U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

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

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

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

74–345 PDF 2002

S. HRG. 107–225

CONSERVATION

HEARING

BEFORE THE

COMMITTEE ON AGRICULTURE,

NUTRITION, AND FORESTRY

UNITED STATES SENATE

ONE HUNDRED SEVENTH CONGRESS

FIRST SESSION

FEBRUARY 28, and MARCH 1, 2001

Printed for the use of the

Committee on Agriculture, Nutrition, and Forestry

(

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

COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY

RICHARD G. LUGAR, Indiana, Chairman

JESSE HELMS, North Carolina

THAD COCHRAN, Mississippi

MITCH MCCONNELL, Kentucky

PAT ROBERTS, Kansas

PETER G. FITZGERALD, Illinois

CRAIG THOMAS, Wyoming

WAYNE ALLARD, Colorado

TIM HUTCHINSON, Arkansas

MICHEAL D. CRAPO, Idaho

TOM HARKIN, Iowa

PATRICK J. LEAHY, Vermont

KENT CONRAD, North Dakota

THOMAS A. DASCHLE, South Dakota

MAX BAUCUS, Montana

BLANCHE L. LINCOLN, Arkansas

ZELL MILLER, Georgia

DEBBIE A. STABENOW, Michigan

BEN NELSON, Nebraska

MARK DAYTON, Minnesota

KEITH LUSE, Staff Director

DAVID L. JOHNSON, Chief Counsel

ROBERT E. STURM, Chief Clerk

MARK HALVERSON, Staff Director for the Minority

(II)

(III)

C O N T E N T S

Page

HEARING(S):

Wednesday, February 28, 2001, Conservation ...................................................... 01

Thursday, March 1, 2001, Conservation ................................................................ 89

Wednesday, February 28, 2001

STATEMENTS PRESENTED BY SENATORS

Lugar, Hon. Richard G., a U.S. Senator from Indiana, Chairman, Committee

on Agriculture, Nutrition, and Forestry ............................................................. 01

Allard, Hon. Wayne, a U.S. Senator from Colorado ............................................. 17

Dayton, Hon. Mark, a U.S. Senator from Minnesota ........................................... 18

Fitzgerald, Hon. Peter G., a U.S. Senator from Illinois ....................................... 15

Harkin, Hon. Tom, a U.S. Senator from Iowa, Ranking Member, Committee

on Agriculture, Nutrition, and Forestry ............................................................. 09

Leahy, Hon. Patrick, a U.S. Senator from Vermont ............................................. 13

Miller, Hon. Zell, a U.S. Senator from Georgia ..................................................... 02

Roberts, Hon. Pat, a U.S. Senator from Kansas ................................................... 12

Thomas, Hon. Craig, a U.S. Senator from Wyoming ............................................ 03

Stabenow, Hon. Debbie, a U.S. Senator from Michigan ....................................... 15

WITNESSES

Smith, Katherine, Director, Resource Economics Division, Economic Research

Service, U.S. Department of Agriculture, Washington, DC .............................. 03

Stephenson, Robert, Director, Conservation and Environmental Program

Division, Farm Service Agency, U.S. Department of Agriculture,

Washington, DC ................................................................................................... 22

Weber, Thomas A., Deputy Chief for Programs, Natural Resource

Conservation Service, U.S. Department of Agriculture, Washington, DC ...... 20

Zinn, Jefferey A., Senior Analyst in Natural Resources Policy, Congressional

Research Service .................................................................................................. 05

APPENDIX

PREPARED STATEMENTS:

Lugar, Hon. Richard G. .................................................................................... 34

Harkin, Hon. Tom ............................................................................................ 36

Stabenow, Hon. Debbie .................................................................................... 38

Smith, Katherine .............................................................................................. 40

Stephenson, Robert ........................................................................................... 58

Weber, Thomas A. ............................................................................................ 51

Zinn, Jefferey A. ............................................................................................... 44

DOCUMENT(S) SUBMITTED FOR THE RECORD:

Hutchinson, Hon. Tim ...................................................................................... 84

Page

IV

DOCUMENT(S) SUBMITTED FOR THE RECORD—CONTINUED

Lincoln, Hon. Blanche L. ................................................................................. 87

Thursday, March 1, 2001

STATEMENTS PRESENTED BY SENATORS

Harkin, Hon. Tom, a U.S. Senator from Iowa, Ranking Member, Committee

on Agriculture, Nutrition, and Forestry ............................................................. 90

Nelson, Hon. Benjamin E., a U.S. Senator from Nebraska .................................. 136

Thomas, Hon. Craig, a U.S. Senator from Wyoming ............................................ 91

WITNESSES

PANEL I

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

Iowa ....................................................................................................................... 92

Hassell, John, Executive Director, Conservation Technology Information

Center, W. Lafayette, Indiana ............................................................................ 93

Johnson, Paul, Farmer, Decorah, Iowa .................................................................. 98

Rudgers, Nathan, Commissioner, New York State Department of Agriculture

and Markets, National Association of State Departments of Agriculture,

Washington, DC ................................................................................................... 96

PANEL II

Buis, Tom, Executive Director, National Farmers Union, Washington, DC ...... 114

Cohn, Gerald, Southeast Regional Director, American Farmland Trust ............ 118

Sparrowe, Rollin, D., President, Wildlife Management Institute, Washington,

DC .......................................................................................................................... 116

Specht, Dan, Sustainable Agriculture Coalition, Washington, DC ..................... 111

Stallman, Bob, President, American Farm Bureau Federation, Washington,

DC .......................................................................................................................... 110

PANEL III

Faeth, Paul, Director, World Resources Insitute, Washington, DC .................... 131

Stawick, David, President, Alliance for Agricultural Conservation,

Washington, DC ................................................................................................... 128

APPENDIX

PREPARED STATEMENTS:

Harkin, Hon. Tom ............................................................................................ 142

Buis, Tom .......................................................................................................... 205

Cox, Craig .......................................................................................................... 144

Cohn, Gerald ..................................................................................................... 219

Faeth, Paul ........................................................................................................ 227

Hassell, John ..................................................................................................... 156

Johnson, Paul W. .............................................................................................. 182

Rudgers, Nathan L. .......................................................................................... 171

Sparrowe, Rollin D. .......................................................................................... 209

Specht, Dan ....................................................................................................... 196

Stallman Bob .................................................................................................... 185

Stawick, David .................................................................................................. 222

DOCUMENT(S) SUBMITTED FOR THE RECORD:

Miller, Hon. Zell ................................................................................................ 232

American Soybean Association ........................................................................ 245

Defenders of Wildlife Statement on the Conservtion Security Act .............. 248

The Land Stewardship Letter ......................................................................... 233

National Corn Growers Association ................................................................ 244

Natural Resources Conservation Service Program Backlog ......................... 249

Page

V

DOCUMENT(S) SUBMITTED FOR THE RECORD—CONTINUED

President of Wildlife Management Institute, Rollin D. Sparrowe ................ 237

Statement of the International Association of Fish and Wildlife Agencies

to the Senate Committee on Agriculture, Nutrition, and Forestry

Regarding Farm Bill Conservation Programs by Max J. Peterson ........... 238

Statement of the National Association on Conservation Districts on the

Conservation Security Act ............................................................................ 246

Sustainable Agriculture Coalition ................................................................... 247

(1)

CONSERVATION

WEDNESDAY, FEBRUARY 28, 2001

U.S. SENATE, COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY, Washington, DC.

The committee met, pursuant to notice, at 9 a.m. in room 328,

Russell Senate Building, Hon. Richard G. Lugar (Chairman of the

Committee) presiding.

Present: Senators Lugar, Miller, Thomas, Stabenow, Allard,

Crapo, Roberts, Harkin, Fitzgerald, Dayton, Leahy, Lincoln, and

McConnell.

OPENING STATEMENT OF HON. RICHARD G. LUGAR, A U.S.

SENATOR FROM INDIANA, CHAIRMAN, COMMITTEE ON

AGRICULTURE, NUTRITION, AND FORESTRY

The CHAIRMAN. Thank you for coming. This hearing of the Senate Agriculture Committee is called to order.

Let me mention to the Member, Senator Miller, who is here on

time, we are hopeful at some point, perhaps in the next 45 minutes, of obtaining a quorum of the committee. That would be 11

Senators. At that time, I’ll try to interrupt the proceedings to gain

consideration of the committee of our budget, our subcommittee

rosters, memorandum of understanding between Senator Harkin

and myself on the bipartisan conduct of the committee and budget

and a whole raft of other things.

This type of procedure is occurring in all committees who are

having meetings today or tomorrow, and so it’s important that we

take action on that. But we will try to count heads, and if we find

11 around the table. So I would ask staff, Democratic and Republican, to alert their Senators, hopefully to bring about their presence, if possible. It is not easy ever to get a quorum this early in

the day or in the session. But we will need to have one so that we

can move ahead.

At this point, I simply want to say, in my opening statement this

morning, that we have begun our work on the new farm bill by receiving testimony from the Commission on the 21st Century Production Agriculture about its recommendations on our legislation.

Today our committee begins 2 days of hearings on conservation, a

very important part of our farm bill and our Farm bill discussion.

Conservation programs were significantly expanded in the conservation title of the 1985 Farm bill. The establishment of the conservation reserve program in the 1985 bill was due to recognition

by many of us in Congress of the need to address serious soil erosion problems facing agriculture.

2

The 1990 and 1996 Farm bills further strengthened agricultural

conservation programs. This is one area of farm bills where there

has been strong bipartisan support in the Congress.

In my view, there are at least three fundamental questions to

consider as we begin debate on the conservation title. First of all,

what should be the environmental goals of the next farm bill? How

should they be designed to attain those goals through voluntary incentive based programs?

Second, what will be the cost and benefits to landowners and

producers of achieving those broad goals? Third, what will be the

cost and benefits to society of achieving those goals?

Hopefully the testimony presented at these 2 days of hearings

will help us answer these questions and perhaps others that members will pose. One of the challenges facing agriculture today is

how to provide food, fiber and industrial raw materials without

jeopardizing the future productivity of our natural resources. Private landowners are stewards of over 70 percent of our Nation’s

land. Our Nation’s farmers and ranchers are facing increasingly

complex environmental problems and regulations. Increasingly,

taxpayers have been demanding and expecting increased conservation achievements from farmers and the agricultural sector.

Given this situation, we have still another request to consider.

Should there be a substantially larger investment by the Federal

Government in conservation cost share and incentive programs?

As we try to answer these questions, it will be important for our

committee to hear about how the current conservation programs

are managed, the use and distribution of funding for those programs, the types of agricultural producers and landowners who

participate in the geographic distribution of those participants.

We’re also seeking suggestions for improvements and changes to

the current programs and asking whether there is need for new initiatives. We’ll be trying to determine the appropriate role for the

Federal Government in assisting farmers, ranchers and other landowners in achieving conservation goals.

Now, today we’ll gather testimony from representatives of the

U.S. Department of Agriculture and the Congressional Research

Service about the administration and funding of our current program. At tomorrow’s hearings, witnesses will include representatives of farm organizations, conservation and wildlife groups, and

State agencies. And we will seek the views on current programs,

as well as suggestions for improvements and new approaches.

I welcome our witnesses today, and look forward to hearing their

testimony. Before I call upon them, let me ask first of all if there

are comments or statements from Senators who were present at

the initiation of this hearing. Senator Miller, do you have an opening comment or statement?

[The prepared statement of Chairman Lugar can be found in the

appendix on page 34.]

STATEMENT OF HON. ZELL MILLER, A U.S. SENATOR

FROM GEORGIA

Senator MILLER. I have an opening comment, but Mr. Chairman,

I’d just like to submit it for the record. I want to hear as many of

these witnesses as possible.

3

The CHAIRMAN. Thank you. It will be submitted into the record

and published in full in the record.

Senator Thomas.

STATEMENT OF HON. CRAIG THOMAS, A U.S. SENATOR

FROM WYOMING

Senator THOMAS. Thank you, Mr. Chairman. I, too, will submit

it for the record. I just want to say that these programs are especially important in Wyoming. I think, when you look at the environment and those kinds of things, we have a good relationship

with NRCS and we look forward to continuing that. But I agree

with you, Mr. Chairman, that we’ve got to look into it and see how

we can make it work better and make it a part of the Farm bill.

So thank you for this.

The CHAIRMAN. Well, thank you very much, Senator Thomas.

Your statement will be a part of the record in full.

It’s a privilege to have before us Ms. Katherine Smith, Director

of Resource Economics, U.S. Department of Agriculture in Washington, DC.; Mr. Jeffrey Zinn, Specialist in Natural Resources of

the Congressional Research Services of Washington, DC.

Let me ask that you try to summarize your testimony and preferably within a 10 minute period of time each. We’ll ask you to testify completely, Ms. Smith and Mr. Zinn, and then we’ll have questions from the Committee. And as you’ve heard the explanation, if

suddenly I see the magic moment has arrived in which we have a

quorum of 11, I will ask you to suspend temporarily your testimonies, so that we can go about that business, and then we will

proceed again.

Ms. Smith, would you give us your testimony?

STATEMENT OF KATHERINE R. SMITH, DIRECTOR, RESOURCE

ECONOMICS DIVISION, ECONOMIC RESEARCH SERVICE, U.S.

DEPARTMENT OF AGRICULTURE

Ms. SMITH. Yes, thank you, Chairman Lugar.

The USDA’s Economic Research Service makes economic assessments of conservation program options, frequently in collaboration

with the agencies that implement those programs, and occasionally

as an independent third party evaluator.

My written testimony provides an overview of conservation programs from that perspective, their costs, their benefits and economic insights that we’ve gained from having evaluated their performance over time. You’ll be getting the details of the current programs from other USDA witnesses this morning. In my brief oral

comments, I would like to emphasize three points. First, the benefits of conservation and environmental programs have been substantial. We don’t even know the total value of the benefits, because many of them are benefits that are not valuated on the market, they’re non-market benefits that are difficult to evaluate. And

yet we have accumulated quite a total of those that we can evaluate in some way.

The sum of on and off site benefits of a 40 percent reduction in

crop land soil erosion over the last 15 years is estimated to be valued at over $2 billion per year. Conservation provisions have drastically slowed the rate of conversion of wetlands to agricultural

4

uses, thus preserving the wildlife habitat benefits and the environmental restoration benefits of between 2.5 and 4 million wetland

acres since 1985.

Wildlife habitat improved by enrolling land in the conservation reserve program is estimated to have provided over $700 million

per year in benefits from enhanced hunting and wildlife viewing

opportunities alone, without the other wildlife enhancement benefits that have not been able to be estimated in dollar terms. An

acre of conservation reserve program land in the great plains pulls

.85 metric tons of carbon out of the atmosphere each year. Depending on international greenhouse gas negotiations, this carbon sequestration service could be worth a substantial amount.

Now, my second point is that while some of these benefits are

self-sustaining, particularly those that arose from education and

technical assistance that informed producers about the benefits

they could obtain personally from adopting practices, most of the

benefits are transitory. Because in the absence of public programs,

producers would have little economic incentive or perhaps limited

economic capability to maintain the actions that result in these big

benefit numbers. So preserving the gains means continuing some

form of public assistance in the conservation and environmental

arena.

Third, we’ve learned from observing the performance of past and

present programs that certain program characteristics are more

likely to make the programs successful, especially in assuring cost

effectiveness of programs. One of those characteristics is that they

are coordinated not only with other conservation and environmental programs and regulations, but also with farm programs

which can, if we’re not careful, work at cross purposes, or to complement. But it has to be kept in mind that the coordination is an

important thing to keep at the forefront of planning new conservation programs.

Second is targeting, spatial targeting by region of the country

that warrants attention for whatever the environmental goal is

that your committee decides is the one or the ones that deserve attention, and also possibly targeting by types of producers that particularly need support in carrying out conservation practices.

A third kind of lesson learned from the past is that flexibility is

a good thing. Giving producers the option to decide how to achieve

an environmental goal is more cost-effective and more successful

than telling them, you must do this particular practice. Working in

the flexibility makes it easier to meet a goal.

And finally, some recent work that we’ve done in the Economic

Research Service suggests that there can be unintended consequences to providing support for conservation practices if that

support encourages increased production, an increase in the acres

under production. If that happens, you may see a reduction in adverse effects on the environment from the initial land farmed that

can be overtaken by the environmental consequences of putting

more land in production.

So these are some of the things mentioned in greater detail in

the written testimony and available in a new report,

AgriEnvironmental Policy at the Crossroads: Guidelines on a

Changing Landscape, of which we’ve brought about 50 copies and

5

would be happy to distribute. Thank you for the opportunity. I’ll be

happy to take questions after Jeff Zinn.

[The prepared statement of Ms. Smith can be found in the appendix on page 40.]

The CHAIRMAN. Well, thank you very much, Ms. Smith.

Let me just ask staff if you can attach some of those copies. It

might be well to distribute them to Senators as they come to this

hearing today, and members of the staff, so that they will have

them. Because that’s an important report and we thank you for

bringing those copies for us.

Mr. Zinn.

STATEMENT OF JEFFREY A. ZINN, SENIOR ANALYST, NATURAL

RESOURCES POLICY, CONGRESSIONAL RESEARCH SERVICE

Mr. ZINN. Mr. Chairman, members of the Committee, good morning and thank you for inviting me to testify today.

The Committee has asked other witnesses to offer recommendations for change in conservation policies and programs. CRS policy,

as many of you know, does not allow me to make or take positions

on recommendations on the record.

My oral statement summarizes my written testimony, which provides a context for consideration of these recommendations. It reviews the evolution of the conversation efforts since 1985 and characterizes the conservation effort today. It also discusses current

programs and activities, and outlines some recent changes in

NRCS, the principal USDA conservation agency.

My statement concludes by identifying through several questions

issues that may arise as you debate future policy options. Congress

has greatly expanded the conservation mission in the last three

Farm bills to include numerous new topics and new approaches.

New topics include water quality, wildlife, air quality and animal

agriculture, among others. New approaches include State technical

committees, priority areas for some programs, and the use of easements, among others.

The conservation mission now includes more than 30 distinct

programs and activities scattered throughout USDA, but concentrated in the two agencies who will testify later, NRCS and

FSA, and depending on whether you’re a lumper or a splitter, I

think you could list quite a few more programs and activities if you

wanted to.

Three of the programs and activities deserve special mention, I

believe. Conservation Technical Assistance is a core activity that is

critical to the success of almost all other conservation programs

and the largest activity in terms of staff demands for conservation.

The Conservation Reserve is the largest program in terms of

spending. It uses about half the total conservation budget each

year, in recent primarily to make rental payments.

The Environmental Quality Incentives program is the main cost

sharing program and includes several policy innovations. Many of

the other conservation programs or smaller efforts focus on a wide

variety of topics.

The expansion of conservation can be viewed in budgetary terms.

Total spending grew from about $1 billion in 1985 to $3.6 billion

in 1998. USDA subdivides the spending among five categories for

6

analytical purposes. One of these categories, rental and easement

payments, has grown from a negligible amount to about half the

total, about $1.8 billion. In the report that Kitty passed out, there’s

an excellent graph that really shows how this change has worked.

The other four have all grown but at far more modest rates.

These changes mean that a significantly larger portion of conservation funds are being paid directly to landowners to provide conservation benefits, while a smaller portion is going to the agencies

at USDA who deliver the conservation effort. The Congress has had

to respond several times in recent years to constraints at NRCS by

enacting supplemental or emergency legislation to provide needed

technical assistance funding.

The expansion of conservation can also be viewed in staffing

terms. While the conservation mission has grown, total staffing at

NRCS has shrunk from more than 13,600 staff years in 1985 to

11,600 staff years in 2000. Its larger mission has meant that local

staff who deliver conservation to producers and landowners have

many more clients and are often unable to work with them one on

one, which historically has been the hallmark of their role in conservation.

Another important result is that far fewer resources are devoted

to monitoring and program evaluation, making it more difficult to

ascertain what the programs are actually accomplishing. The need

for more information has made the Natural Resources Inventory an

even more important tool for understanding how land, water and

other resources are affected by the conservation effort. It provides

data that are necessary to determine how well the programs are

working, especially in the area of erosion control.

Questions about the future of lands in the CRP and other land

retirement and multi-year contract programs have become more

important as the end of some of these contracts starts to approach.

In the CRP, land can be offered to be re-enrolled, but it is unclear

how program benefits will be retained for the other programs that

have multi-year contracts.

Policies to deal with this future need appear to be lacking, although some States are reportedly planning to step in to ensure

that some of these environmental or resource benefits are retained.

We’re just starting to become aware of what some of these efforts

might be.

Let me conclude by listing several questions that may arise as

you debate policy options for the future. First, will the next generation of conservation policy be driven primarily by opportunities to

do more for agriculture, or by pressures from outside forces to alter

current agricultural practices?

Second, are additional programs needed? Third, are there opportunities for greater program consolidation or coordination? Should

any programs be eliminated? We seem to find it much easier to add

programs to the list than to subtract them in the policy making

process.

Can some programs be simplified administratively? Should greater emphasis be given to measuring accomplishments and ongoing

performance? What is the appropriate balance between programs

for working lands and programs to retire land? And finally, should

7

the conservation mission be expanded or readjusted to provide

greater assistance to landowners?

Thank you for the opportunity to talk with you today, and I look

forward to answering any questions you may have. Thank you.

[The prepared statement of Mr. Zinn can be found in the appendix on page 44.]

The CHAIRMAN. Thank you very much, Mr. Zinn.

We’ll commence a round of questioning, with Senators limited to

5 minutes each on the first round. If there are additional questions,

we will attempt to proceed there.

Let me begin simply by indicating that in your testimony, Mr.

Zinn, you have gone through the history of the 1985, 1990 and

1996 Farm bills with the 1985 bill and the Conservation Reserve

Program the largest of these programs initiated, as you pointed out

correctly, created to help curb erosion. Ms. Smith has pointed out

that we’ve had significant success in this, valued at $2 billion a

year each year, I gather, as this has proceeded.

But the debate in the committee then, and I suppose an underlying factor now, was that this was also a way of cutting back production, or productive acres. A good number of Senators saw dual

benefit. Even then, in 1985, prices that were unsatisfactory likewise farmers and in some cases that were retiring or elderly and

wanted to retire, the Conservation Reserve Program appeared to be

a good way to park a good bit of land.

In the 1990 Act, the committee having observed that there were

some lands that were environmentally challenged, but a lot of

lands that were perfectly good wheat, corn and soybean fields in

the program, adopted a scoring program as to how much conservation benefit occurred. So the bidding then occurred on the basis of

the scores that were available. So that then led to much more of

a conservation emphasis. That appears to have proceeded really, although the 1996 Act was involved, as you pointed out, in expanding

the program, most significantly the EQIP, the farm land production

program and the wildlife habitat program.

We’ve had testimony about the tremendous values in each of

these situations. The EQIP program of course requires, as you’ve

pointed out, a lot of staff assistance. The cost sharing situations are

more complex than the bidding of acres in.

But the net effect of this has been remarkable. Year after year,

as we’ve had oversight hearings, no conservation program of any

sort or any other environmental program in America, has had the

cumulative effective, or for that matter, the annual effect, of these

programs that come right out of the Ag Committee. So we celebrate

that each time we take another look at this.

What I would ask of both of you, however, is were we on the

right track, in your judgment, in 1990 in trying to zero in on the

fact that we have so many acres, so many dollars, and try to get

the most conservation effect for those dollars? Has the point system

or those criteria that we used worked? Is there a degree of equity

or correspondence between actual conservation results and this bidding process? Do either of you have any expert testimony or will

you have on suggestions if we were to revise the scoring system,

or enhance it in various other criteria as to how we should do that?

8

Ms. SMITH. You give me an opportunity, Mr. Chairman, to reinforce one of the lessons we learned, one of the points that I made.

That is about targeting. The scoring system, the EBI scoring system, is an excellent way to target that land that you do want to

set aside in order to obtain specific environmental benefits. It has

worked quite well.

In terms of revamping it, really depends on whether you want

to stick with the same goals or change the weights associated with

those goals or add new ones. But the technique has proved to work

extremely well.

The CHAIRMAN. Do you have suggestions about different goals?

In other words, you sort of begged the question as to what we want

to do, and obviously we’ll try and make up our minds. But what

would you recommend that we do, from your perspective?

Ms. SMITH. I don’t think I’m in a position to make a recommendation that reflects really the national priorities. There are

lots of different ways that you can collect that information, by

using States or localities to help determine what those weights

should be on each of the objectives, by making the weights variable

from year to year, rather than fixed in that EBI formula.

The CHAIRMAN. What are our basic objectives? Obviously to stop

soil erosion, and you’ve cited that a good bit of that is occurring,

and thank goodness. We have some carbon sequestration going on

that is very helpful overall in our environmental picture.

Ms. SMITH.That is not currently an explicit goal.

The CHAIRMAN. It just happens to be one of these byproducts.

What else does the program hope to do? In other words, are we enriching soils in some way? Are we doing other things that enhance

this general value?

Mr. ZINN. I’m going to comment also, but probably not answer

your question well at all. It seems to me there are several questions to think about with the future of CRP, without making specific recommendations. One is, is the size appropriate? Is the total

number of acres that we include in it the approximate size we want

to be working at in the future? I think you’ll be hearing proposals

to increase the size.

A second point is that, do you want to have one program that

covers everything using the environmental benefits index or whatever formula we use, or do you want to have some sub-programs,

as we have now, to deal with especially valuable environmental

areas, State cooperative programs and the like. So that’s a second

consideration.

And then the final thing I would say is that the CRP, from its

history, focuses on erosion and cropland. One could ask whether

there should be some components in CRP that maybe don’t deal

with cropland, maybe don’t have the requirement of the cropping

history requirement, and that’s something to consider as well.

The CHAIRMAN. I thank both of you. We’ve been joined by the

distinguished Ranking Member, Senator Harkin, who has had a

long time interest in each of these areas, and has been a major proponent of these hearings, as well as legislation. Tom, I indicated

before you and some others arrived that at the moment we are able

to get eleven of us here, I would like to break into our dialogue to

have the business meeting that we need to have for adoption of the

9

budget, the subcommittees and what have you. But at this moment, we don’t have eleven people here, and I would like to recognize you for your statements and questions of our witnesses.

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

IOWA, RANKING MEMBER, COMMITTEE ON AGRICULTURE,

NUTRITION, AND FORESTRY

Senator HARKIN. Thank you very much, Mr. Chairman. I apologize for being late. Wednesday mornings is when we have our Iowa

breakfast for Iowa constituents. We had a big load of them this

morning, so I apologize for being a little bit late. Because this is,

as you indicated, Mr. Chairman, a long-time interest of mine, and

of all of us, I’m sure, on this committee.

We know we’ve accomplished some good things in the past, the

various and sundry conservation programs, some that date back

basically to the 1930s. They have done a good job. When I look at

the hills in Iowa and I see all the terraces that are out there that

date back to, oh, gosh, I suppose they started back in the 1950s

some time, 1960s, 1970s, 1980s. It’s done a lot to save our soil. The

various things that we’ve done beyond that, the CRP program, the

EQIP program, the wetlands reserve, all of these have done really

good things in terms of stopping soil runoff.

There have been a lot of questions, of course, in terms of CRP.

It has taken a lot of land out of production. Quite frankly, in many

areas, it’s had some detrimental economic impacts, in local areas.

I’m sorry, I just caught the tail end of the Chairman’s remarks

here, but I wonder if we shouldn’t now be looking at a new, sort

of a new approach on conservation that’s not just soil runoff, but

how do we get into the whole new area of nutrients and nutrient

runoff. How do we measure that, how do we encourage the best

kinds of practices so we don’t have this immense nutrient runoff

that we have?

How do we deal with the new situations that we have, at least

in my part of the country and I think some down in your area, too,

with the large confinement operations, and what that’s doing to our

environment? I think I’m right, I may be a little bit off here, but

I think we have about as many hogs in Iowa today as we did when

I was younger, 30 years ago. Thirty years ago, we didn’t have any

problems.

So if we have the same amount of hogs today, why are we having

so many problems? Well, 30 years ago, every small farmer had a

few hogs. And the animal waste from that, you put on your land.

That’s what we did. It was never called waste. We didn’t call it

waste. That was something that was a valuable asset.

Because that was done, it was all spread out, we didn’t have a

problem with nutrient runoff. But now with these large confinements and stuff we’ve got all kinds of problems with underground

and water pollution, with holding facilities breaking periodically,

trying to spread this fertilizer in the wintertime, when it gets run

off into the streams. So we have that new dynamic that we have

to deal with out there.

Then, looking at the whole green payment and carbon sequestration again, this is going to have to be an area we’re going to have

to consider in the future, because of our agreements with other

10

countries. This is an area where I think, again, we can look at how

we can develop this for farmers to be eligible for some kind of support for carbon sequestration.

So in my view, it’s my little rambling discourse here, that while

we’ve had good programs that worked in the past, I don’t know

that we have to abandon them, I think they’re still valuable. I

think we need to build on them for a new system of conservation.

I think that’s our challenge here on this Committee, to try to find

out just what are those new areas and how do we address them.

I’ll end on this note. I think most of our conservation in the past,

most, not all of it has been paying farmers to not produce, some

kind of land reduction. You take this out, you put this aside, you

do something that you don’t produce on it, and you get a payment.

But most farmers I know do things that enhance the environment

on an annual basis in their production practices. They use their

labor, they use equipment, they even may use some of their own

money. But they don’t get any help for that, it’s just out of pocket.

I’m wondering if now we shouldn’t begin looking at some kind of,

in the new Farm bill perhaps, process whereby we can on a voluntary basis get farmers to do certain conservation practices in

their production patterns. Not to cut down on production, it may

even enhance production. But then give them the kind of support

they need as they do produce.

We have, I think, in the next 20 years we’re going to see a

change in agriculture where people are going to be just growing

corn for feed. They’re going to be growing it for feed and for proteins, for oils, for pharmaceuticals, a whole biotech revolution is

upon us. We’re going to have soybean fields that are some for soybean meal and some soybeans for lubricants, some soybean fields

for edible oils and you’re going to have a lot of different designer

crops out there.

How do we start fashioning conservation programs to address the

new biotech revolution that is upon us? I think that is our challenge. I don’t have a specific question right now. But if you just

have any thoughts on those areas, I’d be delighted to hear from you

on that.

Mr. ZINN. I have a couple of comments I would like to make. One

is that historically, before 1985, I think the conservation programs

focused on erosion, and because they focused on erosion, the programs were largely limited to dealing with cropland issues. I think

cropland production is about 20 percent of the value of all agricultural production.

As the mission has expanded to include other goals, other kinds

of lands, and land uses have become important to conservation and

to the conservation effort. I think we see the programs maybe still

largely as having a big focus on the cropland side. There are pressures that I think you’ll be hearing about at tomorrow’s hearing to

expand the effort, to give more attention to some of these other

lands and resources that go with this expanded mission.

A second comment is that the programs deal almost entirely with

individual farms. It seems to me that as we get into a more encompassing framework for looking at conservation needs and conservation issues, perhaps we should also look at ways to reward or assist

multiple farmers who want to do things in a small area where the

11

benefits of many of them getting together is more than the benefits

of each of them acting individually. So I think this sort of scale at

which we approach conservation is also an important issue. Priority areas, start to get at this, but there are some other directions

one could go.

And finally, I think as you identified, there are lots of new topics

that are being put into the conservation mix. They make solving

the problems and designing programs much more complicated.

That suggests some challenges for the institutions that do this that

perhaps should get a little more recognition than they have in the

past.

Senator HARKIN. I appreciate that. Again, as we design these

programs in the future, I mean, a lot of our payment programs

have changed and are continuing to change. Since there is a societal benefit to good conservation practices, I think we ought to look

upon that in terms of not just a burden on the individual producer,

but something that we all ought to share in. That’s just my own

feeling on that.

Thank you.

[The prepared statement of Senator Harkin can be found in the

appendix on page 36.]

The CHAIRMAN. Thank you very much, Senator Harkin. Did you

have a comment, Ms. Smith?

Ms. SMITH. Yes, I do, thank you. The extremely expert and helpful people sitting behind me gave me literally a long list of different

environmental benefits that can arise from conservation and environmental programs. The big three are soil, wildlife habitat and

water quality. But there’s air quality, farm land preservation,

water storage, navigation, it goes on and on and on. So you’ve got

this large list of benefits.

As you mentioned, Senator, you also have differentiated farming

operations and site specificity on top of all that heterogeneity. So

you end up with all sorts of accommodations and permutations of

possible benefits, possible cost, possible actions, on different kinds

of operations. So it really underscores the point that there isn’t

going to be a one-size-fits-all.

Senator HARKIN. I haven’t seen the list, but I challenge your

thinkers sitting back there, is energy production listed on that?

Ms. SMITH. Yes.

Senator HARKIN. Oh, well, you’re way ahead of me.

[Laughter.]

Ms. SMITH. Biomass.

Senator HARKIN. Good for you. OK, that’s fine.

The CHAIRMAN. The magic word. Thank you very much, Senator

Harkin.

I’m going to recognize the Senators in order of seniority, and let

me just sort of go down, so you’ll have an idea of about when your

turn will come. Essentially, on the Republican side, Senator Roberts, Senator Fitzgerald, Senator Thomas, Senator Allard, Senator

Crapo. I have only one alternative on the Democratic side for the

moment, you’ll be joined, Debbie—well, here, you’ve already been

joined by Senator Leahy.

Very well. Senator Roberts.

12

STATEMENT OF HON. PAT ROBERTS, A U.S. SENATOR

FROM KANSAS

Senator ROBERTS. Thank you, Mr. Chairman. I want to thank

you for holding this hearing today, and I want to thank Senator

Harkin, who just received an award in San Antonio from the corn

folks and the soybean folks for his efforts in being a real leader and

thinking out of the box in regards to our conservation efforts and

how we can make them more environmentally sound but still adhere to the basic thrust of what we’re all about. It was an award

that was certainly well deserved.

There are going to be many, many hearings in the always very

complex task of writing the next farm bill. But I don’t think we can

underestimate the importance of conservation. These programs

have numerous soil and wind erosion, wildlife and environmental

benefits, as the Chairman has pointed out, and the distinguished

Vice Chairman or Ranking Member and the witnesses.

I want to just raise a little flag of caution, a parochial flag, a

high plains flag that is always straight out because of the wind. We

have memories of the day of the Dust Bowl in the dirty thirties.

Basically it was because of this very terrible event that Congress

first got into this business. I applaud the discussion in regards to

the CRP program. I would point out there are more acres in Kansas in the CRP program than any other State.

It’s been a very popular program, and as a result we’ve had a lot

of folks, I remember, during the 1996 Act, who thought that they

could have a similar program benefits. With the budget dollars we

have, the only concern I had at that particular time was that we

didn’t want to rob Peter to pay Paul, or to rob Peter to pay Pat,

or Pat to pay Peter, or to rob the high plains for other areas. We

were very supportive of some of the changes that were made from

the standpoint of the environment, but we had hoped for additional

funding, as opposed to taking away the original purpose of CRP,

where we still have the needs.

So I’m going to insist, Mr. Chairman, that these important benefits maintain their very proper role in these programs, and we certainly remember the important history of the programs. I was a

member of the House Agriculture Committee in 1984 when we first

started this. I think I’m listed as one of the co-authors of the CRP

program, along with then–Congressman Dan Glickman, who became Secretary. Then we finally got it done in 1985.

Let me just point out that sometimes we have problems in implementing what we’re trying to achieve with many varied benefits.

When we changed the EBI, the EBI index or criteria, all of a sudden we had farmers whose contracts were in jeopardy because of

the red fox, I can’t remember what little small fox we were trying

to protect, and the burrowing beetle. We looked and looked and

looked, and it wasn’t so much that we had cited these species that

should have been protected, that are protected, we couldn’t find

any.

But there was a holdup in regards to contracts and payment. I

remember we got into quite a meaningful dialogue with Secretary

Glickman. He presented me, Mr. Chairman, a box with a burrowing beetle in it during the debate.

13

I just think we ought to remember that soil is the greatest nontoxic pollutant we have in agriculture, and we still have those primary functions that I think we must address. Let me say that I

appreciate the statement by the witnesses. I had some questions

for them, but obviously that should come later.

Except for the compliance provisions in the statement by Ms.

Smith, and I thank you for an excellent statement, and you mentioned highly erodible land, or what we affectionately call land

from hell out in western Kansas. We had a lot of requirements. We

almost had a revolt out there, until we got the head of then the

SES to come out and take a look at normal cropping practices, at

what we’re trying to do to actually save the land.

So it’s the implementation of some of these things that I think

are very important. That’s why I think I’m so gratified that Tom

Harkin is really hitting up this, because obviously we’re all going

to be aware of the best laid plans and then how they actually affect

our farmers and ranchers.

I think I’ve said enough, and I don’t mean that to be any kind

of a warning flag. I just want to say that these are very good programs. We ought to keep that base, and we ought to again think

out of the box, as the distinguished Senator from Iowa has indicated, and I think we’ll be headed in the right direction.

And I thank you, Mr. Chairman.

The CHAIRMAN. Thank you very much, Senator Roberts.

Senator Leahy.

STATEMENT OF HON. PATRICK J. LEAHY, A U.S. SENATOR

FROM VERMONT

Senator LEAHY. Thank you, Mr. Chairman. Unfortunately, we’re

doing two things at once, as so many of us do. Today we’re marking

up the Bankruptcy bill in Judiciary and I’m going there. But I

wanted to, because of the agenda in Judiciary, I’ve had to be absent

from some of the first meetings of this Committee. But I wanted

to welcome the new members, Senators Allard and Thomas and

Hutchinson and Crapo, and on our side, Zell Miller, Debbie

Stabenow, Mark Dayton and Ben Nelson. I see at least four of

those new members here now.

I think, Mr. Chairman, you and I have been on this committee

for well over 20 years, but I think it wasn’t since 1981 that we had

these many new members. I was younger, you were the same age.

[Laughter.]

Senator LEAHY. But I look forward to working with you and Senator Harkin on this. One of the things that we have done, this committee is probably the most bipartisan or nonpartisan committee in

the Senate. We’ve been able to pass so much by consensus. I hope

we can get money in the budget resolution to pass the farm bill

this year, so that we don’t get caught up in election fever next year.

But that’s of course up to others.

I am working with a group of New England and Mid-Atlantic

States, they produce about 7 percent of the market value of U.S.

farm products, 7 percent, they get around 1 percent of Federal agriculture payments. I think we should look at that part of the country, where oftentimes we feel we get ignored when there’s a disasVerDate 11-MAY-2000 08:32 May 02, 2002 Jkt 074345 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 74345.TXT SAG1 PsN: SAG1
14

ter bill, anything else, we’re asked for the tax money, we don’t get

the help, and we should look at that.

But the most important thing is that we have something we can

all support, because it’s hard enough sometimes to get a farm bill

through the other body. We have to show some very strong support

in the Senate to do that.

I also would like to see us work on mandatory funding for the

international school lunch program. Our former colleagues, both

senior members of this committee, Senator Dole and Senator

McGovern, have done so much on that. Of course, our own nutrition programs here. I think we can look at things like even global

climate change. We look back 100 years from now, people are going

to say, what did we do for our farmers and consumers there. Senator Roberts may be the only one who’s around 100 years from

now, along with Senator Thurmond.

[Laughter.]

But for the rest of us, I want it to work. I hope that we can avoid

divisive regional fights on various subjects like dairy.

[Laughter.]

If we can do that, Mr. Chairman, I know that you have been

nominated and rightly so in the past for Nobel Peace Prize. If we

can avoid any fighting over dairy, I’ll be nominated for one. Thank

you.

Senator ROBERTS. Would the distinguished Chairman Emeritus

yield?

[Laughter.]

Senator LEAHY. To the other former chairman from the House,

of course I would. Because we were part of the chairman caucus

who had a certain hairstyle criteria.

[Laughter.]

Senator ROBERTS. Let us just say that the antique furniture in

the House and Senate are served best by those with marble tops.

[Laughter.]

We have another former chairman sitting to your left. But the

point I would like to make is that both Senator Allard and Senator

Crapo are battle-hardened veterans of the sometimes powerful

House Agriculture Committee, and have ridden with us well on the

infamous Ag posse. I know they’re going to do a great job. But I

wanted to point that out to the Chairman Emeritus. I thank you.

The CHAIRMAN. The Chair will intervene at this point before the

discussion deteriorates any further. Pat, please don’t leave for a

moment, because we will have deterioration if you leave.

Let me just say that in a moment, I’ll move that the Committee

rules, the subcommittees and committee memberships and the

Committee budget be reported. Before I do so, I want to point out

my appreciation to Senator Harkin and his staff, who have worked

diligently with our staffs to try to have an understanding of how

our committee can best function during the Congress. We have

drafted, in fact, a memorandum of understanding. I wanted to reassure all committee members, and copies of that are there. I want

to express public appreciation to Senator Harkin for the spirit with

which he has entered into it, and all members.

Senator HARKIN. Mr. Chairman, if I could just reciprocate on

that. I just want to publicly thank you. We had a very good meetVerDate 11-MAY-2000 08:32 May 02, 2002 Jkt 074345 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 74345.TXT SAG1 PsN: SAG1
15

ing going over these rules with our staffs, with you and me and our

staffs. We’ve worked all this out. I couldn’t have asked for a better

relationship and better understanding between us, given the division, even division that we have on the committee and in the Senate. I want to publicly thank you for your generosity and for your

willingness to work together in this great spirit. I just want you to

know that I support you wholeheartedly in your recommendations.

The CHAIRMAN. I appreciate that. I think this bodes well for the

work of our committee. As has been pointed out, we don’t really get

much credit or time on the Floor unless we come with a pretty good

package by consensus. That may not always be possible, but we

shall try.

At this point, I move that we adopt the committee rules, the subcommittee membership.

[Whereupon, the committee proceeded to a business meeting.]

[Whereupon, the committee returned to the legislative hearing.]

Senator Fitzgerald.

STATEMENT OF HON. PETER G. FITZGERALD, A U.S. SENATOR

FROM ILLINOIS

Senator FITZGERALD. Thank you, Mr. Chairman, and I want to

congratulate you on holding these hearings. I generally have been

supportive of conservation programs.

I’m not going to have a full blown opening statement. I’ll just be

interested to learn whether the USDA has done any studies of

which of the many conservation programs that the Department offers are the most effective, I suppose both in terms of helping our

environment and I suppose one of the goals of these programs is

also to try and guard against overproduction, too. Although maybe

not explicitly, but I think that’s a side benefit of the conservation

program.

So I’ll be interested in hearing that, and I’m wondering whether

we’ve really ever done any studies to analyze which of the many

conservation programs give us the best bang for our buck.

Thank you, Mr. Chairman.

The CHAIRMAN. Thank you very much, Senator Fitzgerald.

At this juncture, I’ve received proxy statements from Senator

Cochran and Senator Hutchinson, and a statement from Senator

Hutchinson with regard to our hearing today, the first with regard

to the business we just conducted. I’ll ask staff to make these a

part of the record.

[The Information referred to can be found in the appendix on

page 84.]

Senator Harkin.

Senator HARKIN. Thank you, Mr. Chairman. I have Kent Conrad

and Senator Daschle and Senator Baucus also.

The CHAIRMAN. Very well, they will all be appropriately reported

in the proper places.

Senator Stabenow, it is your turn.

STATEMENT OF HON. DEBBIE STABENOW, A U.S. SENATOR

FROM MICHIGAN

Senator STABENOW. Thank you, Mr. Chairman. To you and to

Senator Harkin, thank you for holding this hearing. This is a very

16

important topic, I think conservation is a very important part of

our agricultural policy. And also to Senator Harkin, congratulations on your award, your much deserved award, as well.

From my perspective, from Michigan, since 1987 we’ve had over

278,000 acres that have enrolled in some kind of a conservation

program. I would certainly like to see that increase. I have been

very supportive, as a member of the House Agriculture Committee,

of the CRP program and other programs.

I’ve noticed that you specifically said it’s not your role to make

recommendations to us. Although we would like, I think, to hear

recommendations specifically from you about ways to expand or

move in other directions. But I’m wondering, with the CRP program, if you would be willing to talk about possible other criteria.

You’ve talked a little bit about it today, it’s been focused on soil

erosion and cropland. What other kinds of areas would seem to be

logical extensions, based on what you see in terms of the various

demands and interests?

Mr. ZINN. I think that you’re really asking two questions. No. 1,

is what goes on the list, and No. 2, is in the index, how many

points do you give for each of the things you decide you want to

put on the list. I think without getting specific, it’s important to

think of the list as something that can evolve over time, and probably should evolve over time as the merits of relative issues change

in the national policy setting.

At some point it might be worth considering regional variations,

so that some regions of the country might have a somewhat different list than other regions, because both the agriculture is different and the problems are different. But beyond that, I don’t

think I do want to get into specifics. I suspect you’ll have lots of

people coming after us who do want to get into specifics.

Senator STABENOW. Do you want to add to that?

Ms. SMITH. I think Jeff answered it very, very well. There are

a range of things that the current EBI does not incorporate that

it could incorporate. Whether that needs to be done at a national

or regional or State level is an open question. Those weights are

all important, really. You can add many, many things to the list

and dissipate the effect on any one, or you can just change the

weights and change, as some may have expressed some concern

about, the principal objectives of the program.

But certainly, carbon sequestration, energy, livestock waste are

things that appear to be eliciting greater concerns now than a decade ago. So those might be considerations for change.

Senator STABENOW. Absolutely. Well, thank you. We’ll look forward to the others that are coming forward with their specific

items that they would like to have us look at. I would again compliment Senator Harkin for always thinking outside the box and I

am looking forward to a wide discussion, Mr. Chairman, about the

options before the committee.

[The prepared statement of Senator Stabenow be found in the

appendix on page 38.]

The CHAIRMAN. Thank you very much.

Senator ALLARD.

17

STATEMENT OF HON. WAYNE ALLARD, A U.S. SENATOR

FROM COLORADO

Senator ALLARD. Mr. Chairman, thank you. I am looking forward

to serving here on this committee as a new member.

The CHAIRMAN. It’s great to have you.

Senator ALLARD. I served on the House Agriculture Committee

during the Freedom to farm bill deliberation, EQIP was under the

jurisdiction of the subcommittee which I chaired over there. So I’m

interested in that, and obviously interested in conservation programs. We have a particularly unique State in the fact that I like

to refer to our State as two miles deep, from the highest point of

the State down to the lowest point. So watershed gets to be an important issue. We have peaks over 14,000 feet and the lowest level

of the State is somewhere around 3,200 feet. We have a lot of

plains area with dry land crops.

So we have a rather diverse State. Conservation programs are

very important to the State of Colorado. I think we need to continue to ask the question, how are our dollars are being spent, are

the programs effective and what not.

I have a question pertaining to the Small Watershed Rehabilitation amendments of 2000. They became law with considerable support from the Congress. I was just wondering what has NRCS done

to aggressively move forward on this Act, if anything.

Mr. ZINN. I think the NRCS people will be coming after us, and

can give you some pretty specific answers on that.

Senator ALLARD. Can you comment on the EQIP program?

Mr. ZINN. Yes.

[Laughter.]

Senator ALLARD. Would you comment on the EQIP program,

what your perception is on it and what needs to be done, if anything, to improve it?

Mr. ZINN. A couple of comments about EQIP. One is that the use

of priority areas has some real pluses for the environment, I think,

by focusing effort. But it’s had some minuses in the farm community for those people who don’t come from priority areas and have

found it much harder to access funds that they used to be able to

get more easily through ACP. So that’s one issue that I think some

people will raise, is whether this is working the way it was intended and is providing greater environmental benefits.

Another question, and one I raised in my testimony a little bit,

is what happens at the end of these multi-year contracts that people who participate in EQIP get? Are they under any obligation to

maintain the facilities they built or the practices they’ve installed

with the money they’ve received? I don’t believe they are, although

somebody from the Department who knows the program better

might offer some other insights on that. To the degree there’s no

future requirement of any kind, maybe some of those investments

aren’t going to be particularly long-lived as landowners change

their priorities about what they’re doing. I worry that perhaps policy should include something that comes after the EQIP contract.

A third question about EQIP is whether the length of contracts

and the funding amounts are really the appropriate sizes. Is that

buying the kinds of things we want, or do we need to make the potential for more money available to do larger things?

18

A final point about EQIP is the animal agriculture, for EQIP, as

you know, the first conservation program that’s explicitly dealt

with animal agriculture. As such, as you go on to design the next

farm bill, you should have some lessons that have come out of

EQIP that would help in policy formulation for the next generation

of conservation dealing specifically with animal agriculture issues.

Those would be my four points.

Senator ALLARD. What about, there’s a wildlife habitat incentive

program, WHIP. Can you comment about that a little bit?

Mr. ZINN. I know very little about what that Program has accomplished. I’ve heard lots of stories, anecdotes about good things that

have been done in various places. I don’t know what the sum of

those stories is, and maybe somebody from the Department could

answer that better. The other thing about the wildlife program I

think is it may be one of those programs that might be combined

or more fully integrated with some of the other conservation programs, because it is sort of small and sitting out there by itself in

the conservation context. I think the wildlife people might take a

different view of it, however.

Senator ALLARD. I think there’s just one small area in Colorado

that would be impacted by that. It’s probably one that the State

will look at a little closer. So I am like you, we’re going to wait and

see how this program moves forward.

I’d like to get back to the EQIP, but I guess my time’s out. I’m

sorry, Mr. Chairman.

The CHAIRMAN. We’ll come around again.

Senator ALLARD. Very good.

The CHAIRMAN. Senator Dayton?

Senator DAYTON. Thank you, Mr. Chairman.

I’d be glad to yield some time if you want to follow up on a question.

Senator ALLARD. No, I’ll wait. Thank you.

STATEMENT OF HON. MARK DAYTON, A U.S. SENATOR

FROM MINNESOTA

Senator DAYTON. I’m going to be brief, anyway, I have a group

of Minnesota farmers out waiting to meet with me. I’d say leading

into that that one of the relatively few programs on which I think

there’s broad consensus and support among all Minnesota farmers,

as well as hunters and environmentalists, are the value of the conservation programs. So I strongly support them and look forward

to finding out from these witnesses and others how we can

strengthen and improve them.

I was particularly interested in your response, Mr. Zinn, to Senator Allard’s question about the animal conservation, because in

Minnesota, we have a very, very serious and widespread problem

with the animal feed lot operations and lagoons, and a lot of producers, large, medium and small, who are really now under serious

financial constraints and are also wanting to be responsible stewards of their land, as well as their neighbors and others who in

some cases very desperately want to see them make the necessary

improvements.

So I’m really interested to see and explore, Mr. Chairman, as we

unfold these hearings and look at this, if there’s a way in which

19

that kind of need can be incorporated into one of the existing programs, or one of them can be expanded into permitting that kind

of activity to be undertaken. Thank you.

The CHAIRMAN. Thank you very much, Senator Dayton.

Senator Harkin?

Senator HARKIN. I don’t have any questions.

The CHAIRMAN. Senator Allard.

Senator ALLARD. Thank you, Mr. Chairman. Just briefly, on the

EQIP program. Basically you have the Environmental Protection

Agency implementing rules and regulations on feed lots. Then you

come in here and give kind of a supporting role, help them comply

with those requirements and regulations. Do you feel like you’re

able to keep up with the requirements that are being imposed on

feed lots by the Environmental Protection Agency with the support

that you should be getting from EQIP?

Mr. ZINN. I think others from the Department can answer that

a lot more precisely than I can. But my impression, is that more

resources and more money in this particular instance probably

would make a fairly big difference. Also, because the animal agriculture issue has largely emerged since the last Farm bill was enacted, there is very limited policy that gives animal agriculture a

priority within the conservation programs.

As you and others are stating, it sounds like that’s going to get

some serious rethinking. It probably will require some tradeoffs in

resources if more goes to animal agriculture and there isn’t more

to spread around, then it will have to come out of something else

that was being done in the past. Those are the kinds of questions

that are arising at this point.

Senator ALLARD. Thank you, Mr. Chairman.

The CHAIRMAN. Thank you very much, Senator Allard.

I just want to compliment you again, Ms. Smith, on this remarkable publication you have distributed today, the AgriEnvironmental

Policy at the Crossroads. Particularly in the opening parts which

support your testimony and the charts showing that soil erosion

has been significantly reduced. These are impressive figures now,

aggregated from 1982 to 1997, at least in one of your charts.

Even more dramatic, the change in the wetland picture, that

more wetlands have been restored than lost, so that the graph that

you have there, showing from 1954 to 1974 shows in fact a loss,

it looks to me like, of over 600,000 acres. Now these are equated,

and a very small chart showing a little in, a little out, but in essence a net gain as opposed to a dramatic loss.

Finally, the lessons learned that you have evaluated there are

very helpful as we take a look not only at the achievements but

some of the problems that have been involved in that and the challenges. So I commend this to all Senators and their staffs and

members of the general public, because that will enhance our discussion with the facts.

Mr. Zinn, you have likewise, in behalf of your service, as well as

your own personal testimony, been very, very helpful.

So we thank you both and hope that you will continue to be resources for us as we proceed through this chapter of the Farm Bill.

Ms. SMITH. Thank you, Mr. Chairman.

Mr. ZINN. Thank you.

20

Senator HARKIN. I want to join the Chairman in thanking you

both for many years of service. We appreciate it very much.

The CHAIRMAN. It’s a privilege to call now our second panel of

this hearing, Mr. Thomas Weber, the Deputy Chief for Programs,

National Resources Conservation Service of the USDA, and Mr.

Robert Stephenson, Director of Conservation and Environmental

Programs of the U.S. Department of Agriculture, both coming from

Washington, DC.

I’ll ask you to testify in the order that I introduced you. First of

all Mr. Weber, then Mr. Stephenson. Your statements will be made

a part of the record in full. So I ask that you summarize appropriately and hopefully within a 10 minute period, then the Committee will commence questioning. Mr. Weber.

STATEMENT OF THOMAS A. WEBER, DEPUTY CHIEF FOR

PROGRAMS, NATURAL RESOURCES CONSERVATION

SERVICE, U.S. DEPARTMENT OF AGRICULTURE,

WASHINGTON, DC

Mr. WEBER. Thank you, Mr. Chairman, members of the Committee. Thank you for the opportunity to be here today and provide an

update on the conservation programs that are implemented by the

Natural Resource Conservation Service. As you know, farmers

across America are faced with increasing pressures to maintain a

productive and profitable business. We know that farmers want to

be good stewards of the land, and our mission is to help them to

be good stewards with their conservation challenges, and at the

same time assure that they remain productive.

The backlog of our program requests is a testament to the commitment of the farmers and ranchers of this country to conservation. Today I would like to highlight the many ways that our conservation programs are making a difference and describe the large

demand and interest in these programs that NRCS has serviced.

Our programs are voluntary. And they are to help farmers and

ranchers deal with regulatory pressures. The public benefit from

these programs has been so eloquently described today, the societal

benefits are an improved environment for all of us in America, a

point that I feel has not been adequately addressed in this country.

In short, I believe the conservation programs that this committee

included in the last Farm bill are win-win. They’re win-win for

farmers, they’re win-win for America.

But before I outline these programs, I want to say a word about

the cornerstone of everything that we do, that is, the Conservation

Technical Assistance Program. Everything we accomplish is contingent upon the talents and skills of those people that are out there

in the countryside, in our field staff, and the partners that we work

with to help farmers and ranchers. They’re trained professionals

with the technical tools and skills and standards to get the job

done. They’re in every community in this country and rural America. They’re there to help people. The partnership that we have

with State and local people, conservation districts, State conservation agencies, Resource Conservation and Development councils

and others are just as important to helping get the conservation

done as part of what we do as well.

21

Having said this, I want to move on quickly to a review of the

1996 Farm bill programs and highlight several of them. First, the

Wetland Reserve Program. It has been mentioned on a number of

occasions here today. It’s meant to preserve, protect and restore

wetlands, where functions and values have been depleted or diminished. It is making a substantial contribution to the restoration of

the migratory waterfowl habitat in this country, and other habitat

for birds and animals, including endangered species.

The 1996 Act authorized a total of 975,000 acres in the program.

At the conclusion of fiscal year 2000, the program had almost

reached the maximum. However, this year’s appropriation provided

an additional 100,000 acres, allowing the fiscal year 2001 acreage

to increase to 140,000.

We have had five times as many acres offered voluntarily by

landowners to be enrolled in this program than what we can provide funds for. It is clear that WRP continues to be a very popular

program with farmers and has extremely strong support around

the country.

Second, the Wildlife Habitat Incentives Program provides up to

75 percent of the cost share for implementing wildlife habitat practices. The program had an initial funding cap of $50 million. As a

result of the strong need for this program, those funds were exhausted in fiscal year 1999, at which time we had 1.4 million acres

enrolled in over 8,600 long-term contracts.

At the beginning of 2001, the former Secretary did decide to uti- lize an additional $20 million for WHIP from funding that was in

Section 211(b), which was the Agricultural Risk Protection Act of

2000, for WHIP. Again, our successes and landowner interest indicates that WHIP is a program with very strong support in the

countryside.

The next program has to do with farmland protection, a point of

interest around this country in terms of development and concern

over conversion of agricultural land to other purposes. It does provide cost sharing for development rights and easements. There was

$35 million available for it in the initial 1996 Farm bill. At this

point in time, all $35 million has been utilized.

Again, the former Secretary in 2001 did decide to place $20 million from the Agricultural Risk Protection Act into the Farmland

Protection Program. We know that agricultural land conversion is

a growing concern, and we note that the amount of land far overshadows the amount of money available.

I would speak quickly to the EQIP basically to say that we have

utilized all of the funds available for the EQIP program in every

year that funding has been available. It was authorized for $200

million a year. In many years, we’ve had $174 million for this program to address the resource needs. And I would point out also in

this program, each year we’ve had three to six times the demand

for the dollars that we have available.

These programs have been extremely successful, and we continue

to receive many times the applications that we can authorize to

fund for these. That’s good news.

Mr. Chairman, in closing, I would note that good conservation

doesn’t just happen. It takes all of us, including Congress, our conservation partners, and most importantly, the people that are livVerDate 11-MAY-2000 08:32 May 02, 2002 Jkt 074345 PO 00000 Frm 00027 Fmt 6633 Sfmt 6633 74345.TXT SAG1 PsN: SAG1
22

ing on the land that make all of this happen. We’re proud of our

accomplishments. We look forward to working with you to build on

all that we’ve done for the future. This concludes my statement,

Mr. Chairman, and thank you again for the opportunity to appear.

[The prepared statement of Mr. Weber can be found in the appendix on page 51.]

The CHAIRMAN. Thank you for that very strong statement. We

look forward to questioning you in a moment.

First, we’ll call on Mr. Stephenson for his testimony.

STATEMENT OF ROBERT STEPHENSON, DIRECTOR,

CONSERVATION AND ENVIRONMENTAL PROGRAMS

DIVISION, FARM SERVICE AGENCY, U.S. DEPARTMENT OF

AGRICULTURE, WASHINGTON, DC

Mr. STEPHENSON. Good morning, Mr. Chairman and members of

the committee. I’m pleased to appear before you to discuss conservation programs.

The Conservation Reserve Program, implemented by the Farm

Service Agency, is the Federal Government’s single largest environmental improvement program on private lands. Today the CRP is

safeguarding millions of acres of American topsoil from erosion, improving air quality, increasing wildlife habitat and protecting

ground and surface water by reducing water runoff and sedimentation. Countless lakes, rivers, ponds and streams are cleaner,

healthier and more useful because of the CRP.

The CRP’s success, I believe, is accomplished through local voluntary partnerships between individuals and Government. Instead

of compelling participation, the program uses financial incentives

to encourage farmers to voluntarily establish valuable conservation

practices, such as permanent covers of grass and trees on land subject to erosion, where vegetation can improve water quality or to

provide food and habitat for wildlife.

Initially, the CRP emphasized reducing soil erosion. However,

the public was becoming more sensitive to other environmental

issues, such as condition of streams, lakes and rivers, and the need

to preserve threatened wildlife species. In the 1990 Farm bill, Congress broadened the program’s focus and today, CRP’s objectives include improving water quality, turning marginal pasture land into

riparian areas, increasing wildlife habitat and other environmental

goals.

In 1993, total enrollment stood at 36.4 million acres, which is today’s maximum authorized level. Generally, farmers bid competitively for CRP contracts, maximizing the power of each dollar

spent. Only the most environmentally sensitive cropland is accepted, while less vulnerable farm land remains in production. The result is an effort that targets the most sensitive land and helps

farmers while it keeps productive farm land growing food and fiber

at a competitive cost.

The CRP’s benefits go far beyond environmental improvement.

By idling highly vulnerable and environmentally sensitive cropland, the program has produced a wide range of economic benefits.

In an early study, the Economics Research Service indicated that

the economic benefits provided by the CRP total an estimated $8

billion or more per year.

23

In October of 1997, FSA implemented the Conservation Reserve

Enhancement Program. That’s a partnership between the Federal

Government and the States where CREP addresses nationally significant environmental problems by targeting CRP program resources. CREP is working to address water quality problems in the

Chesapeake Bay, restore salmon habitat in the Pacific Northwest,

protect New York City’s water supply, enhance water quality in Illinois and Minnesota, restore a portion of the Great Lakes, improve

wildlife habitat in California and North Dakota, protect water supplies for 54 communities in Missouri and restore vital estuaries in

North Carolina.

For certain high priority conservation practices yielding highly

desirable environmental benefits, farmers and ranchers may sign

up at any time without waiting for an announced signup period,

provided certain eligibility requirements are met. Continuous

signup allows management flexibility in implementing certain special conservation practices on cropland. These practices are designed to achieve significant environmental benefits, giving participants a chance to help protect and enhance wildlife habitat, improve air quality and improve the condition of America’s waterways.

Through mid-January of this year, over 1.4 million acres have

been enrolled under continuous signup practices such as filter

strips, riparian buffers, contour grass strips and grass waterways.

The continuous signup effort has significantly increased the enrollment of these environmentally important practices. For example,

enrollment of filter strips has increased over 600 percent compared

to the land enrolled prior to the enactment of the 1996 Farm bill.

On April 13 of last year, USDA announced new financial incen- tives totaling up to $350 million over a 3 year period for producers

participating in certain practices of the CRP continuous signup.

These new incentives included a signing bonus of $10 per acre for

every year of the contract, or $100 to $150 per acre. A payment

equal to 40 percent of the practice’s installation cost, increases in

maintenance create incentives for practices involving tree planting,

fencing or water developments, and updated marginal pasture land

rental rates to better reflect the market value of those lands.

FSA also implements the Emergency Conservation Program,

which provides emergency cost share funding to agricultural producers to rehabilitate farm land damaged by natural disasters and

for carrying out emergency water conservation measures during periods of severe drought. The Pasture Recovery Program, which provides payments to reestablish permanent vegetative cover to owners and operators who suffered pasture losses and the Debt for Nature Program for persons with FSA loans secured by real estate

who may qualify for cancellation of a portion of their indebtedness

in exchange for a conservation contract with a term of 50, 30 or 10

years.

I appreciate the opportunity to testify today, and I’ll be happy to

respond to your questions.

[The prepared statement of Mr. Stephenson can be found in the

appendix on page 58.]

The CHAIRMAN. Thank you very much. Let me start the questioning, we’ll have a 5 minute round for each of us, and more if indiVerDate 11-MAY-2000 08:32 May 02, 2002 Jkt 074345 PO 00000 Frm 00029 Fmt 6633 Sfmt 6633 74345.TXT SAG1 PsN: SAG1
24

cated. In your testimony, there’s a table at the end of it, Mr. Stephenson, you have Conservation Reserve Program current enrollment level, which is a very useful chart, indicating the number of

contracts by State, the number of acres in the CRP, and the average rental rate, presumably the number of dollars per acre that

were a part of that contract.

The differences between the States and the average rental rates

are substantial. There’s a good explanation for that. Would you

give that? Give us some idea of the bidding process, and why for

example, in Iowa, let’s take the distinguished Ranking Member’s

State, the average rental rate is $97.86 an acre. In another State

where there are lots of acres, North Dakota, for example, it looks

to me like it’s $33 an acre.

What would be the differential between an acre in Iowa and an

acre in North Dakota, given the fact there are many contracts and

many people involved in this?

Mr. STEPHENSON. We have tried to spend considerable resources

working with the FSA economists, the NRCS economists, as well

as in ERS, to approximate local prevailing rental rates. That is a

rental rate for agricultural dry land values. We start the process

by asking all of the local FSA and NRCS employees and other

USDA employees, such as extension service, to sit down and tell us

by soil type, NRCS maintains a data base of soil types nationwide.

They approximate those values and our goal is to not affect the

market, but to approximate what a farmer would get if it was

being cropped.

That’s done for each soil type in the country. The farmer, when

he makes his offer or she makes her offer, the NRCS will tell us

the predominant soil types for that offer. We will take the rental

rates that have been established for each soil type and we’ll do a

weighted average to come up with the maximum amount that we’re

willing to pay for that acre.

The CHAIRMAN. So you then have some benchmarks, and after

this, why, in some States or some districts, this may pile in with

all sorts of offers, in that case presumably the final bid is lower

than your maximum, maybe substantially. Is that the case?

Mr. STEPHENSON. In part of our evaluation of the offers, if a

farmer is willing to accept less than the maximum that we’re willing to pay, we give them additional credit, because we view it as

saving taxpayer money.

The CHAIRMAN. What do you mean by give them additional credit?

Mr. STEPHENSON. In the environmental benefits index, we consider six environmental factors plus the cost that the taxpayers——

The CHAIRMAN. I see. So that would give him some more points,

along with the rest of the economic side of this thing. It was very

interesting.

In taking a look at this table, of course it covers the whole country, but what is the current situation with regard to CRP? There

has not, as you pointed out, been an overall signup in the fiscal

year. But if we were to have another signup, would you anticipate

there would be a great many more bidders than acres available in

this program?

25

Mr. STEPHENSON [continuing.] I would expect, and I might ask

Mike Linsenbigler, who’s here with me, but I would expect that if

we had a signup this year, which we are not scheduling one, we

would anticipate probably somewhere between 2 and 3 million

acres being offered. I wouldn’t be in a position to estimate how

many of those would be accepted, but we would have about a million acres coming due this fall.

The CHAIRMAN. In the initial idea of CRP, the hope was that

many landowners would sign up for very long periods of time because they were going to plant trees. It would not make sense to

plant the trees and cut them down after 5 years or some intermediate period. What has been the experience of the program with regard to those acres that are now in trees, and therefore perhaps

in a more permanent status of conservation?

Mr. STEPHENSON. Many of those acres have been re-offered for

signup, some of which we accepted. I’m not sure—do you have any

numbers, Mike?

Mr. LINSENBIGLER. Historically, the rural bank program, about

95 percent of them plan to plant trees, remain in trees.

The CHAIRMAN. So the contract expires, the farmer would not receive more money, but nevertheless received money for the initial

contract, planted the trees and has then a timber stand, and as you

say, in 95percent of cases, left the timber stand, continued on as

an asset for the property.

Mr. STEPHENSON. That’s true, except that those acres that were

under CRP contract that were about to expire were eligible to be

re-offered.

The CHAIRMAN. So perhaps some of these timber stands are reoffered and additional compensation was paid.

Mr. STEPHENSON. That’s correct.

The CHAIRMAN. With the other programs that you’ve mentioned

that are less extensive than CRP, is there a similar bidding process

for those? How do people get into them and how much are they

paid?

Mr. STEPHENSON. Under the Emergency Conservation Program,

it’s contingent upon some type of disaster condition, tornado, hurricane, drought. Once a geographic area is approved, we will make

available cost share funding for approximately 64 percent of the

out of pocket costs of a producer.

The CHAIRMAN. Sixty-four percent?

Mr. STEPHENSON. That’s correct. Under the Pasture Recovery

Program, that is really a very simple program. It’s a cost share program for seeding. Our cost share rate is 75 percent.

The CHAIRMAN. How about the wetlands programs? How do people bid to get into that?

Mr. STEPHENSON. I need to defer to Mr. Weber.

Mr. WEBER. Thank you, Mr. Chairman. The Wetland Reserve

Program, people would actually come forward with an offer to have

either a permanent easement, a 30 year easement or actually full

restoration of the land without an easement. There are different

cost shares for those, based on the value of the land, or the cost

of restoration. Those proposals would come into the State technical

committee, which is made up of not only the NRCS that would

chair it, but also the other Federal agencies involved, made up of

26

wildlife groups, other interest groups in the State, agricultural

groups.

They actually go through a process of evaluating those, setting

point values and ranking them in order. Then based on the money

available, they would go down that list in that order and then

make offers accordingly.

The CHAIRMAN. So you have a point system or some evaluation

also for the wetlands?

Mr. WEBER. That is correct. That’s essentially true in any of our

programs.

The CHAIRMAN. Of all the programs. Now, is information about

these programs widely available to producers throughout America?

I presume the answer is yes, but if so, how is it made available?

If you are a landowner, somewhere in America and you’re interested in any of these programs, how would you find out if you were

eligible or how do you go about the bidding process?

Mr. STEPHENSON. I think probably both agencies maintain a very

rigorous public information program. Each of our agencies have offices, most of them co-located throughout the country in agricultural areas, where local people answer those questions on a routine

basis. In addition to that, we both have I think probably fairly active web sites that get quite a lot of activity where there’s extensive

information about all of our programs.

The CHAIRMAN. I thank you for those responses. It’s obvious from

the cumulative totals that you have mentioned that a great deal of

conservation good is occurring, likewise, substantial income for

many landowners in America. Both are of interest, obviously, to

this Committee.

Senator Harkin.

Senator HARKIN. Thank you, Mr. Chairman. Thank you both for

excellent verbal and written testimonies here. Again, thank you for

your leadership in both the FSA and the NRCS.

Mr. Chairman, I think there is some really valuable information

here that’s been delineated in a concise form, and I appreciate that.

The Chairman touched on those with the tables.

Just a couple of things I’d like to hit on here. First was, Mr. Stephenson, let me look on yours, at the farmable wetlands pilot program that we just passed last year. We put the money in the appropriations bill for it. As you point out, this covers sort of the

upper Midwest, I don’t know how many States, maybe six or seven

States total. I’ve heard from farmers in Iowa who are anxious to

sign up in this. They’ve been waiting and I just want to know, do

you have any idea when we’re going to be able to start making

these signups available, and making these contracts?

Mr. STEPHENSON. We’re very hopeful we’re going to have something available this spring. Immediately after the bill was enacted,

we had a group of field employees come in, and NRCS also participated. We have drafted a rule for the FEDERAL REGISTER, which is

in clearance now, in the Department. We’re hoping that’s going to

move very quickly, and then this spring, we’ll be able to begin entering into contracts.

Senator HARKIN. Spring out our way is what, April?

Mr. STEPHENSON. I’ve only been permitted to say this spring.

[Laughter.]

27

Senator HARKIN. All right. Well, please take back to the Department the urgency of this. There’s a lot of people, I’m sure it’s true

in Minnesota, too, I’m sure they’re waiting to sign up there, and

ready to go. This again could be a valuable asset and help this year

to many of our farmers, especially some of our smaller farmers that

have the less than five acres that they could put away and get

some help on that. So I hope you’ll move ahead on that aggressively.

Second, I’ve heard some concerns out our way about how well the

two departments, NRCS and FSA, are working together. Basically,

as we know, you do the technical work and you pay the bills, basically. What I’ve heard is that in some cases, well, I’ve heard from

some of the FSA people, well, NRCS is not getting the technical

work out in time, I heard from the NRCS people, well, FSA is not

getting the paperwork done on time and paying it on time.

So I don’t want to say that this is something I hear constantly,

but I hear it enough to warrant my question to you as to how you

feel about the working relationships between your two departments. Is there something that we ought to be looking at here that

might provide for a better delivery of these services? I just ask for

your comments on that.

Mr. WEBER. Senator Harkin, I’ll try to take a shot at that, and

Bob, I’m sure, has some thoughts. It’s my personal view these two

agencies work extraordinarily well together, considering the complexities of all the programs and the interactions that take place,

both from the technical side and the financial side. I’ve worked

with a group of professionals, Bob here and his staff, and others,

that I have a tremendous respect for. I think we can do business

together. Yes, there are times that come up that individuals may

not get along out in the countryside. But I think we work through

those collectively and together, and we’re able to do an excellent

job.

I think the agricultural producers that are benefiting from the

conservation out there and the payments that they’re getting from

that process are being served well.

The CHAIRMAN. Mr. Stephenson, anything to add?

Mr. STEPHENSON. Two things come to mind. First off, we have,

I think in many cases, vigorous debates down at the Department

between us. I think by and large, we end up with a better product.

Sometimes we try not to be personal, but sometimes it’s certainly

loud. But the end of that, I think, generally has resulted in a better

product.

As far as the situations where maybe one side of the Agency is

pitted against the other out in the field, I think we both committed

to each other a long time, for many years now, that when those

come up, we try to address those. If there’s a problem, we want to

get to the bottom of it, because we can burn a lot of resources.

That’s not our goal.

Senator HARKIN. Well, again, I’m not trying to pick sides here or

anything like that. Like I said, it’s not something that I hear a lot

of, but I hear about it. And it sort of raised a question in my mind,

Mr. Chairman, why, we’ve been doing this this way for a long time

and do we need to continue to do it this way? In other words, since

NRCS really has the bulk of the work to do, they’re the ones that

28

go out and do the bulk of the technical work and the help and that

type of thing. Why shouldn’t they be the payers of the bills, too?

Why shouldn’t they just run the financial end through NRCS, too?

I just ask that as an open question. Maybe there are some reasons why, but I want to test that hypothesis. And I’d like to test

it as we move along this year in our programs. Maybe we need to

streamline it just a little bit more.

So I leave that out there, I don’t need a response on that, but

I’d like to kind of look at it as we go along, why can’t we just do

it through one agency, rather than involving two and have FSA do

some other things that maybe they should be involved in. I just

leave that out there for that. There maybe some reasons that I am

not looking at.

Mr. Stephenson, again, I don’t know if I’m duplicating a question

here that the Chairman got into. I was trying to listen carefully,

and maybe you did respond. You talked about this point system,

but I’m trying to figure out, in designing the incentive payments

for the continuous signup practices, that only some of them are eligible for these incentive payments. I’m trying to figure out how you

determine which practices are eligible for the incentive payments

and which are not. I’m talking just about those incentive payments

now.

Mr. STEPHENSON. On the incentive payments, they were born out

of a number of meetings that NRCS conducted out in the countryside, a number of meetings that FSA conducted out in the countryside. Then I believe there were some joint meetings where farmers

were basically asked, what are the impediments to enrollment and

what can we do to remove those. What we were told by those

groups is by and large, what resulted in the incentive payment and

the structure and the amounts that we came up with. I think we

were very responsive to what we were told out in the countryside

by the summation of all those several meetings that occurred over

a couple of year period.

Senator HARKIN. In other words, it was based on NRCS’s?

Mr. STEPHENSON. NRCS did a series of public meetings and FSA

did a series of public meetings, then I believe there were some joint

agency meetings too.

Senator HARKIN. So out of that, that’s how you determined what

practices would be available for the incentive payments?

Mr. STEPHENSON. Yes.

Senator HARKIN. Do you get much feedback on that from your

customers out there? Have they been pretty satisfied?

Mr. STEPHENSON. As to the levels today? The major complaint

we’re getting now, or that I’ve received anyway, and essentially the

only complaint, it has been because we did not make them retroactive, has been the concern that’s been raised to me, about what

the new levels were.

Senator HARKIN. And I hope this may not, I ask this question,

but you may not need to answer it, maybe we need to get other

people from the Department up, some of the budget people. But

you pointed out, Mr. Weber, how much over-subscribed these programs are. It’s been my experience, too, out in the field, that

they’re just way over-subscribed. I think that doesn’t really tell the

whole story. They’re over-subscribed, but I think there’s a lot of

29

people that, they see how long it takes, the odds are they’re not

going to get in, so they don’t even sign up anyway, they get discouraged from coming in. I think that may be another added

amount onto that that’s not reflected in the figures. EQIP you said

was four-times greater?

Mr. WEBER. It varies from three to 6 times, depending on the

year.

Senator HARKIN. Well, do you have a table, or do you have something that would show us how over-subscribed each of the programs are?

Mr. WEBER. I have individual figures. I don’t have it all in a

table. I could outline it very quickly for you, verbally, if you wish.

Senator HARKIN. Well, I don’t know if I want to take the time

of the committee here. I’d kind of like to take a look at it. Send

it up, or something like that. What I’d like to see is, what data do

you have on what each, line up each one of those programs and

give me a little bit of history on the subscription rate and how

much they’ve been over-subscribed. Then I’d like to know some figures on the funding, because I want to see what would the funding

level be required if we were to meet 100 percent of the people that

subscribed. That’s what I’m trying to get a handle on.

Maybe that’s some place, you’ve got those figures handy. I just

could not get my hands on them the other day and I’d like to take

a look at them.

Mr. Chairman, thank you very much.

The CHAIRMAN. Thank you very much, Senator Harkin. In fact,

I think the question that Senator Harkin just asked would be of

really great interest to the whole committee, because clearly as a

part of our legislative work, we’re going to try to evaluate the demand for the programs. We are not at liberty as a committee to determine all the monies, and we’ll have to be working with others

on that. But it would be useful to know the parameters, and that

testimony, if you could give that to the committee, as well as to the

Ranking Member, it would be much appreciated.

Mr. WEBER. We’d be pleased to provide that.

[The information can be found in the appendix on page 56.]

The CHAIRMAN. Senator Allard.

Senator ALLARD. Mr. Chairman, I want to follow up on that last

question that I tried to ask the other panel. I felt like you would

be more in a position to answer that. It has to do with the watershed program, to be more specific, the Small Watershed Rehabilitation Program. I’d like to have you comment on what’s happening

with that program.

Mr. WEBER. Thank you, Senator Allard. The Small Watershed

Rehabilitation Amendments to the 2000 Public Law that was

passed and signed by the President in November authorized us to

work with sponsors of small watershed projects that come under

Public Law 556, Public Law 534 and Resource Conservation Development Acts.

We have identified and we provided a report to Congress, I think

it’s probably been a year or two back now, identifying in a quick

assessment, and I need to underline quick, that we have at least

2,200 structures in this country, and I’m talking dams, small dams,

that are in need of significant renovation, rehabilitation or breachVerDate 11-MAY-2000 08:32 May 02, 2002 Jkt 074345 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 74345.TXT SAG1 PsN: SAG1
30

ing because of potential hazards to life and property. The cost of

that we had estimated from that quick study was about $543 million.

This is a major issue in terms of public health and safety, we believe. The legislation has been authorized; however, there are funding issues that need to be dealt with of course by Congress in that.

At this point, there are no dollars funding that effort. There are

dollars for pilot rehabilitation projects that were authorized under

the Emergency Watershed Program, the last supplement that came

through, the last two supplements actually, a total of $16 million.

Those States are Wisconsin, Ohio, Mississippi and New Mexico

that are now going through pilot efforts to road test the process

that we need to go through to actually rehabilitate these structures. Those States continue to work through as sponsors. We have

roughly 15 dams we’re looking at starting this spring or summer

to actually do construction to rehabilitate.

So that’s where we’re actually doing some things out there on the

landscape under emergency legislation. However, under the new

legislation for rehabilitation there are no dollars at this point.

Senator ALLARD. The sponsors of these are responsible for operation and maintenance, do I have that right?

Mr. WEBER. That is correct.

Senator ALLARD. Then the Federal Government is supposed to

come and provide cost share for rehabilitation. How do you divide

that responsibility up and how does that work?

Mr. WEBER. The legislation prohibits expenditure of Federal

funds for operation and maintenance issues. Where operation and

maintenance has not been carried out in fulfilling the responsibilities under the original project.

Senator ALLARD. Now, my question is, how do you draw the line

between maintenance and rehab?

Mr. WEBER. Basically, a rehabilitation issue would be things like

where concrete has passed its useful life, let’s say 50 years. You

have spoiling, you have cracking, you have deterioration. That

would not be a normal operation and maintenance issue. You have

metal pipe that corrodes and over 50 years, you would certainly in

parts of this country have major problems there for replacement.

That’s how we go out and look at every one.

Senator ALLARD. Let me ask you about the size of the dam. The

Bureau of Reclamation has some responsibilities for dams. I’m not

exactly sure how far that goes. Is there some overlap between what

you’re doing on the small watershed side with dam safety and

what-not, and what the Bureau of Reclamation may be doing?

Mr. WEBER. That’s an excellent question. My answer is no, because we do have, both organizations, including the Corps of Engineers, have a clear distinction in terms of their authorization. We

work on watersheds that are less than 250,000 acres under our legislation, and the others work on the bigger projects. So our dams

tend to be much smaller. But we do have roughly 10,000 of them

around the country.

Senator ALLARD. Two hundred fifty thousand acres, that probably limits you pretty much to flatter land areas? In Colorado,

they’re larger because of our heavy slope and what-not, I would

31

guess in many of those areas it would go into the Bureau, is that

correct?

Mr. WEBER. Probably, I would guess, and we would have the

data. Most of the projects in Colorado I believe are in eastern Colorado.

Senator ALLARD. Or they could be maybe even real high in the

mountains, where there’s not much drainage up above.

Mr. WEBER. Right.

Senator ALLARD. OK. The States have passed dam safety laws

and what-not like that. We’ve had some high mountain reservoirs

which break in Colorado, cause a flood all the way down. Have you

gotten involved in any of those kinds of issues, high reservoirs, perhaps a small drainage area that would qualify, then there’s a break

or something? Have you been involved in any of that?

Mr. WEBER. Not to my knowledge in the high country. We have

had some other structures through flood events that we’ve had

damage to.

Senator ALLARD. In Colorado, we have a lot of, we have some

State laws passed on dam safety and everything. We have a problem with some of these structures with developments occurring

below the structure, it raises the issue about dam safety and whatnot. How do you think the program is working in coordination with

States like Colorado that have dam safety laws, that pass at the

State level what you’re trying to do at the Federal level with these

small watershed structures?

Mr. WEBER. In the work we’re doing out in the States, we’re

working directly with the State dam safety officials. Georgia is a

great example. The State is putting in several million dollars a

year to upgrade these structures to the current standards, which

is another issue that we need to deal with.

Senator ALLARD. Who sets the standards?

Mr. WEBER. Essentially the States.

Senator ALLARD. So they kind of drive your expenses?

Mr. WEBER. Yes, they would have the criteria requirements. But

we work directly with them.

Senator ALLARD. Is there an advantage to the State to have high

standards so they drive more spending by the Federal Government? Does that happen?

Mr. WEBER. I don’t believe so. I’m not that familiar with each

State’s standards.

Senator ALLARD. Mr. Chairman, thank you.

The CHAIRMAN. Thank you very much, Senator Allard.

Gentlemen, we thank you very much for your testimony. Senator

Allard’s questions brought forward again what you have mentioned, and that is the programs of many of our States that are significant. All of these programs work best where American Federalism is the most vital, that is, the Federal Government and the

State governments, and on even some occasions, local governments,

because of particular situations.

I can recall just anecdotally from our own family situation, my

dad attempting to work with whoever was there in the 1930s,

1940s, 1950s, and the programs we’ve talked about today are truly

remarkable as I reflect back on that time. We’ve had wonderful

hearings, I think Senator Harkin would agree with me, testifying

32

bit by bit over the course of the last 15 years or so, of how America

has been transformed.

We look at this, and we should, in the nitty-gritty of who signs

up and who gets paid and so forth. That is very important in terms

of equity, and we’ve got to try to work that out. But the overall

number of acres have transformed the interior of many, many of

our States. This is exciting to see. I can recall the flood control, erosion control business in Indiana, even when I was young enough

to understand all this, in the 1940s, really came down to just getting a bulldozer on your own and using the vacation money to put

more dirt on top of the levee or to clear whatever had to be cleared.

There really wasn’t much governmental impetus to this.

But if you planned to farm there for a good long while, you had

your own conservation ethic. It was your soil and your land that

was going to be affected.

More recently, when the CRP was founded, I had the privilege

of entertaining the Secretary of Agriculture, John Bloch, out on the

Lugar farm, to announce this thing, much to the horror of Dave

Stockman at the time, who was not aware that it was going to cost

so much.

[Laughter.]

The CHAIRMAN. But in any event, I’ve always seen Jack Bloch,

thanked him for coming, and for his own commitment. Because

USDA really was at the forefront of that, and an advocate for these

programs.

We appreciate again your testimony today. We look forward—I

would mention, for all members and staff, I convey that, our hearing tomorrow will be in the Hart 216, the larger chamber. It will

be at 9 o’clock again, and we look forward to a large number of witnesses who will come in from all over America to comment on these

programs.

Do you have any further comments, Senator Harkin?

Senator HARKIN. No, Mr. Chairman, again I thank you for your

leadership in this area over the past. We really have made some

great progress in this country, thanks to your departments, both of

you, and the programs we’ve had out there. As I said earlier, I

don’t mean to repeat myself, but I think we now have to think

about what’s down the pike here. Again, how we utilize the great

program that Senator Lugar started, the CRP program, that, we

have some test programs going now to use the biomass off that for

energy.

But still, it’s still CRP, it’s not erodible, you’re not plowing anything up, you’re planting grasses on that. There’s also carbon sequestration that takes place there. Perhaps we can utilize some of

that for other purposes other than just sitting there. It’s still wildlife cover and everything. So I think we’re thinking about ways of

enhancing some more farm income while not stepping back from

our commitment.

Thank you, Mr. Chairman.

The CHAIRMAN. The hearing is adjourned.

[Whereupon, at 11 a.m., the committee was adjourned, to reconvene at the call of the Chair.]

(33)

A P P E N D I X

FEBRUARY 28, 2001

34

35

36

37

38

39

40

41

42

43

44

45

46

47

48

49

50

51

52

53

54

55

56

57

58

59

60

61

62

63

64

65

66

67

68

69

70

71

72

73

74

75

76

77

78

79

80

81

82

83

(85)

DOCUMENTS SUBMITTED FOR THE RECORD

FEBRUARY 28, 2001

86

87

(89)

CONSERVATION

THURSDAY, MARCH 1, 2001

U.S. SENATE,

COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY,

Washington, DC.

The committee met, pursuant to notice, at 9:02 a.m., in room

216, Senate Hart Building, Hon. Richard G. Lugar (Chairman of

the Committee) presiding.

Present: Senators Lugar, Thomas, Nelson, and Harkin.

The CHAIRMAN. This hearing of the Senate Agriculture Committee is called to order.

In our hearing yesterday we heard testimony from representatives of the U.S. Department of Agriculture and the Congressional

Research Service and others about the administration and funding

of our current conservation programs.

As the author of the Conservation Reserve Program in the 1985

Farm bill, I was heartened to hear about the significant reduction

in soil erosion that has been achieved because of this program.

A recent report prepared by USDA’s Economic Research Service

details the important environmental gains that have resulted from

USDA’s conservation programs in general.

Another example cited was the Wetland Program. Through the

Wetlands Reserve Programs created as a part of the 1990 Farm bill

title, agriculture has become the single largest source of the U.S.

wetland restoration.

In my opening statement yesterday I stated that there are at

least three fundamental questions to consider as we begin debate

on the conservation title of the new Farm bill.

First of all, what should be the environmental goals of the next

farm bill designed to attain through voluntary incentive-based programs and what will be the costs and benefits to the landowners

and producers of achieving these broad goals? What will be the

costs and benefits to society of achieving those goals?

One of the challenges facing agriculture today is how to provide

food, fiber and industrial raw materials without jeopardizing the

future productivity of our natural resources. Private landowners

are the stewards of over 70 percent of our Nation’s land.

Our nation’s farmers and ranchers are facing increasingly complex environmental problems and regulations. Increasingly, taxpayers have been demanding and expecting increased conservation

achievements from farmers and the agricultural sector.

Given this situation, we have another question to consider.

Should there be a substantially larger investment by the Federal

Government in conservation cost share and incentive programs? By

90

seeking answers to these questions we will be trying to determine

the appropriate role for the Federal Government in assisting farmers, ranchers and other landowners in achieving conservation

goals.

Today, our hearing witnesses will include representatives of farm

organizations, conservation and wildlife groups and State agencies.

We will seek views on current programs as well as suggestions for

improvements and new approaches.

I welcome our witnesses today. We look forward to their individual testimony. Before I call upon the first panel, I call upon our

distinguished Ranking Member, Senator Harkin, for his opening

comments.

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

IOWA, RANKING MEMBER, COMMITTEE ON AGRICULTURE,

NUTRITION, AND FORESTRY

Senator HARKIN. Mr. Chairman, thank you again for holding today’s hearing on Conservation and America’s private agricultural

lands.

I first want to welcome my good friend, long-time friend and fellow Iowan, Paul Johnson. As you know, he is the former Chief of

the Natural Resources Conservation Service and former Director of

the Iowa Department of Natural Resources and a farmer from

Decorah, Iowa. He has been a true friend of farmers and a visionary conservationist in the mode of Aldo Leopold himself. I appreciate his long leadership in this area.

I also want to welcome two other Iowans: Craig Cox, the Executive Vice President of the Soil and Water Conservation Society

from Ankeny, and Dan Specht, a farmer from McGregor, Iowa,

who, like Paul Johnson has got a long history of hands-on active

involvement in conservation and with practical farmers of Iowa trying to figure out how we can keep more family farmers on the farm

and keep them actively involved in our conservation of our natural

resources.

So I welcome them here. I know we will have a lot to learn from

them.

As we learned yesterday, our farmers and ranchers have made

great strides towards protecting natural resources. Their role as

conservationists of our lands for future generations is every bit as

important as the food and fiber they grow.

We need to provide them with the tools they need to succeed and

expand our tradition of promoting conservation on private agricultural lands.

I commend our distinguished colleagues, Chairman Lugar and

Senator Leahy for their unwavering dedication to conservation in

past farm bills. I think in this new farm bill conservation must

once again be an integral part of farm policy. In fact, I would go

so far as to say that in the next farm bill I think that conservation

ought to be the centerpiece of our next farm policy because it encompasses, really, everything we are trying to do.

I will get into that more later on, but I think it ought to be the

centerpiece of our next farm bill.

It goes without saying that our farmers and ranchers are facing

stiff economic challenges, low prices for their crops. Our rural areas

91

are being decimated and we need a different view on how we can

reach out to help our farmers and ranchers and at the same time

give them the tools and the expertise and the financial help that

they need to continue to be good stewards of our soil and water and

air.

With that, Mr. Chairman, again I look forward to the testimony

from our witnesses. Thank you again for holding these very timely

hearings.

[The prepared statement of Senator Harkin can be found in the

appendix on page 142.]

The CHAIRMAN. Well, thank you very much, Senator Harkin. As

if obvious, I share Senator Harkin’s view of the importance of the

conservation title. That is one reason that we both decided to have

these hearings first.

We had one hearing from the Commission that was mandated by

the farm bill, summarizing an overall national point of view. But

in terms of chapters or categories, this is our first attempt and we

believe it is an important one.

I want to recognize Senator Thomas if he has an opening comment this morning.

STATEMENT OF HON. CRAIG THOMAS, A U.S. SENATOR

FROM WYOMING

Senator THOMAS. No, Mr. Chairman. All of us are having to come

and go. I just would make the observation that I agree with what

both of the gentlemen have said. It does seem it is our responsibility to examine and see which of these several programs are the

most efficient and effective, how could they be done more efficiency,

should some of them be combined and where should our priorities

be. It seems to me those are important issues as well.

So thank you.

The CHAIRMAN. Thank you very much, Senator Thomas.

Let me introduce now the first panel this morning. First of all,

Mr. Craig Cox, the Executive Director of the Soil and Water Conservation Society, a former Senate Agriculture Committee staff

member for Senator Leahy.

Mr. Cox moved to the USDA as Acting Deputy Under Secretary

for Natural Resources and Environment before taking his current

position with the SWCS. The SWCS is an international, nonprofit

organization of conservation professionals.

It is a special pleasure to greet Mr. John Hassell, who is Executive Director of the Conservation Technology Information Center

[CTIC], which is based at Purdue University and a part of the National Association of Conservation Districts and a public-private

partnership.

CTIC promotes the use of conservation tillage and residue management in ways to protect water quality. They also promote watershed planning as a basis for protecting water quality.

Mr. Nathan Rudgers is Commissioner of the New York State Department of Agriculture and Markets. He represents the National

Association State Departments of Agriculture. We are delighted to

have you on the panel this morning.

As Senator Harkin has mentioned, Mr. Paul Johnson is first of

all an Iowa farmer. He is a former Chief of the Natural Resources

92

Conservation Service and former Director of Natural Resources for

the State of Iowa. Mr. Johnson testified at the Senate Agriculture

Committee hearing reporting IDNR on the total maximum daily

load issue last February. We appreciated that testimony.

He lives on a farm in Iowa and is testifying today as a farmer.

I will ask each of you to testify in the order that I introduced

you, starting with Mr. Cox. If you could summarize your remarks

in 5 minutes, that would be great. We will be somewhat liberal in

allowing some spillage beyond that, as you have seen our practice

before. But to the extent that we can have those summaries, we

will get into the questions that the members will want to raise

with you.

Mr. Cox.

STATEMENT OF CRAIG COX, EXECUTIVE DIRECTOR, SOIL AND

WATER CONSERVATION SOCIETY, ANKENY, IOWA

Mr. COX. Mr. Chairman, Senator Harkin, and Senator Thomas,

I want to thank you so much for the opportunity to appear before

you this morning, and particularly on such an issue that is so critical to agriculture and to the American public.

I would like to applaud you for taking conservation on so early

in this process. I think that sends a good signal to all of us who

are so concerned about American agriculture and the American

landscape.

The Soil and Water Conservation Society held a series of workshops last year. We are in the process now of analyzing the content

of what we heard at those workshops and what it should mean for

reform in the farm bill.

We will issue a report in April with a set of detailed recommendations that we hope will be of service to you in your work

on the Farm bill provisions.

But even our preliminary analysis to day, I think, makes three

things clear that perhaps respond to some of the questions, Mr.

Chairman, that you asked at the outset. First off, we found that

people are worried. Participants across the country universally reported that USDA conservation programs are not meeting their

critical need for assistance, both technical and financial, to deal

with the environmental problems that they face.

That is making them worried both about the environmental and

making them worried about the sustainability and future of the

farms and ranches in their community.

The second thing we heard that was clear is that in this case

money matters a lot. Participants across the board wanted significant increases in existing conservation programs in order to address these critical natural resource needs. In fact analyzing the

proposals from participants for increased funding, we come up with

a proposal to double funding for existing conservation programs to

create about a $5 billion annual program.

That, in the opinion of our participants, would be a sufficient investment to deal with the most basic needs of agriculture in terms

of ensuring the sustainability of the agricultural enterprise by improving its environmental performance.

But, in fact, participants want to do much more than that. That

is what they are worried about. But what they hope for is an inVerDate 11-MAY-2000 08:32 May 02, 2002 Jkt 074345 PO 00000 Frm 00098 Fmt 6601 Sfmt 6601 74345.TXT SAG1 PsN: SAG1
93

vestment sufficient to go beyond pollution prevention and go beyond damage control to actually encourage widespread enhancement of the environment across this country.

In that context, our participants are really envisioning about a $10 billion annual conservation baseline program.

Now, I know at first blush talking about increases of that magnitude might seem outlandish, but I think if we take them in perspective we get a different view. Creating a $5 billion annual baseline would be an increase comparable to what you accomplished in

the 1985 Farm bill.

A $5 billion annual program would be about 20 percent of what

we spent last year in income and disaster assistance to farmers.

Now, even a $10 billion baseline would make this conservation effort about 10 percent of the total program outlays projected for

USDA in 2001.

We heard yesterday a report of over-subscription rates of three,

five or six times what we are able to satisfy with current funding.

So in that context, perhaps a $10 billion increase seems almost conservative.

The other thing we thought was clear is that there is no single

program or authority that can address all of these concerns. What

we really need is a comprehensive conservation title that has the

following components, we think:

First, a major emphasis on technical services and technical assistance, a major new emphasis on assistance to working lands and

farmers producing food and fiber whileprotecting the environment.

Strengthening our land retirement programs that thankfully we

have in place today, leveling the playing field so good stewards are

rewarded and not penalized for what they do and creating more authority and flexibility at the State level to tailor these programs to

unique circumstances.

I think, in conclusion, taking these kinds of actions would, in

fact, move conservation to the center of farm policy with tremendous benefits both for the American public and, I think, for the agricultural community itself.

Again, thank you for the opportunity to appear here today. The

Soil and Water Conservation Society would be more than willing to

do whatever we can to help you in the months ahead as you shape

critical conservation policy for this country.

[The prepared statement of Mr. Cox can be found in the appendix on page 144.]

The CHAIRMAN. We thank you for your testimony and your specific listing of objectives, funding as well as organization, of this

title.

Mr. Hassell.

STATEMENT OF JOHN HASSELL, EXECUTIVE DIRECTOR, CONSERVATION TECHNOLOGY INFORMATION CENTER, W. LAFAYETTE, INDIANA

Mr. HASSELL. Better soils, cleaner water for our nation’s environment and greater profits and a brighter future for our farming families. I want you to know that this is the message that we receive

from farming families across the nation as we go out and talk

about conservation programs.

94

Good morning, Mr. Chairman, and members of the Committee.

As I was introduced, I am John Hassell with the Conservation

Technology Information Center, a nonprofit, public-private partnership. We are a part of the National Association of Conservation

Districts; however, we are separately governed by a board of 25 directors, made up of industry representatives, farm press, conservation groups, environmental organizations and producers.

We also have nine cooperating Federal agencies that provide assistance to us. So we are truly a public-private partnership promoting conservation on America’s working lands.

What I wanted to do today was deliver to you information on

three points: One, information about the work that CTIC did during the 1985 and 1990 farm bills, a new initiative called Core 4

Conservation on which I have handed out some information to you,

and also recommendations for the next farm bill that came from

the NACD Farm bill task force.

CTIC was previously known as the Conservation Tillage Information Center and was started to promote conservation tillage and

residue management. CTIC supported the 1985 and 1990 farm bills

by instituting what was known as the Crop Residue Management

Initiative. We worked with producers to help them meet the compliance portion of their conservation plan.

Because of this effort, 75 percent of the compliance plans that

were written included Crop Residue Management. If you go back

and look at the chart that I handed out to you earlier, the blue and

red one; one side shows No-Till Adoption and Soil Erosion and the

other side shows Conservation Tillage Adoption and Soil Erosion.

Both show that during this Crop Residue Management Initiative,

that we had an increase in conservation tillage adoption and notill adoption and a decrease in soil erosion.

[The information referred to can be found in the appendix on

page 169.]

This is really significant. If you look at where both flattened out,

this is when CTIC dropped its Crop Residue Management Initiative. There is quite a correlation between the two.

We believe that this particular initiative was a success for several reasons. One is that we are a public-private partnership that

worked toward a common goal. There was new technology available

that allowed no-till implementation to be successful and be delivered.

The third was that we had a national marketing campaign that

delivered a consistent message about the benefits of crop residue

management.

Now, our new initiative is something that we call Core 4 Conservation. I am going to tell you the principles several times because I don’t want you to forget them. The principles of Core 4

Conservation are: Better soil, cleaner water, greater profits and a

brighter future.

Core 4 Conservation utilizes a systems approach to land treatment that provides environmental benefits while at the same time

looking at the economic benefits to producers.

So many times in environmental programs we push the environmental end and we never come back and talk about the economic

benefit to the producer. Producers are a lot more likely to adopt

95

something that is economically beneficial to them as opposed to environmental, even though they want to do the right thing.

The practices that we recommend under Core 4 Conservation and

the systems approach are: conservation tillage, buffers, nutrient

management, and integrated pest management, along with other

practices that would be determined upon a site-specific approach.

We understand from the scientists and experts that have looked

at these practices, that we can address 80 percent of the environmental issues on cropland if we use this approach. That is significant.

I believe that Core 4 Conservation is also a banner for all of agriculture to rally under. I really believe that today agriculture is

somewhat fractured and we really need something that we can all

unite under.

The goals of Core 4 Conservation are very clear and concise: Better soil, cleaner water, greater profits and a brighter future.

Members of the CTIC Board of Directors were participants on

the NACD farm bill task force. They took the Core 4 concepts to

that task force and they were implemented within the proposals of

the NACD final report. In that final report, and we agree with this,

and it does meet Core 4 Conservation, we want to maintain a voluntary incentive-based approach. We think that this is extremely

important:

Increasing local involvement in setting priorities and also in carrying out programs; utilizing science-based technology to make decisions; and increasing the technical assistance.

The task force also saw that there was something missing, so

they recommended the Conservation Incentive Programs similar to

Senator Harkin’s proposal that would reward producers for being

good stewards.

Now, the best intended programs are doomed to fail without a

mechanism for implementation. I think that we need to continue

to utilize the 3,000 local conservation districts as a delivery system

and at the same time we need to increase the funding for technical

assistance through our partners, the NRCS.

Federal programs can’t do it alone. We need the private sector

involved in it. We are a public-private partnership and the private

sector not only brings the necessary resources to promote conservation to their constituents, but they also provide us with cutting

edge research and products that make conservation affordable and

achievable for American farmers.

Without a vision on how American agriculture will profit and

thrive in the future, any conservation program will fail. We need

a mechanism for delivering information to agribusinesses, to technical advisers and producers.

We believe that Core 4 Conservation does have that. I think that

you will agree that everybody can buy into this approach. I believe

that if we look at better soils, cleaner water and greater profits for

farm families that will result in a brighter future for all of us. Core

4 Conservation is conservation for agriculture’s future.

Thank you.

[The prepared statement of Mr. Hassell can be found in the appendix on page 156.]

The CHAIRMAN. Thank you very much, Mr. Hassell.

96

Mr. Rudgers.

STATEMENT OF NATHAN RUDGERS, COMMISSIONER,

NEW YORK STATE DEPARTMENT OF AGRICULTURE

AND MARKETS, NATIONAL ASSOCIATION OF STATE

DEPARTMENTS OF AGRICULTURE

Mr. RUDGERS. Good morning, Mr. Chairman, Ranking Member

Harkin and Senator Thomas. Thank you for the opportunity to

offer testimony this morning on the conservation provisions of the

next farm bill.

My name is Nathan Rudgers and I am the Commissioner of Agriculture from the State of New York. I am here today, honored to

represent the National Association of State Departments of Agriculture. I am joined this morning by Commissioner Robert Wells,

from Alaska and Director Joe Hampton from Illinois, who have chosen to join us this morning as well.

Today I will present a broad outline of a new environmental program for America’s open space resources that are under the care

and stewardship of agricultural producers. I would like to stress

that this proposal is a work in progress. It is the product of extensive discussions over the past several months among commissioners, secretaries and directors of agriculture representing all regions of the country.

It was formally adopted as NASDA policy during our mid-year

meeting on Monday. We will further refine our proposal in upcoming months based on continued discussion with other stakeholders

and the input from this committee.

While we support the continuation of the existing conservation

programs and increased funding of those programs, we are recommending certain changes in WHIP, EQIP and CRP. For example, NASDA recommends that USDA give State more flexibility

and discretion in administering the EQIP Program by allowing oneyear contracts, removing the payment cap, and removing the national size restriction for livestock projects.

These and other proposals are described in detail in my written

testimony.

Despite the overall usefulness of existing programs, we see gaps

in coverage that are probably inevitable in any set of programs designed with the entire country in mind. In addition, we have seen

that Federal environmental regulation and policy has evolved to

further address issues such as concentrated animal feeding operations that were probably not prominent when existing conservation programs were designed.

Because meeting changing environmental demands is a make-orbreak challenge for certain producer groups, many of our State departments of agriculture have taken the initiative to design their

own programs tailored to address resource needs unique to their

States that cannot be met by existing conservation programs.

For example, through the leadership of Governor Pataki New

York has a highly successful Agricultural Environmental Management, or AEM, Program. It offers technical and financial assistance

in nutrient management planning and cost share assistance for improvements carried out under approved plans.

97

The primary goal of this voluntary, incentive-based program has

been to assure that New York farmers can meet environmental requirements while maintaining the economic viability of the farm.

The AEM Program is a partnership effort with local sewer and

water conservation districts and NRCS field staff, as well as staff

from my department, Cooperative Extension, farmers and people in

the community.

AEM and similar programs in other States supplement existing

Federal conservation programs while helping farmers bear the cost

of what we see as substantial public benefits such as open space

conservation, resource preservation for future generations, clean

air and water.

Just as the Federal Government has provided cost sharing to

help local governments upgrade water treatment infrastructure to

meet Clean Water Act requirements, we believe the Federal Government should provide assistance to States to help farmers and

ranchers meet environmental requirements.

Moreover, this assistance should be provided with enough flexibility so that States can target these funds to their own resource

needs.

Consequently, we are recommending the establishment of a new

block grant program for agriculture environmental stewardship

with these guidelines: First, money would come through cooperative agreements between USDA and State Departments of Agriculture which would be the lead agencies in designing and carrying

out these programs.

Second, program parameters would recognize activities that enhance protection of land, air, water and wildlife, defined in the

broadest terms possible to permit local flexibility while avoiding

duplication of existing planning systems and infrastructure.

Third, States would have the flexibility to allocate dollars between payments to producers and/or technical assistance based on

local needs and priorities.

Fourth, producer participation would be voluntary, incentivebased and targeted towards those environmental enhancements

supported by sound science and producing measurable results.

Fifth, contract payments to participating producers would be

made on an annual basis.

Finally, all programs would have provisions to protect individual

producer privacy and data confidentiality.

We note that expenditures in the environmental area are likely

to be considered ‘‘green box’’ payments in the context of our WTO

commitments, since their impact on commodity output would certainly be neutral.

We are also sure that our proposal will keep farming operations

that are most heavily burdened from failing while we work to improve opportunities for growth and profitability in agriculture as a

whole.

Speaking for all my State colleagues, I appreciate the opportunity to present views on how we can support good agricultural

environmental stewardship in every region of the country.

We look forward to working with the Committee on development

of a Federal agricultural policy that provides necessary tools for a

98

healthy and profitable agricultural industry that helps farmers continue to be good stewards of the land.

Thank you.

[The prepared statement of Mr. Rudgers can be found in the appendix on page 171.]

The CHAIRMAN. Thank you very much.

Mr. Johnson.

STATEMENT OF PAUL JOHNSON, FARMER, DECORAH, IOWA

Mr. JOHNSON. Thank you. Senator Lugar, Senator Harkin and

Senator Thomas, it is an honor to be here today to share some

ideas with you.

Since Aldo Leopold was already mentioned, I think I will start

with a quote from him written more than 60 years ago when he

wrote that ‘‘It is the American farmer that weaves the conservation

carpet on which America stands.’’

He went on to say, ‘‘Should he weave it with the sober yarns that

warm the feet or shall he also add the colorful yarns that warm

the heart and the eye.’’

I think we can say at this point that we do have the sober yarns

woven into America’s land. It has come about because of through

work that you have done in this committee and the conservation

policies that you have put together over the years.

At that same time, 60 years ago, Hugh Hammond Bennett, the

first chief of the Conservation Service was up here and actually delayed a hearing similar to this until the storm clouds moved in

with dust from the Great Plains. Out of that hearing came the Soil

Conservation Service.

I won’t delay. On the other hand, within 2 months the Des

Moines River will probably be very high in nitrates to the point

where the largest nitrate removal plant in the country will not be

able to handle it. We will ask people to not give babies water from

Des Moines.

We do still have problems. We have made great progress. We do

have problems and that is what we are about here today.

You are very important. If you went out and asked Americans

where conservation and environmental protection takes place in

this town, they will tell you the Department of Interior and the

EPA. I would suggest you are more important than both of them

put together, particularly over the next decade as we craft our policy. I don’t need to tell you, most land is private. Most wildlife

habitat is on private land. Most air quality, most water quality at

this point is dependent on what you do. Your failure to act has consequences that I think we have all talked about.

None of us like to farm under a heavy regulatory hand. Yet, I

think that will come if we don’t continue to make progress.

I would like to suggest five ideas for your consideration as we

move forward. First, I would suggest that you look at crafting a

clear, unambiguous national private lands conservation act.

Every 5 years or so we talk about conservation as productivity

of a farm bill. I think this is where it belongs, in this committee.

But just as we have a Wilderness Act and we have a Clean Water

Act and a Clean Air Act, places where the Nation focuses on these

99

issues, I think it is important that we consider doing that for private lands as well.

We suffer from a lack of support and a lack of understanding

across this country. I think that something like that could help to

do it. I don’t know exactly how it should be done, but I think it

should be a fascinating task to begin. I suggest that you take a look

at that.

I believe that it is time that we set a national goal to make sure

that a basic conservation carpet covers all of our land, cropland,

grazing land, and non-industrial private forestland.

I think that we know how to do it. We have been at this 60 years

now. I think we know how to be landowners to do it. It is called

‘‘money.’’ The conservation payment to every landowner in the

country who is willing to achieve a sustainable level of soil conservation and water protection would do more to advance conservation and environmental protection in our country at this point than

anything we have ever done. I think you ought to consider that. Craig Cox mentioned $10 billion. I think that he is in the ballpark. Can we do it? We are the wealthiest Nation this world has

ever seen. We are in good shape right now as well. I would urge

you to take a look at that.

Leopold once wrote that, ‘‘Conservation occurs when the farmer

takes care of land, but also when land takes care of the farmer.’’ I think that a basic conservation payment for doing basic soil and

water conservation will do more to have take care of farmers across

this country than just about anything else we could do as well. So

as you talk about conservation policy, I would certainly include

that.

You have a wonderful set of tools to put those colorful yarns into

our carpet, CRP, WRP, WHIP, EQIP, Farm Land Protection. All of

these are very, very good programs and I would urge you to keep

them. They all need additional funding. I think they all need more

flexibility as well.

I will cite an example of the continuous CRP. In Iowa, if you

have a waterway that you put in 10 years ago because you were

a very good farmer you are not eligible for a CRP contract. If you

plow it out and put soybeans in it for two years and come back,

you will get it in. I think this is downright dumb. I think that it

needs to be changed.

While we are on that issue, I think the possibility of partial field

enrollment, small pieces of a break in a field or a corner that is

hard to farm, if it meets a high enough EBI, I think it ought to

be included in that CRP as well.

Imagine a working land across this country that has a good conservation carpet in it with residue management and good nutrient

management and at the same time has these colorful pieces

throughout it of wildlife habitat. I think it would be an exciting

landscape for us to work on.

The conservation infrastructure is in place and I think many people in front of you have suggested that we need additional resources there.

When I came in and headed up the NRCS in 1994, I was handed

a ten percent cut. We lost ten percent of our people across this

country. These are conservation technicians and soil conservationVerDate 11-MAY-2000 08:32 May 02, 2002 Jkt 074345 PO 00000 Frm 00105 Fmt 6601 Sfmt 6601 74345.TXT SAG1 PsN: SAG1
100

ists. Don’t let that happen this time. I think a Nation that is so

well off, please don’t let that happen.

Number five, I would certainly expand our research in conservation. I view the commodities, things that come off of good conservation as conservation commodities, whether they are clean water or

wildlife habitat.

I would suggest that you put a great deal more effort into the

research to make sure that we can provide these conservation commodities to the American public.

Thank you for the opportunity to be here. I will be open to further questions or comments.

[The prepared statement of Mr. Johnson can be found in the appendix on page 182.]

The CHAIRMAN. Well, thank you very much, Mr. Johnson.

As an overall comment, let me make the point that your papers

all of them, will be made a part of the record in full. They are a

comprehensive chapter in themselves in terms of their recommendations.

For instance, the broad idea of having, as you were suggesting,

Mr. Johnson, conservation acts equivalent to the Wilderness Act or

Clean Air Act, or what have you is a remarkable concept itself.

As I read your paper before you came, I was still trying to envision technically how we do that, not that it is impossible in this

Congress, but nevertheless, trying to think through the jurisdictions. It is generally agreed among our colleagues that we have jurisdiction to deal with CRP and WHIP and what have you.

Perhaps our ambitions should be broader or should take others

into consideration. But it is an interesting idea, certainly. I just

wanted to comment, Mr. Cox. Imbedded in your paper is some very

interesting data in which you point out, as some others have, that

about 36 percent of farmers currently receive farm payments, as we

think of these, trying to supplement income, a safety net.

Your suggestion is that that could be a much broader net if we

centered much more of our income sufficiency on the conservation

situation, not supplanting the crop-by-crop or category-by-category

idea, but nevertheless, historically, the program crops whereas

other programs have come in and we have tweaked the system to

try to use those programs.

Each of you in a way has talked about this broad carpet of land

in our country, the stewardship that is involved, how comprehensively, either State by State or as a Nation, we try to coordinate

this.

So I thank you, really, for the height of your imagination, but

likewise your experience in dealing with all of this.

Now, let me just pick up one thought that was given to me yesterday by an official in my own home State who has taken responsibility for conservation and soil programs and what have you. She

pointed out that in Indiana— and I was not acquainted with is the

whole digital process now where all of the soil types for farm by

farm, county by county, may be available fairly shortly on the

Internet or at your personal computer—a farmer can take a look

at what his or her land looks like.

In fact maybe even an evolution of this would be to be various

overlays on this. This is an exciting idea. It hasn’t happened yet

101

in Marion County, Indiana, but will, I am advised, maybe within

18 months or so. So this is a way all of us can be better informed

wherever we are sitting about the precise soil situations that we

have now and the possibilities for the land for which we have some

stewardship.

Along with the information, of course, comes the possibility for

responsible action for the type of promotion, public relations, that

have been discussed today.

Just as I say, as we started out with the farm bill, in trying to

think through, given your guidance today, what do we do on the

general support of American agriculture through money?

Mr. Johnson says it helps to solve a lot of problems. Where

should the money go? One way, as you are suggesting, Mr. Cox, but

I want all of you to comment, is that much more of our support as

a people, as a Federal Government, should come through the conservation, through the stewardship of land situation, perhaps as

opposed to bushel-by-bushel subsidies or crops or what have you?

I am not certain, as we have other panels that will come in, that

everyone will agree with that. As a rule, when we take up farm

bills, we hear from wheat growers, corn growers, cotton growers,

rice growers, category by category, vegetable and fruit growers,

people in sugar, tobacco, a lot of people who have very specific and

urgent needs for preservation of what they are doing.

Occasionally, somebody comes in with the whole farm idea that

we ought to be supporting whatever people want to do as opposed

to doing it category by category because some categories always get

left behind, may not have been a part of the last farm bill. So they

try to get additional support in the next one.

But what you are suggesting is really something more fundamental than whatever the produce happens to be from this process and

that is really the land, the stewardship, the basic assets that we

are stewards of for a fairly short time, but are a part of our national heritage, maybe much more a part of our national responsibility.

Do any of you want to venture into this dangerous territory and

comment about money? Now, you might say, well, we should do all

of the above. In other words, there is nothing wrong with supporting the price of corn, but at the same time, why, I do believe something more for stewardship of the land and maybe that is what we

will end up doing.

My guess is ultimately there will have to be decisions in terms

of priorities. Some things are likely to be substituted in part, not

in full. So if you can, give us some underpinnings that we ought

to be thinking of.

Who of you would like to start?

Mr. RUDGERS. Mr. Chairman, I think it is very important to the

Commissioners, Secretaries and Directors of Agriculture across the

Nation that the next farm bill really be an integrated approach.

Let me offer a thought as to why conservation programs and additional assistance in the area of conservation has a direct impact

on all those commodities that you mentioned.

We are expected to compete globally and most, if not all of the

commodities you mentioned have an export outlook. Their future

success is tied to their ability to export. In order to do that, they

102

need to be competitive. In order to be competitive, they need to

have a level playing field.

That are expectations in this country and environmental action

and environmental care on our land is very high. In order to meet

those expectations, producers are already expected to provide significant impacts on their land and within their livestock operations.

In order to be competitive, though, they really need additional

support and additional investment to level that playing field. That

is why this type of an approach fits very well with the commodity

programs as well.

The CHAIRMAN. Mr. Johnson.

Mr. JOHNSON. In 1985, with the Food Security Act, we put together conservation compliance. We said that if you receive these

supports of various kinds, then you meet this basic requirement.

As we moved away from that, and I am not quite sure where you

are going to go this time around, but as we move away from it, we

lose that connection. That is why I suggest the basic conservation

payment to meet basic soil conservation requirements and basic—

probably nutrient would be the key issue when it comes to water

quality, that plus soil conservation.

We are spending, still, in the neighborhood of $20 billion a year

or more in agricultural policy. There are many ways to get that

money to support agriculture.

The problem out across the countryside today, as I see it from

where I am, is what is the Nation getting in return for this? I think

to shift a good chunk of that to paying for conservation commodities, and these are things that the Chicago Board of Trade doesn’t

pay you for. Yet, they are extremely important to the American

public. That is one way to look at it, to move in that direction, I

think.

I would urge you to take a look at that. I know that is a radical

change from where we have been. There are those who will say,

‘‘But farmers will do it anyway, so why should we worry about it?’’

Well, everywhere else in our society we get rewarded for doing

good things. I think most farmers will go above that with those

colorful yarns that I was talking about. But that basic conservation

mat across the country, I think the public would be very pleased

with.

The CHAIRMAN. Well, it is an unusual but important responsibility for this committee. Some would see this committee as being

purely advocates for producers. What you are suggesting is that the

committee should be advocates for the total American public.

Mr. JOHNSON. That is right, but the producer gains from it as

well and has some security. We have talked often about revenue

assurance for agriculture. What better way to do it than this?

Mr. COX. Mr. Chairman, I think the question you ask is very fundamental. The way I think about it is you are really asking what

do we want from agriculture? There are some other numbers in my

testimony that I find even more shocking in that 8 percent of farmers produce over 70 percent of the monetary value of agricultural

production. From a conservation point of view they are doing that

on only 32 percent of the acres in farms.

Not to be, perhaps, too outspoken, but if all we want from agriculture is abundant supplies of food and fiber, it is hard not to

103

come to the conclusion that we can do that with fewer farmers and

fewer acres in production.

I think moving conservation to the center provides us a way to

engage much of the rest of agriculture in a way that produces

something in addition to food and fiber, which is environmental enhancement.

I wouldn’t tread too deeply into suggesting how you balance traditional commodity support objectives with conservation objectives,

but if there is a bright spot, it would be that perhaps moving conservation to the center would provide additional options for producers, especially those producers who really aren’t touched by the existing commodity programs and yet still have the same responsibility to manage their lands as those farmers and ranchers who are

being supported through commodity programs.

So it may be that bringing conservation to the center could allow

you to fashion an agricultural policy that is tailored more to the realities of the diversity of agriculture and more to the realities of

the structure of agriculture.

Maybe perhaps even achieve some cost savings from having, essentially, a one-size-fits-all commodity program that works well for

some producers and maybe not so well for other producers and yet

costs a fair amount of money.

The CHAIRMAN. Mr. Cox, you have introduced an idea. I think

one of the Sparks, Incorporated reports gets into structure. I cited

that in another hearing. But 8 percent of the entities that are family farms, with $1,000 in sales or more qualifying to have a farm

entity. There are about 1.9 million such entities in our country.

But just 8 percent of these, 160,000, do produce, I think according to Sparks, much more than 70 percent of everything that occurs. If you take the next 10 percent, another 18 percent of the

farms do at least 7/8ths of all the business.

This leaves 82 percent of entities, 1.5 million plus. Sparks would

contend that 100 percent, on a net basis, of the income of all of

these farms comes from off the farm. This doesn’t mean that some

of the 1.5 don’t make some money, but the rest lose enough that

as a net group 82 percent are getting all their money from off the

farm somewhere and almost making nothing on the farm.

That is a structural revolution that is not well understood. But

we sort of plow into a farm bill thinking about 1.9 million farms,

as you say, one-size-fits-all, something that is sauce for the goose

is sauce for the gander, but without relationship to who is there

and what they are doing.

But now this is a radical suggestion that you are making because

some would say the purpose of agriculture is to produce food and

fiber. That is what the public interest is.

Now, you are saying, well, that is a part of the public interest,

but as a matter of fact, it is being satisfied, roughly, 7/8ths of it,

by very few people.

So what about the other 4/5ths? Because these are people who

are farming or tending or conserving land for the rest of America.

If I gather, and I don’t want to put words in your mouth, but you

are saying the major objective of agriculture in America ought to

be the support of these people, in essence. Further, if we are going

to have a public interest, it ought to be principally geared to that,

104

as opposed to the 8 percent who are corporate, commercial, family,

but in any event, good sized farmers with entities that are currently among, I suppose, the 36 percent of farms that you point out

get some money. The other 64 percent don’t.

Do you want to amplify further or am I mischaracterizing where

you are headed?

Mr. COX. No. I think you are characterizing it correctly. I think,

you know, what makes agriculture unique as an economic sector,

I think what really makes agriculture unique is the land. I mean

there is no other sector of our economy in which 2 percent of our

population is entrusted with the care of over 50 percent of the land

in the United States.

If there is anything about agriculture that is different than the

local dry cleaner or the hardware store, it is because of both the

responsibility and the unique characteristic of farmers and ranchers as the fundamental land managers and environmental managers in this country.

I want to make clear that the top 20 percent who are managing

all this land and producing all these commodities will need environmental assistance. But they may need a very different kind of

environmental assistance than the large group of individuals who

are managing the largest portion of our landscape.

So I don’t think we can ignore the top producers, so to speak,

from an environmental point of view. But what the changes in

structure does provide is a real opportunity to clearly recognize as

a public the responsibility and the opportunity of harnessing the

skills and labor and management of that large group of producers

out there specifically for environmental enhancement.

The CHAIRMAN. Mr. Hassell, do you have a thought about this?

Mr. HASSELL. I think that is real interesting when we start looking at the environmental issue because the agricultural community

is affected by it tremendously today.

When you look at some of the reports that are turned out, whether they are accurate or not, they are still public record about agriculture being the leading non-point source contributor today. That

is disturbing to me, working in agriculture, because I know there

are a lot of people out there that do good work. One of the things

that I think, and the point that I want to make is that—and somebody said this yesterday—we don’t have the dust storms like we

did 50 or 60 years ago. We don’t see this environmental challenge

out there that we have to work with.

But you know what? Conservation is every day. It is not a onetime fix. We go out and we take land out of production to put it

into CRP lands or wetlands or whatever, and that is good because

they are probably lands that needed to be taken out. But we also

need to be looking at those lands that are in production and providing conservation support for those so that we can continue to have

a good, cheap, healthy supply of food and fiber and energy.

A recent report came out, and I can’t cite who it came from, that

the majority of the soils within our world today are degrading at

a faster rate than they were assumed to be degrading 20 years ago.

We lose almost two million tons of topsoil per acre in this country

of ours. That topsoil takes years to reproduce or to produce the

amount that we lose.

105

Paying for conservation on working lands is probably one of the

most important things that we can do. Less land is available today

for food and fiber production than there was 25 or 30 years ago and

we continue to have more and more taken out as we get urban encroachment and other types of activities that do that.

So conservation on these working lands is probably one of the

most important things that we need to do if we are going to provide

the food and fiber to this country and other countries at the cost

that we provide it today.

The CHAIRMAN. Thank you.

Senator Harkin.

Senator HARKIN. Well, Mr. Chairman, thank you. This has been

a fascinating interchange because we are getting into some of the

philosophical basis of what we are going to do on this next farm

bill and how we are going to move.

It seems to me that what we do here sends signals topeople as

to what they ought to do and how we ought to act. Many of our

programs over the last 15 years or so have been really geared towards income support based, as the Chairman said, on the bushel

basis. How much you produce, that is what you get supported on.

That is the bottom line factor.

So what that has done is it has sent a lot of signals to get bigger

and get bigger and get bigger, because the bigger you are, the more

you produce and the more you get. So we sort of sent those signals

out.

I think now there is question as to whether or not we ought to

continue to send those signals. This is the chart here that you were

talking with Mr. Cox about. It is a little worse than what you said.

It is $32 billion that we outlaid last year for all payments to farmers and $1.9 billion in conservation.

Your figures were at 2.5. But it is really $1.9 billion in conservation. So we spent $32 billion. Again, AMTA payments went out. A

lot of people got the AMTA payments. It was not related to price.

It wasn’t related to anything. It just went out. A lot of these people

got AMTA payments that weren’t even producing anything.

There have been a lot of questions raised about that, about

whether or not that was a wise thing to do, just continue to give

those AMTA payments.

Well, if we are going to take this amount of money next year,

and I hope we will have at least that much in our baseline budget,

do we want to continue to do that or do we want to refocus it?

I think you are suggestion of going up, doubling, is a little low.

I think it ought to be more than double. EQIP, we heard yesterday,

had a four to six times greater demand than the funding available;

farmland protection, six-times greater than the money available;

and wetlands reserve, five-times the level of funding in terms of

the requests. There are probably more. Those are the ones I just

happen to have handy.

I think the idea, if you get down to the philosophy of this, as

Paul Johnson said, and I wrote this down: ‘‘The conservation commodities.’’ Well, why don’t we look upon it as a commodity? People

say, well, you can’t eat it. It doesn’t really make you money. So

how can it be a commodity?

106

Well, maybe it is like a reservoir. Maybe it is just something that

you store up and you keep for the future, just in case, aside from

the Leopold concept of the aesthetic value and what it means for

just warming the eye and the heart.

Perhaps we ought to consider how this might be a reservoir of

land that we keep for generations. Whereas a reservoir might not

make you any money right now, but gosh, if you have a drought

and you have to use that water, it is sure nice to have had that

reservoir.

So maybe that is the way we ought to look upon conservation,

as a commodity that we have to invest in now for future generations. Hopefully, we can move ahead in that direction. I still think

it should be the centerpiece of our next farm bill.

Mr. Rudgers talked about State involvement. One thing I got to

thinking about when I was reading your testimony and listening to

you that occurred to me, is if we are going to be refocusing efforts

to put money out there for incentive payments on conservation,

should we require State matching moneys? The only reason I say

it is because if you are going to have the State involved and your

testimony was about keeping the States involved, should we have

State matching requirements?

Mr. RUDGERS. There are many examples already where States

are contributing significant investment into these activities. So the

answer to your question is yes. However, the challenge is what

level of investment do States have in making that approach be fair

across the Nation.

For example, in my State, not only do we have State contribution

significantly for farmland preservation and for non-point source

pollution abatement, but we also have participation of the City of

New York in the Watershed Agricultural Council, which over several years has provided $35 million in funding to provide improvements on the land for the farmers in that watershed because the

city recognized the value of keeping agriculture as a preferred land

use in that watershed and helping farmers stay on that land.

The alternative is development, the loss of that land for the

water quality benefits that it provides in the hands of the steward,

namely the farmer.

You have across the Nation several examples of State investment. So I think that is a reasonable expectation. But I think to

set a certain percentage would probably be unfair.

Senator HARKIN. Well, I am just trying to get more bang for the

buck, obviously, here.

Mr. RUDGERS. Absolutely.

Senator HARKIN. I don’t want to have something out there that

would discourage people from being involved in conservation because the State didn’t do something. But on the other hand, if we

could get this up to, say, $10 billion, for incentive payments for

farmers, which I hear all of you sort of saying, one way or the

other, if we could get the State to come in with a little bit, we could

leverage that money up a little bit.

Mr. RUDGERS. I don’t have this answer, but it would be interesting to see what that number looks like if you add in the State contributions that are already in place.

107

Senator HARKIN. We ought to do that. I would like to find that

out, what States are doing out there and what they have put into

that in the past and add that on top of that. That would be a good

figure. Does anybody else know that figure?

Of the total spending that we spend here, how much have the

States kicked in of their own money. Do you have any idea, Paul?

Mr. JOHNSON. It really varies from State to State. Some States

have a huge amount going into it. Missouri, for example, has a

dedicated percentage of a sales tax going to conservation, both soil

and water and wildlife.

The State of Iowa probably matches the cost share funds that we

put out through the USDA. Other States may have almost nothing.

So it really does vary from State to State.

Senator HARKIN. Any other thoughts on matching requirements

at all? I don’t know if you have any thoughts on that at all. It

might be one way of leverage. I have to get some data on that to

find out what the States are doing.

The other thing is what you talked about earlier, Paul, the National Private Lands Conservation Act. You have talked about this

before. Is there anything out there? Is there any kind of a draft

proposal on that floating around anywhere?

Mr. JOHNSON. I certainly don’t know of one. We have a process

that goes on that certainly ought to be folded into it, the RCA process that reviews private lands, agriculture lands in particular,

every few years. So we wouldn’t be starting from scratch.

My concern is to get it elevated to the point where America understands the good that agriculture does in providing conservation

benefits to our Nation. Right now, as I say, go out on the mall and

ask people where conservation takes place and they will point to

Interior or EPA. They won’t even look at Agriculture.

Yet, as I said, we are more important, I believe, if we do it right.

So if this committee would call for the beginning of that process,

I think there are a lot of good minds in this country that would

love to work on it with you.

Senator HARKIN. The last thing I would say is that all of you

seem to agree on at least one thing and that strain through all of

your testimony is this present system that we have where if you

have already been practicing good conservation you don’t get anything, but if you haven’t been and then you start, you get something. That is just nonsense.

We ought to come in and start helping those people who have already been practicing good conservation, who have put in their waterways and put up their buffer strips and things like that. A lot

of people have done this on their own. Farmers who have spent

their own time, their own money, their own labor and their own

equipment-it is like you say, the only way you are going to get it

is plow it up, put it into soybeans and then put it back in again,

then you are going to get something. I think that is nonsense.

So I think all of you have said that we have to come in and at

least provide support for those farmers and ranchers who have already been doing good conservation.

Again, from what I have heard from all of you this figure is way

too low. Do you all agree on that?

Mr. COX. Yes.

108

Senator HARKIN. It has to be raised. I think most of you feel

strongly that it should be done on a voluntary basis, that it ought

to involve the technical help and support of the Conservation Service to do that.

I asked one question yesterday. I still don’t know them answer

to this. Since you have been there, maybe you can help answer

this, Paul. The Conservation Service does all the technical help and

stuff and the Farm Service Agency pays the bills.

I have gotten some communication in Iowa where they have not

been working closely together. I have to question why that is, why

shouldn’t the Conservation Service do the technical thing and just

pay the bills? Why do we have that split?

Mr. JOHNSON. This began in the 1930s. I am not sure I want to

go there, other than to suggest that I think that the infrastructure

that we have out there, Extension, Research, Farm Services, Rural

Development, NRCS, all have important roles to play.

I think where we have suffered is we have pitted one against the

other over the years. I think what would do more good for this

country in the delivery of these services is to probably better define

what each does and certainly the Farm Services does provide a lot

of administrative work.

But unfortunately, NRCS, from my perspective, isn’t able to

make all the conservation decisions. I think that you need to help

define their positions, but you also need to remind them that they

do good work. We really do run each other down, and I think that

that is terrible. I think we ought to be able to work through it.

Senator HARKIN. Well, Mr. Chairman, I don’t know, the more I’m

getting into this the more I am thinking we really ought to take

a look at those structures out there, the old structures that have

been build up over the years and see if maybe there ought to be

some changes in any of these services.

Mr. JOHNSON. One thing I would like to caution you on as you

do this, the Natural Resources Conservation Service is an agency

of professional people and I hope that that doesn’t get compromised

as you work through this.

You need to have independent technical assistance and opinion

out there. It should not be compromised with a more political approach from administration to administration.

Senator HARKIN. No. That is a legitimate concern and I don’t

want that to happen either.

Mr. RUDGERS. Also, Senator, States have stepped up and provided the opportunity to create a table where both Federal and

State agencies can come around and work on these issues effectively. That has effectively brought Federal partners together for

conversation and for action, which has been effective.

So the perception that things are not quite getting along as well

as they should might not be universal. I can offer my own State

as an example. We have both a State technical committee with active participation of those Federal agencies and State agencies and

also our State Soil and Water Conservation Committee and the

AEM Steering Committee under that which provide the opportunity for those folks to gather around the table and then agree on

objectives and act on those objectives effectively, using both State

109

and Federal dollars. It is an excellent model and it helps solve

some of the concerns that you have which I think are legitimate.

Senator HARKIN. Thank you all. Thank you, Mr. Chairman.

The CHAIRMAN. Thank you very much, Senator Harkin. I would

just follow through once again with a more parochial note.

Yesterday the NRCS Director in Indiana drew my attention and

this is apparently true throughout the nation-that as they took a

look at NRCS staffing levels in our State of Indiana, that in 1987

there was the equivalent then of 330 work-year persons. This is

now down to somewhere around 240 in the year 2000.

Their suggestion is, given the mandates of the last farm bill that

we passed, that they needed 290. So even with the economies that

might have occurred, there would appear to be a 20 percent plus

shortage in terms of the people giving the technical assistance to

farmers in the field, with regard to EQIP or these other programs.

Senator HARKIN. Is this just Indiana?

The CHAIRMAN. Yes, this is just Indiana’s situation. I would gather probably NRCS could provide similar charts for every other

State, but perhaps because of the urgency of these hearings and

the fact that Senator Harkin and I were going to chair on yesterday, they provided this.

But it was very interesting and it is instructive of the point you

are making. These are technical people. They point out about 83

percent of their entire workforce are technically gifted people in

these fields.

So even as we have important ideas about how the stewardship

should occur and the Federal contribution to this, we have to be

thinking through in the field who is available. We have armed

services objectives, people who can use smart weapons, and recruiting these people is sometimes difficult, and particularly if there is

not the budget provided.

I would just reassure you at least that we are attempting to factor these things into our own consideration and going to school as

we listen to you.

We thank all four of you for your testimony, for coming today

and staying with us throughout this period.

Mr. JOHNSON. Thank you, Mr. Chairman.

The CHAIRMAN. I would like now to call on our second panel.

That will include Mr. Bob Stallman, the President of the American

Farm Bureau Federation, Washington, DC.; Mr. Dan Specht, Sustainable Agriculture Coalition of Washington, DC.; Mr. Tom Buis,

Executive Director of the National Farmers Union in Washington;

and Mr. Rollin D. Sparrowe, President of the Wildlife Management

Institute of Washington, DC.; and Mr. Gerald Cohn, Southeast Regional Director of the American Farmland Trust, Washington, DC.

Well, I will ask you gentlemen to testify in the order in which

we have introduced you. It is always a pleasure to have the President of the American Farm Bureau Federation with us. We thank

you for coming. Would you please commence your testimony,

Mr. Stallman.

110

STATEMENT OF BOB STALLMAN, PRESIDENT, AMERICAN

FARM BUREAU FEDERATION, WASHINGTON, DC

Mr. STALLMAN. Thank you, Mr. Chairman, Senator Harkin. It is

a pleasure to appear before this committee to allow AFBF to

present our views. I am a rice and cattle producer from Columbus,

Texas.

Increased regulatory costs on all levels-Federal, State and localare placing a heavy burden on individual farmers and ranchers as

well as distorting the traditional structure of our industry.

The unintended consequence is the inability of small and medium-sized family farms to compete in a highly charged regulatory

environment. The Farm Bureau believes there is a need for new

environmental policy framework.

We need to move beyond the current debate over whether the

public has the right to mandate features and/or farming practices

in the rural landscape. If a voluntary incentive is offered for a desired environmental outcome, farmers will overwhelm America

with improved soil, water and air quality and wildlife habitats.

In order for a conservation incentive program to work well, public policy must recognize the inherent limitations that command

and control regulations have in attaining desired public benefits.

Efficient public policy is one where the thing demanded by society

is the thing that is being produced.

Farmers and ranchers can produce and market more than traditional agricultural commodities. We can also produce and market

environmental benefits. Under this concept agriculture and the

Government program must come together to create an alternative

market for environmental improvements or amenities that the public desires.

Specifically, Farm Bureau policy supports expanded incentives to

encourage voluntary improvements in the environment, expansion

of the funding baseline in the commodity, specialty crops, livestock,

conservation, research, trade and risk management titles; voluntary participation in a direct payment program that would comply with the WTO green box requirements and providing willing

producers with additional voluntary incentives for adopting and

continuing conservation practices.

Our vision is to capture the opportunity and efficiencies of providing producers with additional conservation incentives. Specifically, I would like to highlight three programs for which we would

like to see new funding.

First, the Farm Bureau supports a limited increase in the

amount of acreage eligible to be enrolled in the CRP with new acreage targeted toward buffer strips, filer strips, wetlands, or grass

waterways.

Second, the current Environmental Quality Incentives Program

does not provide livestock and crop producers the assistance needed

to meet current and emerging regulatory requirements. EQIP must

be reformed and funding increased.

We support the following reforms to EQIP: No. 1, elimination of

language that prevents large livestock operations from being eligible for cost share. No. 2, broader third-party technical assistance

authority, which would allow farmers to hire consultants to provide

technical assistance. No. 3, elimination of priority areas, which

111

would allow all producers, regardless of location, to participate in

the program. No. 4, simplification of program participation.

Finally, I wish to express our support for a new voluntary environmental program that would provide producers with additional

conservation options. This program would provide a guaranteed

payment to participants who implement a voluntary management

plan to provide specific public benefits by creating and maintaining

environmental practices.

The management plan should be a flexible contract, designed and

tailored by the participant to meet his or her goals and objectives

while also achieving the goals of the program. We support an increase in the budget baseline of $3 billion annually for the three conservation initiatives I have outlined.

Two other conservation programs supported by the Farm Bureau

are the Farm Land Protection Program and the Grazing Lands

Conservation Initiative. The Farm Bureau supports funding for the

Farmland Protection Program.

There have been attempts in recent years to make nonprofit organizations eligible for this funding. The Farm Bureau would oppose this change.

Additionally, we oppose the imposition of a farm management

plan on the property. The intent of the Farmland Protection Program is to avoid development pressures, not dictate farming practices.

The Grazing Land Conservation Initiative is a program providing

additional technical assistance that are NRCS for range and pasture management. We support the continuation of this program.

One last item before concluding: Confidentiality of USDA information has become an increasing concern and priority for farmers

and ranchers. We have seen attempts by other government agencies to secure NRCS and NASS data for regulatory purposes.

There have also been attempts by non-governmental organizations to secure farm and ranch data from FSA and APHIS. The

Farm Bureau strongly supports establishment of statutory authority that protects the confidentiality of all data collected by USDA

on individual farms and ranches.

Thank you for the opportunity to be here today. I will be ready

for questions when the time comes.

[The prepared statement of Mr. Stallman can be found in the appendix on page 185.]

The CHAIRMAN. Thank you, Mr. Stallman.

Mr. Specht.

STATEMENT OF DAN SPECHT, SUSTAINABLE AGRICULTURE

COALITION, WASHINGTON, DC

Mr. SPECHT. Good morning. Thank you for the opportunity to testify. My name is Dan Specht and I am a fourth generation farmer

from northeastern Iowa. I am testifying today on behalf of the Sustainable Agriculture Coalition. I started farming in 1971 with my

parents and three of my brothers. I have been farming on my own

since the mid–1900s.

I now raise crops and livestock on about 700 acres. Most of my

land is considered highly erodible. My farm is just outside the Big

Springs Study Area. Many of you may have heard about it.

112

This study was started as part of Iowa’s Ground Water Protection Act and it studied the movement of nitrates into surface and

ground water.

Although many of my friends and neighbors in recent years have

been forced to earn off-farm income and are no longer raising livestock, I am actually very optimistic about the future of agriculture.

I am optimistic because I have been able to produce crops and livestock using low-cost methods that are profitable and environmentally sound.

I have been able to market those products with preserved identity through farmer-owned organic marketing cooperatives.

Besides raising organic soybeans, I have also converted a large

part of my farm to a system of grass-based beef production called

‘‘management intensive rotational grazing.’’ Despite my optimism, I am distressed at the barriers current

farm policy put in front of farmers like myself who are trying to

adopt methods that are more environmentally sound and economically viable.

I think the existing commodity programs have three fatal flaws.

First, if you were a farmer like myself who was making hay, grass

and small grains a big part of your rotation during the base-building years of the 1980s, you are not eligible for AMTA payments on

those acres.

The more land you planted into row crops then, the more money

you qualify for now. Because of my diversity, I am only receiving

AMTA payments on a tiny fraction of a corn base out of the 500

acres that I own.

Neighbors of mine who farm similar land qualify for AMTA payments on nearly 100 percent of their crop acres because they have

a high corn base.

Doubling AMTA payments, which has happened in the last couple of year, has only doubled this inequity. Now, the system of

LDP, Loan Deficiency Payments, is adding insult to injury.

Unlike the AMTA, which has prospective planting flexibility,

LDP monies flow only to the program crops, creating further barriers to resource conservation and environmental improvement.

This bias puts diversified, conservation-oriented farmers at a competitive disadvantage in all kinds of situations, including land markets.

How would you like to be put in a position like I have been in

and have to explain to a landlord that because I was farming his

farm in a soil-conserving rotation his farm isn’t worth as much

today because he has a small corn base.

The second fatal flaw is that the program allows actual cash

prices for the crops to fall below the cost of production. We now

have the worst of two worlds. We have no limits on production,

coupled with what amounts to direct payments as LDPs to increase

production even more.

This gives a competitive edge to industrial livestock producers

who can buy the raw material, feed, at less than the cost of production, while a farmer feeder has to have the real production cost

paid.

The third fatal flaw in this program is the lack of effective targeting to family farm income or any effective payment limitation.

113

The current program is ‘‘the sky is the limit.’’ The program exacerbates the first two problems. It provides a public subsidy for land

concentration and reduces diversity and continues environmental

problems.

These flaws mean we are losing the potential to capture many

of these social benefits that diverse crop and livestock farms can

provide. I believe that the first thing Congress needs to do in addressing conservation in the Farm Bill is to take a hard look at

farm programs and take serious steps towards making them consistent with widely shared public support for good stewardship. Incentives for over-production and land consolidation need to be reduced. Barriers to diversification need to be removed and real requirements for basic conservation need to be reinvigorated.

I have witnessed some of these resource and environmental benefits firsthand on my own operation and I would welcome any members of the committee to come out and see my farm with its improved wildlife habitat, erosion control, and water quality. Pheasant season is open in November. Deer season is December. Turkeys

are April and May.

I am always looking for an excuse to go fishing. I have the Mississippi River right next door. There are a lot of trout streams and

farm pond in northeast Iowa that you would be welcome to visit.

But I would like to share with you what the scientific community

is finding about sustainable farming systems that I am using. One

of these systems is management intensive rotational grazing.

The Minnesota Cooperative Fish and Wildlife Unit has found

that rotational grazing significantly reduces the amount of sediment flowing into a waterway. In one instance, a single storm

dumped 10 tons per acre of soil off cropland but only 4 pounds per

acre from the adjacent rotationally grazed paddocks.

Researchers have also found that life in the stream degraded by

overgrazing and sedimentation starts to recover as it flows through

a rotationally grazed area.

The University of Vermont has found that a grass-based operation burns 24 percent less fuel than a row-crop farm.

University of Wisconsin researchers recorded more than twice

the number of nesting grassland songbirds in a rotationally grazed

paddock when compared to the same acreage of a continuously

grazed pasture and almost no nesting in adjacent cropland.

The CHAIRMAN. Mr. Specht, let me just ask if you would summarize a little bit more. That would be appreciated because in fairness

to all of our witnesses, I suggested at the beginning, perhaps before

you got here, about a five minute summary. If you could do that

I would appreciate it.

Mr. SPECHT. Well, this testimony is in my written remarks.

The CHAIRMAN. Yes, and it will be made completely a part of our

record.

Mr. SPECHT. One thing I do want to bring out today are the

health benefits that have been recently discovered by ARS researchers and researchers at the University of Wisconsin. Worldwide studies have shown where cows who graze exclusively have

dramatically higher levels of conjugated linoleic acid, CLA, in their

milk. Laboratory studies done throughout the world on CLA in

both meat and milk have shown it can help prevent breast cancer

114

and other malignant growths. It also is a very heart-healthy substance.

The fascinating thing about CLA is that what an animal eats determines what the CLA content is in the product. CLA in meat and

milk from animals getting their diet from grazing is five times

more concentrated than milk from confined and grain fed animals.

I wanted to make sure that everybody in the room heard that

fact because it is very new scientific information.

The CHAIRMAN. I appreciate your highlighting that as well as the

other elements of your testimony. It was important.

I make the point for all of the panel that all of your statements

will be published in full in the record.

[The prepared statement of Mr. Specht can be found in the appendix on page 196.]

Mr. Buis.

STATEMENT OF TOM BUIS, EXECUTIVE DIRECTOR, NATIONAL

FARMERS UNION, WASHINGTON, DC

Mr. BUIS. Thank you, Chairman Lugar, Senator Harkin, and

Senator Nelson. It is an honor to be here today to share with the

Committee the National Farmers Union’s positions and recommendations on current conservation programs and a couple of

new initiatives.

The conservation programs currently authorized under the FAIR

Act have generally been very sound programs. They have served to

conserve our soil resources, enhance our wildlife and improve the

quality of both air and water through incentives and technical assistance.

However, we do believe there is room for improvement in two

general areas. First, it is important that the level of funding be

adequate to ensure the long-term success of these initiatives. Second, a key priority of these programs should be to target assistance

to family-sized farm and ranch operations.

We believe such an approach will serve to promote the broadest

possible development in application of conservation measures while

reducing the likelihood these programs encourage further concentration in agriculture.

After reviewing the current programs, we would make the following observations and suggestions. The Conservation Reserve Program has been the most successful conservation program in our nation’s history, thanks in large measure to your foresight in introducing that legislation 15 or 16 years ago and the determination

of this committee and other committees in Congress to keep it

going.

It has significantly reduced soil erosion, dramatically improved

wildlife habitat by idling highly erodible and environmentally sensitive land. We thank you for that.

We also support in the CRP Program raising the cap on total enrollment to at least 40 million acres, reducing the emphasis on

whole farm enrollment, ensuring compensation rates are tied to

local rental rates, reviewing and enforcing the aggregate county

entry levels, reviewing the requirements and benefits of planting

expensive and often unneeded five-way seed mixtures as cover

crops, and for re-enrolling existing CRP acreage we think a reVerDate 11-MAY-2000 08:32 May 02, 2002 Jkt 074345 PO 00000 Frm 00120 Fmt 6601 Sfmt 6601 74345.TXT SAG1 PsN: SAG1
115

quired field inspection should be conducted to determine whether

the current cover crop contains desired multiple plant species, not

just based upon what was planted originally.

We also feel that allowing whole field enrollment is a wise way

to go, as well as authorizing enrollment of farmable wetlands similar to a pilot program that is about to be implemented in South Dakota.

For the Wetlands Reserve Program, we recommend removing the

cumulative acreage cap and providing such funds necessary to address the current and future demand.

We also recommend additional funding and support for the EQIP

Program, Conservation and Technical Assistance Program, Private

Grazing Land Initiative, Wildlife Habitat Incentives Program and

the Farmland Protection Program.

There is tremendous demand out there for these programs and

we would encourage their continuation.

In addition, we think there are some improvements that need to

be made and some programs adopted. First among these is the

Conservation Security Act—and I want to commend Senator Harkin for the outstanding work he has done on that proposal. We

think it is a great proposal that would provide incentivepayments

to producers for the application of appropriate conservation measures on land that is currently and likely to remain in production.

The Conservation Security Act, I think, is designed to target

those payments to family farmers and ranchers who are engaged

in production agriculture in a way that is consistent both with our

obligations to the WTO while encouraging increased levels of environmental stewardship.

We think this framework is a way to reward both those who have

undertaken the establishment of conservation practices in the past

and those who implement future activities. We highly recommend

the committee take that into consideration.

A second new initiative that we have been talking about is the

Soil Rehabilitation Program. In many parts of the country there

are significant areas of cropland that have been decimated by adverse weather, disease and/or pests. The incidence of these problems has reduced the productive capacity of the land and poses an

ongoing threat to the producers in the short and intermediate term.

The program would provide both technical and economic assistance to family farmers so that they may undertake the needed

stewardship activities to restore their resources to their historic

level of productivity.

For example, in the Northern Plains the disease fusarium head

blight, also known as ‘‘scab,’’ has reduced the yield and quality potential of wheat, durum and barley production significantly in recent years. Due to the accumulation of the disease inoculum in the

soil, lack of resistant grain varieties and agronomic limitations on

alternative crop production, producers must either assume the excessive production risk of discontinue production of those traditional crops.

We think either scenario is beyond the economic capacity of these

producers and we would encourage the Committee to adopt it.

Briefly, we also support appropriate incentives, and maybe this

can be worked into the Conservation Security Act provisions of

116

Senator Harkin for support for carbon sequestration efforts at the

farm and where farmers cannot only benefit but be able to have a

market for carbon sequestration credits that is open to both producers and cooperatives.

Mr. Chairman, I thank you for the opportunity. I will be glad to

answer any questions.

The CHAIRMAN. Thank you, Mr. Buis. It is always good to have

testimony from the National Farmers Union. Thank you for coming

this morning.

[The prepared statement of Mr. Buis can be found in the appendix on page 205.]

Mr. Sparrowe.

STATEMENT OF ROLLIN D. SPARROWE, PRESIDENT, WILDLIFE

MANAGEMENT INSTITUTE, WASHINGTON, DC

Mr. SPARROWE. Thank you, Mr. Chairman. I really appreciate

being here to speak on behalf of a very large array of wildlife interests who have become increasingly involved in farm programs over

the last couple of decades.

We appreciate the great progress made during the past few years

with wildlife as a co-equal status with soil and water conservation.

We think there have been some wonderful opportunities that we

are doing our best to take advantage of. You have heard much

about the benefits from the hearing yesterday and some of the

speakers today, so I won’t repeat the specifics at this point. We

have some in our testimony about gains for such things as waterfowl and game birds and so on.

What I would like to talk about is what we in the wildlife community have been up to to try to answer a fundamental question

we anticipated we would be asked, and that is: how much is

enough and what does it do for wildlife and what are the broad

benefits?

We think a lot of these programs have returned excellent benefits to farmers and they help make the continuing case for conservation programs to be a big part of agricultural expenditures.

We have conducted workshops bringing wildlife and agricultural

interests together to address this issue and talk about problems

and implementation. We have maintained an e-mail network with

farm bill active people across the country, both in the agricultural

sector, private sector, and in the State fish and wildlife agencies.

This has been very helpful in sorting out issues related to implementation. It hasn’t solved them all. But it is a good forum to have.

Our big energy has gone into producing the document that we attached to our testimony which is the ‘‘How Much is Enough for

2002’’ document.

One of the most interesting things about this is on the opening

page under ‘‘acknowledgements,’’ there are 60 agencies and organizations that contributed to both the input and the support for putting this together.

This is a demonstration of the interest and the willingness of

wildlife organizations and agricultural organizations to work together. Based on these assessments, there are lots of details presented on a regional basis. That is one of the messages that comes

out of this assessment, that there are differences in what needs to

117

happen on the land, both for farmers, for crops, and for wildlife in

California versus North Dakota versus Georgia.

We think there is an increasing need to take that into account.

The examples of specific success are many. But there are some

areas of the country that have not benefited as much. The northeast and the southeast and some parts of the west have seen this

as a farm program, a wildlife program for the upper Midwest.

There is great interest in expanding the reach to deal with some

real problems on the land that farm activities affect in other parts

of the country.

I want to call your attention to an NRCS publication, a comprehensive review of farm bill contributions to wildlife conservation, which, in response to the demand to work together, Pete

Heard of the Wildlife Habitat Management Institute led with some

of our wildlife colleagues.

They put together a really excellent compendium of what the

science base is for what we now know some of those benefits are.

We are engaged in a very important coalition-building effort at

this point, looking at such data on evaluating program impact,

working toward coalitions that, at the State level, bring farm operators, wildlife biologists, agribusiness representatives and others

together, some folks who don’t talk to each other in all circumstances.

In some State we have seen great success and great advances in

people sitting down together, particularly States where the State

technical committee has flowered and pulled people in to work together. We think those coalitions which we now have going on in

20 States can be a very important contributing factor.

We have a few recommendations that are specific. The technical

assistance area has been of deep concern to us. The wildlife community has worked with three successive chiefs of NRCS, unsuccessfully, to make our case that while downsizing and other things

have been going on, that without technical assistance at the field

level, these programs can’t be delivered. I think you have heard

that from several other speakers.

Our radical proposal is that there is one alternative to more Federal staffing and that is for some Federal funding to be made available directly to the State wildlife agencies and other agencies within the States for that matter and even to non-government organizations to help with this technical assistance.

One of the big discussion points a few minutes ago here was on

what the States are contributing. Actually, States and NGOs have

put up an awful lot in the technical assistance arena. We would be

pleased to work with you to try to document some of that.

We have strong feelings that agricultural support payments

should be linked to conservation compliance. We certainly endorse

as much of that being voluntary as is possible, but compliance is

a necessary part.

We think there needs to be flexibility in implementation of farm

programs, not only on a regional basis, but even in the traditional

agricultural arenas. Conservation tillage, as an example, was designed and did a good job to retard soil erosion from wind and

water. But it also provides great wildlife benefits by leaving some

cover on the land.

118

We need to look at grazing and cropping and other things in collaboration with some additional research to find those things we

can do with existing agriculture that can also lead to additional

wildlife benefits.

Finally, one program we think should be thought about is a native grassland easement program. This would provide for needs in

many areas of the country, particularly the west. We are ready to

work with you. We think we have a good documentation of what

some of the benefits and needs for the future are. We thank you

for this opportunity.

[The prepared statement of Mr. Sparrowe can be found in the appendix on page 209.]

The CHAIRMAN. Thank you very much, Mr. Sparrowe, for coming

this morning.

Our next witness is Mr. Gerald Cohn, the Director of the Southeast Region of the American Farmland Trust. We appreciate your

coming.

Please testify.

STATEMENT OF GERALD COHN, SOUTHEAST REGIONAL

DIRECTOR, AMERICAN FARMLAND TRUST

Mr. COHN. Thank you very much. The American Farmland Trust

appreciates the opportunity to provide your committee with our

views on how the Conservation Security Act will help farmers and

ranchers improve their bottom line and meet the increasing public

expectation of agriculture to produce environmental benefits as

well as food and fiber.

We also thank the Committee for recognizing the need for a comprehensive farm bill. You will need all the programs, including research, conservation, and forestry to help farmers meet today’s

challenges.

I am the Southeast Regional Director for AFT. With my family,

I run a small, diversified produce and livestock farm in Snow

Camp, North Carolina. We have enrolled pieces of our farm in the

CRP and CREP programs. They are a valuable management tool

for profitability and to demonstrate the multiple benefits of farmland to our community.

American Farmland Trust is a national nonprofit organization

with 50,000 members, working to stop the loss of productive farmland and to promote farming practices that lead to a healthy environment.

When most people think about farmland protection they think it

is just about protecting the land. It is not. It is also about protecting the community and protecting the farmer. That is why the Conservation Security Act is so important to farmers, ranchers and agricultural communities around the country who face increasing

challenges from urban sprawl, tightening environmental standards,

and global and local food markets.

As Congress starts its discussion of the next farm bill, two key

issues from AFT’s farm bill meetings around the country. Farmers

and ranchers want to improve the conservation practices and the

public expects them to do it.

119

Unfortunately, the current menu of conservation programs

doesn’t come anywhere close to meeting the demand from farmers,

ranchers or voters.

I would like to enter into the record a letter to the Senate Budget

Committee from over 30 organizations that highlights the number

of farmers and ranchers seeking Federal assistance to meet the Nation’s pressing environmental challenges, but are turned away.

Looking at the backlog of farmers and ranchers waiting to participate in conservation programs, Federal support needs to at least

double in the next farm bill.

Although the demand for conservation programs has climbed significantly since the 1996 Farm bill, funding for these programs has

dropped from 30 percent of agricultural spending to just eight percent.

How can we continue to turn away farmers and ranchers who

want to do the right thing? I think the public has begun to ask,

how can we spend $32 billion a year on farm programs and not address this overwhelming need?

These programs still miss a large sector of American agriculture

that is producing the majority of agricultural value in the United

States and face some of the most significant environmental challenges. I am referring to those farmers and ranchers in urban influence areas who face the same price and supply challenges as traditional commodity agriculture, but also face the many problems

brought by urban development, nuisance suits, trespassers, transportation nightmares and escalating land values.

In addition, the pressure on these producers to clean up the environment is greater than in more remote areas. These farmers receive little to no Federal assistance and yet are the farmers and

ranchers most of us living in urban areas think of when agriculture

is mentioned.

The Conservation Security Act is one big step toward creating a

safety net for these farmers and ranchers. Let me give you a couple

examples of just a few of the challenges facing farmers in my region and how the Conservation Security Act will help farmers meet

them.

The first challenge faced in the southeast is rapid growth. USA

TODAY recently included four southeast cities in the top five most

sprawling metro areas. Our best farmland is being consumed by

this tidal wave of sprawl.

How do we keep these lands and farms and not become housing

developments? The first step is to protect the land through the purchase of development rights. The only Federal program supporting

this, FPP, is oversubscribed by 600 percent.

Also, make it economically worthwhile to keep producing. That

means paying farmers not just for the food and fiber they produce,

but also the environmental benefits they provide.

The Conservation Security Act would do that by compensating

growers, not just sharing the cost for implementing and maintaining conservation practices.

The next biggest threat to agriculture in my region is the changing in the tobacco and peanut industries. As quota for these commodities is being reduced, farmers are either getting out of farming

120

altogether, or struggling to find profitable alternatives to replace

their lost income.

Successful diversification requires risk and time and the Conservation Security Act would provide an income safety net to help

farmers through this transition period and promote green practices

that potentially could open new markets for their production.

The CSA would also bring more regional equity to farm programs

simply because every farmer would be eligible. Right now States in

the Southeast receive only 5 cents in Federal farm assistance for

every dollar they produce, compared to some States receiving more

than 25 cents per dollar.

We need to start focusing farm policy on those farmers and

ranchers who produce the greatest environmental and economic

benefit to the taxpayer. The CSA is a good start to finding that balance.

By giving farmers and ranchers the tools and financial assistance

to meet their environmental challenges, we can build the public

support necessary to make sure the next generation of farmers

doesn’t have to ask if their children will be able to carry on the

proud farming legacy.

Thank you.

[The prepared statement of Mr. Cohn can be found in the appendix on page 219.]

The CHAIRMAN. Thank you very much, Mr. Cohn.

Let me ask a question of you, Mr. Specht, because I was intrigued by your analysis of the AMTA payments that have been

made the last twoyears. Then you pointed out LDP payments on

top of that, I think you said were sort of a double insult.

Given the particular choices you have made in how to manage

your farm, and in fairness, we have had a debate here in the committee and my colleague, Senator Harkin, has raised some of those

issues.

I voted in favor of the AMTA payment route because pragmatically, in an attempt to get income to American farmers we had

lists, we were able to use computers. We were able to cut checks.

Money got to farmers. They paid country banks and they stayed in

business.

I think all this is well known, although our oilseed payments

that sort of came along in a way with the second round of this are

now just being distributed. We got ours in the last 10 days or so

and I gather that is probably true of many people who are soybean

farmers after a much more laborious process, sort of finding out

who is there and how many bushels and so forth.

Others who were affected by the Farm bill payments last year,

in an attempt to help in those emergencies are still receiving payments or will at some point, I hope during calendar 2001, even as

we contemplate the future.

So this is sort of the nature of this type of business. However,

on my farm we have 200 acres now devoted to a timber improvement stand. We planted 60 acres of walnuts, oaks, and cherry,

what have you.

The thought occurs to me as I listen to you that I am not getting

an AMTA payment on these acres. One option was to plant corn

on those acres, at least pragmatically the yields, given the soil

121

types, the yields would not have been as good as they are in my

bottomland and various other places.

So that was part of the consideration and it is always, as we try

to manage our land successfully. But another part of the consideration was my grandchildren like trees and we now have 12 herd

of deer in there and lots of other things that get to the wildlife and

other considerations of the joy of having such a property.

I am not sure how you evaluate all of this. I have wrestled with

this a good bit as have Senator Harkin and other members of the

Committee, both in terms of the safety net for income, yet we had

the testimony which I cited before this morning that just 36 percent of farmers are receiving these checks, these payments, which

means 64 percent are not.

Even after you think of the structure of agriculture which we recited today, all these overlays are very confusing to the members

of this committee as to how we ought to proceed. I mention this because I sort of ask of you, is your testimony essentially that we

ought to proceed by de-emphasizing in the next farm bill the AMTA

route and try to think of some new formula that is more conservation based. That is a pretty broad category, but thinking through

various practices that have been suggested today, various land conservation management plans, and just pragmatically, how many

people will be required to evaluate all this or can you or your organizations collectively, not today, but in the months to come be helpful in trying to think through if you were philosophically to move

in this direction, how would we do it?

I will just ask you for a short comment rather than off the top

of your head reciting legislative language we should adopt. This is

sort of a long lead up to a philosophical inquiry.

Mr. SPECHT. No. I think the original goal of the last farm bill to

try to move toward market-oriented goals is a worthy goal, reducing the emphasis on producing for the program. It would be very

logical, if you want to support farmers, to do it with a conservation

stewardship type of a payment. That would make a great deal of

sense from my point of view.

I think the consumer would get more out of it and it would not

be dictating a type, like if you live in southwest Wisconsin and you

have very steep, hilly ground that happens to also be very productive ground, people who have been growing strip cropping with alfalfa and small grains and feeding their cows alfalfa and small

grains are now currently being penalized because they were doing

it that way versus growing corn on those same hills. So I don’t

think commodity-type legislation should be dictating what farmers

grow. They shouldn’t be growing crops for a commodity program.

They should be growing crops to make money in the market.

The CHAIRMAN. Mr. Sparrowe, let me ask a different type of

question. You have suggested that State game and fish agencies

might take on more responsibility in implementing some of the conservation programs. Perhaps. But this strikes me just from my own

experience in my own State that it would create some anxiety level

on the part of farmers.

I am not certain how many of these folks they want wandering

around the farm inspecting the situation and sometimes we get

into a kind of adversary proceeding over this.

122

How can all these people be friends or do you have some idea

from your experience of how this might work out?

Mr. SPARROWE. Obviously, personal behavior and sensitivity to

the needs of people working on the land is something that a biologist has to have. Otherwise, they are not going to be successful.

We have some notable successes. We worked to help Kansas and

NRCS collaborate on this in the early stages of the Farm Act. It

worked very well. I think six or eight employees of the State were

supported to quickly advance the cause of some of this. A State like

Missouri which has a larger, well-funded program of its own has

recently decided to co-locate its biologists who work with private

lands issues with NRCS offices. So people are working hand in

glove, day by day.

In many cases, starting back with Chief Richards, we noted that

while there is a lot of biological expertise in NRCS in the field, the

new people being hired were generally not very heavy on biologists.

They were heavy on other kinds of skills.

So not only is it numbers, it is the focus that has been placed

on this. We are just suggesting strong attention to this.

Another notable success has been Ducks Unlimited, which has

very widespread private land programs. They have been providing

extensive, both cost-sharing and technical assistance on the

ground.

Pheasants Forever in the upper Midwest has done this and other

organizations now as different geographic regions of the country

kind of come awake to the opportunities are trying to weigh in.

The CHAIRMAN. It is interesting that you mentioned Ducks Unlimited and Pheasants Forever. They have been coming into our

hearings with enthusiasm for these programs. We are grateful that

there has been this marriage of a good number of Americans and

a different constituency.

Senator Harkin.

Senator HARKIN. Thank you very much. I have just a couple of

things. I will try to be quick here.

Mr. Buis, on the carbon sequestration that you mentioned, we already have that in the CSA bill. I would ask you and any others

who are interested in carbon sequestration to take a look at that.

Any suggestions or advice you have on how we might modify it,

change it, make it better, we need that input.

Mr. BUIS. We would be glad to. Also, you might want to look at

the soil rehabilitation idea that we had where you had diseased

lands that really need to be idled to get beyond the scab infestation

and some other challenges we face.

I don’t know if that could work in that program as well.

Senator HARKIN. I don’t see why not. On the whole issue of carbon sequestration, again, I ask all of you to be thinking about that.

Any further input you have on that, we would sure appreciate it.

Mr. Cohn, I want to thank you for your strong support of CSA.

I appreciate that very much. Again, I ask for any advice or suggestions you have. Two things you mentioned that I think we have not

kind of focused very much on and that is this whole issue of urban

sprawl.

The same is happening, I am sure, in your State and mine and

everywhere else. We are losing a lot of this good land to urban

123

sprawl. I don’t know exactly how we stop some of it, but you had

a suggestion that maybe in the CSA that kind of the payments for

conservation and enhancement might help keep some of this land

in farmland and in wildlife.

Again, I want to get a better idea of how that might work. That

is something that we have not really focused on but it might be a

good thing to focus on.

So if you have some suggestions on how we might wrap that into

the bill itself, I don’t know. It seems to me then you get into the

thing about people bidding up the price of land and that type of

thing. I am concerned about that.

Mr. COHN. I think, you know, the key step to keeping farmland

in farmland is to make it profitable to be a farmer and having a

range of options available to the farmer where he can respond to

changes in the marketplace and changes in environmental conditions is the best opportunity farmers have in order to compete on

the urban edge.

Another piece I would add, if I can go back to your question of

the previous panel about the State and local match, the Federal

Farmland Protection Program in the first $35 million that it was

authorized for that program leveraged $230 million of State and

local funds.

So it really evidenced very well the commitment on the local

level to protecting farmland.

Senator HARKIN. Thanks for those figures. The other thing is

about the tobacco farmers. I think that is another thing that we

are going to have to look upon there and the way we transition

them out.

We haven’t really focused on that. While I may have strong feelings about people not smoking, I don’t think the tobacco farmers

can be held to blame for that, for crying out loud. They are going

to have to transition, so this may be another good element of a conservation-based payment system to get support out to them in a

way they can transition to some other type of agriculture.

Dan, you mentioned, for example, in your testimony—I was hoping you would mention it verbally but you didn’t get to it. But you

said one important improvement under the Conservation Security

Program that could be made would be to direct USDA to take all

necessary steps to ensure that organic farming plans developed

under the new National Organic Program were going to also meet

the terms of the Conservation Security Program.

I underline that and asterisk that because I think you are right.

I don’t know that we have focused on that too much. Since there

is more and more demand for organic foods, we see it in our farmers’ markets. We see it in Fresh Fields, the stores that are going

up all over that can’t even meet the demand of people coming into

them. So perhaps we need some focus on organic farming in a conservation type of a bill.

Again, if any of you have any thoughts on that, I would appreciate it. Dan, do you have any thoughts on that at all?

Mr. SPECHT. Well, I think a lot of people who haven’t had much

experience with organic farming don’t realize that it does take

some long-range planning and if you are going to be producing

124

from the soil, you have to be building your soil to get production

from an organic system.

So a lot of the soil conservation and soil improvement type goals

are naturally a part of trying to raise healthy, organic crops. You

are trying to build your soils and soil conservation is a part of most

of the farmers I know.

Senator HARKIN. I guess I am thinking out loud here, but, you

know, if you have an incentive-based program which is voluntary,

which is the way we are moving, and if people want to voluntarily

engage in organic farming, that is fine.

Perhaps we ought to have some focus in a bill. I guess I am asking, do you think there ought to be some added incentives for people to engage in organic farming? Obviously, it costs more money,

I think, in many cases than it does for non-organic farming.

Mr. SPECHT. Well, I think we have to be careful because so far

it has been a market-driven, demand-driven business and I think

most of the people who are currently producing from organic markets would hate to see the organic marketplace become another

commodity-type business where government incentives create oversupply.

So I think you have to be careful. There would be room. Thinking

out loud again, I can see there is a requirement for organic production to be buffered by a 25- to 30-foot strip from chemical applications. Possibly organic buffer strips, if they meet other conservation

requirements, could be included in a buffer initiative along fence

rows.

On either side of the fence, I would be happier if my organic

farm could produce up to the fence and I could talk my neighbor

into putting the buffer on his side of the fence. It would be nice to

see them both qualify.

Senator HARKIN. Mr. Sparrowe, you think CRP ought to be increased to 45 million acres. Does your organization have other data

on the value of CRP’s improvements to wildlife, viewing and pheasant hunting? You estimated a $704 million a year. You cite a study

here.

If you have any other data on that, I would like to have it. I

would appreciate it if we could see that because it has been hard

to get a handle on what has been the economic impact of using conservation land for hunting purposes, that type of thing.

Mr. SPARROWE. We will look at that.

Senator HARKIN. I am like you, I am a hunter. I like it, but I

don’t know how much economic benefit it has provided. As bad a

shot as I am, it has probably added a lot.

Mr. Stallman, again, I thank you for your testimony. It seems

that the Farm Bureau, is basically in favor of an incentive-based

voluntary approach to a conservation program that would be a part

of the new farm bill, at least that is what I understood anyway.

Mr. STALLMAN. Yes, Senator, that is correct. That is one tool in

our whole toolbox of farm policy that I presume we will be laying

out before this committee at some point.

Senator HARKIN. From your standpoint, from Texas, you say you

are rice and something else?

Mr. STALLMAN. Yes, Sir, rice and cattle.

125

Senator HARKIN. Again, we have to think about this conservation

thing in a broad aspect, from the fruit and vegetable growers, the

cherry farmers in Michigan that Senator Stabenow has been telling

me about, to our livestock producers. On the rangeland in the

West, they are good stewards, too, and they don’t get anything for

it either. So they ought to be involved in this, too. So I appreciate

your support on that approach. Again, any further advice and suggestions you have, we would like to have that.

Mr. SPECHT. We will certainly continue to work with you, Senator.

Senator HARKIN. Thank you very much. Thank you, Mr. Chairman.

The CHAIRMAN. Thank you very much, Senator.

Mr. Specht, in your sort of thinking outside the box, it is intriguing when you mention you are not sure you want the organic farmers into the program crop group.

We had some testimony of this. This is anecdotal, perhaps, and

it may be broader from some of the farmers who are producing

fruits, vegetables and nuts and other things that are sometimes

thought of as being niche crops but now are very much larger as

a part of the total farm income, making this the same point that

risk is involved in these areas and so prices are higher.

Once you have a program crop, cotton, rice, corn or wheat, as a

matter of fact, however else we talk about it, there are strong incentives to over-produce and prices remain low, almost bound to remain low. That is a problem. How we liberate the system from this

situation or simply accept the fact that this is the way the world

works, I don’t know, but it is an interesting thought.

You know, in equity, why should not organic folks get into the

situation, along with peaches and cherries and nuts and whatever

or tobacco, cotton, rice, almost anybody in equity. But it makes an

interesting predicament in terms of those equities, you know, how

the pie is going to be sliced.

In the past, we have not been too constrained. We have just said

more of everybody and built a broad coalition.

But, nevertheless, we are doing a new farm bill. We have an opportunity to take a look presently. So I appreciate even these unconventional suggestions from unconventional questions.

Senator Nelson.

Senator NELSON. Thank you very much, Mr. Chairman. I hear a

lot of concern about the programs that are coming into place that

I think are great incentive programs, but they tend to reward new

applications. They don’t necessarily go back and take care of those

who have already engaged in significant environmental work.

I know it is true that virtue is its own reward, but I have found

that if you can help compensate and help take care of those who

have done the right thing, that is also advisable. It may even inspire others to do so.

Do any of you have any specific suggestions, about what we

might do to go back and reward those who have already engaged

in favorable practices, who have already done ‘‘the right thing’’ so

that we do take care of that? It is not just about new applications

and new applicants.

126

Mr. SPECHT. Senator Nelson, that is the environmental incentive

payment portion of our toolbox. We do understand the importance

of maintaining what has already been done as opposed to, as you

accurately suggest, programs in the past that talk about implementing practices. That is an important component, too.

But, we do think it is very important to maintain good practices

and that is why our environmental incentive payment approach is

a part of our toolbox.

Senator NELSON. It would be retrospective as well as prospective?

Mr. SPECHT. Yes.

Senator NELSON. Thank you.

Mr. Buis, you recommend increasing the CRP acres and I think

others have as well—certainly, I agree with that—and making

itcomparable to local rental rates. Making it competitive, making

it attractive, certainly is advisable.

Do you have a sense of how much this might cost us overall,

being that somebody is always watching the bottom line, I am interested in knowing if you have identified anything of that sort.

Mr. BUIS. Well, if we increase the acreage cap by another three

million acres, roughly, if you add an average rental rate of, say,

$60 per acre, it is going to cost some money. But I think all these

programs are going to cost money.

You know, in agriculture today our backs are very much against

the wall from the budget perspective. I know we and most of the

farm organizations recently sent a letter to the budget committees

saying that if we are going to address the challenges we face, we

are going to have to make that commitment to the budget.

But we think CRP is a valuable tool and one that pays back in

the benefits to rural America.

Senator NELSON. Thank you. I also noticed, Mr. Buis, that you

mentioned that the programs should be aimed to really benefit

family arms. I recall the Chairman referring to his farm as a transitional farm. I have not figured out whether he is transitioning up

or transitioning out. He may not know either.

But, is there a size factor, not necessarily total acreage, but size

on the basis of the kind of agricultural producer you are talking

about?

Mr. BUIS. I think there is. Our delegates actually are meeting

this weekend in Rochester, New York to try to put some more

pieces to the puzzle for the conservation provisions. But, I think

there is a size limitation.

One of the big concerns that we see growing out of here is in the

nature of livestock manure management systems and who is eligible for those benefits and who is not and what kind of competitive

advantage that gives a large, integrated operation over an independent hog producer. We have seen over 75 percent of them disappear in the past 10 years.

So we are very concerned about that. We want to make sure that

assistance is available because money is hard to come by to put in

new management tools out there right now. We will be glad to

share that with you after our convention.

Senator NELSON. Well, clearly, there is a difference between the

size of a farm with low rainfall or no access to significant irrigation

127

or other modifications and one that maybe can produce the same

level of income on a much smaller plot.

So I would hope there would be some effort to help us identify

what is big. I am concerned about what transition means, Mr.

Chairman. I hope you are transitioning up. My fear is that you are

not.

Thank you.

The CHAIRMAN. Well, thank you very much.

Senator HARKIN. Ben, I don’t know if you were here earlier to see this, but these are the payments we had last year to CCC: $32 billion and $1.9 billion for conservation. The point I made earlier, and

I will make it to this panel again and anyone else who will listen

is that things have not improved that much in rural America pricewise so we can say, ‘‘Oh, now we can forget about the $32 billion,

we can just forget about that.’’ No, we can’t, because prices are still low. Our rural communities

are hurting. Our farm families are hurting. The question is: Do we

continue to put it out the way we did or do we raise this up and

put more emphasis on a conservation-based voluntary incentive

program that might be more equitable and might be more widespread in terms of involving more farmers from around the country, in different parts of the country, that have not been involved

before, down in the southeastern part of the United States, down

in the Plains States, where they really haven’t gotten much of this.

So that is sort of the point I keep trying to make, that maybe

this has to go up, not that we cut that down, but we bring this up.

The CHAIRMAN. Well, Senator Harkin presents a very appealing

picture for everybody in this room. I suppose that we will have to

work with the rest of our colleagues as to whether we can simply

add on both sides. They may be willing to do that. Otherwise, we

get back, as we often do, to the priorities.

Senator HARKIN. Don’t misunderstand. I am saying that I don’t

want to change the total. This may have to go. This kind of a payment may have to come down, but I am just saying don’t reduce

the total because we can’t afford it in rural America. That is all I

am saying.

The CHAIRMAN. I suspect that is about right.

I just want to reassure Senator Nelson that I was surprised to

find that my farm was in transition, but I was citing the Sparks,

Incorporated study which showed that we sort of come into the second group of ten percent after the larger eight percent. The point

they made is that farmers in this and this category, about 57 percent of their income comes from off the farm and 43 percent comes

from on the farm.

So it raises a good question because probably that indicates that

if you were going to support a middle-class income family, send

your children to college and other things that people want to do,

you need to be farming more land. Now, you may not own all of

it, but our experience, at least in Indiana, is that many farmers

with, say, 1500 acres, 2000, rent part of that, and maybe more, to

amortize their unit cost and so forth.

So there is a certain sense of transition by generation as to how

to make it profitable, as you know from your own experience in Nebraska.

128

Well, we thank each one of you as witnesses for your testimony,

for listening to our colloquy both with you and each other, and we

look forward to working with you as we proceed in this title and

in others.

Now, I would like to call our third panel: Mr. David Stawick,

President of the Alliance for Agricultural Conservation and Mr.

Paul Faeth, Director of the World Resources Institute.

We welcome our witnesses. Most of you know that David Stawick

is a former member of our staff of this committee. He was very active during the formation of the 1996 Farm Bill.

The alliance that he heads is a new project of several agribusiness firms including Cargill, ConAgra, Farmland Industries,

Monsanto, Pioneer and Syngenta. I would like to mention furthermore that Mr. Faeth, Director of World Resources Institute heads

an organization that provides very comprehensive data on a broad

array of environmental, economic and social issues.

Among other things, Mr. Faeth will be summarizing a report he

co-authored, discussing the use of nutrient-trading mechanisms to

enhance the environment and provide additional income for agriculture.

The WRI has a very informative website for those interested in

that, at www.wri.org.

We are delighted to have both of you. Mr. Stawick, would you

proceed and try to summarize your comments. As you will remember from your days with the committee, 5 minutes more or less, followed by Mr. Faeth and then questions from Senators.

STATEMENT OF DAVID STAWICK, PRESIDENT, ALLIANCE FOR

AGRICULTURAL CONSERVATION, WASHINGTON, DC

Mr. STAWICK. Good morning, Mr. Chairman, Senator Harkin and

Senator Nelson. Mr. Chairman, if I may say so, it was always an

honor to sit behind you at a hearing like this and it is a privilege

to sit in front of you for a change. Thank you.

I appreciate the opportunity to testify. I am very excited about

the hearing so early in the process, as has been mentioned.

The mission of our new Alliance for Agricultural Conservation is

to advocate additional financial incentives for farmers and ranchers

to apply conservation measures on working agricultural lands.

More incentives, focus on working lands. I know certainly that

you and Senator Harkin share that focus with your work on EQIP,

Mr. Chairman, in 1996, and Senator Harkin, with your Conservation Security Act now. We appreciate that.

I would like to describe four conservation issues that we suggest

you tackle in the conservation title of the next farm bill. The first

is to address this issue of the shortages in incentives for conservation practices.

You have heard a lot of estimates from the very fine panels we

have had earlier today. I would simply say that none of those are

unreasonable from where I sit, at least in terms of those total numbers.

There are also some possibilities for improving the EQIP Program or whatever program might supplant it or accompany it in

the future. I mention them in my written testimony and if you

would like to discuss them later, I would be happy to do so.

129

Your staffs have asked this panel to kind of get out of the box

a little bit more, as has been done earlier. Some of those issues

have already been touched upon. I will take that path with our

three remaining issues.

The second of those is to leverage conservation funds through

market-based initiatives. In many regions there is very strong, but

untapped, economic justification for utilities or business entities or

States and local governments to provide incentives to landowners

who adopt conservation practices.

This kind of gets to the whole issue of the value of conservation.

You were talking about conservation commodities and the value of

those to the public at large, people in urban areas.

Now, Mr. Faeth is going to talk about one approach, credit trading. He has a very interesting piece of testimony. I will defer to

him on that.

Another idea, though, that you may consider is the establishment

of local best management practice funds, BMP funds, from which

EQIP-style payments could be channeled to participating landowners.

Now, these BMPs would reduce pollutant loadings at the source

so that expensive, for example, drinking water treatment facilities

down closer near the tap wouldn’t be needed. The savings to rate

payers can be huge. Mr. Rudgers alluded to that type of activity

in his statement as something that is already going on with the

dairy farmers in the New York City watershed.

Now, the Federal Government role in these otherwise market-oriented strategies might be to assist in the initiative capitalization

of BMP funds or credit trading scenarios.

For example, in qualifying projects, the Federal Government

might kick in a dollar for every $2 or $3 that a non-Federal entity

would put in for a BMP fund or for buying pollutant credits—and

those Federal dollars should be passed on to farmers.

BMP funds and credit trading are not a substitute, I would say,

for other incentive programs such as EQIP, but they hold tremendous potential. They are not just pipe dreams. They have gone on

in various places, Mr. Chairman. For example, they have gone on

in the Fort Wayne watershed. We have seen them in New York

City.

Paul is going to talk about his website. So these are not arcane

concepts whatsoever.

The third issue is to increase agricultural landowners’ access to

conservation technical assistance. Environmental challenges to

farmers and ranchers have proliferated, but as Paul Johnson mentioned earlier, the ability of the Federal Government through the

NRCS to provide necessary technical assistance has declined.

I want to be very clear that we very strongly support NRCS and

its local conservation district partners. But current realities and

likely future demands dictate a rethinking of NRCS’s role in the

delivery of conservation technical assistance.

One option might be to focus NRCS field staff on the needs of

landowners with limited resources. At the same time, larger, more

capitalized landowners could employ private crop advisers and engineers, and agronomists, whose qualifications to make those recVerDate 11-MAY-2000 08:32 May 02, 2002 Jkt 074345 PO 00000 Frm 00135 Fmt 6601 Sfmt 6601 74345.TXT SAG1 PsN: SAG1
130

ommendations would be certified by NRCS. So it would be an expanded certification process for that agency.

I understand this is a very sensitive area for people in the conservation world. I simply suggest that recent history strongly suggests that NRCS as currently focused and funded will not be able

to provide the technical assistance that is needed in the countryside.

Strategic issue four is to examine a comprehensive national policy for working lands conservation. You have talked about that before this morning as well. Our Nation’s natural resources are protected by a series of somewhat overlapping laws and regulations

authorized by several statutes under the authority of many different committees.

The environment is generally well served by this regime, but it

can provide exasperation for landowners and actually hinder better

environmental stewardship. We know the examples, the wetlands

programs, the Clean Water Act Programs.

The jurisdictional hurdles that I mentioned will prevent this

committee from solving this problem in this farm bill. But there

may be a couple of things that you could do as the Agriculture

Committee in the short run.

One would be to authorize an outside group that would identify

legislative and regulatory overlaps, point out the jurisdictional barriers that exist in Congress and suggest strategies for moving legislation that could bring more regulatory certainty to landowners

who participate in USDA conservation programs, sort of have a legislative road map that you as Chairmen and Ranking Members

could use to link arms and move forward.

Another idea might be to direct the agencies themselves to look

at a similar investigation.

I close, Mr. Chairman, with two final suggestions that impact on

all these strategic issues that I mentioned. First, I suggest that you

delineate goals for what the conservation title of the next farm bill

should accomplish through voluntary incentive-based programs.

How much should we reduce agriculture nonpoint source pollution?

What percentage of land should meet the soil loss tolerance? I am

talking about specific things, strong goals that will help focus on

what approaches and funding increases are appropriate and will

also help generate necessary support from outside this committee

when you go to the Floor and when you get to conference.

Second, make environmental performance paramount. This is relevant when you discuss, as you have this morning, replacing to

some degree commodity supports with payments that are based on

conservation.

New conservation funds, I would suggest, must really result in

environmental gains. Anything less would ultimately be cruel to

landowners who are staring down the gun barrel of environmental

regulation and it would also be hollow for the urban dwellers, the

taxpayers, who stand to benefit from conservation on working agricultural lands.

Thank you, Mr. Chairman.

[The prepared statement of Mr. Stawick can be found in the appendix on page 222.]

131

The CHAIRMAN. Thank you very much, Mr. Stawick, for a very

important paper and for your summary this morning.

Mr. Faeth.

STATEMENT OF PAUL FAETH, DIRECTOR, WORLD RESOURCES

INSTITUTE, WASHINGTON, DC

Mr. FAETH. Thank you, Mr. Chairman. By way of introduction,

I would like to say, for those of you who do not know, that the

World Resources Institute is a private, nonprofit, nonpartisan environmental think tank. What we try to do is figure out good ideas

and implement them to change the way things work to improve the

environment and also people’s lives.

Our goal is to identify and implement and protect policies that

protect the environment in ways that maintain and improve farm

income in this area of conservation.

In recent years much of our work has focused on the development of markets for environmental services that can be cost-effectively provided by farmers. The two most likely opportunities that

appear to be able to be generated in the near term include markets

for reductions in nutrient runoff and greenhouse gas emissions.

Water quality is consistently rated by the public as the number

one environmental issue. EPA has identified nutrients as the biggest cause of water quality problems with as many as 3,400 waterways impaired by nutrients.

In addition, nutrient over-enrichment also leads to hypoxic zones,

areas where the oxygen in the water is too low to support life. The

largest of these is the so-called ‘‘dead zone’’ in the Gulf of Mexico,

an area the size of New Jersey.

As directed by Congress, EPA recently released a task force report that calls for reduction in the size of the ‘‘dead zone’’ through

voluntary actions by nonpoint sources and existing regulatory control of point sources in the Mississippi Basin.

The cost of meeting clean water goals could be quite high with

traditional approaches of command and control, coupled with more

or less untargeted subsidies. But a cap and trade system, a market,

could cut the cost dramatically.

Under the Clean Water Act, impaired waterways will eventually

face some sort of a limit on loads. Point sources like municipal sewage treatment plants and industrial treatment works will have new

obligations to cut nutrient loads.

This is handled currently through the TMDL or Total Maximum

Daily Load process that sets a maximum load and allocates it

among the dischargers in the watershed.

With that process, basically you are half way to a cap and trade

system. The only element missing is to create markets to trade surplus nutrient reductions through investments in agricultural

BMPs. With that, we need clear Federal guidance to do so and that

doesn’t now exist.

We worked with State agencies in Minnesota, Michigan and Wisconsin to do studies to explore the cost and benefits of marketbased mechanisms to support nutrient load reductions such as

those under a TMDL.

We found that compared to traditional command and control regulations on municipal and industrial dischargers, nutrient trading

132

could cut the cost of meeting environmental goals by 62 to 88 percent in those States.

The simple idea here is that point sources could pay farmers to

install cost-effective best management practices for nutrient management and take credit for reductions under the Clean Water permits.

We are currently developing and testing a website called

‘‘nutrientnet’’ at www.nutrientnet.org to create nutrient trading

markets and provide farmers with tools to participate. Mr. Lugar,

you mentioned earlier about mentioning maps and a variety of systems that are now available. We are using just this technology to

implement this website.

We are testing this and implementing it with State agencies and

other stakeholders in Michigan, Idaho, and the Chesapeake Bay

Watershed.

One of the fascinating elements of nutrient trading that I have

found, specifically for nitrogen, is that it can also help meet the climate challenge. The largest source of greenhouse gases from agriculture is nitrous oxide, largely, but not solely from excess fertilizer

use.

There is a very tight synergy between water quality management

and climate protection for this reason, as well as another opportunity for the creation of an environmental market. For comparisons sake, a 10 percent reduction in nitrous oxide emissions from

agriculture would be about equal to all the carbon sequestered annually in the CRP.

If the U.S. someday decides to constrain its greenhouse gas emissions and uses a cap and trade system to do that, then farmers

could generate credits to sell in such a market through a variety

of BMPs that not only have climate benefits, but also reduce nutrient loads, protect the soil, and provide wildlife protection.

So how does all this relate to the farm bill? The key, I think, is

to help farmers get ready to participate in environmental markets

and make conservation programs behave more like markets. To

that end I have a few suggestions.

First, I think it is important to provide incentives to encourage

farmers to provide more environmental services to society. Not only

could this help farmers address their own environmental issues,

but also help them to create environmental benefits for the rest of

the economy.

In the context of the Farm bill, I think this means increasing the

funding available for programs like EQIP, WRP and new programs

perhaps such as the Conservation Security Act. This would be a

good first step.

A number of conservation organizations are putting forward a

plan for spending increases which I think is generally in the right

direction.

Second, there is no substitute for doing the research. Markets dependent on the ability to be sure about what one is buying. That

means we need to be able to measure environmental services, verify and monitor.

Third, conservation subsidies, to the extent possible, should be

based on performance. The Environmental Benefits Index and the

133

Conservation Reserve Program is one example. But it could be extended to other programs.

Going one step further, and finally, I would recommend that the

next farm bill include pilot programs that are fully market based.

Why not allocate money for a pilot nutrient trading program or

greenhouse gas program? The government could act as the buyer,

which essentially would be a market-based type program. Farmers

could use the Internet to estimate how much it would cost to generate a nutrient or greenhouse gas credit and sell it to the Government in a competitive way.

Such programs could help prime the market, so to speak, so

when the time comes farmers will be fully able to take advantage

of this.

Building on what Dave said, I would also like to mention strategy. I wouldn’t be from a think tank if I did not somehow talk

about or think about strategy.

If you look at through variety of policy opportunities like the

Farm Bill, the Clean Water Act, the Hypoxia Action Play, perhaps

the Kyoto Protocol, with the right lens you see opportunities for

farmers to provide services to the rest of the economy, and also,

and not secondarily, put a few bucks in their pockets.

Thank you very much.

[The prepared statement of Mr. Faeth can be found in the appendix on page 227.]

The CHAIRMAN. Well, thank you very much, Mr. Faeth.

Let me just comment briefly that the Congress faced in the Clean

Air Act this market-based strategy up front and the trading of

those credits with utilities or others who are creating some clean

air problems and other people who are taking mitigating strategies,

or had at least much more clean air focus that had been going on

for some time.

The result has been, among other things, cleaner air in the country, a reduction of a number of situations. Now, this has not gone

without some criticism and I suppose that this is most focused in

the most recent international conference in which the Europeans

rejected out of hand the proposal by our Department of State that

somehow when you come to clean air in the world that this credit

system would be favorable, as they saw it, to the United States,

having developed these markets and the concept.

Those who wanted the clean air wanted some punishment for the

polluters. In other words, as opposed to simply mitigating the

amount of pollutants in the air in the world, etc., they wanted to

get at the malefactors, or it could simply have been, in some cases,

an allegation of sheer protectionism. That is, some continents felt

this that still gave American producers too much of an edge and

they wanted a little punishment to sort of mitigate their advantages.

Well, whatever may have been the problem, it did not work out

in that conference. Now, this is an interesting idea as you move

along now more toward the water business and the clean water

and the creation, certainly, of problems of point and nonpoint pollution which we have been hearing about a good bit today.

I think the idea is a remarkable one on its merits, but it also

gets at the problem that underlies a part of our farm bill considerVerDate 11-MAY-2000 08:32 May 02, 2002 Jkt 074345 PO 00000 Frm 00139 Fmt 6601 Sfmt 6601 74345.TXT SAG1 PsN: SAG1
134

ation: What about the 64 percent of farms who get no payments

under the current income support situations, or farmers who are

not planting for either the subsidies, either the safety net, however

one wants to characterize the situation?

We had testimony earlier about the management of land by a

farmer in Iowa who is doing a number of things. It would appear

to be conservation-oriented and very specific for his own satisfaction, but there are occurring societal benefits.

Now, to the extent that we are able to work out markets, whether they be in carbon sequestration of the sort that has been talked

about with the planting of trees or no-till or various other situations, or whether we work at it—and you have pointed out with the

nitrous oxide that could be reduced, and these mechanisms that

you are suggesting, clearly, there is a potential for income for a lot

of farmers who engage in sound conservation practices.

We have not really come to a decision in the Committee or even

begun to debate this in the Congress as to what the major objectives ought to be of landowners, including farmers, and producers

in America. But clearly there is some consensus that a major one

ought to be stewardship.

In terms of our national interests, why do taxpayers who are not

farmers, not producers, want to put money into all of this? One

reason may very well be the national interest is to have cleaner air,

cleaner water, preservation of our basic assets, which include stopping soil erosion or problems of nutrients leaving the soil.

I think this is an extremely important concept. The problem that

I see thus far is that most working farmers are not able to envision

exactly how this works. They hear discussions such as this. They

watch C–SPAN and their eyes light up. But there doesn’t seem to

be anything out there that follows through on this.

I visited with some people. One of our jurisdictions is the Commodity Futures Market, the CFTC authorization and those who

deal in these sorts of things. I visited with leaders in that industry

a month or two ago to discuss how they are coming, say, with the

carbon sequestration markets. They are coming along pretty fast.

There may be some possibilities of some markets on a much broader scale than simply a pilot project. I don’t demean that for a moment.

Your suggestion here is, I suppose, based on the thought that

with such a new idea for this committee or this Congress or this

administration to tackle it wholesale may be a bridge too far, that

you sort of work at it.

But nevertheless, we are talking about a farm bill of several

years duration, probably. How income comes to farmers, why there

is a Federal interest in providing income to farmers beyond that

which occurs directly in the sale of commodities.

I appreciate your outlining this and I take this time to underline

that because it appears to me that this is a very important objective in terms of the public interest as well as farm income and perhaps for those of us—and most of us are interested in the overall

environment of our country or our world—a distinct contribution.

Now, in the work that you are doing in the pilot projects now,

and I have not had a chance to visit the website you cited this

morning, what happens on that website? Are people contemplating

135

hypothetical trading situations? Can you describe to us what you

might find for those who might want to get into this?

Mr. FAETH. Yes, Sir. We have copies of a brochure on the

website. It is available and it is functional now. We had been doing

tests on this; our first live test with farmers and point source discharges was in Kalamazoo, Michigan a month ago. The State of

Michigan is going statewide with regulations allowing nutrient

trading in probably July or August.

In Kalamazoo, Michigan, they have a TMDL and the site will be

operational in support of the TMDL process for Kalamazoo. Basically, it is a set of maps. So when you go to the site, if you are a

farmer, you click on your watershed and you see a picture of the

Kalamazoo watershed. It has the county boundaries and the interstate highways, etc.

Then you click on the county where you live and you come up

with a road map. You click again and you get closer to where you

live. When you click there, what actually happens is that it pegs

through with a soils map, a topographic map, a land use map, and

a map of distance to the nearest stream, which the farmer never

even sees.

So all the information that you need to actually calculate nutrient loads are pegged there, but the user never even knows it.

Then the next step is, you say, okay, what am I doing now? I am

growing corn and beans with a no-till, etc. You run through scenarios of, ‘‘Well, what if I put in a buffer strip’’ for example, or

‘‘What if I want to create a wetlands?’’ There are a series of different options you can run through and it tells you the cost per

pound to remediate that is $8 per pound of phosphorous kept out

of the stream.

Next you go to a marketplace and you can post an offer, ‘‘I will

be willing to sell phosphorous credits, 200, at $15 a pound.’’

Clearly you will want to do it at much higher than your cost. But

then the point sources can post bids to purchase. We had 30 players in our last demonstration and we had about 20 trades that occurred between the parties.

The CHAIRMAN. These are actual commercial trades?

Mr. FAETH. These are demonstration trades at the moment. This

will be live in support of the TMDL for Kalamazoo in July.

The CHAIRMAN. Somebody would transfer some money? In other

words, somebody made a bid of $10 for this phosphorous and pays

some farmer who offered?

Mr. FAETH. That is right. Then these are registered with the

State agencies as appropriate. That is the next and final step to actually register the credits and the trade and it becomes real.

The CHAIRMAN. Well, you mentioned the TMDL. The last hearing

we had with regard to that was a very volatile hearing because

most people who came in who were farmers or with farm organizations did not like the idea at all. As a matter of fact, they wanted

to stop.

Now, the people dealing with TMDLs, ‘‘Well, we don’t want to do

that.’’ But it wasn’t really aimed exactly at farmers. We had some

sort of amelioration of discontent in the process aimed at other big

polluters and so forth.

136

But, nevertheless, it was sort of out there and it came largely because of disputes with the forestry interests. As I recall, that particular hearing brought it to the fore. But it is interesting that in

Michigan there is a TMDL and people still taking it seriously.

So as a result, even though farmers were saying, ‘‘We are not the

ones,’’ here is a farmer prepared, as you say, to adopt the new plan.

It is going to remove something, nonpoint though this may be, from

the waterways of Michigan.

Somebody else is willing to pay for that process. So I think that

is a very interesting and important breakthrough which probably

will engage more than 30 players after some money passes hands

and there is a commercial transaction.

Mr. FAETH. We are developing a version of the site for the Mississippi Basin as a test, beginning next year. Paul Johnson mentioned trading on the Chicago Board of Trade; we share the same

vision.

The CHAIRMAN. Well, I hope, in a parochial way again, it will extend to White River in Indiana or the Wabash or some places of

this sort in due course.

Senator Nelson.

STATEMENT OF HON. BENJAMIN E. NELSON, A U.S. SENATOR

FROM NEBRASKA

Senator NELSON. Thank you, Mr. Chairman.

Mr. Stawick, I must commend you. You are the first person to

come that I have had the pleasure to hear saying that maybe the

Federal Government could give $1 dollar or $2 dollars to get $4

somewhere else. Usually, it seems to work in the reverse.

I agree with you that the EQIP Program is probably under-funded. I think in your testimony you said that the payments have been

about $200 million and yet applications are probably in the range

of $600 million.

One of the ways that Nebraska has attempted to deal with this

is to use the leverage of local funds to be able to attract EQIP

funds and so there are stakeholders who could conceivably help expand the availability of the results by staying somewhere near or

on the total dollars that are expended under the EQIP Program at

the Federal level.

I have to make a pitch for what I did. I created an environmental

trust fund. Part of the funding that goes into the environmental

trust fund comes from the Nebraska Lottery. That was before Senator Harkin’s State had so many riverboats on their side of the

river.

While this is not the generous level of support that the total

gambling provides, it has provided a significant amount of money

aimed at helping create co-activity in environmental stewardship.

We have several examples of where the environmental trust fund

has funded on a multi-year basis projects that have then qualified

for EQIP funds to try to create the kind of leverage that I think

you had reference to. I would hope that other stakeholders would

find similar ways to come in and leverage and expand the capacity

of these funds to do good on so many other levels. I hope that that

will in fact occur.

137

Mr. STAWICK. Senator, there is one other very good example that

was touched upon by Mr. Stevenson in yesterday’s testimony. That

is the Conservation Reserve Enhancement Program which is a sort

of subset of the Conservation Reserve Continuous Signup which is

very explicitly involving State governments in getting additional incentives to landowners atop the CRP payments.

That is underway in, I think, about 12 States now, Illinois, the

Chesapeake Bay, Minnesota, etc.. So that is another very substantial program that is out there. There are more of these so-called

CRP agreements, more and more every year.

Senator NELSON. Well, I hope we continue to create these kinds

of partnerships on a multi-government basis because we certainly

can get more leverage out of the dollars from both sides of the contributions.

Mr. Faeth, I am taken by the trade of environmental transactions that you are talking about here. How are you flying under

the radar to not attract attention of the SEC to begin with or the

local Blue Sky laws within the States? I hope you are able to stay

under that radar.

For example, as you do that and there are dollars exchanging

hands ultimately, how do you have, first of all, the collection of the

dollars, but second, how do you have enforcement because if I pay

for these environmental practices, I want to make sure that they

occur at the other end.

Mr. FAETH. There are a variety of ways that these are being

worked out. Most of the programs that have been tried are experimental programs right now. For example, in Michigan, which is the

first State to go statewide with a regulatory program, the first step

is that when there is a trade between any of the two parties that

it is registered with the State.

If one party has an NPDES permit and does a trade with another party, for example, it may be two point source dischargers

who both have a permit.

Senator NELSON. So you have the equivalent of some sort of exchange. It may not be the stock exchange or it may not be something out of Chicago, but you have some mechanism.

Mr. FAETH. That is what our site does. It is a bulletin board

where you post offers to buy and sell. Parties look at the site and

they decide what they want to pay, look at their own remediation

costs. If they can buy cheaper than they can treat, then they go

ahead and do so.

For rural communities this could be a huge help. In Minnesota

one of our cases, has 212 point source dischargers, only about 25

are larger than one million gallons a day in effluent discharge. The

rest are tiny. The cost per unit of treatment is much higher for

small facilities than for large facilities. So for rural communities

that face the highest cost of water treatment, trading is probably

the best way to keep those costs down and make it more equitable

in terms of what the water treatment costs would be for those communities.

So when you trade, you have a contract. One of the things that

has been tried is a loan that the point source might provide to the

farmer to implement the practice and then the loan it is paid back

in credits.

138

Senator NELSON. How do you enforce? It is better to have a contract than not have a contract. But sometimes both parties don’t

always comply.

Mr. FAETH. Under the Michigan rules, if you voluntarily undertake a trade with a party that has an NPDES permit, you provide

a commitment under law that you will meet the obligation you set

out in your trade.

So if you say, for example, I am going to exclude cattle from the

stream and you make that promise and take money to do so, if you

don’t do it, you have to provide three times the credits that you

said you were going to provide.

So if you said this will generate 100 pounds of phosphorus reductions and it is discovered that you don’t, the owner of the credits

or the buyer of the credits has the right to enforce and the State

has the right to enforce as well.

If you voluntarily do that and you are found not to have done it,

then you owe 300 credits to the system. The credits that the point

source discharger was using to apply are invalid and they have to

go back into the market and purchase credits.

Senator NELSON. So enforcement may be civil or——

Mr. FAETH. It can be both. There are opportunities for both.

Senator NELSON. [continuing.] Thank you, Mr. Chairman.

The CHAIRMAN. Thank you very much, Senator Nelson, for illuminating further this process because as we get back to our CFTC

responsibilities, the whole clearing process is of the essence. Where

you are sitting, Mr. Faeth, we had a trader in corn last year. With

a screen there in front of him, one that we could watch, he sold

1,000 bushels of corn somewhere in Europe, right here in the hearing room.

The problem then is enforcement, the contract clearance of all of

this. He went through a rather elaborate explanation as to how it

works. But this would be of the essence with a State or with a Governor or with a court system.

Still, it is very important. I am glad you have thought through

those aspects. As you say, you are in the pilot project part. Questions that we raise as lay people hopefully will get back to those

who are working in the system.

Mr. Stawick, when you mentioned the EQIP Program in your testimony you suggested that, as has been pointed out, the demand

exceeds the funds. Perhaps one way of looking at this would be

small farms, those who do not have the resources of large farms,

for example, might have, through a priority, use of the technical

personnel that are now available and others might employ consultants who then have some validation through the professionals of

their programs and their results.

Can you illuminate that any further without asking you what the

cut-off is between those who ought to be using or have priority and

those who are larger entities who might hire consultants for more

complex plans? Have you given any thought to where we might demarcate that?

Mr. STAWICK. One way of answering that, Mr. Chairman, might

be to look at what the reality is in a lot of areas already. I suggest

for technical assistance purposes, as you say, that the NRCS field

staff perhaps be considered as the—you will be familiar with this

139

term for agricultural lending—perhaps NRCS field staff could be

considered the technical assistance source of last resort, so to

speak, for persons of limited income.

The fact is, that is the case in a lot of counties in a lot of conservation districts around the country right now. If you look at the

other end, there are the larger landowners who say, ‘‘I know I need

to do something.’’ It may be a confined animal feeding operation that has an

NPDES permit. You know, they have to address those permit requirements or they may want to put in conservation buffers but

may not want to go through the encumbrance of an EQIP contract

or a CRP contract. They say, ‘‘I just want the technical assistance.

I need somebody to tell me how wide that buffer should be and

what type of cover should it have,’’ etc., and they are willing to do

that themselves, but they don’t have the technical help they need

to answer those questions because, again, the stretched NRCS staff

is looking at other, more limited resource people.

I don’t know, Mr. Chairman, where that line is, but I would suggest that if we got some more information from NRCS to look in

a lot of these areas, you know, who they are able to help, who they

are literally able to help with the current staffing levels.

That may help drive us to some answers to your questions.

The CHAIRMAN. That could be. Obviously, NRCS would like to

have more staff and that may be the will of the Congress, to provide more. My guess is if we were generally successful many of the

things we have been talking about today are going to stimulate a

lot more interest in conservation around the country.

So even as we get the staff, we hope that there will be a broader

population of interest. We would come back to this problem again

and again in terms of the smaller farmers of America, in terms of

marketing strategies, to be able to use puts and calls and future

trading or this type of thing which we found using the Sparks, Incorporated study that we talked about, that the larger farmers, the

eight percent, are apparently selling corn for about 30 cents more

a bushel than are the group of smaller farms.

This is in part because they employ sophisticated marketing

strategies. They have people, who assist them, go to extension

courses or do more marketing education. It is not a question of the

rich getting richer or the poor getting poorer. But in terms of technical expertise, this is very important. The question is how do we

get this more broadly disseminated? How do we get people to ask

for it, to know that it is even there and to have confidence? So

these are questions at least some Senators are probing.

Mr. STAWICK. Could I raise one other market potential on this

very question of technical assistance?

The CHAIRMAN. Yes.

Mr. STAWICK. You might consider in the farm bill a system in

which there was some kind of technical assistance funding, perhaps

in the form of vouchers that could be given broadly to landowners

and which could be traded.

Depending on your size, depending on what are the requirements

in the TMDL in the watershed where you live, you may want to

take that voucher and redeem it for assistance directly from NRCS

or you may say, ‘‘I’m fairly well set with my technical assistance

140

needs, perhaps I can sell that voucher to somebody else who could

then accumulate a few if necessary and then get the technical assistance that they need.’’ Those vouchers perhaps also could be redeemed by private sector

entities that I mentioned that could stand to get into the technical

assistance business if we could just get them certified by NRCS.

So while that is obviously not really as well thought-out as Paul’s

ideas on credit trading, that may be another way of using some

market forces to get technical assistance and allocate our technical

assistance resources, even the Government technical assistance resources, where they are needed the most.

The CHAIRMAN. Senator Nelson, do you have any further questions?

Senator NELSON. Well, I was just going to say that if we keep

finding ways with securities and other kinds of trades, we might

find a way to make agricultural profitable.

The CHAIRMAN. Exactly. That is just what we are about.

I thank you very much for coming to us today. We thank all the

witnesses. We will try to take carefully into consideration the papers that we made a part of the record in full.

The hearing is adjourned.

[Whereupon, at 11:55 a.m., the committee was adjourned, to reconvene at the call of the Chair.]

(141)

A P P E N D I X

MARCH 1, 2001

142

143

144

145

146

147

148

149

150

151

152

153

154

155

156

157

158

159

160

161

162

163

164

165

166

167

168

169

170

171

172

173

174

175

176

177

178

179

180

181

182

183

184

185

186

187

188

189

190

191

192

193

194

195

196

197

198

199

200

201

202

203

204

205

206

207

208

209

210

211

212

213

214

215

216

217

218

219

220

221

222

223

224

225

226

227

228

229

(231)

DOCUMENTS SUBMITTED FOR THE RECORD

MARCH 1, 2001

232

233

234

235

236

237

238

239

240

241

242

243

244

245

246

247

248

249

250

Æ