[Senate Hearing 108-564]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 108-564

        OVERSIGHT OF CONSERVATION PROGRAMS OF THE 2002 FARM BILL

=======================================================================

                                HEARING

                               before the

    SUBCOMMITTEE ON FORESTRY, CONSERVATION, AND RURAL REVITALIZATION

                                 of the

                       COMMITTEE ON AGRICULTURE,
                        NUTRITION, AND FORESTRY

                          UNITED STATES SENATE


                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION


                               __________

                              MAY 11, 2004

                               __________

                       Printed for the use of the
           Committee on Agriculture, Nutrition, and Forestry


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           COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY



                  THAD COCHRAN, Mississippi, Chairman

RICHARD G. LUGAR, Indiana            TOM HARKIN, Iowa
MITCH McCONNELL, Kentucky            PATRICK J. LEAHY, Vermont
PAT ROBERTS, Kansas                  KENT CONRAD, North Dakota
PETER G. FITZGERALD, Illinois        THOMAS A. DASCHLE, South Dakota
SAXBY CHAMBLISS, Georgia             MAX BAUCUS, Montana
NORM COLEMAN, Minnesota              BLANCHE L. LINCOLN, Arkansas
MICHEAL D. CRAPO, Idaho              ZELL MILLER, Georgia
JAMES M. TALENT, Missouri            DEBBIE A. STABENOW, Michigan
ELIZABETH DOLE, North Carolina       E. BENJAMIN NELSON, Nebraska
CHARLES E. GRASSLEY, Iowa            MARK DAYTON, Minnesota

                 Hunt Shipman, Majority Staff Director

                David L. Johnson, Majority Chief Counsel

               Lance Kotschwar, Majority General Counsel

                      Robert E. Sturm, Chief Clerk

                Mark Halverson, Minority Staff Director

                                  (ii)

  
                            C O N T E N T S

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                                                                   Page

Hearing(s):

Oversight of Conservation Programs of the 2002 Farm Bill.........    01

                              ----------                              

                         Tuesday, May 11, 2004
                    STATEMENTS PRESENTED BY SENATORS

Crapo, Hon. Mike, a U.S. Senator from Idaho, Chairman, 
  Subcommittee on Forestry, Conservation, and Rural 
  Revitalization, Committee on 
  Agriculture, Nutrition, and Forestry...........................    02
Harkin, Hon. Tom, a U.S. Senator from Iowa, Ranking Member, 
  Committee on Agriculture, Nutrition, and Forestry..............    05
Leahy, Hon. Patrick, a U.S. Senator from Vermont.................    04
Lincoln, Hon. Blanche, a U.S. Senator from Arkansas..............    19
                              ----------                              

                               WITNESSES
                                Panel I

Little, James R., Administrator, Farm Service Agency, U.S. 
  Department of Agriculture......................................    07
Knight, Bruce I., Chief, Natural Resources Conservation Service, 
  U.S. 
  Department of Agriculture......................................    09

                                Panel II

Christopherson, Al, President, Minnesota Farm Bureau; on behalf 
  of 
  American Farm Bureau Federation................................    21
Gallup, Gordon, on behalf of the National Association of Wheat 
  Growers; National Cotton Council; National Corn Growers 
  Association; American Soybean Association; and the U.S. Rice 
  Federation.....................................................    26
Hansen, John K., President, Nebraska Farmers Union; on behalf of 
  the 
  National Farmers Union.........................................    23
Nelson, Jeffrey W., on behalf of Ducks Unlimited, Inc. 
  Congressional 
  Sportsman's Foundation; Pheasants Forever; International 
  Association of Fish and Wildlife Agencies; The Izaak Walton 
  League, The Wildlife Society; and Wildlife Management Institute    28
Petty, David, on behalf of the National Cattlemen's Beef 
  Association; National Chicken Council; National Pork Producers 
  Council; National Turkey 
  Federation; and the United Egg Producers.......................    29
Thicke, Francis, Member, Iowa State Technical Committee; on 
  behalf of the Sustainable Agriculture Coalition................    31
Wilson, Bill, President-Elect, National Association of 
  Conservation Districts.........................................    24
                              ----------                              

                                APPENDIX

Prepared Statements:
    Christopherson, Al...........................................   103
    Gallup, Gordon...............................................   121
    Hansen, John.................................................   112
    Knight, Bruce................................................    73
    Lincoln, Hon. Blanche........................................    42
    Little, James R..............................................    46
    Nelson, Jeffrey..............................................   124
    Petty, David.................................................   138
    Talent, Hon. James...........................................    44
    Thicke, Francis..............................................   150
    Wilson, Bill.................................................   116


 
        OVERSIGHT OF CONSERVATION PROGRAMS OF THE 2002 FARM BILL

                              ----------                              


                         TUESDAY, MAY 11, 2004

                                       U.S. Senate,
         Subcommittee on Forestry, Conservation, and Rural 
Revitalization, of the Committee on Agriculture, Nutrition 
                                              and Forestry,
                                                     Washington, DC
    The Subcommittee met, pursuant to notice, at 9:58 a.m., in 
room SD-628, Dirksen Senate Office Building, Hon. Mike Crapo, 
[Chairman of the Subcommittee], presiding.
    Present: Senators Crapo, Talent, Harkin, Lincoln, and 
Leahy.
    Senator Crapo. If everybody would take their seats, the 
hearing will come to order.
    I'm going to start just a couple of minutes early because--
and I see we have our witnesses here--we're going to be under a 
pretty tight time constraint today. We will be having a vote at 
noon, which means we have only 2 hours for nine witnesses. I'm 
going to start now, and I expect we will have other members 
arriving shortly. I have had a number of them express an 
interest or concern and so I expect them to show up.
    I will also remind all the witnesses that, because of our 
tight time constraints, we're going to be very careful to 
follow the clock. That is, we are giving you 5 minutes to 
summarize your testimony. We ask you to try to do it in 5 
minutes or less, so that it will give us plenty of time for 
questions and interaction.
    I always tell the witnesses, the time will be up before 
you're done saying what you had to say, and we encourage you to 
pay attention to the clock and then get your extra points in 
during the question and answer period.
    I want to say that we are very pleased today to have Bruce 
Knight, the Chief of the Natural Resources Conservation 
Service, and James Little, the Administrator for the Farm 
Service Agency, here to testify on the programs and the 
progress they have made since the 2002 Farm bill was signed 
into law.
    Following their testimony, we will hear from individuals 
representing those affected by the conservation programs, and I 
appreciate the widespread interest in this hearing. I look 
forward to their insight and will introduce them when we bring 
up that panel.

   STATEMENT OF HON. MIKE CRAPO, A U.S. SENATOR FROM IDAHO, 
              CHAIRMAN, SUBCOMMITTEE ON FORESTRY, 
     CONSERVATION, AND RURAL REVITILIZATION, COMMITTEE ON 
              AGRICULTURE, NUTRITION, AND FORESTRY

    Senator Crapo. Nearly 2 years ago, the President signed the 
Farm bill into law, and at that time he noted the importance of 
the conservation title. The importance of these conservation 
programs in helping producers meet newer and higher 
environmental standards and enhancing their ability to protect 
wetlands, water quality and wildlife habitat cannot be 
overstated.
    I agreed then, and I still agree. I continue to assert that 
the Farm bill is one of the most significant pieces of 
environmental legislation that Congress deals with. The 
conservation programs result in real significant environmental 
benefits. The success of these voluntary incentive programs in 
addressing environmental concerns is a testimony to the farmers 
and ranchers who make a living off the land and have long been 
the stewards of these resources, and the employees at the USDA 
who are faced with the task of implementing these programs.
    The bill provided an historic 80 percent increase in 
conservation spending and made a point of addressing effective 
conservation on working lands. It increased funding, made major 
changes to existing programs, and created significant new 
programs. The conservation title to the 2002 Farm bill was a 
tremendous step forward in meeting the public demands for 
cleaner air and water, greater soil conservation, increased 
wildlife habitat, and more open spaces.
    I also have the privilege of serving as the chairman of the 
subcommittee in the Senate that has jurisdiction over 
fisheries, wildlife and water. Based on that experience, I 
cannot overstate how important these farm bill programs are to 
all three issues. For those struggling to comply with the Clean 
Water Act requirements, to those facing demands for assistance 
with wildlife habitat, farm bill conservation programs get 
money and technical assistance on the ground and into the hands 
of landowners.
    In Idaho, the Environmental Quality Incentives Program has 
been making significant inroads to address watershed concerns, 
and we have an EQIP contract in almost every TMDL planning 
watershed. The Idaho Department of Fish and Game credits the 
Conservation Reserve Program in Idaho for having the biggest 
population of Columbian sharptailed grouse in the country.
    USDA has announced a program to address salmon habitat 
restoration through the Wildlife Habitat Incentives Program. 
With the majority of Pacific salmon habitat in Idaho, this will 
be helpful to our continued efforts to address the habitat 
needs of anadromous fish.
    Many in my State have also indicated that the WHIP program 
will be crucial in sustaining conservation efforts to prevent 
the need to list the western sage grouse. I appreciate NRCS' 
efforts to support both sage grouse and the salmon efforts.
    Also to be commended is the work that the RCND councils are 
doing throughout the State. Their proactive efforts to combat 
noxious weeds is crucial to long-term stewardship. I could go 
on and on about the work being done through the Farm bill 
programs, from the use of farm and ranchland protection 
programs, to the Wetlands Reserve Program at Henry's Lake, to 
how the ground and surface water program can benefit irrigated 
agriculture and our precious water supply. While I use Idaho as 
an example, these successes are indicative of work occurring 
throughout the country.
    Two years after the bill was signed into law, there are 
also challenges and questions that remain. I hope to delve more 
deeply into those issues when we have an opportunity to 
question the witnesses, but I would like to highlight a few 
right now.
    The Grassland Reserve Program is the most over-subscribed 
program in Idaho. Yet, we haven't seen the final rules for this 
program. I understand there may be some news on that today.
    Ranchers in Idaho see this as a crucial program for 
addressing the protection and restoration of native grasses. 
Our weed experts see it as critical for addressing noxious weed 
problems. Our biologists see it as important for nesting 
habitat. I appreciate your making funding available for the 
program through notices, but a final rule will provide the 
guidance for implementing this important program.
    Also, I am still concerned that we have not been able to 
resolve the technical assistance issue. Congress was clear in 
waiving the section 11 cap, but 2 years later, we are still 
working to find a fix. I appreciate the massive effort on 
behalf of USDA to reduce TA costs, but even with a reduction, a 
discretionary account is not the way to fix this.
    There is a great deal of optimism associated with the 
Conservation Security Program. Some see it as a replacement for 
farm programs. Others, like myself, see it as a supplement or a 
complement to our existing conservation toolbox. Like any 
program that has not been implemented but holds the promise of 
paying out billions of dollars, CSP has piqued the interest of 
potentially eligible producers, and as we wrote it in the Farm 
bill, just about everyone is eligible.
    With this level of excitement, there is also discontent. 
There is a strong concern that the USDA is proceeding in a 
manner that is not consistent with the Farm bill. I am aware 
that a 15 percent cap on TA, requirements to not rank 
applicants and Congress', split personality on funding caps 
makes writing a rule difficult. My bottom line is that I want a 
program that addresses the intent of our legislation, a working 
lands program that supports ongoing stewardship and creates an 
incentive for more stewardship.
    One reason producers support the conservation title is the 
ability to assist them in meeting regulatory burdens. There are 
concerns that the programs ranking systems do not adequately 
weight assisting producers with increasingly stringent 
regulatory mandates.
    These are just a few of the concerns that I have heard from 
farmers in Idaho. I will raise these and other questions when 
the opportunity arises.
    However, while there are concerns overall, the farmers in 
Idaho are pleased with the progress being made in our 
conservation programs. It is clear that the conservation 
programs of the Farm bill enjoy support from all sectors of the 
agriculture community and the public. From the bipartisan 
support of policymakers to the farmers and ranchers who use the 
programs, to the public that reaps many of the benefits, 
support for these programs and for the work being done is 
strong and is sustained.
    On that note, I just want to point out in closing that 
today in Idaho, high school students are participating in the 
Idaho Envirothon 2004. The Idaho event is sponsored by the 
Idaho Association of Soil Conservation Districts, and like the 
other programs across the country, it promotes natural resource 
education in a fun and interesting environment. They are 
learning about many of these farm programs and the benefits 
derived from good stewardship.
    These Idaho students are competing for the opportunity to 
represent Idaho at the Cannon Envirothon International event 
later this year. More than that, they are fostering an interest 
in environment and natural resources, and developing a 
knowledge base that they will take with them into the future.
    With that, I have concluded my opening statement. Senator 
Leahy, I see that you have arrived and are ready, so I will 
turn the podium over to you for your opening remarks.

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

    Senator Leahy. Thank you, Mr. Chairman. I do appreciate you 
holding this hearing, and also to Senator Lincoln and Senator 
Harkin for being here.
    We went through a great deal when we wrote the 2002 Farm 
bill. To say ``a great deal'' is an understatement. I remember 
all the weekends and all night long sessions we had in doing 
it. We included a much needed boost of new funding of national 
conservation assistance for working farms, working farms and 
forests, funds that would protect open space and fertile soils 
and wildlife habitat, water and air quality.
    One of the most important additions to this Farm bill was 
the regional equity requirement that requires under-served 
States receive at least $12 million in conservation assistance. 
That is something that I had authored and thought it was very, 
very important, because I knew how well it would be used. Chief 
Knight, I want to thank you again for implementing this 
provision.
    There are some other bright spots in the 2002 Farm bill. 
Funding for the Agriculture Management Assistance program, the 
AMA program, has doubled. Even with the additional funding in 
the Farm bill--and we put in significantly additional funding--
my own State of Vermont continues to have a $2 million backlog, 
which is because of extremely low allocations.
    Now, there is still time to change this year's allocation. 
I would ask the USDA to make a good faith effort to reprogram 
much needed funding. I will be happy to work with you, and my 
staff will be happy to work with you. We have time to do it.
    I have visited a number of the areas where it might be 
used. We are a very small State and I tend to know everybody in 
the State. I know how well it would be used. Please work with 
us to do it.
    The Farm bill also included historic funding increases for 
important working lands conservation programs, but the 
combination of Presidential budget cuts and the diversion of 
mandatory program funds have reduced funding for producers. 
What I worry about is the family farmers and ranchers offering 
to restore wetlands, or offer to change the way they farm or 
improve air and water quality, get turned down when they seek 
conservation assistance. They can't just do it by themselves. 
Most ranchers and most farmers can't do it by themselves. They 
need the assistance.
    Now, we have come a long way with the passage of the 2002 
Farm bill. Historic funding has begun to make a real difference 
in rural America. USDA has done a commendable job in 
implementing the law, but there is a lot more to be done. I 
have read the testimony, and again, Mr. Chairman, I 
congratulate you for doing this.
    On a personal note, I regret that I am not going to be with 
you in Coeur d'Alene. My wife is giving the graduation address 
at a school of nursing that weekend in Vermont, and as she is 
the one with Canadian ancestry, I had better be where she's 
giving the graduation address.
    Senator Crapo. We'll miss you.
    Senator Harkin.

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 thank 
you and the Chairman of the full committee for having this 
hearing to examine the implementation of the conservation title 
of the 2002 Farm bill.
    I join in welcoming all our witnesses. I especially want to 
thank two from Iowa, David Petty, representing our livestock 
producers, and Francis Thicke, representing the Sustainable 
Agriculture Coalition.
    With good reason, we celebrated the enactment of the 
conservation title's historic increases in funding, expansion 
of programs, and creation of several new and innovative 
programs and initiatives. In fact, President Bush specifically 
mentioned the conservation provisions as a reason for signing 
the Farm bill 2 years. I remember. I was there.
    Despite some progress, far too much of the praise and 
promise associated with the conservation title remains 
unfulfilled and unrealized. The first disappointment was the 
White House's seemingly willful misreading of the Farm bill, to 
block funds dedicated to conservation technical assistance. To 
make up the shortfall, over $210 million has already been 
redirected to technical assistance from funds that should have 
gone directly to producers to conserve soil, water, wildlife 
and other resources.
    The Grassland Reserve Program still struggles for lack of 
final regulations. Though the Wetlands Reserve Program, the 
WRP, is a huge success story in helping restore wetlands on 
agricultural lands, the President's budget once again calls for 
scaling it back by 50,000 acres next year.
    In EQIP, there needs to be a more equitable distribution of 
funds, geographically and among types of operations. To help 
livestock producers meet environmental challenges, we provided 
in the Farm bill a 60-40 split of EQIP funds between livestock 
and crop practices. The actual split now is closer to 65-35, 
and the funds have not been distributed equitably.
    For example, swine operations make up about 22 percent of 
all confined livestock operations, but I was just made to 
discover that swine got only 7 percent of the EQIP cost share 
funds that went to confined livestock.
    The largest new initiative in the Farm bill, of course, is 
the Conservation Security Program. It has drawn tremendous 
interest and support across both the agriculture and 
conservation environmental communities. I compliment Mr. Knight 
here. I have a story here that quotes you, Mr. Knight, as 
saying that CSP is one giant leap for conservation. Well, 
that's true and I agree with that.
    I believe it's more of a giant leap for all of agriculture 
as a whole. If properly implemented, true to the law, CSP will 
reward all types of agriculture producers who voluntarily make 
the required effort to protect and enhance water, air, soil, 
wildlife and other resources on working lands, as Senator Leahy 
said, on working lands.
    The proposed CSP regulations have drawn a firestorm of over 
14,000 comments, virtually all of them critical. For starters, 
the proposal to rotate signups among watersheds means a 
producer would have only one chance every 8 years to enroll. I 
will be getting into a discussion with you, Mr. Knight, about 
that. Once every 8 years. For example, let's say you have just 
about made the cutoff, you were the next person in line, and 
you didn't make it in that watershed. You have to wait eight 
more years to sign up again. That just doesn't seem right.
    Proposed CSP payments are so drastically reduced that even 
the best stewards will see little reward for signing up. 
Producers seeking to increase their stewardship would 
inexplicably have to install and maintain high level water and 
soil conservation practices before they could apply for help 
through CSP. That would be especially tough on young, beginning 
and limited resource farmers.
    In short, the administration's CSP proposal allows only a 
few producers to apply, and then offers so little reward that 
most will avoid the program. The proposed rule turns Secretary 
Veneman's description of CSP on its head by failing to reward 
the best or to motivate the rest. That's what Secretary Veneman 
said. They wanted to reward the best and motivate the rest.
    In addition, the administration advocates capping CSP 
funding at $209 million for fiscal 2005, and limiting it in 
later years, so that, at best, only 5 percent of our Nation's 
farmers and ranchers can participate over the next 8 years. 
Five percent.
    Regrettably, the administration seems determined to release 
a CSP rule in June that disregards the overwhelming comments 
against the proposal. At the least, it should be an interim 
final rule which can more easily be modified to correct the 
likely errors and shortcomings. I hope that Mr. Knight and Mr. 
Little will take back to USDA the fact that the administration, 
I believe, faces a real credibility gap with producers in the 
conservation programs, and it is critical, Mr. Chairman, that 
we fix these without delay.
    Thank you, Mr. Chairman.
    Senator Crapo. Thank you very much, Senator Harkin.
    I should note that I have been given a note that Senator 
Coleman has had a death in the family and, therefore, he 
probably won't be able to attend the hearing. He did, however, 
want us to indicate his interest in the hearing and to let 
everybody know that he'll be paying close attention to the 
testimony that we receive today.
    As I indicated when we started the hearing, we are going to 
be under a very tight time constraint today because of the vote 
that will occur at noon, which gives us only 2 hours for nine 
witnesses. Again, I remind the witnesses to stay very close to 
your 5 minutes allocated for your remarks, to give us time for 
interaction. If you forget to watch the clock, I will lightly 
rap the gavel to remind you to do so.
    With that, why don't we go ahead and start with you, Mr. 
Little.

   STATEMENT OF JAMES R. LITTLE, ADMINISTRATOR, FARM SERVICE 
             AGENCY, U.S. DEPARTMENT OF AGRICULTURE

    Mr. Little. Thank you, Mr. Chairman, and members of the 
subcommittee. Thank you for inviting me here today to talk 
about the conservation programs authorized by the 2002 Farm 
bill.
    CRP helps protect soil productivity while it improves 
water, air quality, and wildlife habitat. Countless lakes, 
rivers, ponds and streams across America are cleaner and 
healthier today because of the Conservation Reserve Program, 
the premier conservation program on private lands at USDA.
    From the onset of the program in 1985, CRP has resulted in 
substantial reductions in soil erosion. By 1990, the water 
quality and wildlife benefits generated by CRP were widely 
recognized, and over 33.9 million acres of highly erodible land 
were enrolled. From 1991 through 1995, an additional 2.5 
million acres were entered into the program.
    The Federal Agricultural Improvement and Reform Act of 1996 
capped the program at 36.4 million acres. At that time, the 
Agency developed several tools to maximize the conservation 
benefits produced by CRP. An objective environmental benefits 
index, or EBI, was implemented to rank CRP enrollment offers 
nationwide based on potential environmental benefits.
    FSA also began the Continuous Conservation Reserve Program 
signup at that time to target enrollment of highly valued 
buffer practices, such as filter strips, riparian buffers, 
grass waterways, windbreaks, and similar practices on working 
lands. These measures are often established along streams and 
rivers to keep sediment and farm chemicals out of the surface 
water. Practices implemented under Continuous/CRP also reduce 
gully erosion in fields, protect groundwater, recharge areas 
for public water supplies, and enhance wildlife habitat on 
field borders and wetland areas.
    Through CRP, farmers and ranchers have achieved their 
personal conservation goals voluntarily, reducing soil erosion 
by over 442 million tons per year. Our Nation's waters are much 
cleaner due to the reduced sediment in nutrient loadings. Over 
1.5 million acres of streamside buffers and 3.9 million acres 
of wetlands in adjacent tracts have been enrolled. This has 
dramatically increased migratory waterfowl numbers.
    A recent estimate by the United States Fish and Wildlife 
Service indicated that over 2.5 million additional ducks per 
year are attributable to CRP. CRP has also significantly 
enhanced many other wildlife species and is a key tool in the 
restoration of threatened and endangered species, such as 
salmon in the Pacific Northwest, the prairie chicken in Texas, 
and the sharptailed grouse in Idaho.
    CRP is also a key tool in protecting our Nation's water 
supplies. Buffers adjacent to streams and rivers reduce the 
potential for nutrients, pesticides and pathogens from 
contaminating water used for human consumption. This reduces 
water treatment costs and the need for costly filtration 
systems. CRP is used to protect public wells from impacts 
associated with the leaching of nutrients and pesticides.
    FSA has implemented a number of administrative measures to 
improve program delivery. During the most recent CRP signups 
held last spring, FSA developed a new software tool in close 
collaboration with the Natural Resources Conservation Service 
to automate the EBI and to provide geo-spacial information 
system support in many counties. Over the last year, the GIS 
tool reduced the time required for farmers to submit offers, 
saved farmers $160,000 in participation expenses, and helped 
FSA reduce administrative costs for CRP by over $7 million.
    In October 1997, FSA implemented the Conservation Reserve 
Enhancement Program, a partnership between the Federal 
Government, State and local governments. CREP targets some of 
our Nation's most critical resource areas and provides for 
locally tailored conservation measures and incentives under the 
CRP program umbrella.
    Currently, FSA has 29 CREP partnership agreements in 25 
States. Each CREP project is developed at the grassroots level, 
with strong support of the community.
    In addition to CRP and CREP, FSA also offers the emergency 
conservation program in the Grasslands Reserve Program. ECP 
provides emergency cost share funding to producers to 
rehabilitate farmland damaged by natural disasters and for 
emergency water measures during drought. The Grassland Reserve 
Program is another voluntary program administered jointly by 
FSA and NRCS. It helps landowners restore and protect 
grasslands, including rangeland and pastureland, while 
maintaining the areas grazing lands.
    Where is the CRP heading for the future? First, I am 
pleased to announce that the CRP final rule is now at the 
Federal Register and should be published this week. We are 
currently evaluating when the next CRP general signup will be, 
but we expect to have that evaluation to be completed this 
summer.
    Looking to the future, we are working aggressively to 
quantify, using sound scientific methodologies, the benefits of 
conservation measures implemented through the CRP. We are also 
sponsoring, in consultation with the U.S. Geological Survey, in 
hosting a conference this June to provide a scientific and 
technical forum to review ongoing and planned research 
projects. With over 16 million CRP acres expiring in 2007, now 
is the time to be looking to the future.
    CRP has built its success through the momentum of 
partnerships and ultimately this is a personal issue for us 
all, and at the end of the day we should all be supporting 
conservation for ourselves.
    This concludes my oral testimony and I would be glad to 
take any questions.
    [The prepared statement of Mr. Little can be found in the 
appendix on page 46.]
    Senator Crapo. Thank you very much, Mr. Little.
    Mr. Knight.

         STATEMENT OF BRUCE I. KNIGHT, CHIEF, NATURAL 
 RESOURCES CONSERVATION SERVICE, U.S. DEPARTMENT OF AGRICULTURE

    Mr. Knight. Mr. Chairman, members of the subcommittee, 
thank you for the opportunity to appear here today to discuss 
the conservation provisions included in the 2002 Farm bill.
    Two years ago this week, almost to the day, President Bush 
signed the Farm bill into law, representing what many have 
acknowledged, an unprecedented conservation commitment to 
working lands of America.
    Today, I am pleased to provide an update on the 
conservation investment you made for farming and ranching 
families across the Nation. I am especially proud to report 
that the men and women of the Natural Resources Conservation 
Service have accomplished objectives that few, quite frankly, 
believed were possible. To date, roughly $3.3 billion in 
conservation dollars have successfully reached farmers, 
ranchers, and other customers. In addition, NRCS has published 
rules for ten major programs, issued six requests for proposal, 
and has three new rules under review, and will have implemented 
each of these rules by the end of the fiscal year.
    During this time frame, the agency continued to make gains 
in other aspects of the mission. This year alone, NRCS assisted 
four million farmers and ranchers, mapped or updated 22.5 
million acres of soils, and distributed more than one million 
publications. Throughout the Farm bill implementation, we have 
made program and allocation data more accessible to the public, 
and have greatly streamlined program delivery.
    In fiscal year 2003, NRCS worked closely with FSA to 
improve CRP program efficiencies that resulted in an additional 
$38 million allocated back out to States through other 
conservation programs. I believe the strong cooperation between 
our agencies is making a real difference, both for our 
respective agencies and, most importantly, customers.
    Mr. Chairman, I can report that, overall, the Farm bill 
conservation title has been extremely popular. The flexibility 
and innovation that was integrated into the legislation is 
working well for all of us. As an example, the EQIP backlog for 
fiscal year 2002 requests was over 70,000 unfunded 
applications, totaling roughly $1.5 billion. The backlog for 
fiscal year 2003 requests was 108,000 unfunded applications, 
totaling more than $2.06 billion. Specifically, the new ground 
and surface water conservation provisions are being met with an 
excellent response from farmers and ranchers and saving 
significant quantities of water nationwide.
    Also, a few weeks ago, as an example of helping farmers 
with threatened and endangered species issues, we announced the 
availability of $3.5 million in WHIP funding for salmon habitat 
restoration. Under the farm and ranchland protection program, 
many new entities are coming forward and leveraging new 
projects, greatly expanding our ideas about what is possible 
under that program.
    I need to clarify for the record that the acreage protected 
is now nearly 328,000 acres to date. Further, today the 
Secretary announced the release of the Grazing Lands Reserve 
Program interim final rule. We anticipate that that program 
signup will be able to be initiated shortly.
    A new program that has gained a lot of attention and 
interest, of course, is the Conservation Security Program. We 
in the administration are enthusiastic and committed to the 
prospects of CSP and look forward to making the program 
available on farms and ranches across the country.
    Mr. Chairman, the single most misunderstood aspect of CSP 
is the budget for the program. When the President signed the 
2002 Farm bill into law, the Conservation Security Program was 
estimated to cost $2 billion over 10 years. Later, CBO 
estimated the program would obligate $6.8 billion, and Congress 
subsequently capped it at $3.7 billion. Then, under further 
revisions in the law, Congress placed a cap on expenditures of 
$41.443 million for this fiscal year, and the CBO score is now 
under $9 billion.
    Mr. Chairman, there have been a lot of numbers floating 
around. I would just like to point out that our approach, which 
will result in an estimated $13.4 billion in CSP contracts over 
7 years, is higher than any estimate that has come out to date.
    We have attempted to design the program in a way that 
provides funding obligations in a similar way the Conservation 
Reserve Program obligations are structured. For example, the 
President's budget request of $209 million for CSP in fiscal 
year 2005 will provide about $1.7 billion in funding over the 
life of contracts to farmers and ranchers. In addition, our 
recently announced watershed approach and payment structure 
will ensure that CSP is all about environmental performance and 
enhancements. It is not an income transfer program.
    I would note for members of the subcommittee that the CSP 
base payment is just one of four components of a CSP 
participant's payment. We are proud of what we have 
accomplished and look forward to making funding available to 
producers this year. As we look ahead, it's clear that the 
challenge before us will require the dedication of all 
available resources, the skills and expertise of the NRCS 
staff, the contributions of volunteers, and continued 
collaboration with our partners.
    I thank the Chairman and members of the subcommittee for 
the opportunity to appear here today, and for your ongoing 
support and attention to implementation of the 2002 provisions 
of the Farm bill.
    Thank you.
    [The prepared statement of Mr. Knight can be found in 
appendix on page 73.]
    Senator Crapo. Thank you very much, Mr. Knight and Mr. 
Little. We appreciate both of you making the effort to be here 
today.
    Mr. Knight, you actually answered my first question. My 
first question was going to be when do you expect to have a 
final rule on the grasslands program. I appreciate the fact 
that that rule will be out today and I will forego other 
questions on that until we have a chance to review the rule. We 
appreciate that news, however.
    I'm going to go with my questioning immediately into the 
EQIP program. Helping producers meet an increasingly stringent 
environmental standard was a priority of mine when we crafted 
the Farm bill. The significant increase for EQIP and the 
lifting of size caps was a direct result of the need to address 
regulations on animal feeding operations and requirements for 
developing comprehensive nutrient management plans.
    However, disbursement of the EQIP that I have seen for 
fiscal year 2003 doesn't appear to reflect a priority on 
addressing air and quality regulatory changes. For example, 
pork producers in Idaho have indicated to me that confined 
operations receive very little of the EQIP livestock funding, 
and that pork producers received only a small percent of that 
funding. I understand that fiscal year 2003 was a transition 
period, so I'm interested in what steps USDA is taking in 2004 
to make sure that those facing significant water and air 
quality regulatory challenges, like our pork producers in 
Idaho, are going to get adequate assistance from EQIP.
    Mr. Knight. Mr. Chairman, one of the real challenges of 
having attempted to implement these programs in a much more 
transparent manner is that the results of that transparency 
sometimes come back to haunt you. We have a goal in the case of 
livestock of 60 percent. It looks like we're doing--that about 
65 percent of the EQIP funding has gone to livestock. As we 
have all found, we have a surprisingly low amount of the total 
EQIP dollars actually going to assist pork producers, perhaps 
as little as 10 percent or less of the total dollars in this 
past year.
    We are now in the process of going through to see what are 
the reasons for these net results and what are some of the 
changes that could be put in place.
    One of the things I have stressed with all of the NRCS 
employees is that we should be providing the service to all of 
our customers in a size-neutral manner. The debate on the size 
and complexity of the farm operations, in my view, was settled 
by Congress, and so we're attempting to implement these 
programs in a size-neutral manner.
    We have to look at what are the potential barriers. We have 
looked at some of those things. We are reviewing issues such as 
portable equipment being available for EQIP funding. This is 
one of the things that we think can provide greater assistance 
out there, in ensuring that we're properly responsive on these 
issues. The other thing that we're trying to fully assess is 
if, in the ranking processes, because of the higher level of 
regulations that pork operations presently operate under, if 
that isn't one of the reasons why pork operations do not appear 
to be ranking as high as the dairy or beef operation.
    We are very earnestly looking at how the programs are being 
implemented, to ensure that there are no inadvertent barriers 
to participation by any producer, regardless of the type of 
livestock or the type of structure for that operation.
    Senator Crapo. Thank you. I appreciate your indication of 
your understanding that Congress settled the question of 
whether size matters. There is some concern out there in the 
field, if you will, that perhaps that understanding has not 
filtered all the way through the system yet. I appreciate your 
acknowledgement of that and would encourage you to be sure that 
that approach is understood and implemented.
    By the way, NRCS has never before collected and reported 
information that breaks out by livestock species the EQIP 
applications and contracts. It is my understanding that it was 
done on an ad hoc basis for 2003. While it results in questions 
like mine, this transparency is very helpful.
    I was wondering if you could make collecting and reporting 
this information a standard procedure.
    Mr. Knight. We'll be very pleased to take a look at what we 
can do to be able to break it down by species.
    Senator Crapo. Thank you very much.
    I see that my time has expired. Senator Harkin.
    Senator Harkin. Thank you very much, Mr. Chairman. I want 
to thank both Mr. Little and Mr. Knight for their stewardship 
and for being here today for this hearing.
    You have covered the swine portion, Mr. Chairman, pretty 
adequately, so I won't go into that. I thank you for that and 
appreciate your taking a look at that and finding out why we 
have such a huge imbalance there.
    I'm sure it comes as no surprise that I would like to go 
right to the CSP program and discuss that with you, Mr. Knight. 
While I'm pleased that it appears USDA is preparing to move 
forward with enrolling producers in CSP this fiscal year, I do 
have some serious concerns, as I mentioned in my opening 
statement, with the ranking system being used by USDA.
    In reading the recently issued notice on selecting certain 
watersheds in which to offer the CSP, I see it says that, ``If 
there are no funding restrictions, all watersheds could be 
eligible.''
    Mr. Knight, if CSP funding remains without a set dollar 
limitation, will CSP be open to producers in all watersheds 
each year?
    Mr. Knight. Senator Harkin, I would like to be able to get 
the program fully operational this first fiscal year and to be 
able to evaluate what our costs of delivery are, what the costs 
of implementation are, and how many contracts we will be able 
to do to really be able to make a good estimate of how far you 
can go.
    The operating restriction that has driven us to look and 
embrace the watershed approach, however, is the 15 percent 
limitation on technical assistance. That has us inclined to 
continue to utilize a watershed approach in future years as we 
move forward on implementation of CSP.
    Senator Harkin. Well, my question had to do with the 
statement, ``If there are no funding restrictions, all 
watersheds could be eligible.'' I'm just asking you, if the 
funding remains without a set dollar limitation, will it be 
open to producers in all watersheds each year?
    Mr. Knight. The 15 percent technical assistance is the 
operating limitation on----
    Senator Harkin. Well, let's jump right to that. You state 
that the statutory cap on technical assistance forces you to 
limit offering to CSP producers, such as rotating among 
watersheds, restricting eligibility, et cetera.
    I have looked into this assertion and, quite frankly, I 
don't think that's correct, Bruce. Several factors will keep TA 
costs below 15 percent without restricting CSP, as you propose. 
First, you use the technical assistance cost of EQIP as your 
benchmark. I don't think that's valid.
    First, is it correct that EQIP covers just new practices, 
while CSP covers both maintaining existing practices and new 
practices? Is that not correct? In other words, EQIP covers 
just new practices, and CSP covers both new and existing.
    Mr. Knight. That is correct.
    Senator Harkin. OK. The second part, is it not correct that 
the technical assistance cost associated with maintaining 
existing practices is much less than with totally new 
practices? Obviously, if you've got practices that you've been 
maintaining, the technical assistance would have to be a lot 
less.
    Mr. Knight. In theory, you should have certain cost 
savings. However, the costs of oversight and implementation 
would be very similar between a new practice and an existing 
practice, because you're still out there doing spot checks.
    Senator Harkin. That's just some oversight, but that's not 
really technical assistance if you're maintaining something 
that has already been approved by you. In other words, to get 
into the CSP, they have a practice, they're maintaining it, 
they're now in the CSP, and I don't understand why it would 
cost so much in technical assistance.
    Mr. Knight. With all of our programs, program integrity and 
oversight are part of our technical assistance calculation. 
That is included in the technical assistance costs of all of 
our programs.
    Senator Harkin. You don't need any engineering or 
construction oversight.
    Mr. Knight. You still have spot checks, ensuring that what 
has been promised in the contract is delivered. Especially 
since these are contracts that will be management intensity and 
not practice intensity, there is an unknown quantity as to the 
amount of oversight that will be necessary.
    Senator Harkin. Let's keep going then. Is it correct that 
EQIP includes very expensive technical assistance for costly 
waste transport and storage practices, such as waste storage 
facilities and lagoons, which are not eligible under CSP? Is 
that correct?
    Mr. Knight. It is correct that those items are not eligible 
under CSP. That particular instance does give you a good 
example of where using a percentage of the total dollars is not 
the most accurate estimate of technical assistance costs, 
because sometimes the highest technical assistance costs are on 
your smaller contracts because they tend to be very labor 
intensive with a lot of hours per dollar expended, versus some 
of the larger livestock waste management which, yes, they have 
engineering costs, but you may be amortizing the technical 
assistance costs over several hundred thousand dollars rather 
than just a couple of thousand dollars.
    Senator Harkin. It seems to me that the total technical 
assistance, if you're talking about under EQIP, where you're 
building and constructing, which is not allowed under CSP, that 
engineering kind of technical assistance, that construction 
type of technical assistance, that's what you do under EQIP 
which you don't need under CSP. Yet you're factoring it into 
your CSP in terms of saying the 15 percent gives you a limit.
    Now, what I would like you to do is I would like to see you 
take a look at the EQIP, take out the engineering and 
construction costs, and then what is the technical assistance 
percentage. Well, I don't know, but I'll bet you it is much 
less than 15 percent.
    Mr. Knight. Senator, I am sitting down with my staff this 
afternoon to go through the estimates once again, and I will be 
pleased to ask that question and check on that.
    Senator Harkin. Please ask that question, because we have 
been down this road--I have looked at this. You keep saying the 
15 percent limits you. I'm telling you, Chief Knight, that is 
not right, simply because you've got maintaining practices and 
that's going to cost a lot less. You don't have any 
construction or engineering technical assistance, which sucks 
up a lot of money technical assistance-wise in EQIP, which you 
don't have under CSP.
    Now, third, I have here a chart. I have here the NRCS 
planning process on the steps that they have to go through. 
Phase I, Phase II, Phase III. There are nine steps, OK, for 
NRCS?
    Isn't it correct that the NRCS begins charging EQIP 
technical assistance only when they get to step 8, when they 
get to step 8, after all this has been done? Under CSP, you're 
going to start charging from step 1. That's what I understand. 
NRCS is going to start charging from step 1 for technical 
assistance. Under EQIP, they only do it from step 8. Why don't 
you do it from step 8 for CSP?
    Mr. Knight. We have a nine-step planning process----
    Senator Harkin. That's right. I have it right here.
    Mr. Knight. My interpretation is that the first seven steps 
are generally program neutral. At that point in time in which 
it is obvious which program a producer is intending to apply 
for or participate in, that is when we try to start doing the 
accounting to that particular program.
    If a producer is looking at total comprehensive goals and 
objectives, that is program neutral planning. If a producer 
insists that they are applying for WRP, you have to start with 
step 1. If they insist that they are EQIP, you have to start 
there. The neutral aspects up to step 7 should be neutral and 
would be assigned to the conservation technical assistance 
account and then transferred over to that.
    In the case of CSP, for those producers that utilize our 
program neutral planning to get to a watershed that they are 
not yet eligible for signing up in, that will largely be done, 
I would anticipate, under the CTA account.
    One of the things I may want to put into perspective for 
everyone is that our EQIP technical assistance costs 3 years 
ago were 28 percent. Then we got them down to 25, and last year 
we came in at 24 percent. That is why it is a considerable 
task, a herculean task, to bring TSP in at a 15 percent cost. 
It's not a challenge that I'm not willing to attempt to do, but 
it is a herculean task.
    Senator Harkin. Mr. Chairman, I don't know if you want 
another round, but I know my time is up.
    Senator Crapo. I would like to ask another question or two 
and then we can come back for another round.
    Senator Harkin. That will be fine.
    Senator Crapo. Mr. Knight, as I indicated in my opening 
statement, I believe that the conservation programs of the Farm 
bill--and, Mr. Little, this could be a question you could 
comment on as well--I believe the conservation programs in the 
Farm bill are probably the most environmentally beneficial 
things, if you look at one piece of legislation that Congress 
adopts, that we do here in Congress.
    I would like to get your perspectives on whether this is 
working. In the context of this question, I also happen to 
chair the committee that governs the Endangered Species Act. 
Under that Act, we spend a lot of effort stopping harmful 
activities toward species. It seems to me that the conservation 
title of the Farm bill, however, focuses on incentivizing 
beneficial activities toward the environment and toward 
species, things that go beyond just stopping harmful activity 
but actually incentivize things that help promote habitat and 
strengthen our environmental heritage in this country.
    I would like to have your comments, or at least your 
observations, on both your parts about that.
    Mr. Little. Mr. Chairman, as I mentioned in my opening 
comments, the Conservation Reserve Program itself is a 
voluntary program and it helps our Nation's farmers and 
ranchers implement conserving applications that are going to 
help them reach their goals and help the Nation reach 
additional goals to conserve our natural environment for the 
future.
    As I mentioned, we are seeing an improved environment 
through the reduction of phosphorus and nitrates into our 
drinking water systems, helping filtration of sediment into 
wells and into our drinking water. It has also helped to 
improve the habitat with endangered and threatened species, 
including the sharpbilled grouse in Idaho.
    Most importantly, what it's doing is helping, particularly 
with the Conservation Reserve Program. We're seeing 
partnerships being developed between the States and the Federal 
Government, along with local interests. We have 29 CREP 
agreements in place now in 25 States, and we're also having 
several in line that are going to be helping come on line in 
Minnesota, Indiana, and Maryland in the very near future.
    These are all partnerships that are really helping private 
landowners. A good percentage of the rain that helps supply our 
water system falls on private lands. The partnership that we're 
seeing on private lands is helping us all see a cleaner 
environment.
    Senator Crapo. Thank you.
    Mr. Knight.
    Mr. Knight. Certainly we have a recent success that should 
be noted in the aspect of your question. That is, on Earth Day, 
Secretary Veneman announced that we have essentially achieved 
no net loss of wetlands from agriculture. As a matter of fact, 
as a result of the National Resource Inventory, the NRI that 
NRCS does, we have now realized about 131,000 acres net gain in 
wetlands, largely as a result of voluntary, incentive-based 
actions, both the Conservation Reserve Program and WRP.
    As a result of that, President Bush laid out a challenge 
that I know NRCS and FSA and all of us in agriculture and 
throughout the administration are anxious to leap to that 
challenge, and that is to do, over the next 5 years, another 
million acres of wetlands restoration, a million acres of 
wetlands enhancement, and a million acres of wetlands 
protection. We believe that virtually all of this can be done 
by continuing to use these voluntary, incentive-based programs, 
and done in conjunction with working lands conservation.
    Senator Crapo. Thank you very much. I just want to 
highlight that, it seems to me, the programs that the two of 
you administer show the effort under the Farm bill from us to 
address some of these issues that are so critical--water 
quality, air quality, species conservation, habitat improvement 
and the like. It's important as we talk about these things to 
make sure the public understands the scope and the reach of 
these activities.
    Just before I began this hearing, I was at a press 
conference with Environmental Defense, who are engaging right 
now in a broad new program to try to focus on this exact type 
of thing--that is, providing incentives for positive activities 
for the environment as opposed to focusing on penalties for 
harmful activities. We need to focus on both, but we need to 
remember the benefit of these programs.
    I also think it's important for us to note that in the Farm 
bill we had an increase in focus, and it's represented by the 
CSP program that Senator Harkin is championing, which was 
essentially making sure that, in addition to our programs that 
focus on taking land out of production and developing habitat 
and so forth, we now have significant new resources focusing on 
operating lands so that we can have the incentives for 
improvements that these programs provide the incentive for. 
Again, I thank you both for that.
    Senator Harkin, I want to try to get the next panel on by 
11 o'clock, if I possibly can, so if you can take just five or 
10 minutes, that would be fine.
    Senator Harkin. I appreciate that. Thank you, Mr. Chairman.
    Again, I just want to point out why this 15 percent thing 
is nonsense. If there is a problem, it's manufactured. 
Basically, I had this chart here. EQIP covers only new 
practices, as I said, and CSP covers new and existing. EQIP 
covers many structural practices, lagoons, holding ponds, other 
intensively engineered way structures that require extensive 
designs and increase the amount of technical assistance.
    That is not true under CSP. All I have heard under CSP is 
you've got oversight. Again, I pointed out that technical 
assistance costs should be charged only when the producer 
enters the program, the same as EQIP.
    I would say right now, Mr. Chairman, if someone comes into 
their local office and says they want to sign up for EQIP. EQIP 
is not charged technical assistance from that moment on. There 
is no charge on EQIP until they get to step 8. As I understand 
it, if you walk in and say you want to sign up for CSP, then 
they start charging it right away. I'm saying it ought to be 
the same.
    Again, that's where this 15 percent rule is being 
manufactured somehow, because it is not the same as EQIP. The 
15 percent payment I don't believe in any way limits the 
program.
    Now, there is another chart here I wanted to show. I am 
also a little upset with how this is being implemented, Mr. 
Chairman, in disregard of the clear law that we passed. Here is 
Tier 1, Tier 2 and Tier 3, and here is the extent, the required 
treatment, rental rate, base payment, contract limit.
    Now, we said in the law that under Tier 1, for example, or 
Tier 2, you had to address at least one resource concern. You 
are now saying you've got to do two. You have to do soil and 
water. We didn't say that in the law. Again, I am pointing out 
that the proposed regulations that they're using is not in 
accordance with what we passed in the law.
    Also, we specified a rental rate limit, 5, 10 and 15 
percent. We specified that in the law. What does the 
regulations provide? One-tenth of that, five-tenths of a 
percent, 1 percent, and 1.5 percent. That's what they have 
provided.
    It just seems to me, Mr. Knight, that at least in those two 
instances, the proposed rules don't comport with the law.
    Mr. Knight. We certainly have a number of lawyers who do 
believe that we are fully within the legal authorities in how 
we have moved forward with the proposed rule. We are under 
evaluation of the proposed rule, and we have had a number of 
suggestions within the rule of how to make improvements and all 
of those are under due consideration at this time. We are 
looking at the rental rate limits to see if there are 
adjustments that can or should be made and are able to do that.
    However, it is important to note that, especially in this 
first year, we are in a zero sum game, so the more generous the 
program implementation is per contract, the fewer total 
contracts we are able to do under the cap that we currently 
have to operate under. We're trying to find that right balance 
between how generous the contract should be and the number of 
contracts that we should be able to do.
    We are currently estimating in this first year to be able 
to write between 3-5,000 contracts, which we would estimate to 
obligate about $400 million worth of funding, which expresses 
our commitment because, by using the CRP example as a means of 
doing the obligations, we are able to go beyond that $41 
million restriction that was placed on the cap.
    Senator Harkin. Well, this is from your office, by the way. 
I didn't draw this up. This is NRCS. You have developed the 
chart and yet, what is in the proposed rules doesn't comport 
with the chart that your own department came up with on that. I 
hope you will take a look at that and we'll keep talking about 
this.
    Last, these base payments are so low, I just don't know how 
you're going to get people in this, since you have already said 
that producers have to have already met NRCS quality criteria 
levels for both soil and water before they can even get into 
the program.
    Then you get the base payments down so low--What if I'm a 
beginning farmer. I don't know how beginning I am, but I'm a 
farmer and I want to get in the CSP program and I want to start 
doing conservation practices. I haven't met that soil and 
water, but I want to do that. I don't have the wherewithal. I 
don't have enough money to do that. I want to get in and start 
doing this.
    What you're basically saying is, since I don't meet both 
the soil and water criteria levels, which are pretty high, I'm 
out. I'm just out. How can you ``motivate the rest,'' as the 
Secretary says, when I can't even get in?
    Mr. Knight. The key thing is that, with this program, this 
is the completion of our conservation toolbox. For many 
producers, this is the completion of the conservation toolbox. 
For many producers, this fits above all of our other programs. 
For many producers, if they have a specific practice-based 
orientation, they may want to go first to EQIP. That may be 
their first need as they're moving. That is a good example of 
where a beginning farmer may be better able to be utilized.
    The second thing that I would like to point out as it 
pertains to those base payments, the base payments are one of 
four components that make a producer's total payment. There is 
a base payment level, there will be a maintenance payment 
level, there is also for many producers a one-time-only 
practice payment level, and then there will be the 
enhancements. Our clear intent is to make a majority of the 
payments through enhancements that purchase the additional 
conservation that we are trying to achieve through the 
Conservation Security Program.
    Senator Harkin. I understand that. That's in the law, that 
the enhancement payment is part of it. Before you can ever get 
to the enhancement payment, you have got to get in. You don't 
get an enhancement payment if you're not in the program. It 
seems to me what you're doing is you're going to pick a few 
people in a watershed, and selected watersheds, and then that 
watershed will not be eligible for 8 years.
    Let's say you've got a watershed in Arkansas and you have a 
few people that meet the criteria, but you have someone just 
underneath it, just right under the cutoff point. They don't 
make it. They have to wait 8 years to get in the program again.
    Mr. Knight. The tough thing about the watersheds is that 
that is the only way we could bring the cost of delivery in 
total down to a manageable level. In this very first year, if 
we rolled out with a nationwide signup and you had, of the 1.8 
million farmers and ranchers who are potentially eligible for 
the program, if you only had 500- or 700,000 of those producers 
go in and need an hour of service from the agency, we would 
have spent the entire $41 million allocation just in going 
through that processing point without ever having implemented 
CSP.
    Now, I am quite aware that earlier you had pointed out that 
I should look and see if that should be part of the program-
neutral planning, which would be assigned to the CTA account 
and not to the CSP account. It would be important for me to 
point out that even if we went down that path, we still have to 
pay the $41 million out of somewhere. We would be providing $41 
million in less service through the Conservation Technical 
Assistance account if we utilized the methodology that you're 
talking about. There is a challenge of which levels of 
conservation service are you no longer providing if we go down 
that particular path.
    Senator Harkin. Mr. Chairman, you have been very indulgent 
and I appreciate it. This is a very important program and there 
are some real problems out here.
    Again, Mr. Chairman, I would point out that none of the 
experiences I've ever had, going back as far as I have been 
involved in this committee or in agriculture, of 1.8 million 
farmers jumping in to sign up for anything all at one time.
    Look at the CRP program. You hold it out there and a few 
farmers come in, and then the few farmers look and see what 
their neighbors are doing and see if it applies to them.
    It seems like we're always taking the worst case scenario, 
the idea that 1.8 million farmers are going to rush to the door 
in the first year. There is no history to show that that's 
true. Some farmers will come in and want to sign up, and the 
next year, as I said, other farmers look at their neighbors and 
say, well, I might do that, and then, after 3 or 4 years, then 
you will start developing people coming in. This idea they're 
all going to rush your doors in the first year, I don't think 
there is any history to show that that has ever happened.
    You have been very indulgent, Mr. Chairman, and I 
appreciate it.
    Senator Crapo. Thank you, Senator Harkin. We will continue 
to work with you as we work with the administration to assure 
we get the implementation of our entire conservation title 
accomplished as Congress intends it.
    We have been joined by our Ranking Member, Senator Blanche 
Lincoln from Arkansas.
    Do you have any questions of this panel, Blanche?
    Senator Lincoln. I can just submit them.
    Senator Crapo. OK. We will submit questions to this panel.
    Senator Lincoln is going to make an opening statement, but 
I would like to excuse this panel and have the next panel begin 
coming forward so that we can save as much time as possible 
since we're going to be under such a strict time constraint. 
With that, we will excuse this panel and ask the next panel to 
come forward.
    While that transition is taking place, Senator Lincoln, 
please take over and share any of your thoughts with us.

STATEMENT OF HON. BLANCHE LINCOLN, A U.S. SENATOR FROM ARKANSAS

    Senator Lincoln. A special thanks to the panel that is 
leaving us. I will submit my questions in writing, in the hope 
that we can certainly work through some of the implementation 
of the conservation programs in the Farm bill.
    I want to start by saying a very special thanks to Chairman 
Crapo. It is really a delight and a pleasure to share this 
subcommittee with you. I am so proud that you have brought up 
this very worthwhile hearing to focus on the implementation of 
the conservation provisions of our 2002 Farm bill.
    It is a bill that I worked very hard on, as did other 
members of the Ag Committee. I support it because of it's 
importance to my State's rural economy and our way of life. I 
am delighted that you see the importance of this issue and 
continue to bring about the worthwhile conversation that we 
need to have.
    Indeed, probably the most notable part of the legislation 
we did deal with was its historic increase in the conservation 
component. As a member of a 7th generation Arkansas farm family 
that enjoys hunting and fishing and other outdoor activities, I 
know well the importance of the conservation programs. It 
really does allow our farmers and our producers to not only be 
good stewards of the land, but to be good stewards of the 
Government as well.
    To be able to utilize these programs that help them take 
the unproductive lands out of cultivation or improve the lands 
that they have in cultivation in a way that helps them maximize 
what they're doing, for not only providing the safest, most 
abundant and affordable food supply to the world, but also in 
providing to their families as well as conserving the land 
around them, allowing them to be the good stewards of the land 
that they want to be, is a critical component for our 
agricultural community.
    Environmentally, the conservation programs safeguard 
millions of acres of American topsoil from erosion, while 
improving air quality, increasing wildlife habitat, and 
protecting ground and surface water quality by reducing water 
runoff and sedimentation.
    Economically, the benefits are immeasurable. These programs 
not only increase net farm income, they preserve soil 
productivity, they improve surface water quality, they reduce 
damage from windblown dust and increase uses of wildlife. It is 
just overall an incredibly important component of our overall 
production and agricultural component of this Government.
    The dual benefits are critical to the long-term 
sustainability of American agriculture and to life in rural 
America, and it provides a much needed bridge between an 
adequate farm safety net and the resources that are truly 
necessary to conserve our land. I applaud the chairman for 
working with all of us on very, very important issues like 
conservation programs.
    We thank the witnesses for being here today. I do have 
questions for both panels, so if I do have to excuse myself, I 
would like to be able to offer those for the record.
    We do encourage all of you to work with us as we begin to 
work through the implementation of the intent of the law that 
we passed in 2002. Again, we worked very conscientiously 
together to craft a piece of legislation that would benefit 
everybody involved, both Government as well as individuals and 
communities, as well as the environment. We look forward to 
working with you.
    [The prepared statement of Senator Lincoln can be found in 
the appendix on page 42.]
    I thank you again, Mr. Chairman. It's a delight to work 
with you.
    Senator Crapo. Thank you very much, Senator Lincoln. It is 
truly my privilege to work with you. We have a great bipartisan 
relationship here and we get a lot of good work done.
    I definitely agree with your comments. I have said many 
times that the most important environmental legislation that we 
do in this Congress is in the Farm bill. It certainly has a 
tremendous impact.
    Senator Lincoln. With that, let us go to our second panel. 
Our second panel is composed of Mr. Al Christopherson, who is 
president of the Minnesota Farm Bureau; Mr. John Hansen, 
president of the Nebraska Farmers Union; Billy Wilson, 
president-elect of the National Association of Conservation 
Districts; Gordon Gallup, representing the National Association 
of Wheat Growers, the Cotton Council, the Corn Growers, the 
Soybean Association and the Rice Federation.
    Also is Mr. Jeff Nelson, Director of Operations of the 
Great Plains Regional office of Ducks Unlimited. He, is also 
representing a number of other groups here, including the 
Sportsmen's Foundation, Pheasants Forever, the International 
Association of Fish and Wildlife Agencies, the Izaak Walton 
League, the Wildlife Society, and the Wildlife Management 
Institute.
    We also have David Petty from the National Cattlemen's Beef 
Association, also representing the National Chicken Council, 
National Milk Producers Federation, the National Pork Producers 
Council, the National Turkey Federation, and United Egg 
Producers. Also Francis Thicke, who is here representing the 
Sustainable Agriculture Coalition.
    Gentlemen, we welcome you all. As you have heard me say, 
we're under a very tight time constraint, so please pay 
attention to the 5-minute limit, speak quickly, and we'll have 
a little bit of time to get into dialog with you before they 
call that cloture vote. As I indicated, unfortunately, we're 
facing a time deadline at noon with a cloture vote that I 
believe is going to be called fairly timely.
    With that, why don't we start with you, Mr. Christopherson.

          STATEMENT OF AL CHRISTOPHERSON, PRESIDENT, 
 MINNESOTA FARM BUREAU; ON BEHALF OF THE AMERICAN FARM BUREAU 
                           FEDERATION

    Mr. Christopherson. Thank you.
    Mr. Chairman and members of the committee, my name is Al 
Christopherson. I produce corn, soybeans and raise hogs near 
Pennock, MN. I am president of the Minnesota Farm Bureau, as 
you are aware, and a member of the American Farm Bureau 
Federation board of directors. I want to thank you again for 
the opportunity to share some of our thoughts on the status of 
the conservation provisions of the Farm bill.
    We have made great strides in improving our environment 
over the past last three decades. By nearly every measure, our 
environment and natural resources are in better condition than 
any other time in our lives. The Farm bill has led the way by 
providing willing producers with tools to adopt and continue 
conservation practices. For the most part, the programs have 
been very popular and well received by farmers and ranchers.
    Building on the gains over the last three decades requires 
new programs such as the Conservation Security Program to 
deliver the kinds of conservation the public now desires. We 
strongly support the CSP, but we have numerous concerns with 
the proposed rule. For example, we contend that CSP should be 
available to all ag producers rather than only in a few 
targeted watersheds. We also believe that the final rule should 
reflect the mandatory status of the program. If CSP is 
implemented consistent with congressional intent, it will 
deliver enormous benefits to all Americans. Now, there is broad 
support for CSP within agriculture, and we look forward to a 
revised rule and its implementation as soon as possible.
    We also strongly support the EQIP program and the 
improvements made by Congress in the 2002 Farm bill. We are 
concerned that NRCS has not been monitoring EQIP projects or 
providing animal feeding operations with the assistance to meet 
their regulatory requirements. Specifically, we understand that 
EQIP provided $483 million in assistance to all agricultural 
operations in fiscal year 2003. Of the $483 million, $314 
million was provided to livestock operations, of which $105 
million was directed to animal feeding operations.
    This is troubling. If these numbers are correct, we believe 
the allocation within the livestock sector does not place 
enough emphasis on confined animal operations and their 
associated regulatory compliance costs, which was a major 
intent of Congress. The situation is particularly vexing 
because, in promulgating the revised animal feeding operations 
rule in 2003, EPA, in part, justified the heavy regulatory 
burden on producers by reference to EQIP funds available for 
producer assistance.
    With regard to the Wetlands Reserve Program, President Bush 
noted the role that the incentive-based program such as the WRP 
played in achieving the goal of no net loss, and specifically 
lauded the response of farmers and ranchers to such approaches. 
One recommendation we have is that prior to a landowner being 
allowed to place a parcel of land into the WRP, the adjoining 
landowner should be notified and assured that they will not be 
affected by any change in drainage patterns. We have seen first 
hand instances where a landowner's participation in the WRP has 
altered the drainage on adjacent farmland and resulted in 
wetlands violations and land use restrictions and those types 
of things.
    The Farm Bureau has advocated for increased conservation 
funding in technical assistance in the 2002 Farm bill. As 
local, State and Federal environmental regulations has 
increased, cost sharing and technical assistance are essential 
to addressing public concerns relating to the environment. We 
are troubled by the ongoing shortfall of technical assistance 
funding for both CRP and WRP. These shortfalls will result in a 
cut for EQIP and other programs in order to deliver CRP and 
WRP.
    We believe that every program should cover its own 
technical assistance delivery costs. It is also important that 
NRCS maintain adequate career manpower resources for program 
delivery. It will be necessary to utilize technical service 
providers to supplement these resources. We support the use of 
third party technical service providers to ensure adequate 
delivery of the needed services.
    We recognize the challenges the NRCS faces with limited 
Government manpower for program delivery. The situation is 
compounded by the increasing regulation which has made 
conservation planning significantly more complex and time-
consuming.
    We appreciate the opportunity to offer these brief 
perspectives on some of the conservation programs of the Farm 
Security and Rural Investment Act of 2002. These programs 
provide great opportunity to agricultural producers and great 
benefit to the nonfarm public.
    Thank you.
    [The prepared statement of Mr. Christopherson can be found 
in the appendix on page 103.]
    Senator Crapo. Thank you very much, Mr. Christopherson. You 
were right on time.
    Mr. Hansen.

STATEMENT OF JOHN K. HANSEN, PRESIDENT, NEBRASKA FARMERS UNION; 
            ON BEHALF OF THE NATIONAL FARMERS UNION

    Mr. Hansen. Thank you, Mr. Chairman, members of the 
committee. I am John Hansen, President of the Nebraska Farmers 
Union.
    Our National Farmers Union represents over 260,000 
independent, diversified, owner-operated family farms and 
ranches across the Nation. We appreciate the opportunity to 
appear before you today and to discuss the conservation 
programs of the 2002 Farm bill.
    In the interest of time, let me get right at our list of 
conservation considerations.
    Our National Farmers Union policy, set by our members, 
strongly supports public funding for soil and water 
conservation programs and the necessary technical support to 
properly implement them. We believe that the 2002 Farm bill is 
a long overdue step forward in conservation funding, while 
providing new initiatives and the expansion of existing 
programs. I am actively involved in helping make these 
conservation programs work. As a member of the Nebraska State 
Technical Committee, the Environmental Quality Incentives 
Program subcommittee, and the Conservation Security Program 
subcommittee, I am actively involved in making these programs, 
as are my Farmers Union counterparts around the country.
    The good news is that conservation program funding has 
increased. The bad news is the funding for the necessary 
technical assistance to help our farmers and ranchers put often 
complex conservation systems into operation simply has not kept 
pace with dramatically increased workloads.
    Our local governmental entities in Nebraska that are 
responsible for soil and water conservation and our natural 
resource district system used over $1 million of local property 
tax revenues last year to help fund additional clerical staff 
to help support NRCS implement Federal conservation programs, 
yet we are still falling behind. We ask for your support to 
increase additional funding for NRCS technical support staff.
    Our farmers and ranchers want to use conservation programs 
to protect and enhance our natural resources. However, demand 
for these programs far exceeds current funding. In Nebraska, 
there was approximately $263 million in requests for EQIP 
programs, and yet there was only $28 million worth of funding 
actually that was accepted. That is 11 percent of the program 
demand.
    CRP continues to be a heavily utilized program by Nebraska 
producers, with 1.1 million acres currently enrolled. CRP is 
then used as the base for many additional programs and is 
considered to be the single most important program for 
protecting our soil, water, fish, and wildlife resources. For 
example, in Nebraska our Game and Parks Commission has invested 
over a million dollars a year in three programs that enhance 
CRP acres.
    I am encouraged that we are expanding conservation programs 
for grazing lands, restoration and protection, which in my 
judgment has been lacking. Because of the diversity of our 
State's regional resource needs, State and local advisory 
committees are providing a great service by helping us tailor 
our programs to meet our local resource needs.
    Farmers Union strongly supported the new Conservation 
Security Program included in the 2002 Farm bill. We think it is 
appropriate to financially reward good resource management. We 
are very concerned that USDA's proposed CSP implementation plan 
that uses targeted watersheds is not consistent with the 
original intent of Congress for a full-scale nationwide 
program.
    In summary, the National Farmers Union feels it is 
important that Congress: one, recognize the importance and 
popularity of conservation programs among farmers and ranchers 
nationwide as a tool to protect and enhance our Nation's soil, 
water, and wildlife; two, that we fully fund all those 
conservation programs included in the 2002 Farm bill; three, 
that we fully fund technical assistance for implementing all 
farm bill conservation programs, including the use of mandatory 
funds to achieve this goal; and four, that we ensure the newly 
created Conservation Security Program is implemented as 
intended by Congress and not be diverted or restricted by the 
USDA rulemaking process.
    We look forward to working with you, Mr. Chairman, and 
members of this committee and the Senate, in the days ahead to 
help fulfill the promise of the expanded conservation 
provisions provided in the 2002 Farm bill so that our farmers 
and ranchers do have the tools that we need to help protect our 
soil and water resources for the generations yet to come.
    Thank you for this opportunity to appear before you today.
    [The prepared statement of Mr. Hansen can be found in the 
appendix on page 112.]
    Senator Crapo. Thank you very much, Mr. Hansen.
    Mr. Wilson.

STATEMENT OF BILL WILSON, PRESIDENT-ELECT, NATIONAL ASSOCIATION 
                   OF CONSERVATION DISTRICTS

    Mr. Wilson. Thank you, Mr. Chairman, and members of the 
committee. I am Bill Wilson. I am president-elect of the 
National Association of Conservation Districts and live in 
eastern Oklahoma. NACD represents 3,000 conservation district 
members and a little over three million cooperators in this 
country.
    We strongly support incentive-based approaches to private 
working lands conservation, so you might imagine how excited we 
were when the 2002 Farm bill added authority in those areas. We 
strongly support that and, in fact, our members are locally led 
in conservation. That's what we're about. That theme was 
repeated throughout the Farm bill and we were excited about 
that as well.
    I want to thank this subcommittee for your leadership in 
developing this farm bill, and we look forward in future farm 
bills to work with you. As we know, and as has been said 
already, this has been the largest private working lands effort 
that we have seen come out of this Government and this Congress 
ever, and we applaud the bill.
    We have been involved with farm bill conservation programs 
from their very beginning, our members have, for 60 years. In 
fact, many of our members are helping implement this farm bill 
through the offering of technical assistance and as technical 
service providers, so we are intimately involved here. We are 
direct partners with NRCS at the local level and our members 
are housed in the same office with their staff, so we certainly 
have a vested interest in making this farm bill a success.
    We are concerned, however, that the budget request in 2005 
starts to reduce the funding levels that were committed to in 
this farm bill. EQIP would be reduced nearly 20 percent, as you 
know, $215 million below the authorized level, the WHIP program 
by more than a 31 percent reduction, and the WRP program by 
around a 20 percent reduction. The budget request caps the CSP 
program at an arbitrary level instead of fully funding at its 
national program provision, and it provides no Commodity Credit 
funding for the small Watershed Rehabilitation Program, which 
in my State is a very important program and a real concern that 
we have.
    We applaud the Senate budget resolution, the language that 
attempts to address the technical issue situation with the WRP 
and the CRP programs. In the past, taking their technical 
assistance from the donor programs, as has been stated earlier, 
that takes money away from producers that could be used out 
there to implement conservation on the land. We applaud the 
Senate budget resolution language and support that. We hope 
that can stay in.
    The CSP program is one that we are really excited about. It 
truly does take conservation to the next level in this country 
in our mind. It gives the American taxpaying public security 
that the conservation practices that they fund will be in 
place, and that they will receive the benefits that are 
intended and that they are paying for rightfully so should 
happen.
    We are concerned about the watershed approach, though. In 
the rule that is being written now, it is too limited. It might 
be a way to start understanding that there's a $41 million 
limit on the program in this year. We need to remember that 
that rule was written before that cap was lifted in the Omnibus 
Appropriations bill, so in our comments to the agency, we have 
encouraged them to not go the watershed approach, at least in 
the final version, and we have encouraged them in our testimony 
to look at coming back in a year and doing a final rule and to 
go ahead and implement this year's program under an interim 
final rule.
    We think, and they have told us from the beginning, that 
this is an important program and we need to do it right, so our 
encouragement is let's implement under an interim final rule, 
come back a year from now with perhaps another comment period 
and do a final rule, because we, too, want to get this program 
right.
    Our concern is the rule is too restrictive. It's complex in 
its eligibility requirements, it is way below the funding level 
that was in the law for base payments, and the cost share 
payments and maintenance payments as well. We believe that the 
15 percent cap on technical assistance levels is adequate if, 
in fact, the rule and the law is implemented according to the 
statute. We think that 15 percent is adequate.
    The decisions on these issues will have a major impact on 
whether or not the program is seen as rewarding good stewards 
and providing the incentives that make it worthwhile to 
participate. Now that the funding cap has been lifted, as I 
said earlier, in the Omnibus bill for 2005, we urge the 
administration and the agency to rewrite the rule and to make 
it as it was intended in the statute.
    There has been a tremendous increase in workload for NRCS 
and its partners, and as I said, we're doing what we can to 
have our members help deliver that.
    Thank you, Mr. Chairman, and I will yield for questions if 
there are any later. Thank you.
    [The prepared statement of Mr. Wilson can be found in the 
appendix on page 116.]
    Senator Crapo. Thank you very much, Mr. Wilson.
    Mr. Gallup.

           STATEMENT OF GORDON GALLUP, BOARD MEMBER, 
 NATIONAL ASSOCIATION OF WHEAT GROWERS; ON BEHALF OF NATIONAL 
               ASSOCIATION OF WHEAT GROWERS, THE 
      NATIONAL COTTON COUNCIL, THE NATIONAL CORN ]GROWERS 
               ASSOCIATION, THE AMERICAN SOYBEAN 
           ASSOCIATION, AND THE U.S. RICE FEDERATION

    Mr. Gallup. Thank you, Mr. Chairman, and members of the 
committee. My name is Gordon Gallup. I'm an Idaho producer of 
wheat and barley, a board member of the National Association of 
Wheat Growers, and the chairman of the National Association of 
Wheat Growers Environmental Policy Committee.
    I am pleased to appear before the committee today to 
present testimony on behalf of the National Association of 
Wheat Growers, the National Cotton Council, the National Corn 
Growers Association, the US Rice Federation, and the American 
Soybean Association.
    May I ask the committee's permission to make our written 
statement a part of the record?
    Senator Crapo. Without objection. All written statements 
will be a part of the record.
    Mr. Gallup. Thank you.
    Mr. Chairman, passage of the 2002 Farm bill marked a giant 
leap forward in advancing private land conservation efforts in 
this country. At the signing of the bill, President Bush called 
it ``the single most significant commitment of resources toward 
conservation on private lands in the Nation's history.''
    Thanks to your efforts, Mr. Chairman, and members of your 
committee, programs such as EQIP and WRP were expanded and the 
CRP was continued under a slightly higher cap. Under the new 
programs created, the Grassland Reserve Program, which can help 
enroll two million acres to restore and improve natural 
grassland range and pasturelands, has been a fairly smooth 
implementation, I would say.
    The other new program, the Conservation Security Program, 
has been one of the most anticipated programs among producers 
of all title II programs, the one that I had hoped would allow 
me to embrace new technologies on my own operation, allowing me 
to become more productive and efficient, the working lands 
program to reward those producers who had engaged in state-of-
the-art conservation practices already, in addition to 
providing financial assistance and encouragement to all 
producers to upgrade their conservation practices.
    Unfortunately, when the draft regulations were published, 
the program outlined in these drafts appeared to be far 
different than what the program suggested in the statute. This 
is due, in part, to the complexity of the program and the 
changing directions from Congress from the original mandatory 
spending program with unlimited scope.
    While we don't fault the NRCS or the USDA--in fact, we 
commend them for grappling with such a difficult issue, and 
it's been a tough one--the draft regulations with inconsistent 
farm definitions, priority watersheds, enrollment categories, 
ranking with enrollment categories and unwarranted reductions 
in base payments and cost share amounts is designed to limit 
participation rather than to encourage participation.
    Some have suggested that a person is more likely to win the 
lottery than to be eligible to participate in the CSP program. 
I'm very unlucky at the lottery, too, or I wouldn't be farming. 
This is because the administration, by their own admission, is 
viewing this as a capped entitlement program with limited 
resources to meet our enormous demand. However, beginning in 
fiscal year 2005, CSP will be returned to its original design 
as an uncapped mandatory spending program, and I would suggest 
that the current draft rules remain as an interim rule until 
final rules can be drafted to reflect the program as described 
in the law.
    Again, in the larger conservation picture, there remains 
the problem of how conservation technical assistance is 
accounted for. With the cost of CRP and WRP being paid for by 
every other conservation program, this needs to be changed to 
ensure that each conservation program pays for its own 
technical assistance.
    We understand that there is some language in the Senate 
version of the pending budget resolution that would direct this 
to be corrected, and we would appreciate this, assuming the 
final budget resolution is adopted.
    We would hope that the funding disbursements for these 
programs, particularly the CSP, would be administered through 
the Farm Service Agency.
    Mr. Chairman, these are the important principles that 
remain priorities for the implementation of the farm law to 
continue. We believe that each conservation program should pay 
for its own technical assistance; second, we believe that the 
Conservation Security Program should be implemented and funded 
as originally intended by Congress in the 2002 Farm bill; and 
finally, we will continue to oppose any attempt to amend, alter 
or divert funding away from farm bill programs as authorized by 
Congress and signed into law by the President nearly 2 years 
ago.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Gallup can be found in the 
appendix on page 121.]
    Senator Crapo. Thank you very much, Mr. Gallup.
    Mr. Nelson.

          STATEMENT OF JEFFREY W. NELSON, DIRECTOR OF 
      OPERATIONS, DUCKS UNLIMITED, INC; ON BEHALF OF THE 
          CONGRESSIONAL SPORTSMAN'S FOUNDATION; DUCKS 
UNLIMITED; PHEASANTS FOREVER; THE INTERNATIONAL ASSOCIATION OF 
   FISH AND WILDLIFE AGENCIES; THE IZAAK ]WALTON LEAGUE; THE 
                   WILDLIFE SOCIETY; AND THE 
                 WILDLIFE MANAGEMENT INSTITUTE

    Mr. Nelson. Thank you, Mr. Chairman, and members of the 
subcommittee.
    As noted in the introduction, I am the Director of 
Operations for Ducks Unlimited at the Great Plains Regional 
office in Bismarck, ND, which covers an eight-State region, 
including South Dakota, Nebraska, Iowa and Minnesota. As the 
chairman noted, today I represent a coalition of seven wildlife 
organizations, representing hundreds of thousands of concerned 
conservationists.
    Thank you for the invitation to testify before you today. 
Your subcommittee should be proud that in many ways America's 
landscape is healthier and more productive than it has been in 
decades. The money being spent on conservation programs through 
the Farm bill is a great investment for future generations and 
is producing measurable benefits for fish and wildlife. Our 
ongoing partnerships with producers, FSA and NRCS are both 
appreciated and productive.
    In light of time constraints today, I will simply give some 
very brief examples of the dramatic results of the Farm bill's 
conservation title, particularly focused on the Conservation 
Reserve Program, or CRP, and outline some of the challenges we 
face.
    CRP is extremely well-received by producers and has had 
clear measurable benefits to wildlife. As illustrated in this 
first chart to my right, increased grassland cover results in 
improved nesting success for five species of prairie waterfowl. 
In Montana and the Dakotas alone, 4.7 million acres of CRP 
resulted in 12.4 million ducks added to the fall flight between 
1992 and 1997. The program is producing measurable benefits for 
many other species as well.
    Some claim that CRP leads to economic decline in rural 
areas. Based on chart 2, it is clear that since CRP was enacted 
in 1985, the rate of farm loss has actually slowed. Recent 
studies in North Dakota back this up.
    CRP is a very popular and effective program. Therefore, we 
respectfully request that it be fully funded, reauthorized, 
and/or expanded in the next Farm bill.
    Demand for the WRP, the WRP, is three times greater than 
the 250,000 acres annually authorized. WRP provides potential 
feeding habitat for wintering waterfowl, wild turkey, and a 
myriad of other game and nongame fish and wildlife species. Its 
benefits are well documented in our written testimony.
    Importantly to this program, we understand that the final 
technical service provider rule is due out this summer. We look 
forward to its release. Technical assistance should be provided 
for restoration so that WRP can fulfill the 2002 Farm bill 
goals. We support the Senate resolution calling for TA funds to 
be available through the CCC, and recommend enrollment and 
restoration of all authorized acres for WRP before the end of 
fiscal 2007.
    A wide variety of fish and wildlife have benefited from 
WHIP projects, the Wildlife Habitat Incentive Program, because 
it fills critical conservation gaps, helping to respond to the 
Endangered Species Act needs, and benefiting other species that 
could be headed toward listing. Demand for the program outpaces 
funding, however. Unfunded WHIP applications in fiscal 2003 
totaled $40 million, including $1.5 million of unfunded 
applications just in Idaho. We recommend full funding for WHIP 
at authorized levels.
    We applaud the establishment of the Grassland Reserve 
Program, GRP. Most native grasslands in the heart of the U.S. 
have been converted to cropland since the 1800's. Once plowed, 
they are expensive and nearly impossible to restore. GRP would 
help prevent conversion, conserving wildlife habitat in the 
process.
    Demand for GRP funding is also overwhelming. In South 
Dakota, applications for funding total $150 million, but only 
$1.4 million was allocated to the State. In North Dakota, less 
than 1 percent of 471 applications could be funded. Due to the 
overwhelming demand, increased funding should be considered in 
upcoming years and in the next Farm bill.
    Finally, maintaining an effective Swampbuster remains vital 
to achieving the overall net increase in wetlands that the 
President committed to in his Earth Day speech 3 weeks ago. 
Studies referenced again in our written testimony point to the 
high value of wetlands protected by this program. Swampbusters 
should be maintained and enhanced in the next Farm bill, 
including better enforcement, as suggested in a recent GAO 
report.
    In conclusion, the challenge we face is to provide funding 
and support for these programs at levels already authorized. 
Moreover, demand remains strong from producers for the 
expansion of several popular program that offer tremendous 
returns to the American taxpayer, both fiscally and in terms of 
conservation. We remain committed to assist in any way possible 
to meet these challenging demands.
    Mr. Chairman, thank you for this opportunity to present our 
view of the outcomes, benefits and importance of this farm bill 
and its conservation programs. Please do not hesitate to call 
upon us for any reason regarding any of these important issues.
    I would be happy to answer questions if there is time.
    [The prepared statement of Mr. Nelson can be found in the 
appendix o page 124.]
    Senator Crapo. Thank you very much, Mr. Nelson.
    Mr. Petty.

STATEMENT OF DAVID PETTY, ON BEHALF OF THE NATIONAL CATTLEMEN'S 
   BEEF ASSOCIATION; NATIONAL CHICKEN COUNCIL; NATIONAL MILK 
                     PRODUCERS FEDERATION; 
           NATIONAL PORK PRODUCERS COUNCIL; NATIONAL 
        TURKEY FEDERATION; AND THE UNITED EGG PRODUCERS

    Mr. Petty. Good morning, Mr. Chairman. I am David Petty 
from Eldora, IA. I am a farmer and rancher with a diversified 
crop and livestock operation.
    I would like to note that we recently received an award 
from NCBA, the national environmental stewardship award, as 
well as from EPA for environmental excellence. We do use a lot 
of conservation practices in our operation and these programs 
are very important to me personally.
    Today I am here representing the National Cattlemen's Beef 
Association, of which I'm a member, and I am here representing 
the pork, dairy, beef and poultry industries. The testimony 
today will include all of those as well as the livestock.
    We are very grateful to you and the members of the 
subcommittee for holding this hearing and allowing us an 
opportunity to provide to you our views of the implementation 
of the conservation title of the 2002 Farm bill. We cannot 
stress enough how important it is to our producer members for 
the conservation title to be implemented well and effectively, 
and we welcome your commitment to this objective.
    We know the members of this subcommittee understand better 
than anyone the significance of the economic contribution that 
livestock producers make to the U.S. agricultural sector. 
Livestock receipts were a little more than $100 billion last 
year, and consistently they average over 50 percent of the 
total agriculture receipts. We are the single biggest customer 
of the U.S. feed crop producers and our single largest expense 
is the feed we purchase for our livestock. Without a doubt, 
livestock agriculture is value-added agriculture.
    Environment Quality Incentive Program. Livestock producers 
made it a top priority to work together in the 2002 Farm bill 
process to ensure that the EQIP program was well funded and 
properly structured. They were and continue to be seriously 
alarmed by water and air quality regulations being imposed on 
AFOs. While EQIP has been able to help some AFOs in 2003, more 
help is needed. Our written testimony goes into considerable 
detail on these items, but I will mention a few of them here.
    We believe NRCS should set aside EQIP funds at the State 
level for the specific purposes of addressing animal feeding 
operations. Producers seeking assistance with costly regulation 
requirements should not be ranked lower than they would 
otherwise if they had not done a good job addressing the manure 
issues in previous times. Many thousands of livestock producers 
need and want comprehensive nutrient management plans, and EQIP 
is not helping enough for this. If EQIP can't work, then we 
need NRCS to find some other ways to help the producers get the 
CNMPs that they are desiring to get.
    Mobile and portable equipment that is effectively and 
economically used for transferring manure from these AFOs to 
better utilize it as a nutrient also needs to be considered as 
cost share equipment, which at the present time it is not. APOs 
application for EQIP assistance to install air quality 
protection and odor reducing systems must be given higher 
priority than they presently are.
    We are deeply concerned that the Department excludes custom 
feeders from EQIP. EQIP was intended for everyone, but they are 
not eligible.
    We support a budget resolution this year that would provide 
funds to CRP and WRP to pay for their own technical assistance, 
rather than drawing in $60-100 million from EQIP, and we 
support Congress passing subsequent authorization legislation 
that would direct USDA to use these new funds in the base line 
to pay for CRP and WRP financial technical assistance.
    The Conservation Security Program. A number of members of 
our agriculture committee were excited by the enactment of the 
Conservation Security Program as part of the 2002 Farm bill. 
Other groups are leery of the new program for fear that it 
would prop up inefficient producers and hurt the overall 
efficiency of the industry. Our overall goal is to create a 
regulatory and business environment in which our members can 
thrive and produce the food needed for America and the world. 
We will be particularly supportive of these concepts of CSP 
that promote the economic efficiency of producers.
    The program needs to be fixed in many ways, some of which I 
will highlight:
    Enrollment in the program should not be limited to a few 
watersheds across the country. Producers should not be required 
to address significant water and air quality concerns prior to 
getting enrolled in the program. All resource concerns, 
particularly air quality, should be accorded equal weight with 
soil and water for the enrollment of this program.
    Limits of feedlot participation in the program for base 
payments and for watershed selection should be eliminated. The 
lower payment rate that is proposed in the rule will reduce 
producer interest, and they certainly won't be knocking the 
door down.
    In the Grassland Reserve, we certainly support that as it 
was intended, just keeping grasslands in grasslands versus 
tearing them up. We certainly applaud the NRCS for the work 
they have done through WHIP, helping with the sage grouse and 
keeping that from being listed, and we support the technical 
services.
    Thank you, sir.
    [The prepared statement of Mr. Petty can be found in the 
appendix on page 138.]
    Senator Crapo. Thank you very much, Mr. Petty.
    Mr. Thicke.

   STATEMENT OF FRANCIS THICKE, MEMBER, IOWA STATE TECHNICAL 
 COMMITTEE, ON BEHALF OF THE SUSTAINABLE AGRICULTURE COALITION

    Mr. Thicke. Thank you, Mr. Chairman.
    My name is Francis Thicke. I am a farmer from southeast 
Iowa. In the past I farmed in Minnesota, and actually, in the 
meantime, between, I spent some time in grad school and came 
and worked for the USDA in Washington, where I helped write the 
conservation programs in the past. I would like to tell my 
friends I'm a ``born again farmer.''
    Our farm that we are now farming in Iowa was in corn and 
soybeans. It was very eroded. It's hilly land, the farm, and we 
planted it basically in grasses and in conservation crops. As 
Dave Petty's farm, farms can be transformed drastically. Dave 
is a little modest. He has won a lot of awards for his work in 
grassland conservation and cattle and livestock grazing.
    Like Dave, we get many visitors to our farm that look at 
what we're doing and would like to change. They would like to 
change from what they're doing. They don't like only 
monocropping, as you see a lot of in the Midwest. They are 
afraid to do that. They are really afraid to make these 
changes. They are dependent upon the commodity programs and 
they don't see how they can make these changes.
    The Conservation Security Program can really come to the 
aid of farmers today. If properly implemented, we could see a 
big change in American agriculture, from monoculutre, from 
resource degradation--one that we don't hear about from 
agriculture, resource degradation. We could make it into 
resource enhancement. I like to think that my whole farm is a 
buffer strip. People like to put buffer stripes on their farm. 
Dave's farm is a buffer strip that actually buffers for water 
and soil quality and air quality. We can really enhance our 
resources, not just try to maintain them. That is, if we can 
implement this program properly.
    How many have heard of the Integrated Crop Management 
Program, or the Integrated Farm Management Program, or the 
Conservation Farm Option in the nineties? Nobody. They all 
died. They all died because they got strangled from 
bureaucratic rule writing, some of them did, and for other 
reasons as well.
    Now the time is right. We had 14,000 comments on this 
program. Farmers are excited. They are looking for something 
out here. Of course, I'm not going to mention all the things 
that are wrong with CSP. Fourteen thousand comments came in and 
we have heard them already here.
    Just a few of them I will mention, though. A 90 percent 
reduction in payment rates, that means that a 10 percent 
payment rate for these base payments. That means in some cases 
it's like less than a dollar an acre. Farmers are not going to 
sign up for that. It is actually ridiculous. For pastures, it's 
much less than for cropland. For pastures, for resource 
conserving uses, it's less than for cropland, which is more 
resource degradating.
    The rotating watersheds, the mysterious rotating watersheds 
that Senator Harkin talked about, you may have to wait 8 years 
to sign up if you don't quite get in in 1 year. The low cost 
share rate for the Conservation Security Program versus EQIP 
and other programs. A prohibition on renewing contracts, the 
convoluted categories and ranking systems. What's going on 
here? It's really convoluted. Again, I don't want to see this 
program strangled by this bureaucratic rulemaking.
    From my experience at USDA, we have writing rules and we 
don't have conservation minded NRCS people working the way they 
would normally work. We see here a political process. We have 
the ``tail wagging the dog.'' The tail here is the NRCS, and 
the dog is being wagged by some political process. What I see 
here is actually the long arm of the Office of Management and 
Budget of the White House. We can talk to Chief Knight until 
we're blue in the face, but it really isn't going to make a 
difference as long as this is a political process.
    For example, the 15 percent technical assistance thing is 
really a facade. That assumes this budget cap, which Congress 
has taken off, as you well know, and now that is still assumed 
to be driving the process. I would like to think of it as the 
one domino that knocked all of the other dominos down. All 
these problems at CSP are a result of this alleged budget cap, 
which doesn't exist. I guess I would suggest that the next time 
you bring an OMB budget examiner to one of these hearings here.
    Now, Chief Knight has said that he has several lawyers that 
have said NRCS is within the law. Well, frankly, I could find 
several lawyers that can tell you just about anything. Congress 
has said no cap, no ranking criteria, has specifically said no 
ranking criteria, no cap. What part of ``no cap'' don't they 
understand? I don't get it.
    Basic junior high civics is that there are three branches 
of Government. Congress makes the law and the Executive branch 
enforces the law. What's happening here is they're trying to 
rewrite the Farm bill. Are we going to have to use the third 
branch, the Judicial branch, to stop this?
    I would ask you Senators here to make this happen, because 
this program could get strangled like other programs have in 
the past.
    Thank you.
    [The prepared statement of Mr. Thicke can be found in the 
appendix on page 150.]
    Senator Crapo. Thank you very much, Mr. Thicke.
    To the entire panel, I want to thank you. You were all very 
good at staying within your time limits, which has helped us 
tremendously.
    Before I proceed with my questions, I want to make a 
request on behalf of Senator Talent, who was here but had to 
leave for another hearing, and who wanted to have his statement 
submitted for the record. Without objection, it will be 
submitted.
    [The prepared statement of Senator Talent can be found in 
the appendix on page 44.]
    Senator Crapo. I have just a couple of questions. The first 
one I will direct to you, Mr. Gallup, although I would welcome 
input from any members of the panel who have a thought on this.
    Noxious weeds are one of the big threats that we are facing 
right now in our environment. Fortunately, they are one problem 
where, when addressed early can be managed in an affordable 
way. That and the severe threats that they pose is one reason 
that we made weed treatments eligible for cost share assistance 
under the Farm bill programs. I'm seeing more conservation 
spending being used to address these threats.
    Do you agree that these threats should be and can be 
addressed effectively through the conservation programs of the 
Farm bill?
    Mr. Gallup. They definitely have been, and are being. These 
conservation programs help us tremendously through the 
conservation tillage where weeds have definitely been under 
control. We are seeing a little bit on the rangelands, and 
that's probably our worst areas right now of the noxious weeds, 
but we're getting them under control, also, through the natural 
processes.
    Senator Crapo. Thank you very much. Again, I'm going to 
toss out a couple of questions here and anybody on the panel 
who is interested is welcome to respond.
    Another area that we tried to address in the Farm bill was 
to try to make sure that those who are facing an increased 
regulatory burden under Federal environmental laws got 
increased weight in their applications under various farm 
bills. I would like to know your thoughts about whether that's 
a good idea and whether it's working. Even further, there is a 
notion that has been suggested, which I am at least evaluating, 
which is, namely, that areas where there is designated critical 
habitat under the Endangered Species Act would be given 
additional weighting in the application of the farm programs.
    Would anybody like to jump in on those issues, for or 
against? Mr. Wilson.
    Mr. Wilson. The first one you talked about certainly is 
being addressed and should be under these programs. In my 
conservation district where I live, we have a number of 
integrated poultry and swine producers that are under certainly 
stringent Federal regulations.
    In my State, we lead the Nation in State regulations on 
those types of operations as it relates to water quality 
issues. We are the first State, to my knowledge, that actually 
requires those producers to have a license, and that requires 
them to go to school, if you will, for continuing education, so 
many hours a year to maintain that license to stay in business.
    In my particular district, we have really, over the past 
Farm bill and this farm bill, been able to assist those 
producers in complying with those environmental regulations. It 
has been very helpful to them to do that. That is certainly a 
very important aspect of these programs.
    Senator Crapo. Thank you.
    Does anybody else want to jump in? Mr. Hansen.
    Mr. Hansen. Mr. Chairman, I would say that in Nebraska we 
have 67 percent of our EQIP dollars going to livestock 
operations. I have been involved in doing conservation work now 
for 30 years as a local public official, or involved in these 
kinds of issues and discussions.
    It seems to me that, within the ag community, you get a 
very opinionated response with a lot of diversity over whether 
or not the traditional conservation programs that are geared 
toward lands and conservation, wind and soil erosion, whether 
or not those dollars ought to be put in the same pool and 
compete with specific water quality problems that are the 
result of CAFOs, that that's not the traditional view of what 
conservation was supposed to be about or should be involved in. 
Yet, water quality is important.
    It seems to me that, as I'm helping to administer these 
programs and give advice at the State level, perhaps we need to 
take a look at different kinds of criteria for livestock.
    My personal view--and it's not the view of the 
organization--is that we struggle with this whole business of 
whether or not we ought to be using public tax dollars to 
subsidize the waste management problems created by vertical 
integrators who are, in fact, unfairly competing against 
traditional livestock producers. That argument goes on.
    I hope that that argument and area of disagreement doesn't 
jeopardize our opportunity to move forward with general soil 
and water conservation programs as a whole, and that the Farm 
bill presented the opportunity to do that. I would hate to see 
us end up having to short that opportunity after we have spent 
all of this money and all of this education, for all of these 
years, trying to get farmers to the point where they actually 
want to put conservation on the land. I would hope that we 
wouldn't short them when we provide incentives for them to do 
it.
    Senator Crapo. Thank you.
    Mr. Thicke.
    Mr. Thicke. We have to be careful not to go too far in 
using conservation funds to help with regulatory burdens. In 
Iowa, in the State Technical Committee, when we saw the EQIP 
funds be allowed to go to CAFOs, we saw a huge difference in 
the number of participants. It went from hundreds of 
participants in EQIP down to--I don't remember the numbers any 
more, and maybe Dave does. It was almost to 25 percent or so. 
All that funding was funneled into a few producers, large 
producers, and people have to question that. As was mentioned, 
do we really want to fund commercial organizations that have to 
meet a regulatory rule anyway? We should probably use that 
money instead to help those who are not yet regulated but we 
can get up to a higher level of functioning.
    Senator Crapo. Thank you.
    Mr. Nelson, and then Mr. Gallup.
    Mr. Nelson. I will just quickly add, of course, we're all 
concerned about those species that have reached the threatened 
or endangered level. One other thing to think about is 
targeting groups of species that are maybe sliding toward that 
level of listing and try to target programs to keep those from 
getting to the point where these kind of regulatory options 
need to be considered.
    Senator Crapo. Thank you.
    Mr. Gallup.
    Mr. Gallup. Mr. Chairman, in thinking about endangered 
species, the only reason I would prioritize them higher on the 
list would be to help and assist the farmer that is impacted by 
that, because the cost is enormous sometimes to meet those. I 
would say they need some help so that they can be viable still.
    Senator Crapo. Thank you.
    Mr. Christopherson.
    Mr. Christopherson. Any time you get into the issue of 
targeting, you have to be careful so that you don't lose sight 
of what the initial activity of Congress was. If, indeed, it 
was dealing with conservation issues as it relates to clean 
air, clean water, et cetera, then size really becomes 
irrelevant, even though, yes, while the dollars per individual 
site may increase, but supposedly so should the impact. That is 
the first thing you need to be careful of.
    Second, we, as producers, are operating in the real world, 
where we have to pay our bills, and any time you slap on 
regulatory requirements or anything like that, there is a cost 
that we have to pay.
    Now, let me say first of all that farmers in most cases are 
willing to shoulder some of that, and we can be innovative in 
how we address some of those issues to meet those goals. At the 
same time, the reality of it is, if you're going to put a level 
of expectation on producers, you need to be a little careful. 
Otherwise, you will turn them off and you will get less 
participation than what you would have gotten initially without 
any program at all.
    Senator Crapo. Thank you.
    Mr. Petty, did you want to jump in here?
    Mr. Petty. Yes. Mr. Chairman, remember that one of the 
original intents of EQIP was to help producers to come into 
compliance with regulations and preventing them from needing 
further assistance down the road. We have a lot of producers in 
the feedlot scenario, farmer producers, small by national 
standards, but who truly need to have more EQIP money. If we 
had more EQIP money, we could solve a lot of things.
    Being that we don't, it goes back to the local level of 
deciding what the priority and what the ranking criteria is. If 
it turns into being some social issue that becomes involved in 
there, and if the social issue becomes too strong, then the 
ranking criteria does not justify what is really going to get 
the most ``bang for the buck.'' Consequently, a lot of the 
producers with livestock are not getting the help that they 
need because of the social issue.
    Senator Crapo. Thank you.
    Senator Harkin, I have a lot of other questions, but I know 
we're going to run out of time here. You can take the rest of 
the time up until noon, or until they call the vote, if you 
would like to do that.
    Senator Harkin. Thank you very much, Mr. Chairman. Again, 
let me thank you for holding this hearing. I want to thank all 
of our panel for being here today.
    There are about three different areas I want to cover. 
First, Mr. Wilson, from the NACD, I assume you were in the room 
when I had an exchange with Mr. Knight about that 15 percent 
cap and why it's different than the EQIP program. I believe in 
your statement you basically address that, at least in your 
spoken words here today, and I wanted to have you say again.
    Is the 15 percent cap an impediment in implementing the CSP 
program?
    Mr. Wilson. In my view, Mr. Harkin, and in the view of our 
association, our members, it is not a problem if the rule is 
written more in line with what the statute says. It becomes a 
problem when the payment limitations are put on that they're 
suggesting, and certainly the conservation practices that are 
numbered and named in CSP by the list don't list construction, 
if you will, or the engineering type practices. The last one 
leaves it to the discretion of the Secretary to be able to fund 
any practice that she deems necessary, or he, whoever it might 
be.
    It is our belief that the intent of the law was to not 
implement, design and implement practices, but was to make 
incentive payments available to those people who had those 
practices in place and to give the public, as I said in my 
comments, some security that the practices they helped pay for 
with their tax dollars will be maintained over a period of 
years and, consequently, the outcomes that they expect and are 
willing to pay for will be realized.
    Senator Harkin. I appreciate that. I will be talking more 
with Mr. Knight about that. That 15 percent cap, as I said 
earlier, is a manufactured problem. It's not a real one.
    I want to go to you, Mr. Petty. Again, I thank you for 
being here and for your statement. One of the things you 
touched on and we have to make clear also is that, in these 
conservation programs, we don't have just one conservation 
program that has a border here and a border here, and then 
another one has a border here and a border here. These aren't 
all segmented out. They overlap. Almost every one of these 
programs, whether it's WRP or CRP or WHIP or anything, they all 
overlap on one another. There is probably a central core of 
each of them that's unique to that program, but on the edges, 
they can go into one or into the other. We have purposely 
designed these programs that way, understanding that you may 
not fit into one little niche but you may fit in that gray area 
where maybe both of them will apply.
    Now, the EQIP program, for example, in terms of livestock 
operations, has been a good program. We've got some problems in 
that in terms of the split, and we talked about that earlier. 
Hopefully, we're getting closer to a good split on it. It was 
never intended that the CSP program would not apply to 
livestock production. It may not apply to waste structures 
that's EQIP. It didn't mean that it wouldn't apply to other 
things in terms of feedlots and things like that that could be 
eligible for CSP on a working land. These are working lands, 
and to the extent they're carving those out of CSP really 
upsets me.
    I'm really glad that you pointed that out, that this should 
be eligible also under CSP. We were all there when we wrote the 
law, and there is nothing that excluded that at all. I wanted 
to make that point, to make it very clear that maybe some 
people thought the livestock producers weren't included, and 
that was never our intention. It is not in the bill anywhere. 
We wanted to cover everyone who was a producer in any way.
    Also, the other thing you mentioned about soil and water on 
CSP. Here again is where CSP can come in for a livestock 
producer. As you know, in Iowa we have concern with air 
quality. We all recognize that. CSP would handle it because it 
addresses air quality. Again, this is one area in which the way 
the Department is moving on this would exclude you from meeting 
air quality standards and qualifying under the CSP program.
    Am I stating it fairly correctly?
    Mr. Petty. That's the way the rules are coming out.
    Senator Harkin. Mr. Chairman, this was never intended that 
way. I didn't get into that with Mr. Knight before. We didn't 
have enough time. This is one area where we've really got to 
have this final rule that's different than what they're 
proposing.
    One last thing, Mr. Petty. You mentioned that USDA excluded 
custom feeding operations from EQIP. Can you explain your 
understanding for the basis for this policy and the impact on 
the livestock industry?
    Mr. Petty. I'll try, but I'm not sure I understand it, 
either, why they did it.
    They are saying that a custom feeder is not an agriculture 
entity, and they are just as much as everyone else. They're not 
a part of an agriculture entity, and in their Schedule F 
they're not filing that way. It doesn't make a bit of sense to 
me because, in the beef industry, there are more and more 
custom feeders all the time and there are a lot more individual 
producers that are doing some custom feeding in their own 
operation just to help supplement their operations. It was 
probably just an oversight.
    Senator Harkin. Again, Mr. Chairman, I guess this is 
something that really need to be corrected. Custom feeding 
operations ought to be included. I have no understanding of 
what their rationale is for taking them out. Again, hopefully, 
we can prepare a letter and try to find out what their thinking 
is on this. I don't know if they have followed through on it, 
and maybe they will change their proposed regulations on that.
    Mr. Gallup, give us a look to the future. CSP is fully 
funded and we move ahead on this as it is supposed to, a 
national program. What does the future look like in terms of 
farmers, no matter whether they're in Idaho or--is it lentils 
you grow?
    Mr. Gallup. Potatoes.
    Senator Harkin. Potatoes and all that kind of thing, and in 
my State, corn and beans, and wheat in your area, what does 
this mean? Just give me some idea of what it might mean for the 
future.
    Mr. Gallup. For me in the future, what I was looking at 
when I first heard CSP, I thought this is going to give me the 
ability to go in and use the technologies that are out there, 
that right now are cost prohibitive for a wheat farmer with 
$3.80 wheat and a drought. To me, it gives me the opportunity 
for variable rate technologies to be put on the farm, which in 
turn helps in several ways, applying fertilizer better, puts in 
it less concentrated areas so that you have less ability to 
leach that into the water and so on. You're applying the 
fertilizer as it's needed for the type of soil you have, those 
types of things where the GPS technology is out there. Yield 
monitoring can help you with those types of things that are 
really cost prohibitive for a farmer like myself.
    That is what I had hoped to see CSP accomplish.
    Senator Harkin. Anybody else?
    Mr. Petty. I'll take a shot at that.
    When I first saw CSP come out, I went straight to the local 
office and told them, I said I've been in there a lot of times 
and do a lot of different conservation practices, and I said we 
can use my place, and if there's something else I need to be 
doing out there, let me know so that we can get it in place.
    You know, they came up, the DCs, and as near as they 
thought, we had everything just totally in line and they 
couldn't recommend another thing that maybe I could be doing 
along the way. I thought this is great. This really fits me, to 
finally get some recognition for some waterways that I had put 
in that a lot of other people had been farming straight through 
and putting sedimentation straight into the water, all these 
different good practices.
    I had bordered the river for seven miles, and I'm not in a 
watershed. You explain that to me. I'm probably at about year 
nine, so as it looks right now, I don't think I'll ever be 
eligible for CSP.
    Senator Harkin. You were the type of people that we had 
envisioned--and we talked about this a lot in the development 
of the Farm bill--that in the past, it seems that every time we 
had a program, the bad actors got in and the people that had 
been doing it were carved out. In fact, we know in the past 
that a lot of people tore up things just to get in the program. 
We didn't want that to happen. This is an excellent example of 
what we're talking about.
    Mr. Christopherson, before my time runs out, I want to give 
you a chance.
    Mr. Christopherson. You identified something in your 
opening statement regarding things happen as we notice what our 
neighbors are doing. I view the CSP program as an opportunity 
to get some examples out there for other people to see.
    Each of us recognize there are things on our own farms that 
we would like to change, like to improve, like to address. 
Basically farmers are stewards of their land and they like to 
be good stewards, but at the same time we sometimes lack--
again, it goes back to the technical assistance that we 
sometimes don't get. We are forced into a program to in many 
cases accept money for some grand scheme, and we think, because 
farmers are innovative, we think that with a little bit of 
technical assistance, a little bit of--give us the numbers and 
we'll work with them.
    A program like this was an example of where we saw or I saw 
an opportunity to get some ideas on the ground out in practice 
and, hopefully, a lot of my neighbors would participate. That 
was what I thought was going to be exciting about the whole 
thing.
    Senator Harkin. Right down the line. I know we're running 
out of time.
    Mr. Hansen. Senator Harkin, of course, I'm Norwegian so I 
have a different take on almost everything. My view was, as you 
look through these traditional conflicts within conservation, I 
looked at the Conservation Security Program as an opportunity 
to actually reward those folks that have been good resource 
managers, had been doing the right stuff, and in a lot of cases 
had been sucking up the financial costs and paying them out of 
their own pocket rather than getting Government incentives to 
be encouraged to do the right thing that they were already 
doing a lot of. They were already being good resource managers 
and we wanted to try to let almost everyone in who was doing 
that and then, after we had rewarded them, help give them 
additional incentives to move them up to even higher levels of 
resource management through the tiered system. That was my 
take.
    Senator Harkin. Mr. Gallup.
    Mr. Gallup. Senator Harkin, I've been a dyed in the wool 
no-till farmer since 1985. I've got neighbors next door to me 
who still tell me that it will not work on my farm. A lot of it 
is because of the cost of the equipment to get started. I was 
dumb enough and young enough at that age that I sold everything 
I owned and bought a no-till drill, so it had to work. It 
works.
    That is what my whole vision, too, of this program would 
be, to help those neighbors get involved in something that I 
have seen conservation-wise on my place, that erosion is almost 
nonexistent.
    Senator Harkin. You got it. That's what we're trying to get 
to.
    I have two left, Mr. Nelson and Mr. Thicke.
    Mr. Nelson. I didn't comment a lot in my testimony about 
CSP, mostly because we're waiting for it to be implemented to 
see what kind of wildlife values it does have. We anticipate 
good things.
    I would just say that I totally agree with your point about 
this rewarding good stewardship as opposed to only having 
programs that reward those who maybe did the wrong thing and 
need help getting back to where they ought to have been in the 
first place.
    Having said that, we continue to see thousands of acres 
being plowed up, of native prairie, in many areas. I don't know 
if some of the other farm programs are taking the risk out of 
that, but I would certainly like to see programs that prevent 
that from happening and reward those who keep those kinds of 
areas intact.
    Senator Harkin. Thank you, Mr. Nelson.
    Mr. Thicke.
    Mr. Thicke. It seems to me that diversity is really the key 
thing when you look at the law, diversity of crops, not just in 
Iowa where we see all corn and soybeans, but we need to get 
more resource conserving crops in there.
    Mr. Chairman, you spoke earlier about noxious weeds. Ralph 
Waldo Emerson defined a weed as ``a plant whose value has not 
yet been discovered.''
    [Laughter.]
    We need to look at the whole system. If we begin to use 
more rotations, then these things fall out, some of these 
problems fall out as we begin to do this. Dave and I have 
discovered that cows really do like to graze and they don't 
have to stand in feedlots, so we can use the whole system in 
the CRP program.
    Senator Harkin. I appreciate all your testimonies and thank 
you very much for what you have been doing in the past. I thank 
all the organizations who are represented here.
    Mr. Chairman, it's clear that conservation is the hallmark 
of the last Farm bill. It is something that we just have to 
continue oversight on and continue to work with the 
administration to make sure that all these programs are 
implemented and funded in a way that makes them work.
    Could I just close on this note. Talking about money and 
the Farm bill and how things have changed, in this 3 years 
since the Farm bill passed, we have saved over $15 billion in 
payments that would have gone out. Why? Because prices are high 
so we had the countercyclical programs. It was $15 billion that 
we were allotted to spend, could have spent, but we didn't 
spend. It seems to me that, if we're asking for a couple of 
billion to implement all these conservation programs, and to do 
it right, we're still saving the taxpayers a lot of money. This 
idea that somehow we have to cut this down because we have a 
deficit--and I know we have a deficit; we're all trying to 
reduce that. Agriculture has done more than its fair share of 
helping out.
    Thank you, Mr. Chairman.
    Senator Crapo. Thank you very much, Senator Harkin.
    I share your views on those issues. This is a critical part 
of the Farm bill and a critical part of our effort in our 
economy, as well as in terms of our stewardship over the 
environment.
    We are 10 minutes into that vote that we were talking 
about, so we have about 5 minutes to get there. I want to again 
commend all of our witnesses for following the time restraints.
    I should also note that I have a thick binder here of all 
of your written testimony, so I understand the effort that you 
went to to put together your written as well as your oral 
testimony. We thank you for it.
    Without anything further, this hearing will be adjourned.
    Senator Harkin. Thank you, Mr. Chairman.
    [Whereupon, at 12:08 p.m., the subcommittee adjourned.]

      
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