of the Farm Security and Rural Investment Act of 2002 represents

one of the most significant opportunities and challenges in the history of American

private land conservation. Pressure from natural resource challenges and associated

regulatory activity will mean an ever-increasing sense of urgency on the part of

farmers and ranchers to get conservation practices on the ground. Adequate and uninterrupted funding to provide technical assistance is critically important. The

President’s budget proposal represents an important step in the direction of the Nation’s conservation efforts.

It will take a strong focus and resolve if we are to be successful. I am proud of

the tenacity that our people exhibit day in and day out as they go about the work

of getting conservation on the ground and I believe that we will be successful.I look

forward to working with you as move ahead in this endeavor.

This concludes my statement. I will be glad to answer any questions that Members of the Subcommittee might have.

STATEMENT OF ROSEMARIE WATKINS

The American Farm Bureau Federation appreciates the opportunity to testify before the House Agriculture subcommittee on Conservation, Credit, Rural Development and Research.

Technical Assistance Funding. The subcommittee has specifically requested that

we address the issue of Natural Resource Conservation Service (NRCS) conservation

program technical assistance funding. Farm Bureau is extremely concerned about

the ongoing shortfall of technical assistance funding for the Conservation Reserve

Program (CRP) and the Wetland Reserve Program (WRP). In FY03, this shortfall

will result in a substantial cut in funding for the Environmental Quality Incentive

Program (EQIP) and other conservation programs in order to deliver CRP and WRP.

This comes at a time when EQIP has a significant application backlog. We believe

every program must cover its own technical assistance delivery costs. The Chairman’s bill is a good first step in providing guidance. In the case of CRP and WRP,

USDA should calculate the delivery cost of program enrollment. Acres available for

an enrollment should be reduced to the level necessary to fund technical assistance

needs and compensated for program delivery cost. We are not suggesting a reduction

in the statutory cap of 39.2 million acres. CRP has never been fully enrolled and

WRP yearly acreages have varied. The programs and their goals would not be sacrificed or jeopardized in any way. In this manner the programs could cover their

own costs without incurring additional budget obligations or taxing other programs.

We urge Congress and the administration to work together to resolve this issue. The

integrity of the Farm Security and Rural Investment Act of 2002 is critical; resolving this issue in a timely, straightforward way is essential. Farm Bureau supports

full funding of the farm bill and opposes any action that upsets the financial balance.

Conservation Program Delivery and Implementation. Farm Bureau was a strong

advocate for increased conservation funding and technical assistance in the 2002

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farm bill. Conservation has increasingly become a priority for Farm Bureau members. The pressure of local, State and Federal environmental regulation has increased significantly during a time when farmers and ranchers are financially

stressed. Conservation cost-share and incentives are essential to assist producers in

addressing public concerns relating to the environment.

Conservation planners are confronted with overlapping issues of endangered species and wildlife management, wetlands protection, nutrient management, air quality regulation, integrated pest management, and water quality issues, in addition

to soil erosion. We can expect planning challenges to increase as the complexity of

environmental regulation grows. President Bush has been a strong advocate of incentive-based solutions. If the farm bill conservation programs are to be successful,

adequate technical assistance will be key. USDA must be able to demonstrate that

voluntary, incentive-based conservation programs can be successful in addressing

environmental issues and serve as an alternative to a more costly and burdensome

regulatory approach.

Technical Service Providers. One important component of program delivery will

be the utilization of technical service providers. Farm Bureau supports the use of

third-party technical service providers to ensure conservation program delivery. We

recognize the challenges NRCS faces in terms of limited government manpower for

program delivery. The situation is compounded by the increasing regulation of agricultural production, which has made conservation planning significantly more complex and time-consuming.

We have some concerns regarding implementation of the technical service provider program: • The confidentiality of information provided to technical service providers must

be protected. Farmers and ranchers are increasingly concerned regarding the utilization of information provided as part of program participation. Outside agencies

have attempted to use program information for regulatory and other purposes. The

farm bill specifically exempted such information from distribution to other agencies

of government and from disclosure under the Freedom of Information Act. This protection must be extended to information made available to third party technical

service providers. NRCS must work to assure that third-party contractors are subject to stringent confidentiality requirements. NRCS should explore all means available for accomplishing this goal; including making it a condition of certification and

offering standardized contracting language. • Technical service providers must be bonded and have appropriate liability insurance. Bonding and insurance will be vitally important to producers to assure that

they are protected and not held liable for inferior planning and services. We have

been made aware that in some States liability insurance may not be available for

some practices or is cost-prohibitive. NRCS should review bonding and insurance

issues on a state-by-state basis to assess availability. Lack of insurance coverage

could create a shortfall for technical service providers and hamper program delivery.

NRCS should consider a means for providing liability insurance for service providers. • Payment rates for technical service providers are to be based on NRCS’ cost of

service. When calculating cost of service, the rate should be based on actual NRCS

cost. The calculation of actual cost must include all costs (insurance/liability, office/

administrative, et cetera.) • The regulations lay out a complex system through which producers can utilize

third-party technical service providers. Errors in timing and contracting procedures

could result in producers not being reimbursed for planning costs. It is essential

that NRCS produce a plain-English, step-by-step procedure guide for producers

planning to utilize technical service providers.

Environment Quality Incentives Program.The EQIP final rule was released late

last month, making it difficult to assess program delivery. We will be working with

State Farm Bureaus to monitor implementation. Farm Bureau is a strong supporter

of EQIP and the improvements to the program made by the Congress in the farm

bill. We encourage the administration to move forward with implementation of this

program.

With regard to implementation, we would like to emphasize the following points:

• We are concerned that there may be attempts by some groups to reestablish animal unit livestock caps. We would object to any attempt to reinstate size caps for

determining program eligibility.

• Priority setting will be key to all funding allocations and success of the program.

The EQIP program was specifically targeted to assist farmers in complying with

regulations, such as, but not limited to, CAFO/AFO and other nonpoint source concerns, reduced ground-water contamination, conservation of ground and surface

water, air quality issues and soil erosion. When establishing national and local

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funding priorities emphasis should be given to assisting farmers and ranchers complying with local, State and Federal regulations. State allocations should also be

tied to regulatory compliance needs.

• We believe that State incentives in the final rule are inappropriate. The failure

of a State conservationist to achieve a goal should not be a burden placed on agricultural producers. The adequacy of the State conservationist should not be reflected

in funding or allocations available to a State.

• The regulation states that an authorized NRCS representative has the right to

enter a unit or tract for program purposes. The rule provides that the authorized

NRCS representative should make a reasonable effort to contact the participant

prior to access. Farm Bureau does not believe it is sufficient for the representative

to merely make an effort to contact the producer. The authorized NRCS representative must have permission from the producer before accessing the property.

Conservation Security Program. During the farm bill debate Farm Bureau was a

strong supporter for the establishment of a new type of conservation incentive program. We believe that agricultural producers must receive assistance to help defray

the cost of ongoing environmental improvement and regulation. The Conservation

Security Program (CSP) will assist farmers to achieve environmental goals and reward them for improved environmental performance. We believe CSP must be available to all producers nationwide. We continue to believe that this program is extremely important. The program should be fully funded and should be implemented

as a nationwide program. Since no rules have been published for implementing the

program, we will focus on issues raised in the Advance Notice of Proposed Rulemaking (ANPR):

• The ANPR appeared to focus on narrowing the scope of the program to target

geographic priority areas or identifying areas for focus based on specific resource

problems. We believe this approach runs contrary to the intent of the program. The

Environmental Quality Incentives Program is specifically targeted toward assisting

producers in making infrastructure improvements required to address identified environmental regulations and issues. CSP should be more broadly available to assist

with and reward overall environmental improvement, including good stewardship.

• NRCS requested comments on the definition of ‘‘entire operation’’ for tier 2 and

3 purposes; our recommendation is that ‘‘entire operation’’ be defined as contiguous

acres that are part of an agricultural operation. An ‘‘entire operation’’ may include

as part of the ‘‘entire operation’’ land rented or leased during the CSP contract period; however no producer should be excluded from program participation if they do

not control the rented or leased land for the entire term of the contract. Should CSP

contract land change during the contract period, the CSP contracts would be amended to reflect revised acreage and practice changes. Producers would not be subject

to penalties or violations related to changes in landholdings.

• NRCS also requested comments on whether multiple contracts could be stacked

across separate agricultural operations. We believe contracts could be stacked as

long as the acreage is not contiguous. Contracts could also be stacked across Tier

types; however no producer would receive a cumulative payment under CSP in excess of $45,000 per year.

Performance measures. During the farm bill debate some members of the committee raised the question of performance measures. Farm Bureau recognizes that performance measurements are necessary to demonstrate the effectiveness of conservation programs such as CSP. However, many environmental improvements cannot be

measured directly or immediately. Improvement may take years to be realized. We

recommend that NRCS establish a measurement system based on reference sites

and environmental models. This information should be used to provide a measurement of program success and accountability.

In conclusion, conservation financial and technical assistance are critical tools for

assisting farmers and ranchers in addressing resource needs. Adequate conservation

planning will be essential for program delivery NRCS must work with every segment of agriculture to ensure program success and broad participation. The programs encompassed in the farm bill offer tremendous opportunity for NRCS and agriculture but delivery will be challenging. Those who support American agriculture

must work together to ensure success.

While we have focused primarily on technical assistance related to EQIP and

CSP, we would be happy to answer questions regarding other conservations programs.

Thank you and we look forward to working with the chairman and the committee

on these issues.

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STATEMENT OF SCOTT SUTHERLAND

Mr. Chairman, members of the committee, my name is Scott Sutherland. I am the

director for Ducks Unlimited, Inc.’s (DU) governmental affairs office in Washington,

DC. I am a professional conservationist. I have worked for DU since 1990 and am

currently responsible for overseeing DU’s advocacy for habitat-based Federal conservation programs.

Ducks Unlimited was founded in 1937 by concerned and farsighted sportsmen and

conservationists. It has grown from a handful of people to an organization of over

1 million supporters who now make up the largest wetlands and waterfowl conservation organization in the world. DU has conserved almost 11 million acres of

wildlife habitat in the U.S., Canada, and Mexico. We pride ourselves on our cooperative work with private landowners on working lands to assist them in meeting their

economic and production goals while providing high quality habitat for the wildlife

that depend on their land for survival.

The Wildlife Management Institute (WMI) was established in 1911 by sportsmen/

businessmen gravely concerned about the dramatic declines of many wildlife populations. Its founders saw the need for a small, independent and aggressive cadre of

people dedicated to restoring and ensuring the well being of wild populations and

their habitats. WMI continues to be a professional conservation organization with

highly trained staff that work to improve the professional foundation of wildlife

management.

I appreciate the opportunity to speak with you today on behalf of Ducks Unlimited and the Wildlife Management Institute.

Over the past two decades, conservation programs of the farm bill have played

an integral role in the economic vitality and general well being of this Nation’s

farmers, ranchers, and foresters. In addition, they have improved conservation on

private lands by enhancing and protecting wildlife habitat, water quality, and soil

quality. The increased role and importance of conservation in agriculture and its

role in private lands stewardship has led to consensus and partnerships among government and private interests including commodity groups, individual producers,

livestock organizations, and the wildlife conservation community. Voluntary, incentive-based conservation provisions included in the farm bill have provided the

framework for win-win solutions on the farm and across the rural and urban landscapes. Congress recognized the success of and demand for these conservation programs when it passed the 2002 farm bill, increasing the acreage caps of both the

Conservation Reserve Program (CRP) and the Wetlands Reserve Program (WRP). To

ensure that all of these new acres actually reach the ground, sufficient funding for

both technical assistance and program costs must be available.

Historically, technical assistance funding was provided through the Commodity

Credit Corporation (CCC) until the so-called section 11 Cap in 1996. Since that time

the Natural Resources Conservation Service (NRCS) Conservation Operations Account (CO1) provided most of the technical assistance funding. We are aware that

the omnibus appropriations bill has removed the technical assistance funding from

the CO1 Account for the conservation title of the farm bill. In response, in order

to cover technical assistance costs for some conservation programs, program managers have used funds from other programs, and thus, reduced their effectiveness

in protecting air, water, soil, and wildlife resources. Some solutions to this issue

that focus primarily on using funds that will effectively remove substantial acreage

from both CRP and WRP despite the high demand for these programs by landowners. We are concerned that this situation will lead to a loss of funding that actually reaches the ground in the form of program acres for landowners. We believe

that should be the last option used to find necessary funds and should be used only

after all other options are exhausted. We would like to remind Americans of the

broad public benefits of both of these programs and suggest possible alternatives for

meeting the technical assistance funding demand without reducing the authorized

acreages of these very popular programs.

CONSERVATION RESERVE PROGRAM

No program in history has done more for landscape-level conservation of soil,

water, and wildlife habitat on farmland while offering producers a significant and

stable source of income than CRP. The 2002 farm bill increased the acreage cap on

CRP from 36.4 to 39.2 million acres, with the clear implication that an additional

2.8 million acres of CRP contracts would be available to producers. CRP has been

very popular with landowners, as evidenced by the demand for land enrollment

(acres bid) often exceeding availability by a 3 to 1 ratio.

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CRP not only reduces erosion, but also provides habitat for many species of wildlife across the country. It has been especially important where cropland had replaced grassland on marginal soils. When left relatively undisturbed, CRP grasslands furnish extremely desirable nesting and brood-rearing habitat for a host of

grassland species and have allowed several species of waterfowl to rebound to record

levels following the return of precipitation to the northern prairies in 1993. Grassland birds, one of the fastest declining groups of birds in the country, have also responded positively to the habitat afforded by CRP, staving off declines that could

lead to increased listings of threatened and endangered species. Scientists are certain that CRP is partially responsible for these population increases, because waterfowl and other grassland birds continue to do relatively poorly in Canada and other

regions of the U.S. where CRP and other similar measures are lacking.

Depressed commodity prices are forcing farmers to diversify and rethink the design of their operations. Some have decided to diversify into grassland-based agriculture and are using CRP to help make the transition. As evidence of this, hundreds of farmers in the Dakotas and Iowa have restored formerly drained wetlands

within their CRP tracts through CP–23. Many others are using available incentive

programs to install grazing systems on expiring CRP. Others are using CRP payments to stabilize their financial situation and to pay off debt. As of May 2004, portions of more than 400,000 farms have enrolled in CRP across the nation. CRP remains very popular in prairie States like Texas, Kansas, Nebraska, and Minnesota

where portions of over 20,000 farms in each of these States have enrolled in CRP.

Clearly hundreds of thousands of producers realize the benefits of CRP and are

using it to improve their financial position and the quality of the resources on their

land.

Simultaneously, U.S. taxpayers are benefiting from cleaner air and improved

water quality, because CRP removes greenhouse gases from the atmosphere and reduces soil erosion and nutrient runoff into our waterways. Recovering wildlife populations are enjoyed by sportsmen and wildlife watchers across the Nation generating

millions of dollars and jobs for rural economies. Additionally, increasing wildlife

populations are helping to diversify income sources for farmers who are responding

to strong demand for fee hunting opportunities by operating hunting-related businesses. Many producers also have opened up the land they have enrolled in CRP

to public access for hunting and fishing, thus improving the relationship between

landowners, State fish and wildlife agencies and the hunting and fishing public.

Given all of these benefits to producers, the environment, and the American public, we cannot afford the loss of CRP acres authorized in the farm bill by diverting

funds that were intended for landowners to now cover technical assistance needs.

WETLAND RESERVE PROGRAM

The Wetland Reserve Program (WRP) was established by Congress in the 1990

farm bill and reauthorized in 1996 and 2002. The acreage cap for WRP was increased in the 2002 farm bill to 2.275 million acres, with the requirement to enroll

up to 250,000 acres per year to the maximum extent practicable. Popularity of the

program remains very high, with demand continuing to exceed availability.

WRP provides farmers with financial incentives to remove marginal lands from

crop production. These lands have proven to be less suitable for growing crops, because of the frequency and duration of flooding or soil saturation. The program also

helps landowners restore and protect wetlands on their property and to develop land

use plans that ensure sustainability and potential economic return over time. WRP

provides an alternative for those lands that have proven to be difficult to farm as

well as saving taxpayers money due to avoiding repeated disaster payments. WRP

payments have assisted producers in improving their financial positions through

debt payment, capital improvements, and retirement and educational savings. Restored wetlands are helping to reduce flooding on more productive agriculture lands

and in urban areas. They also improve water and air quality and provide habitat

for a diversity of plant and animal life.

WRP projects have been implemented in 49 States, all except Alaska. There have

been more than 6,800 contracts funded nationally, enrolling nearly 1.3 million acres

of flood prone land. Besides the well-known success and popularity of WRP in the

Mississippi Alluvial Valley States of Louisiana, Arkansas, and Mississippi, the program is also very popular with landowners in other States such as California, Minnesota, Texas, and Oklahoma, with nearly 900 contracts funded in these four States.

Benefits from WRP are evident along streams, rivers, and estuaries throughout the

country. In addition to the economic benefits for landowners, a myriad of wildlife

species, several of them threatened, endangered or in serious decline, have gained

quality habitat and are responding in a positive manner. Citizens who value wildlife

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and open space, whether they are hunters, anglers, bird watchers or just outdoor

enthusiasts, also are obvious beneficiaries of WRP.

WRP has been a platform for public/private partnerships throughout the country.

For example, Ducks Unlimited has entered into agreements with the Natural Resources Conservation Service (NRCS) whereby we assist with applications, costshare funding, restoration delivery, and/or monitoring to help farmers and private

landowners meet the requirements of WRP. Indeed, this leveraging of private funds,

in-kind services, and promotion across the country is one of the reasons the conservation programs of the farm bill have been so successful. Secretary Veneman recently reported that contributions from State and local levels of the conservation

partnership totaled $713 million for financial assistance, technical assistance, and

the fair market value of equipment and materials. She further reported that this

year, partnership contributions are expected to be $771 million.

POTENTIAL SOLUTIONS

Ducks Unlimited believes that several options may be available to find the technical assistance funds necessary for CRP and WRP, while minimizing the reduction

of acreage of these programs. Given the value and demand of these programs, failure to fully explore these options would be a disservice to producers and American

taxpayers. We urge you to fully explore these options before reducing program acres.

One option is to reauthorize the use of CO1 funding for Technical Assistance in

delivering the Conservation Title of the farm bill. It is our understanding that funding remains in this account to help cover the technical assistance costs that occurred

historically. Restoring this funding source would bring EQIP, WHIP, FRP, and GRP

back to their fully authorized funding levels and keep CRP and WRP at their fully

authorized acreage levels.

A second option is for Congress to appropriate additional conservation program

funding that will cover technical assistance costs and allow full funding of authorized acres within CRP and WRP program funding allocations.

Another option is to find cost savings in the delivery of CRP and WRP without

reducing acreage. This could be accomplished by reducing expenditures that are not

essential to the attractiveness of the programs to landowners, thereby cutting costs

but not participation. Costs savings may also be found through increased partnerships with individuals, organizations, and agencies. Many of these conservation

partners have contributed cost share and in-kind services to help deliver farm bill

conservation programs to farmers, ranchers, and foresters in the past. We believe

there is some middle ground between a contribution agreement that requires 50 percent cost share by conservation partners and a technical service provider that requires no cost share by conservation partners.

The conservation title of the farm bill provides our nation with critical tools for

the long-term conservation of air, soil, water, and wildlife habitat while ensuring a

sound financial base for agriculture. In order for the full benefits of these programs

to be realized, funding levels must allow producers access to the program levels authorized by Congress in 2002. The Subcommittee on Conservation has the special

challenge to again find a solution to the chronic problem of Technical Assistance

funding. We encourage you to lead your colleagues in Congress to a solution that

does not reduce the acres available for CRP and WRP, programs that are in high

demand by the very landowners these programs seek to serve. We have offered

ideas on potential solutions and believe with some combination of CO1 account

funding and program cost savings that the necessary technical assistance funds can

be found.

Thank you for this opportunity to present our view of the importance of farm bill

conservation programs and securing the necessary technical assistance funding

without severe impacts to the level of practices reaching the ground. Please do not

hesitate to call upon us for any reason regarding these important issues. I would

be happy to answer any questions you might have.

STATEMENT OF NITA C. VAIL

Good afternoon, Mr. Chairman. I am a fourth generation rancher and a member

of the National Cattlemen’s Beef Association (NCBA) and resident of California. I

am here today to provide testimony on NCBA’s behalf as well on behalf of the National Milk Producers Federation, the National Pork Producers Council, the South

East Dairy Farmers Association and Western United Dairymen—collectively referred to as ‘‘livestock’’ in this testimony. We are very grateful for this opportunity

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to provide you with our views on the implementation of critical issues in the 2002

farm bill.

This group wants to express our thanks and appreciation to you Chairman Lucas,

as well as to the other members of the Subcommittee, for holding this oversight

hearing. The conservation title of the Farm Security and Rural Investment Act of

2002 (2002 farm bill) is extremely important to livestock producers and there are

a number of critical issues that need to be discussed in these early, crucial stages

of the 2002 farm bill’s implementation.

It is still very early in the implementation of the conservation title’s provisions.

Final rules have either just been issued, as is the case with EQIP, or they are still

pending, as is the case with the Grasslands Reserve Program (GRP) and the Conservation Security Program (CSP). As such, we have not been able to collect, distill

and analyze the type of information from the field that would be most useful for

this hearing. But there are important observations to be made about how these

rules turned out or are developing, as well as with regard to what we understand

to be happening with implementation at the State level, and our comments will reflect this.

The Diversion of Technical Assistance Funds. First, the livestock groups would

like to indicate our grave concern that funds are going to be diverted in fiscal year

2003 from EQIP, the Grasslands Reserve Program (GRP), the Farm and Ranch

Land Protection Program (FRPP) and the Wildlife Habitat Incentives Program

(WHIP) to support the implementation of the Conservation Reserve Program (CRP)

and Wetland Reserve Program (WRP). We support the principle that each of the

2002 farm bill conservation programs pay for their own technical assistance (TA)

costs. We do not support the use of funds from one set of farm bill conservation programs to pay for the TA of other farm bill conservation programs.

We had thought that Congress had adopted this principle in the 2002 farm bill,

but the administration interpreted these provisions very differently, and Congress’

subsequent legislative language earlier this year has allowed these programs to

move forward. But this new language, unfortunately, has also resulted in the probable diversion of more than $107 million from EQIP in fiscal year 2003, and the

GRP, FRPP and WHIP lose a comparable relative share of the total funds needed

to pay for CRP and WRP TA. Worse yet, the amount of funds to be diverted from

EQIP and these other programs increases dramatically in years to come.

We are deeply concerned about this situation and very much would like to see it

corrected in this fiscal year in a manner that results in no harm to the 2002 farm

bill. The livestock groups believe that your and Ranking Member Holden’s recent

legislation on this matter serves as a fine interim measure to ensure that no funds

are diverted from EQIP, GRP, FRPP and WHIP in fiscal year 2003. We support an

ultimate solution that preserves the funding for these programs and allows a strong

and effective CRP and WRP to be implemented.

The Implementation of EQIP. Livestock groups worked hard during the 2002 farm

bill process to support this committee and Congress’ efforts to dramatically increase

funds for EQIP. Our efforts were driven by livestock producers’ needs for financial

and technical assistance to help them meet current and emerging environmental

regulations and costs. We were very pleased that this committee and Congress

adopted language and provided $9 billion in new EQIP funding to go along with the

$2 billion in the baseline, in part to meet this need.

Some groups have criticized the administration for faithfully adhering to the farm

bill’s language that allows EQIP funds to be used for structural measures for socalled ‘‘large’’ livestock operation, including new and expanding operations. We find

such criticisms misguided on numerous fronts, particularly on the matter of ensuring that EQIP can be a true environmental program. In most of the major livestock

sectors, the majority of manure is being produced by operations that were considered ‘‘large’’ under the 1996 EQIP provisions. If the 2002 EQIP were to have retained the 1996 limitation, it would have been prevented from addressing manure

issues from the majority of the sector.

We continue to believe that the EQIP payment limitation, combined with the farm

bill’s overall gross revenue provisions, provide very adequate assurances that EQIP

funds can support a sound and environmentally successful program that places primary emphasis on assisting family owned and operated farms and ranches. We continue to wholeheartedly support this approach.

We have significant concerns about one of the provisions in the EQIP final rule

having to do with national priorities. We do not support making EQIP’s lead water

quality national priority that of addressing nonpoint sources of water pollutants in

‘‘impaired’’ waters, as consistent with the Clean Water Act’s Total Maximum Daily

Load (TMDL) program. We are not aware of any single agricultural group that advocated increased funding for EQIP in the 2002 farm bill so that it could be so-foVerDate 11-SEP-98 11:25 Jul 16, 2003 Jkt 088313 PO 00000 Frm 00062 Fmt 6633 Sfmt 6633 F:\DOCS\1087 HAGRI PsN: HAGRI
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cused on the TMDL program. There are significant potential problems with this provision, depending on how NRCS implements it. We know that these national priorities are not the sole determinant of how NRCS will allocate EQIP funds to States,

and that NRCS clearly has leeway to make allocations to States and within States

to address any one of several natural resource concerns. We ask for the Subcommittee’s assistance to support NRCS’ implementation of this particular provision in a

manner that does not otherwise damage the program.

With regard to the implementation of EQIP in 2003, as we stated earlier, the final

rule has just been published. States are still finalizing their own guidance and decision support documents consistent with this final rule. Some States have published

on the web their draft guidance and program rules so far. While we are not able

to draw any final conclusions from these materials, there are some issues that need

comment.

The first has to do with our emphasis in the 2002 farm bill debates on the need

for an EQIP that can help producers address pressing environmental regulations

and other challenges. Most States appear to be heading in the direction of giving

higher priority to EQIP applications that include a major soil erosion control component, particularly applications that will take soil erosion to ‘‘T’’. We fully support

the use of EQIP for erosion control, but we are not convinced that this emphasis

will always make sense for a livestock producer needing critical assistance with manure management in order to comply with an environmental regulation. Producers

willing to do a first rate job of managing their manure might be denied critically

needed assistance as a result. We will be monitoring this aspect of EQIP’s implementation closely and anticipate having comments on this issue later this year.

With regard to comprehensive nutrient management plans (CNMP), there are preliminary indications that several States with strong livestock production sectors

have not made CNMP development eligible for EQIP financial assistance. We also

have observed that in at least one State that has not made CNMP development eligible for financial assistance that it appears that they are requiring a CNMP be prepared in advance of an EQIP application for cost-share for structural measures. One

State has apparently limited the incentive payment for a CNMP to no more than

$1,000—a fixed rate of compensation for a practice that we know can cost up to

$20,000 or more, depending on the number of fields and soils receiving manure.

CNMPs, or nutrient management plans of comparable complexity and depth, are

going to be critical to helping livestock producers comply with the latest Clean

Water Act CAFO regulations. EQIP must work with regard to CNMPs. We will report back to the committee on this matter once better information is available.

Technical Service Providers. The use of third party, technical service providers

(TSP) is going to be critical to the implementation of the conservation title. We supported during the 2002 farm bill debates the need for greater emphasis on the use

of TSPs to help with the implementation of conservation programs. Our groups support the Natural Resources Conservation Service’s (NRCS) role as the top technical

assistance provider organization in the country. But we know that NRCS is not

going to get the resources needed to bring into the agency all the personnel and

skill-sets needed to fully implement the conservation provisions, and that these capabilities can be found in the private sector and with other entities. We applauded

the provisions in the farm bill that address this need and fully support USDA’s and

NRCS’ efforts to implement the TSP provisions.

It is still too early to say much about how USDA’s implementation of the 2002

farm bill’s TSP provisions is working, but we believe that USDA is going to need

considerable and consistent outside advice and counsel on how the TSP program

should be implemented and move forward. Many livestock groups advocated in their

comments on the TSP rulemaking on the need for USDA to formally create a Federal Advisory Committee to serve this purpose. We continue to support this idea and

encourage USDA to move forward with it.

Conservation Security Program. Livestock groups recognize that the Conservation

Security Program (CSP), as adopted in the 2002 farm bill, has potential to provide

livestock producers with important conservation assistance. We encourage USDA to

move forward with implementation of the CSP and look forward to providing comments on the CSP rulemaking once it is published.

In closing, Mr. Chairman, we look forward to working with you in the months and

years to come to make sure that the 2002 farm bill works for our producer members

in the manner you and the other members of this committee envisioned when it was

passed last year. Thanks once again for this hearing and your leadership on these

issues that are so important to livestock producers.

Dear Chairman Lucas:

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Farmers and ranchers value and appreciate your outstanding efforts on their behalf in the 2002 farm bill to create a strong and well-funded conservation title. We

write today to express our support for your recent efforts to ensure that each of the

2002 farm bill conservation programs funded by the Commodity Credit Corporation

pay for their own technical assistance (TA) costs. We do not support the use of funds

from one set of farm bill conservation programs to pay for the TA of other farm bill

conservation programs.

Under current law, as being implemented by the administration in this fiscal

year, the TA costs of the Conservation Reserve Program and the Wetlands Reserve

Program will be paid from CCC funds made available for the Environmental Quality

Incentives Program, the Wildlife Habitat Incentives Program, the Farmland Protection Program, and the Grassland Reserves Program. In the case of EQIP in fiscal

year 2003, this will result in the withdrawal of approximately $107 million. GRP,

FPP and WHIP lose a comparable relative share of the total funds needed to pay

for CRP and WRP TA.

We are deeply concerned about this situation and very much would like to see it

corrected in this fiscal year in a manner that results in no harm to the 2002 farm

bill provisions that have been supported and embraced by the agricultural community.

Sincerely,

American Farm Bureau Federation South East Dairy Farmers Association, American Soybean Association National Pork Producers Council, National Association of

Wheat Growers National Turkey Federation, National Cattlemen’s Beef Association

United Egg Producers, National Chicken Council USA Rice Federation, National

Corn Growers Association Western United Dairymen, National Cotton Council, National Milk Producers Federation

STATEMENT OF BILL WILSON

Mr. Chairman and members of the subcommittee, I am Bill Wilson, from Kinta,

Oklahoma. I am first vice president of the National Association of Conservation Districts (NACD) and have served as a district official for the Haskell County Conservation District since 1980. I am also a founder and past chairman of the National

Watershed Coalition.

I own and operate a 400-acre cow/calf, horse and mule ranch in East Central

Oklahoma, am a registered land surveyor in both Oklahoma and Arkansas and I

have worked many years to restore Dust Bowl era farm fields into productive pasture land.

NACD is the nonprofit organization that represents the Nation’s 3,000 conservation districts and the more than 16,000 men and women—district officials—who

serve on their governing boards. Conservation districts are local units of government

established under State law to carry out natural resource management programs at

the local level. Currently, conservation districts work with the Natural Resources

Conservation Service (NRCS) and other agencies and organizations to provide technical and other assistance to millions of landowners and others to help them manage and protect the Nation’s land, water and related resources. Conservation districts encompass more than 98 percent of the private lands in the United States.

I am here today to share with you the conservation district perspective on implementation of the conservation title of the 2002 farm bill. Conservation districts work

shoulder-to-shoulder with NRCS every day in implementing most of the provisions

of the conservation title. Districts also work closely with the Farm Service Agency

in carrying out the Conservation Reserve Program (CRP) and, in fact, approve the

conservation plans developed for the CRP. As we talk today about the farm bill conservation programs, I urge you to keep in mind that I speak on behalf of the people

who work at the very point where the programs you authorized are delivered to the

customers.

Throughout our history, conservation districts have strongly supported voluntary,

incentive-based approaches to private working lands conservation—a theme repeated throughout the 2002 Act’s conservation title. We also believe the best way

to achieve conservation is through local decision-making with input from all stakeholders and customers to identify natural resource priorities and objectives.

Today, conservation district staff number more than 7,000 employees of all types.

State and local governments, including districts themselves, contribute more than

a billion dollars a year to carry out our Nation’s private lands conservation efforts.

Private landowners, businesses and other interests add more than a billion dollars

to the mix as well.

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The Nation’s 3,000 conservation districts appreciate the leadership and vision that

members of this subcommittee provided in developing the most sweeping conservation title in the history of farm bills. We also compliment the administration for

striving for full implementation of the new and improved programs as evidenced by

the release of most of the program rules and the decision to fully allocate the 2003

funding made available by Congress. If fully implemented, the expanded funding in

the 2002 conservation title will allow us to make considerable progress in addressing the huge backlog of conservation requests throughout the nation.

The conservation title got off to a rocky start in 2002 stemming from differing interpretations of language in the bill that provided technical assistance funding from

the program accounts of the Commodity Credit Corporation (CCC). Our view was

that the initial language of the 2002 farm bill law provided for full technical assistance from each of the programs accounts and that funds for that purpose were not

subject to the CCC section 11 cap. The Office of Management and Budget concluded

otherwise and imposed a strict limit on the amount of funds available for technical

assistance. The 2003 agriculture appropriations law partly resolved the issue by including language to clarify that technical assistance funds for all but two of the

CCC-funded conservation title programs are not subject to the limits imposed by

section 11 of the CCC Charter Act.

Language in that same law that prohibited the use of NRCS Conservation Operations (CO) funds, or any other funds appropriated in 2003, to provide technical assistance to implement the farm bill conservation programs—a position that we fully

support. It was our understanding that the conservation title provided for the CCCfunded programs to pay entirely for their own technical assistance in order to leave

the CO account intact to support the original purposes outlined in its organic legislation. We urge you to help us ensure that this firewall, if you will, remains in place

in the future so that millions of farmers, ranchers and other cooperators can get the

conservation help they need.

Regarding the question raised in your invitation to NACD, ‘‘Is the current funding

for technical assistance sound and equitable?’’ the answer at this point would have

to be no. As mentioned earlier, the 2003 appropriations act included language providing that CCC technical assistance funds for the Environmental Quality Incentives Program (EQIP), Wildlife Habitat Incentive Program (WHIP), Grassland Reserve Program (GRP) and Farm and Ranch Land Protection Program (FRPP) and

Conservation Security Program (CSP) are not subject to the section 11 cap. However, by most interpretations it did not provide the same provision for funds from

the CRP and Wetlands Reserve Program (WRP) accounts. As a result, technical assistance for those two programs, at least for now, has been donated by EQIP, WHIP,

GRP and FRPP. This creates an unacceptable situation in which NRCS is being

forced to re-direct funds from those programs to purposes for which they were never

meant. Since NRCS has also chosen to provide the technical assistance for Ground

and Surface Water Conservation and the Klamath water conservation initiative, the

total amount of technical assistance re-directed from the four other programs in

2003 could be nearly $160 million—funds that could be used to provide financial assistance to a fairly large number of producers. This may be the only current solution

to the problem; however, we encourage you to help find a permanent solution to this

problem and look forward to working with you to resolve the issue.

Once the CRP/WRP problem is fixed, the language and mechanisms in the conservation title should allow for sound and equitable technical assistance to implement the CCC-funded conservation programs without increasing the score for the

agricultural baseline. In the future, it will be a matter of USDA and the Office of

Management and Budget (OMB) coming to agreement on just how much technical

assistance is needed from the program accounts to ensure that the programs are effectively implemented. This will, of course, be an annual exercise and require continuing recognition that as the funding levels and activities for the various programs climb, so will their technical assistance needs.

In addition to technical assistance, there are several other issues that need to be

addressed as you examine implementation of the conservation title. Ensuring full

funding for the programs will be critical to achieving the goals Congress spelled out

when the farm bill was enacted. Decision-makers in both chambers’ budget committees and authorizing committees provided for an 80 percent increase in spending for

conservation to ensure our Nation’s natural resources are protected for current and

future generations. This goal was supported in the final enactment of the bill and

endorsed by the President’s signature last year. We strongly urge both the Congress

and the administration to fully fund the increases so strongly applauded when the

farm bill was passed.

We have particular concerns about the new Conservation Security Program (CSP).

Conservation districts supported the concept behind the new CSP for over 25 years.

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It was with much fanfare that the CSP became part of the new generation of programs to bring conservation to a higher level in America. However, the CSP’s once

almost unlimited potential to bring more conservation to the landscape has been

tethered by capping its spending at $3.77 billion over 10 years—probably less than

half the amount needed during that time. Conservation districts strongly support

the original intent of the CSP: a nationwide conservation program available to all

producers and all crops on all working lands with no cap.

We also urge the administration to expedite the CSP rule-making process in order

to get a rule in place and begin implementing this innovative new program this fiscal year. The final rule that governs the program should be developed to ensure that

stringent standards be adhered to in order to ensure that program funds are well

spent and fully accounted for.

Conservation districts fully support the farm bill’s expanded Technical Service

Provider initiative as a way to increase the delivery of technical assistance to producers nationwide. But, we need to take care to ensure that the proper standards

and training are in place so that producers will continue to receive the quality technical assistance needed to properly conserve and protect the resource base. We also

need to recognize that it will likely take years, not months, to get the initiative up

and running at its full potential. Regardless of the scope of the TSP initiative, it

remains critical that we maintain a strong, fully funded NRCS cadre of field technical staff and the infrastructure needed to fully support it. This will be necessary

to ensure that the agency maintains a sound Field Office Technical Guide, solid use

of research and progressive national standards.

We note that in USDA’s notice of availability of funds, EQIP’s Ground and Surface Water Conservation (GSWC) provision is being implemented only in the 17

Western States. The purpose of the GSWC is to provide cost-share, incentive payments and loans to producers to carry out eligible water conservation activities such

as improving irrigation and water storage measures. These activities are needed in

all States, not just in the West and we urge USDA to keep this in mind in future

program years to ensure that all States with needs have access to these important

funds.

Conservation districts have similar concerns over the way in which new Grassland Reserve Program (GRP) is being proposed for implementation. Again, in the

notice of availability of funds, NRCS announced that the GRP would be implemented in four drought-affected areas in the Western United States. It was our understanding that the GRP was to be a national program and nowhere in the enabling legislation is drought mitigation mentioned as a purpose of the program. We

would like to make certain that for future years USDA implements the GRP nationwide following the established purposes of the program.

Along this same line, we very much support the regional equity provision of the

2002 act. One criticism of the financial assistance conservation programs of earlier

farm bills was that they focused primarily on large agricultural States, leaving other

States with little opportunity to take advantage of what was then much more limited funding. The Agricultural Management Assistance program enacted earlier addressed this issue on a limited scale. The regional equity provision of the new farm

bill helps to ensure that all States will be able to take advantage of the tremendous

funding increases it contains. Because the 2003 appropriations law was delayed so

long, NRCS was unable to implement this provision this year. We hope that a more

timely appropriation and allocation process will allow the regional equity provision

to be implemented in 2004.

Conservation districts worked closely with this subcommittee to make the 2002

farm bill a reality. We believe the conservation accomplishments that are being

made possible will go a long way toward providing the benefits of more productive

soils, cleaner water and air and abundant wildlife for our nation that the American

public is increasingly demanding. We are committed to fulfilling our role in implementing the new farm bill and contributing to our fair share of the work load. We

look forward to continuing our close working relationship with the USDA agencies

that will have the lead in carrying out its conservation provisions.

We appreciate the opportunity to provide our views to the subcommittee.

STATEMENT OF TERRY DETRICK

Chairman Lucas, Ranking Member Holden, members of the House Agriculture

Subcommittee on Conservation, I am Terry Detrick, a wheat, forage and livestock

producer from Ames, Oklahoma, and I currently serve as vice president of the Oklahoma Farmers Union.

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As a constituent, I want to personally thank you, Mr. Lucas, for providing the

leadership for the authorization and funding of the upstream flood-control rehabilitation program that is so important for Oklahoma.

National Farmers Union represents 300,000 independent, diversified, owner-operated family farms and ranches across the nation, and we are grateful to have the

opportunity to appear before you today to discuss the sudden thorny issue related

to funding for technical assistance of conservation programs included in 2002 farm

bill.

As you know, the 2002 farm bill created a number of new conservation initiatives

and expanded existing programs that have far-reaching implications for working

lands in production agriculture and for livestock producers across America.

Although this is an intricate budgetary topic we thank the Chair, the ranking

member, and others for their efforts to rectify the funding fight that has developed

seemingly between the administration and Congress. The issue before us today centers around the amount and source of money for the farm bill conservation programs, and this includes the technical assistance provided to farmers and ranchers

that must implement complex conservation systems on their working lands. We believe the money for technical assistance should come from the conservation program

accounts themselves, and support your bi-partisan efforts on H.R. 1907 to address

the funding dilemma that has been created for some of these agricultural conservation programs.

We believe that the administration’s Office of Management and Budget (OMB) decision to not fully fund the technical components of the conservation programs because they claim other funds are available, is wrong for conservation programs and

wrong for farmers and ranchers. We also believe that USDA’s Natural Resources

Conservation Service should not use funds from its Conservation Operations account

to supplement these programs, as these funds are crucial for NRCS’s non-farm bill

conservation responsibilities.

To follow this approach only encourages a divide and conquer strategy, and it sets

up a potential fight among livestock and production agriculture, geographical regions of the country, and working lands conservation versus non-working lands conservation. This type of geographical competition is not healthy for the development

of conservation program opportunities meant to apply to all farmers and ranchers

across the country.

If I could summarize our views on this subject in a nutshell it would be that: (1)

The farm bill conservation programs should be fully funded as authorized in the

farm bill and (2) That the discretionary NRCS Conservation Operation fund should

not be redirected to support the implementation of the mandatory farm bill conservation programs.

The 2002 farm bill has been called the greenest ever, and all of our members

want the programs that they supported and worked hard to be included in the farm

bill, get implemented the way Congress wrote the law.

Throughout the farm bill debate, congressional leaders such as you saw the importance of technical assistance as a key component in getting conservation programs put into practice on working lands across America. In order that complex conservation systems be developed and applied, the concept of technical assistance supplied by third-party providers was a key element supported by both Congress and

the administration. It has been pointed out that the farm bill conservation provisions will be seriously undermined if technical assistance is not fully funded.

The partnership between the NRCS and the local conservation districts provides

for the best and most effective avenue for conducting conservation technical assistance, and could be key to rendering effective third-party provider technical assistance across the countryside.

As we understand, the language in your legislation protects EQIP, Farmland Protection, and the Grasslands Reserve Program as far as technical assistance is concerned, but not the Wildlife Habitat Incentives Program (WHIP). We also know that

you have made efforts recently to correct the exemption of WHIP and we are ready

to help you in any way to protect this important program. In fact, in Oklahoma we

have heard that the WHIP program is the most backlogged of any conservation program in the nation.

However, the bigger picture is even more troubling because if specific programs

are singled out to deny full technical assistance funding, the cloth that was woven

to get support in the farm bill for the comprehensive conservation programs starts

to become unraveled.

It appears that the administration supports using a combination of program fund

offsets and redirected discretionary funds including a large percentage of base conservation operations funds to fund technical assistance for our conservation programs. We feel that this approach would result in severe reductions in important

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conservation and rural development programs. We have also been told that it would

restrict the ability of the appropriation committees to direct funds to programs it

sees as high priority needs for the country.

We agree with the conclusions reached by the Government Accounting Office of

its study on the issue, that the farm bill specifically provides funding for technical

assistance as part of the mandatory funding for CRP, EQIP, WRP, CSP, GRP,

WHIP, and FPP. We encourage your efforts and your legislation to be as inclusive

as possible. We also are supportive of any efforts you may take to ensure that the

original intent of Congress in writing the 2002 farm bill be carried out.

What ranchers and farmers do not want is further delay in implementing the

farm bill. We have heard predictions about programs not being implemented and

the need to lay off NRCS employees if Congress does not consent to the administration’s position.

We are ready to work with you to protect the integrity of the NRCS conservation

operating program that is important to our States rural development projects and

non-farm bill work, and to use mandatory program funds to finance both the financial assistance and technical assistance costs of the farm bill Conservation programs.

Thank you for your interest.

ANSWERS TO SUBMITTED QUESTIONS

Question from Mr. Holden

NFU and several of the commodity organizations lobbied congress for

over a year and a half for disaster assistance despite warning from Members of Congress that such an effort could likely lead to agriculture having

to pay a high price for that assistance later either with cuts in the farm

bill or through budget reconciliation. In your personal opinions, was the

cost that agriculture had to pay, losing the entitlement nature of the Conservation Security Program, too high a price to pay for that disaster assistance?

The National Farmers Union (NFU) and over 30 other farm, commodity and cooperative organizations consistently supported the efforts, originally initiated in the

Senate, to provide weather related, emergency disaster assistance for crop and livestock producers who suffered production and quality losses during the 2001 and

2002 production years. A copy of the coalition’s December 19, 2002 letter is attached.

We neither apologize nor in hindsight regret seeking needed economic help for the

vast number of farmers and ranchers whose very livelihoods were decimated by adverse weather during the aforementioned two-year period.

In addition, NFU was one of the original supporters of the Conservation Security

Program (CSP) and continue to believe the CSP offers a unique opportunity to address priority conservation needs on working farms.

The fact that the final assistance package resulted in an adjustment in the funding levels for the CSP was the result of a lengthy campaign orchestrated by the

Bush administration, not by farm organizations. It is clear the administration’s intent was to preempt the consideration of a meaningful disaster assistance program

for agricultural producers and at the same time limit the scope of previously authorized farm bill programs.

At no time during the farm bill debate, where a disaster program for the 2001

production year was considered, or in the weeks and months following the adoption

of the 2002 farm bill when the scope of the agricultural disaster became even more

clear and pronounced did the National Farmers Union or any of the other groups

supporting disaster assistance agree with the administration’s position that assistance funding should be offset through reductions in farm bill program authorities.

In fact we strenuously opposed re-opening the farm bill in order to modify programs

to achieve the budgetary offset.

Disaster assistance supporters consistently urged Congress and the administration to designate the agricultural disaster funding as emergency spending which

would not be subject to the constraints of the budget resolution. This position was

wholly consistent with the funding provisions of previous agricultural disaster assistance programs as well as assistance to address non-agricultural disasters.

Thank you for allowing the NFU the opportunity to more fully respond to your

question than was possible during the Subcommittee hearing and set the record

straight concerning our support for both the much needed disaster assistance program and adequate funding for conservation priorities.

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ATTACHMENT TO JUNE 10, 2003 LETTER TO REP. HOLDEN

Dear Member of Congress:

The undersigned organizations write to urge your support for emergency disaster

assistance for crop and livestock producers who have suffered losses during the 2001

and 2002 agriculture production years due to natural disasters. Such disaster assistance would be consistent with responses by the U.S. government to natural disasters in the past, including hurricanes, floods, and droughts.

The Food Security and Rural Investment Act of 2002 provides increased economic

resources, certainty, and stability across a wide range of agricultural, rural, and nutrition programs administered by USDA. For commodities, we believe it was the intent of Congress that the new farm bill reduce or eliminate the need for future ad

hoc market loss-related assistance and, instead, provide a similar level of assistance

in a more efficient and cost effective manner than the legislation it replaced. In fact,

projected outlays for commodity programs under the new law are projected to be significantly less than the annual average Federal expenditures incurred since 1998.

However, the new farm bill is incapable of predicting and adequately dealing with

natural disasters.

Furthermore, due in part to increased prices resulting from the impact of natural

disasters, the most recent projected outlays for 2002 are less than originally projected at the signing of the farm bill. Despite these savings and the precedence of

assistance for those who suffer from natural disasters, Congress has failed to pass

emergency disaster assistance.

For U.S. farmers and ranchers, the current production disaster is multi-faceted.

In many areas, drought has decimated row crops and forage and has reduced water

supplies available for livestock. In other regions, farmers are experiencing crop destruction and reduced yields and quality due to flooding and an increased incidence

of crop pests and diseases. Especially hard hit are the specialty crops such as apples, cherries and grapes in the Great Lakes region, the eastern States and the Pacific Northwest that suffered frost, freeze and drought damage this season and adverse weather in 2001 that caused a failure of the blossom set required to produce

fruit.

The negative economic impact of natural disasters to American agriculture and

rural communities continues to grow.

• Almost 90 percent of U.S. counties have received a USDA disaster designation

in 2002.

• Over 40 percent have received designations in both 2001 and 2002.

• Washington State alone suffered $100 million in apple crop losses in 2002 due

to early freeze.

• Adverse weather conditions cut the expected cotton crop by over 1 million bales.

Drought conditions harmed the growing season, and a series of storms hit during

harvest, inflicting continued quality and quantity losses. In the Southeast and MidSouth, only 55 percent of the crop achieved a color grade of Strict Low Middling or

better. This compares to a 5-year average of 81 percent.

• The producers on the Blackfeet Reservation, Montana, lost over 3000 head of

cattle in a freak June 3rd snowstorm. The storm did fill stock ponds and provided

some additional spring green-up moisture but did not provide enough to alleviate

the effects of four years of drought.

• The wheat acreage harvested at 45 million acres is the lowest it has been in

the last decade.

Financial assistance is needed now if the economic ruin of farms, ranches and

rural businesses caused by these natural disasters is to be averted.

Within the range of its existing options, we believe USDA has taken positive actions to address the weather and disease-related disasters experienced by crop and

livestock producers during the 2001 and 2002 production years. Unfortunately, the

Department’s authority and resources available to mitigate the losses sustained by

farmers, ranchers and rural businesses are inadequate given the full scope of the

weather and disease problems confronting American agriculture.

While crop insurance, disaster loans, emergency haying and grazing of Conservation Reserve Program acreage, and the Livestock Compensation Program (LCP) are

helpful, the relief they provide cannot effectively respond to the unprecedented and

expansive devastation being experienced across a large part of America. We urge

your active engagement and support immediately upon convening the 108th Congress of the emergency disaster assistance legislation passed by the Senate last session.

We urge Congress to approve this legislation and work with the administration

to ensure that this emergency program is in place, which provides a responsible

67

level of assistance to those suffering substantial losses as a result of natural disasters. This adequate response is needed immediately to reduce the devastating economic impacts being experienced by farmers, ranchers and their communities

throughout much of rural America because of natural disasters beyond their control.

Thank you for your attention to this issue. We look forward to working with you

to address this serious situation in a timely and effective manner.

Sincerely,

National Farmers Union, American Farm Bureau Federation , National Grange,

National Farmers Organization, American Beekeeping Federation, American Corn

Growers Association, American Sheep Industry Association, American Soybean Association, Burley Tobacco Growers Cooperative, Cape Cod Cranberry Growers’ Association CoBank, Farm Credit Council, Intertribal Agriculture Council, National Association of Wheat Growers, National Barley Growers Association, National Cotton

Council, National Grain Sorghum Producers, National Grape Cooperative Association, Inc., National Milk Producers Federation, National Potato Council, National

Sunflower Association, Northeast Farm Credit Regional Council, National Association of State Departments of Agriculture , Northeast States Association for Agricultural Stewardship, R-CALF United Stockgrowers of America, Soybean Producers of

America, Southern Peanut Farmers Federation, USA Dry Pea & Lentil Council, U.S.

Apple Association, U.S. Canola Association, U.S. Custom Harvesters, Inc, Vidalia

Onion Business Council, Welch’s, WIFE.

STATEMENT OF SCOTT FABER

Mr. Chairman, thank you for the opportunity to appear before the Conservation,

Credit, Rural Development and Research Subcommittee of the House Agriculture

Committee.

My name is Scott Faber, and I am testifying today on behalf of Environmental

Defense, National Audubon Society, Defenders of Wildlife, Land Trust Alliance, Sustainable Agriculture Coalition, and the National Wildlife Federation. Our organizations strongly oppose diverting $138.7 million from working lands incentive programs in fiscal year 2003 to pay for the technical assistance costs of the

Conservation Reserve Program (CRP), the Wetlands Reserve Program (WRP), and

the Ground and Surface Water Conservation and Klamath Basin initiatives within

EQIP. As you know, the administration has diverted $87.9 million from the Environmental Quality Incentives Program (EQIP), $27.6 from the Farmland and Ranchland Protection Program (FRPP), $14.6 million from the Grasslands Reserve Program, and $8.6 million from the Wildlife Habitat Incentives Program (WHIP) to pay

for technical assistance for the two acreage-based programs, the CRP and WRP, and

two EQIP sub-programs.

We are united on several key points. We believe that sufficient technical assistance funding is absolutely critical to implement the 2002 farm bill conservation programs. We support mandatory Commodity Credit Corporation funding for conservation technical assistance needed to implement farm bill conservation programs. We

believe funds utilized for conservation technical assistance for each particular program should be assessed to and apportioned from that same particular program.

Hence, we strongly oppose taking away funds associated with one program to pay

for conservation technical assistance for another program. Finally, we support technical assistance funding for the two acreage-based programs (CRP and WRP) from

the CCC in amounts over and above the funding apportioned for financial assistance.

In our view, these principals were reflected 2002 farm bill. We believe the administration should have honored the 2002 farm bill by providing technical assistance

from the Commodity Credit Corporation (CCC) for each of the programs, including

CRP and WRP, and by ensuring that technical assistance for each program is derived from funds provided for that program. The administration had ample authority to do so, as should be clear from the statute itself, from explicit Managers conference report language, from floor colloquies on the subject, and from the excellent

report produced by the U.S. General Accounting Office.

The administration still has ample authority to immediately release funds from

the CCC to pay for the cost of CRP and WRP technical assistance. As you know,

section 213 of the fiscal year 2003 Omnibus Appropriations bill gave USDA authority to divert funds from working lands programs. Section 213 did not direct the administration to divert funds from EQIP, WHIP, GRP and FRPP but only permitted

the administration to divert these funds. USDA retains discretion to pay for CRP

and WRP technical assistance with funds from the CCC without diverting funds

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from other programs. We are anxious to work with the committee to persuade the

administration to honor the intent of the 2002 farm bill by immediately releasing

CCC funds for CRP and WRP technical assistance.

If the administration refuses to change its current position, we urge the committee work with us to seek sufficient emergency funding in the next supplemental appropriation or other appropriate legislative vehicle for the costs of technical assistance for CRP, WRP and two EQIP sub-programs. This should be accomplished by

repealing section 213 of the fiscal year 2003 Omnibus Appropriations bill, by clearly

exempting farm bill technical assistance from the section 11 cap, and by ensuring

that technical assistance funds provided for one conservation program cannot be

used to provide funds to another program.

We recognize that the timing of a supplemental appropriations bill or other potential vehicles cannot be certain. In the meantime, we urge you act quickly to protect

all working lands programs from being used to pay for CRP and WRP technical assistance, as you have proposed in H.R. 1907 and as the Congress has already provided for the Conservation Security Program. Though only an interim step, this

measure will hopefully persuade the administration to honor the intent of the 2002

farm bill and perhaps avoid the need for subsequent action by Congress.

We also encourage you to reserve for continuous enrollment of buffers and other

high-value lands at least 5 million CRP over and above the acres already enrolled

through the continuous sign-up options of CRP. In addition to targeting CRP acres

to maximize environmental gain, reserving 5 million new CRP acres for continuous

enrollment will spread CRP technical assistance costs over many years and will

limit though not solve the current technical assistance crisis.

As another important interim step, we encourage the committee to oppose the ad- ministration’s plan to divert $20 million or more in EQIP funds to compensate third

party technical service providers (TSPs). TSP funding for private contractors should

come from CCC funds under section 4 of the CCC Charter Act. There is no credible

claim thats section 2701 of the 2002 farm bill or section 213 of the Omnibus Appropriations bill in any way limits CCC payments to private sector technical service

providers, and there is no rational basis for the administration’s decision to instead

divert EQIP funding for this purpose.

Finally, we encourage the committee to take the necessary legislative steps to

bring the Water Conservation and Klamath Basin sections of EQIP under section

2701, the basic financial and technical assistance funding section of the conservation

title, to remove them from their current status as ‘‘recipient’’ programs for technical

assistance funding.

Despite significant conservation funding provided by the 2002 farm bill, many

farmers and ranchers will continue to be rejected when they seek USDA conservation assistance to help meet the Nation’s environmental challenges. As you know,

working lands incentive programs like EQIP, WHIP and FRPP face significant backlogs, which are attached to this testimony. In fiscal year 2002, the nation faced a

$1.5 billion EQIP backlog. USDA reported a $24.7 million backlog in Oklahoma, a

$66.2 million backlog in Kansas, a $106.7 million in Nebraska, a $200.3 million

backlog in Missouri, a $502 million backlog in Texas, a $29 million backlog in Iowa,

and a $36.5 million backlog in Florida. Many of these States also have the Nation’s

largest WHIP backlogs. As you know, Oklahoma has the largest WHIP backlog in

the nation.

Diverting EQIP and WHIP funds to pay for CRP and WRP technical assistance

will only make the long lines farmers and rancher face even longer. Unless the nation shares these costs with private landowners, we will fail to provide clean water,

clear air, habitat for wildlife and open spaces for future generations. Because farmland, ranchland, and private forestland make up 70 percent of the American landscape, private landowners have a significant impact on the quality of our rivers,

lakes and bays and most rare species depend upon private lands for their survival.

Fortunately, farmers and ranchers are willing to help meet these environmental

challenges but face new costs and risks when they take steps to provide cleaner

water and air, serve as the frontline against sprawl, or provide habitat for rare species. The farm bill provided unprecedented incentives for better stewardship on

working lands. Unfortunately, the administration’s faulty interpretation of section

2701 threatens to undermine the important gains made in the farm bill.

We urge you to act as quickly as possible to protect funding for these critical

working lands incentive programs from being needlessly diverted. In particular, we

hope to work with you to persuade the administration to honor the 2002 farm bill

or, if necessary, seek emergency funding in a supplemental appropriation for technical assistance for CRP, WRP, and two EQIP sub-programs. We also urge you to

take important interim steps to protect working lands incentives from being diverted, as proposed in H.R. 1907, by supporting the reservation of 5 million addiVerDate 11-SEP-98 11:25 Jul 16, 2003 Jkt 088313 PO 00000 Frm 00071 Fmt 6633 Sfmt 6633 F:\DOCS\1087 HAGRI PsN: HAGRI
69

tional CRP acres for targeted enrollments, and by supporting funding of private sector TSPs through section 4 of the CCC. Once the current crisis is solved, we would

encourage the Subcommittee to continue to examine the critical importance of technical assistance in delivery of conservation assistance programs and to assess how

technical assistance is administered, evaluated, and its ultimate effectiveness for

each Conservation Title program.

Thank you for the opportunity to testify. I would be happy to answer any questions.

STATEMENT OF MARC CURTIS

Mr. Chairman and Members of the committee: I am Marc Curtis, a soybean, rice,

corn, and wheat farmer from Leland, Mississippi. I am past President of the American Soybean Association and for the sake of full disclosure, I would like the committee to know that I am currently serving as the Treasurer of the National Association of Conservation Districts. However, today I am representing a group of commodity organizations that work together on conservation issues and feel strongly

about the issues that we will be discussing during this hearing. The groups being

represented today include the National Association of Wheat Growers, the National

Cotton Council, the National Corn Growers Association, the American Soybean Association and the USA Rice Federation. Our testimony will focus on implementation

of the conservation title of the Farm Security and Rural Investment Act of 2002.

I would like to thank you for your leadership, Mr. Chairman, and the leadership

of your committee in helping to craft a conservation title in the 2002 farm bill that

represents, in the words of the Bush administration, ‘‘the single most significant

commitment of resources toward conservation on private lands in the Nations history.’’

This was accomplished by greatly expanding existing working lands programs

such as the Environmental Quality Incentives Program (EQIP) and expressly directs

a percentage share of the program toward non-livestock producers and increasing

the acreage cap enrollment on set-aside programs such as the Conservation Reserve

Program.

You also created promising new programs such as the Grassland Reserve Program

which authorizes enrollment of up to 2 million acres of restored, improved, or natural grassland, rangeland and pastureland and a program in which our members

have enormous interest in, the Conservation Security Program which can provide

an unprecedented opportunity to increase conservation on private working lands.

I say it can provide an unprecedented opportunity because draft regulations have

yet to be sent out for public comment, and there are some initial indications, for

example in the Advanced Notice of Proposed Rulemaking recently sent out for public

comment, that USDA is looking for ways to artificially constrain this program.

And while we realize that the Federal Government is not about to throw open the

doors of the Federal Treasury and hand us a pitchfork to start shoveling out the

dough, it seemed clear that the intent of Congress was for the CSP to be a program

for all producers on all working lands addressing one or more resources of concern

on all or part of their farming operation.

Many of our members are also concerned that this program not simply be targeted

at the ‘‘bad actors’’ who have not been as ambitious in addressing conservation concerns but also be utilized to reward those producers who have been very aggressive

in addressing conservation needs and could at least qualify for Tier 1 conservation

maintenance.

We fully understand the daunting task facing the Department of Agriculture in

implementing these programs and we understand that they have been diligently

working to get regulations finalized, funding allocated and get these programs up

and running so we can begin to realize conservation benefits on the ground and out

in our fields.

However, the initial optimism, which followed passage of the 2002 farm bill has

given way to concern in part because of the ongoing debate over funding sources

for funding sources for technical assistance. It appears that interpretation of the

provisions of the new farm law and recent language added to the omnibus appropriations measure will erode program resources as well as the confidence and support of our members.

For example the EQIP program was initially authorized at $700 million, which

was then reduced to $695 million as a result of appropriations actions. It now

stands as a $588 million program as a result of the interpretation that requires

EQIP to contribute toward the technical assistance requirements of the Conservation Reserve Program and the Wetland Reserve Program.

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Some of our members have also been informed that while land planted anytime

in the past to a multi-year grass or legume would meet the cropping eligibility for

enrollment in CRP, the eligibility now only applies to lands planted to a multi-year

grass or legume after 1996. Is highly erodible land in 1995 less valuable to protect

than highly erodible land in 1997? These are rules cooked up by pencil pushers with

green eyeshades not by those who are concerned about the good conservation stewardship of our land.

We also understand that the 2002 farm bill was drafted and passed by the Congress during a time of budget surplus while it is being implemented during a time

of budget deficits. Clearly there are increasing pressures to restrain domestic spending, but the farm law was written in compliance with the Budget Resolution in effect at that time. Therefore, the programs authorized in the farm bill and signed

into law by the President just over a year ago should be implemented as authorized.

Each of our organizations, along with the American Farm Bureau Federation and

the National Farmers Union, have corresponded with Congress indicating our

strong opposition to any effort to amend, alter or siphon off funding from the Farm

Security and Rural Investment Act of 2002. Our groups will again communicate our

oppositions to amendments, which alter the balance of funding for price support,

conservation, and nutrition, risk management and export promotion. I have a copy

of our letter that I ask be included in the record

We are aware of the legislation you have introduced, Mr. Chairman, to address

the problem of technical assistance funding, and wish to express our support for

yourrecent efforts to ensure that each of the 2002 farm bill conservationprograms

funded by the Commodity Credit Corporation pay for their owntechnical assistance

(TA) costs. We do not support the use of fundsfrom one set of farm bill conservation

programs to pay for the TA ofother farm bill conservation programs.

Under current law, as being implemented by the administration in this fiscal

year, the TA costs of the Conservation Reserve Program (CRP) and the Wetlands

Reserve Program (WRP) will be paid from CCC funds made available for the Environmental Quality Incentives Program (EQIP), the Wildlife Habitat Incentives Program (WHIP), the Farmland Protection Program (FPP), and the Grassland Reserves

Program (GRP). In the case of EQIP in fiscal year 2003, this will result in the withdrawal of approximately $107 million. GRP, FPP and WHIP lose a comparable relative share of the total funds needed to pay for CRP and WRP TA.

We are deeply concerned about this situation and very much would like to see it

corrected in this fiscal year in a manner that results in no harm to the 2002 farm

bill provisions that have been supported and embraced by the agricultural community.

In closing, Mr. Chairman, we would like to emphasize several principles that we

feel are important to keep in our collective minds as we move forward on farm bill

implementation.

First, we believe each conservation program should pay its own technical assistance and that the provisions embodied in the legislation you have introduced provide positive guidance toward achieving this objective. However, we sincerely hope

that an administrative solution can be found based on your direction.

Second, we will actively oppose any attempt to amend, alter, or divert funding

away from farm bill programs as authorized by Congress and signed into law by

the President just over a year ago. Farmers need a consistent, predictable long-term

policy in order to make sound investment, cropping and marketing decisions and to

compete in a world market replete with subsidies, tariffs and non-tariff barriers.

We appreciate this opportunity to present our views and we are happy to respond

to any questions you may have.

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