[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
AGRICULTURAL PROGRAM AUDIT
=======================================================================
HEARINGS
BEFORE THE
SUBCOMMITTEES ON:
GENERAL FARM COMMODITIES
AND RISK MANAGEMENT;
CONSERVATION, ENERGY, AND FORESTRY;
NUTRITION AND HORTICULTURE;
RURAL DEVELOPMENT, RESEARCH, BIOTECHNOLOGY, AND FOREIGN AGRICULTURE;
DEPARTMENT OPERATIONS, OVERSIGHT, AND CREDIT;
AND
LIVESTOCK, DAIRY, AND POULTRY
OF THE
COMMITTEE ON AGRICULTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
----------
JUNE 24;
JULY 7, 13, 14, 20, 21, 27, 28;
SEPTEMBER 8, 13, 2011
----------
Serial No. 112-20
Printed for the use of the Committee on Agriculture
agriculture.house.gov
AGRICULTURAL PROGRAM AUDIT
AGRICULTURAL PROGRAM AUDIT
=======================================================================
HEARINGS
BEFORE THE
SUBCOMMITTEES ON:
GENERAL FARM COMMODITIES
AND RISK MANAGEMENT;
CONSERVATION, ENERGY, AND FORESTRY;
NUTRITION AND HORTICULTURE;
RURAL DEVELOPMENT, RESEARCH, BIOTECHNOLOGY, AND FOREIGN AGRICULTURE;
DEPARTMENT OPERATIONS, OVERSIGHT, AND CREDIT;
AND
LIVESTOCK, DAIRY, AND POULTRY
OF THE
COMMITTEE ON AGRICULTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
JUNE 24;
JULY 7, 13, 14, 20, 21, 27, 28;
SEPTEMBER 8, 13, 2011
__________
Serial No. 112-20
Printed for the use of the Committee on Agriculture
agriculture.house.gov
----------
U.S. GOVERNMENT PRINTING OFFICE
68-336 PDF WASHINGTON : 2012
For sale by the Superintendent of Documents, U.S. Government Printing
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Washington, DC 20402-0001
COMMITTEE ON AGRICULTURE
FRANK D. LUCAS, Oklahoma, Chairman
BOB GOODLATTE, Virginia, COLLIN C. PETERSON, Minnesota,
Vice Chairman Ranking Minority Member
TIMOTHY V. JOHNSON, Illinois TIM HOLDEN, Pennsylvania
STEVE KING, Iowa MIKE McINTYRE, North Carolina
RANDY NEUGEBAUER, Texas LEONARD L. BOSWELL, Iowa
K. MICHAEL CONAWAY, Texas JOE BACA, California
JEFF FORTENBERRY, Nebraska DENNIS A. CARDOZA, California
JEAN SCHMIDT, Ohio DAVID SCOTT, Georgia
GLENN THOMPSON, Pennsylvania HENRY CUELLAR, Texas
THOMAS J. ROONEY, Florida JIM COSTA, California
MARLIN A. STUTZMAN, Indiana TIMOTHY J. WALZ, Minnesota
BOB GIBBS, Ohio KURT SCHRADER, Oregon
AUSTIN SCOTT, Georgia LARRY KISSELL, North Carolina
SCOTT R. TIPTON, Colorado WILLIAM L. OWENS, New York
STEVE SOUTHERLAND II, Florida CHELLIE PINGREE, Maine
ERIC A. ``RICK'' CRAWFORD, Arkansas JOE COURTNEY, Connecticut
MARTHA ROBY, Alabama PETER WELCH, Vermont
TIM HUELSKAMP, Kansas MARCIA L. FUDGE, Ohio
SCOTT DesJARLAIS, Tennessee GREGORIO KILILI CAMACHO SABLAN,
RENEE L. ELLMERS, North Carolina Northern Mariana Islands
CHRISTOPHER P. GIBSON, New York TERRI A. SEWELL, Alabama
RANDY HULTGREN, Illinois JAMES P. McGOVERN, Massachusetts
VICKY HARTZLER, Missouri
ROBERT T. SCHILLING, Illinois
REID J. RIBBLE, Wisconsin
KRISTI L. NOEM, South Dakota
______
Professional Staff
Nicole Scott, Staff Director
Kevin J. Kramp, Chief Counsel
Tamara Hinton, Communications Director
Robert L. Larew, Minority Staff Director
(ii)
Subcommittee on General Farm Commodities and Risk Management
K. MICHAEL CONAWAY, Texas, Chairman
STEVE KING, Iowa LEONARD L. BOSWELL, Iowa, Ranking
RANDY NEUGEBAUER, Texas Minority Member
JEAN SCHMIDT, Ohio MIKE McINTYRE, North Carolina
BOB GIBBS, Ohio TIMOTHY J. WALZ, Minnesota
AUSTIN SCOTT, Georgia LARRY KISSELL, North Carolina
ERIC A. ``RICK'' CRAWFORD, Arkansas JAMES P. McGOVERN, Massachusetts
MARTHA ROBY, Alabama DENNIS A. CARDOZA, California
TIM HUELSKAMP, Kansas DAVID SCOTT, Georgia
RENEE L. ELLMERS, North Carolina JOE COURTNEY, Connecticut
CHRISTOPHER P. GIBSON, New York PETER WELCH, Vermont
RANDY HULTGREN, Illinois TERRI A. SEWELL, Alabama
VICKY HARTZLER, Missouri
ROBERT T. SCHILLING, Illinois
Matt Schertz, Subcommittee Staff Director
______
Subcommittee on Conservation, Energy, and Forestry
GLENN THOMPSON, Pennsylvania, Chairman
BOB GOODLATTE, Virginia TIM HOLDEN, Pennsylvania, Ranking
MARLIN A. STUTZMAN, Indiana Minority Member
BOB GIBBS, Ohio KURT SCHRADER, Oregon
SCOTT R. TIPTON, Colorado WILLIAM L. OWENS, New York
STEVE SOUTHERLAND II, Florida MIKE McINTYRE, North Carolina
MARTHA ROBY, Alabama JIM COSTA, California
TIM HUELSKAMP, Kansas TIMOTHY J. WALZ, Minnesota
RANDY HULTGREN, Illinois CHELLIE PINGREE, Maine
REID J. RIBBLE, Wisconsin MARCIA L. FUDGE, Ohio
KRISTI L. NOEM, South Dakota GREGORIO KILILI CAMACHO SABLAN,
Northern Mariana Islands
Brent Blevins, Subcommittee Staff Director
______
Subcommittee on Nutrition and Horticulture
JEAN SCHMIDT, Ohio, Chairwoman
STEVE KING, Iowa JOE BACA, California, Ranking
THOMAS J. ROONEY, Florida Minority Member
STEVE SOUTHERLAND II, Florida CHELLIE PINGREE, Maine
ERIC A. ``RICK'' CRAWFORD, Arkansas GREGORIO KILILI CAMACHO SABLAN,
Northern Mariana Islands
Matt Perin, Subcommittee Staff Director
(iii)
?
Subcommittee on Rural Development, Research, Biotechnology, and Foreign
Agriculture
TIMOTHY V. JOHNSON, Illinois, Chairman
GLENN THOMPSON, Pennsylvania JIM COSTA, California, Ranking
MARLIN A. STUTZMAN, Indiana Minority Member
AUSTIN SCOTT, Georgia HENRY CUELLAR, Texas
RANDY HULTGREN, Illinois PETER WELCH, Vermont
VICKY HARTZLER, Missouri TERRI A. SEWELL, Alabama
ROBERT T. SCHILLING, Illinois LARRY KISSELL, North Carolina
Mike Dunlap, Subcommittee Staff Director
______
Subcommittee on Department Operations, Oversight, and Credit
JEFF FORTENBERRY, Nebraska, Chairman
TIMOTHY V. JOHNSON, Illinois MARCIA L. FUDGE, Ohio, Ranking
STEVE KING, Iowa Minority Member
ERIC A. ``RICK'' CRAWFORD, Arkansas JAMES P. McGOVERN, Massachusetts
KRISTI L. NOEM, South Dakota JOE BACA, California
Brandon Lipps, Subcommittee Staff Director
______
Subcommittee on Livestock, Dairy, and Poultry
THOMAS J. ROONEY, Florida, Chairman
BOB GOODLATTE, Virginia DENNIS A. CARDOZA, California,
STEVE KING, Iowa Ranking Minority Member
RANDY NEUGEBAUER, Texas DAVID SCOTT, Georgia
K. MICHAEL CONAWAY, Texas JOE COURTNEY, Connecticut
TIM HUELSKAMP, Kansas TIM HOLDEN, Pennsylvania
SCOTT DesJARLAIS, Tennessee LEONARD L. BOSWELL, Iowa
CHRISTOPHER P. GIBSON, New York JOE BACA, California
REID J. RIBBLE, Wisconsin KURT SCHRADER, Oregon
KRISTI L. NOEM, South Dakota WILLIAM L. OWENS, New York
Michelle Weber, Subcommittee Staff Director
(iv)
C O N T E N T S
----------
Page
Subcommittee on General Farm Commodities and Risk Management, Friday,
June 24, 2011
Boswell, Hon. Leonard L., a Representative in Congress from Iowa,
opening statement.............................................. 4
Conaway, Hon. K. Michael, a Representative in Congress from
Texas, opening statement....................................... 1
Prepared statement........................................... 3
Lucas, Hon. Frank D., a Representative in Congress from Oklahoma,
opening statement.............................................. 5
Prepared statement........................................... 6
Witness
Murphy, William J., Administrator, Risk Management Agency, U.S.
Department of Agriculture, Washington, D.C..................... 7
Prepared statement........................................... 9
Supplementary information.................................... 35
Questionnaire................................................ 37
Subcommittee on Conservation, Energy, and Forestry, Thursday, July 07,
2011
Holden, Hon. Tim, a Representative in Congress from Pennsylvania,
opening statement.............................................. 47
Lucas, Hon. Frank D., a Representative in Congress from Oklahoma,
opening statement.............................................. 48
Prepared statement........................................... 49
Thompson, Hon. Glenn, a Representative in Congress from
Pennsylvania, opening statement................................ 45
Prepared statement........................................... 46
Witnesses
Nelson, Bruce, Administrator, Farm Service Agency, U.S.
Department of Agriculture, Washington, D.C..................... 50
Prepared statement........................................... 51
Submitted questions.......................................... 99
White, Dave, Chief, Natural Resources Conservation Services, U.S.
Department of Agriculture, Washington, D.C..................... 55
Prepared statement........................................... 60
Submitted questions.......................................... 103
Submitted Material
Huntley, Mark G., President, Irrigation Association, submitted
letter......................................................... 97
U.S. Department of Agriculture, questionnaire.................... 112
Subcommittee on Nutrition and Horticulture, Thursday, July 07, 2011
Baca, Hon. Joe, a Representative in Congress from California,
opening statement.............................................. 198
Prepared statement........................................... 199
Schmidt, Hon. Jean, a Representative in Congress from Ohio,
opening statement.............................................. 195
Prepared statement........................................... 197
Southerland II, Hon. Steve, a Representative in Congress from
Florida, prepared statement.................................... 200
Witnesses
Pegg, Rayne, Administrator, Agricultural Marketing Service, U.S.
Department of Agriculture, Washington, D.C..................... 201
Joint prepared statement..................................... 204
Bech, Rebecca, Deputy Administrator for Plant Protection and
Quarantine, Animal and Plant Health Inspection Service, U.S.
Department of Agriculture, Washington, D.C..................... 203
Joint prepared statement..................................... 204
Supplementary material....................................... 225
Submitted Material
U.S. Department of Agriculture, questionnaire.................... 234
Subcommittee on Rural Development, Research, Biotechnology, and Foreign
Agriculture, Thursday, July 13, 2011
Costa, Hon. Jim, a Representative in Congress from California,
opening statement.............................................. 265
Johnson, Hon. Timothy V., a Representative in Congress from
Illinois, opening statement.................................... 263
Prepared statement........................................... 264
Witnesses
Heinen, Suzanne, Acting Administrator, Foreign Agricultural
Service, U.S. Department of Agriculture, Washington, D.C....... 267
Prepared statement........................................... 268
Supplementary material....................................... 297
Submitted questions.......................................... 298
Questionnaire................................................ 304
Lindborg, Nancy, Assistant Administrator, Bureau for Democracy,
Conflict and Humanitarian Assistance, U.S. Agency for
International Development, Washington, D.C..................... 275
Prepared statement........................................... 277
Supplementary material....................................... 297
Submitted questions.......................................... 298
Questionnaire................................................ 345
Subcommittee on Department Operations, Oversight, and Credit, Thursday,
July 14, 2011
Fortenberry, Hon. Jeff, a Representative in Congress from
Nebraska, opening statement.................................... 441
Prepared statement........................................... 442
Fudge, Hon. Marcia L., a Representative in Congress from Ohio,
opening statement.............................................. 443
Witness
Nelson, Bruce, Administrator, Farm Service Agency, U.S.
Department of Agriculture, Washington, D.C.; accompanied by Jim
Radintz, Assistant Deputy Administrator, FSA, USDA............. 444
Prepared statement........................................... 445
Supplementary material....................................... 459
Submitted questions.......................................... 464
Questionnaire................................................ 464
Subcommittee on Conservation, Energy, and Forestry, Wednesday, July 20,
2011
Fudge, Hon. Marcia L., a Representative in Congress from Ohio,
prepared statement............................................. 488
Holden, Hon. Tim, a Representative in Congress from Pennsylvania,
opening statement.............................................. 487
Thompson, Hon. Glenn, a Representative in Congress from
Pennsylvania, opening statement................................ 485
Prepared statement........................................... 486
Submitted article............................................ 529
Witnesses
Tidwell, Thomas, Chief, U.S. Forest Service, U.S. Department of
Agriculture, Washington, D.C................................... 489
Prepared statement........................................... 492
Canales, Judy, Administrator, Rural Business-Cooperative Service,
U.S. Department of Agriculture, Washington, D.C................ 497
Joint prepared statement..................................... 501
Garcia, Juan, Deputy Administrator, Farm Service Agency, U.S.
Department of Agriculture, Washington, D.C..................... 499
Joint prepared statement..................................... 501
Submitted Material
U.S. Department of Agriculture, response to submitted questions.. 530
U.S. Department of Agriculture:
Forestry Questionnaire....................................... 556
Energy Questionnaire......................................... 584
Subcommittee on Nutrition and Horticulture, Thursday, July 21, 2011
Baca, Hon. Joe, a Representative in Congress from California,
opening statement.............................................. 620
Lucas, Hon. Frank D., a Representative in Congress from Oklahoma,
opening statement.............................................. 621
Schmidt, Hon. Jean, a Representative in Congress from Ohio,
opening statement.............................................. 617
Prepared statement........................................... 619
Witness
Rowe, Audrey, Administrator, Food and Nutrition Service, U.S.
Department of Agriculture, Washington, D.C..................... 622
Prepared statement........................................... 625
Submitted questions.......................................... 661
Questionnaire................................................ 663
Submitted Material
Davis, Lisa, Vice President of Public Policy, Feeding America,
submitted statement............................................ 655
Stone, Sam, Vice President, Government Relations, Dairy Farmers
of America, Inc., submitted letter and statement............... 659
Subcommittee on General Farm Commodities and Risk Management,
Wednesday, July 27, 2011
Boswell, Hon. Leonard L., a Representative in Congress from Iowa,
opening statement.............................................. 693
Prepared statement........................................... 695
Conaway, Hon. K. Michael, a Representative in Congress from
Texas, opening statement....................................... 689
Prepared statement........................................... 689
Lucas, Hon. Frank D., a Representative in Congress from Oklahoma,
opening statement.............................................. 690
Prepared statement........................................... 692
McGovern, Hon. James P., a Representative in Congress from
Massachusetts, prepared statement.............................. 697
Peterson, Hon. Collin C., a Representative in Congress from
Minnesota, prepared statement.................................. 696
Witness
Nelson, Bruce, Administrator, Farm Service Agency, U.S.
Department of Agriculture, Washington, D.C.; accompanied by
Juan M. Garcia, Acting Deputy Administrator for Farm Programs,
FSA, USDA...................................................... 698
Prepared statement........................................... 699
Submitted questions.......................................... 727
Questionnaire................................................ 727
Subcommittee on Rural Development, Research, Biotechnology, and Foreign
Agriculture, Thursday, July 28, 2011
Costa, Hon. Jim, a Representative in Congress from California,
opening statement.............................................. 791
Johnson, Hon. Timothy V., a Representative in Congress from
Illinois, opening statement.................................... 789
Prepared statement........................................... 790
Witnesses
Knipling, Dr. Edward B., Administrator, Agricultural Research
Service, U.S. Department of Agriculture, Washington, D.C....... 793
Prepared statement........................................... 795
Questionnaire................................................ 832
Jacobs-Young, Ph.D., Chavonda, Acting Director, National
Institute of Food and Agriculture, U.S. Department of
Agriculture, Washington, D.C................................... 800
Prepared statement........................................... 801
Questionnaire................................................ 879
Clark, Dr. Cynthia, Administrator, National Agricultural
Statistics Service, U.S. Department of Agriculture, Washington,
D.C............................................................ 804
Prepared statement........................................... 806
Questionnaire................................................ 929
Unnevehr, Ph.D., Laurian J., Acting Administrator, Economic
Research Service, U.S. Department of Agriculture, Washington,
D.C............................................................ 809
Prepared statement........................................... 810
Questionnaire................................................ 935
Submitted Material
Biotechnology Industry Organization, submitted statement......... 826
Van Arsdall, R. Thomas, Executive Director, National Coalition
for Food and Agricultural Research, submitted statement........ 823
U.S. Department of Agriculture, response to submitted questions.. 828
Subcommittee on Livestock, Dairy, and Poultry, and Foreign Agriculture,
Thursday, September 08, 2011
Baca, Hon. Joe, a Representative in Congress from California,
prepared statement............................................. 944
Cardoza, Hon. Dennis A., a Representative in Congress from
California, opening statement.................................. 942
Prepared statement........................................... 943
Peterson, Hon. Collin C., a Representative in Congress from
Minnesota, prepared statement.................................. 943
Rooney, Hon. Thomas J., a Representative in Congress from
Florida, opening statement..................................... 941
Prepared statement........................................... 942
Witnesses
Garcia, Juan M., Acting Deputy Administrator for Farm Programs,
Farm Service Agency, U.S. Department of Agriculture,
Washington, D.C.; accompanied by Larry Salathe, Ph.D., Senior
Economist, Office of the Chief Economist, USDA................. 944
Prepared statement........................................... 946
Submitted questions.......................................... 973
Questionnaire................................................ 997
Coale, Dana, Deputy Administrator for Dairy Programs,
Agricultural Marketing Service, U.S. Department of Agriculture,
Washington, D.C.; accompanied by Larry Salathe, Ph.D., Senior
Economist, Office of the Chief Economist, USDA................. 949
Prepared statement........................................... 950
Submitted questions.......................................... 973
Questionnaire................................................ 1011
Submitted Material
National Milk Producers Federation, submitted report............. 974
Supplementary material submitted by the USDA..................... 971
Subcommittee on Rural Development, Research, Biotechnology, and Foreign
Agriculture, Tuesday, September 13, 2011
Costa, Hon. Jim, a Representative in Congress from California,
opening statement.............................................. 1021
Johnson, Hon. Timothy V., a Representative in Congress from
Illinois, opening statement.................................... 1019
Prepared statement........................................... 1020
Witnesses
Adelstein, Hon. Jonathan S., Administrator, Rural Utilities
Service, U.S. Department of Agriculture, Washington, D.C....... 1023
Prepared statement........................................... 1025
Questionnaire................................................ 1073
Canales, Judith A., Administrator, Rural Business-Cooperative
Service, U.S. Department of Agriculture, Washington, D.C....... 1026
Prepared statement........................................... 1028
Supplementary material....................................... 1055
Submitted report............................................. 1056
Questionnaire................................................ 1101
Trevino, Tammye H., Administrator, Rural Housing Service, U.S.
Department of Agriculture, Washington, D.C..................... 1032
Prepared statement........................................... 1034
Questionnaire................................................ 1117
Submitted Questions
U.S. Department of Agriculture, response to submitted questions.. 1065
AGRICULTURAL PROGRAM AUDIT
(EXAMINATION OF THE FEDERAL CROP INSURANCE PROGRAM)
----------
FRIDAY, JUNE 24, 2011
Subcommittee on General Farm Commodities
and Risk Management,
House of Representatives,
Committee on Agriculture,
Washington, D.C.
The Subcommittee met, pursuant to call, at 10:02 a.m., in
Room 1300 of the Longworth House Office Building, Hon. K.
Michael Conaway [Chairman of the Subcommittee] presiding.
Members present: Representatives Conaway, Neugebauer,
Schmidt, Austin Scott of Georgia, Crawford, Roby, Huelskamp,
Gibson, Hultgren, Hartzler, Schilling, Stutzman, Lucas (ex
officio), Boswell, McIntyre, Walz, Kissell, David Scott of
Georgia, Courtney, and Peterson (ex officio).
Staff present: Tamara Hinton, Kevin Kramp, Matt Schertz,
Pelham Straughn, Suzanne Watson, Bart Fischer, Liz Friedlander,
Clark Ogilvie, Anne Simmons, John Konya, and Jamie Mitchell.
OPENING STATEMENT OF HON. K. MICHAEL CONAWAY, A REPRESENTATIVE
IN CONGRESS FROM TEXAS
The Chairman. We will call the hearing to order. This
hearing of the Subcommittee on General Farm Commodities and
Risk Management entitled, Agricultural Program Audit:
Examination of Federal Crop Insurance Programs, will come to
order. We are pleased to have before us today the Administrator
of the Risk Management Agency Bill Murphy. It is appropriate
that our first farm bill audit hearing focuses on the Federal
Crop Insurance program, because crop insurance has evolved over
73 years to become a cornerstone of U.S. farm policy. It is as
important now as ever. Farmers across the country are dealing
with wild fires, droughts, and I am told, extra water in
Minnesota, floods. It is also important to observe why the
Federal Government is involved in crop insurance. That is
because without Federal involvement, America's farmers quite
simply would not have crop insurance. Without crop insurance,
lenders would not likely make loans to producers. After all,
producers are borrowing more money in a single year than many
Americans borrow in a lifetime. So if there is ever a role for
Federal involvement in what would ordinarily be a private
market activity, this is a prime example.
Still, as essential that Federal crop insurance is to most
producers, it has been a long road to get to where we are, and
we have not yet reached our final destination. Three events
helped farm crop insurance become what it is today. First, 100
percent private sector delivery through a strong agent
workforce; second, the 2000 reform bill that increased producer
access to high levels of coverage at more affordable prices;
and third, the approval of revenue products that help producers
cope with production losses and better market their crops,
while dealing with price volatility. This last improvement was
also a private sector innovation.
With these innovations, participation has more than doubled
over the past 20 years, and total liabilities protected has
increased over 600 percent, reaching an expected total of over
$100 billion in 2011. We have witnessed an increase in risk
management tools available to producers, most notably the
revenue products now on the market.
Despite these successes, there are areas where Federal crop
insurance must move forward to meet the risk management needs
of U.S. producers, and this is especially true in the current
budget climate. Federal crop insurance must be built upon, or
it will wither and die because it will fall behind producer
needs. For example, it is great that we have producers covered
at the 70 to 85 percent coverage levels, meeting deductibles
ranging from 30 down to 15 percent. These high deductibles grow
even larger when coupled with artificially low actual
production histories, or APHs, that further shrink insurable
yields. But for many producers, only low levels of coverage are
cost effective. This is true, despite the introduction of
enterprise units in the farm bill that help producers buy up
higher levels of coverage.
Unfortunately, a lot of time has already been lost. Over
the last 4 years, the Risk Management Agency has taken its
focus off the task at hand in order to implement cuts to the
Federal Crop Insurance program, first made in the 2008 Farm
Bill, roughly a $6 billion reduction. And then in the
renegotiation of the Standard Reinsurance Agreement, which
reduced CBO baseline for ag spending by another $6 billion, all
of which went to deficit reduction. While I was comfortable
with the farm bill, I was not sold on the wisdom behind the
SRA. In any case, we do not yet know the full impact of the
farm bill and SRA will have on crop insurance. This has created
great uncertainty and has preoccupied the time of RMA, and thus
agents and companies, with issues that are not the primary goal
of Federal crop insurance, which is to serve producer risk
management needs. RMA and the industry must pick up where they
left off and focus on meeting the needs of farmers and
ranchers.
In short, this public-private partnership is necessary. The
farmer must pay to play. Risk management tools under Federal
crop insurance are tailored to producer price and production
risks. Lenders require and the Federal crop insurance has
contributed to deficit reduction, and fully complies with the
WTO. This is a good deal for the farmer, the agents, the
companies creating private sector jobs, and economic activity,
and good for the taxpayer.
I look forward to hearing from Administrator Murphy on how
we can make things better.
[The prepared statement of Mr. Conaway follows:]
Prepared Statement of Hon. K. Michael Conaway, a Representative in
Congress from Texas
We are pleased to have before us the Administrator of the Risk
Management Agency, Mr. Bill Murphy.
It is appropriate that our first farm bill audit hearing focuses on
Federal Crop Insurance because crop insurance has evolved over 73 years
to become a cornerstone of U.S. farm policy. It's as important now as
ever. Farmers across the country are dealing with wildfires, droughts,
and floods.
It is also important to observe why the Federal Government is
involved in crop insurance: it's because without Federal involvement
America's farmers quite simply would not have crop insurance. And
without crop insurance, lenders would likely not make loans to
producers. After all, producers are borrowing more money in a single
year than most Americans will borrow in a lifetime.
So, if there was ever a role for Federal involvement in what would
ordinarily be a private market activity, this is a prime example.
Still, as essential as Federal Crop Insurance is to most producers,
it has been a long road to get to where we are--and we have not yet
reached our final destination.
Three events helped Federal Crop Insurance become what it is today:
First, 100% private sector delivery through a strong agent workforce;
second, the 2000 reform bill that increased producer access to higher
levels of coverage at more affordable prices; and third, the approval
of revenue products that help producers cope with production losses and
better market their crops while dealing with price volatility. This
last improvement was also a private sector innovation.
With these innovations, participation has more than doubled over
the past 20 years and total liabilities protected has increased by over
600%, reaching an expected total of over $100 billion in 2011, and we
have witnessed an increase in the risk management tools available to
producers, most notably ``revenue'' products.
Despite these successes, there are areas where Federal Crop
Insurance must move forward to meet the risk management needs of U.S.
producers, and this is especially true in the current budget climate.
Federal Crop Insurance must be built upon or it will wither and die
because it will fall behind producer needs. For example, it is great
that we have producers covered at the 70% to 85% coverage levels,
meaning deductibles ranging from 30% down to 15%. These high
deductibles grow even larger when coupled with artificially low actual
production histories, or APHs, that further shrink insurable yields.
But for many producers, only low levels of coverage are cost effective.
This is true despite the introduction of ``enterprise units'' in the
farm bill that helped producer's buy-up higher levels of coverage.
Unfortunately, a lot of time has already been lost. Over the last 4
years, the Risk Management Agency has taken its focus off of the task
at hand in order to implement cuts to Federal Crop Insurance, first
made in the 2008 Farm Bill--roughly a $6 billion reduction--and then in
the renegotiation of the Standard Reinsurance Agreement, which reduced
the CBO baseline for agriculture by another $6 billion, all of which
went to deficit reduction.
While I was comfortable with the farm bill, I was not sold on the
wisdom behind the SRA. In any case, we do not yet know the full impact
the farm bill and the SRA will have on Crop Insurance. This has created
great uncertainty and has preoccupied the time of RMA, and thus agents
and companies, with issues that are not the primary goal of Federal
Crop Insurance, which is to serve producer risk management needs. RMA
and the industry must pick up where they left off and focus on meeting
the needs of our farmers and ranchers.
In short, this private-public partnership is necessary. The farmer
must pay to play. Risk management tools under Federal Crop Insurance
are tailored to producer price and production risks. Lenders require
it. And, Federal Crop Insurance has contributed to deficit reduction
and fully complies with the WTO. This is a good deal for the farmer,
the agents and the companies creating private sector jobs and economic
activity, and for the taxpayer. I look forward to hearing from
Administrator Murphy on how we can make a good thing even better.
But first I would yield to the Ranking Member of the Subcommittee,
Mr. Boswell, for any opening remarks he may have.
The Chairman. I would like to yield to the Ranking Member
of the Subcommittee, Mr. Boswell, for any comments he may make.
OPENING STATEMENT OF HON. LEONARD L. BOSWELL, A REPRESENTATIVE
IN CONGRESS FROM IOWA
Mr. Boswell. Well, thank you, Mr. Chairman, and I
appreciate you having this hearing. I certainly concur with
much of what you have just said. Pay to play, that is a pretty
good little term, and I think it rings very true. We will
probably talk about some of that.
I also would like to thank everybody for joining us here
today, as I look around the gallery and see who is here and the
interest level seems to remain high. Mr. Murphy, welcome back,
too. We have had a few conversations. It has been a little
while, so maybe this is a chance for us to catch up.
But anyway, I come from a state where we have, as you know,
92,000 farms and more than 30 million acres in production. It
sounds like we are having an interruption, doesn't it? I
understand challenges of farmers and those in agricultural
business face today. It is high risk, as you well know.
When I retired from the Army and returned home to farm, I
quickly realized that farming had greatly changed over the 20
years that I was away. Back then, I had always said that in
order to farm, a producer needs to have access to a bank and a
place to buy and sell product, and the inputs. Of course, we
have gotten much more sophisticated over the last years. I got
caught right in the farm crisis of the late 1970s, early 1980s.
After surviving it, which I did, and I also was chairing my
local place to buy and sell, the cooperative, I realized how
important a good crop insurance agent was to help me manage my
risk. I worked with my agent, sure that I was never put in the
position that I was during the 1980s farm crisis, because I had
an opportunity to do it.
I share that story because I understand the importance of
the crop insurance industry, not only in the State of Iowa, but
across the country. In 2010, 255 million acres were enrolled in
crop insurance. Sign up and buy up levels for crop insurance
have proven that farmers appreciate having additional options
to help them manage risks; however, certain regions and certain
crops are underrepresented, we have found. Looking ahead, we
need to see how we can make the program work for more
producers.
Additionally, I have to say that I am opposed to cutting
funding to the program. Budgets are tight, but tight budgets do
not mean we must jeopardize the risk management tools that we
have today, or put in question when improvements can be made in
the future.
On that note, this Committee has gone a long ways in
previous years to address sound fiscal management, and the USDA
has decreased costs through the renegotiation of the Standard
Reinsurance Agreement, SRA. I have been concerned with these
cuts and the effects this negotiation may have on the
relationship between farmers and their agents. We must
acknowledge that the crop insurance industry is a business, and
both the companies and the agents need to make a reasonable
profit in order to stay in the market.
Just yesterday, I had an unexpected conversation with a
senior agent in a small town surrounded by agriculture. I won't
name the place, but I could if we have a conversation about it.
He is concerned. It is time to start thinking about passing the
business on, and with all the questions, whether it is to
family or somebody, to keep, it is a vital part. It is as
important as having the bank and the place to buy and sell.
That agency is important in that community, is my point.
So with that in mind, at this hearing I will be submitting
a question when we get into question time to you, Mr. Murphy,
with the request for a written response on this issue. The
renegotiation of the SRA has left insurance agents in my state
and many others perplexed, worried sick, I guess, by a direct
cap in the SRA on commissions private companies are allowed to
provide. To me, this is arbitrary and neglects the principle of
a free market and the expertise and hard work of insurance
agents our farmers rely on. So I look forward to the response
and working with you to further enhance the crop insurance
industry so it provides maximum benefits to producers and
consumers alike.
One of the many farm programs we support are highly valued
crop insurance and must be structured to ensure a free
marketplace for insurers and agents across the nation. We are
making great strides to help the American farmer, and I look
forward to hearing more about the crop insurance program today.
I thank you again for your testimony, which will be an
essential means for us to continue to move forward on the next
farm bill.
So thank you, Mr. Chairman. I yield back.
The Chairman. Thank you, sir. I recognize the Chairman of
the full Committee for any comments he might have.
OPENING STATEMENT OF HON. FRANK D. LUCAS, A REPRESENTATIVE IN
CONGRESS FROM OKLAHOMA
Mr. Lucas. Thank you, and I would like to thank the
Chairman and the Ranking Member for holding this first in a
series of audit hearings to examine programs authorized in the
farm bill.
My goal with these hearings is two-fold. First, I want the
Department to present a spending snapshot of farm programs. Our
Subcommittees will examine spending trends, confirm whether the
purposes and goals of the programs we authorize are being met
successfully. We will look for duplication within issue areas
to determine program overlap. We will also examine program
eligibility and whether those eligibility criteria meet the
needs of our constituents. We will scrutinize waste, fraud, and
abuse, and look for ways to build on the success the Department
has already achieved in this area of program integrity. In
essence, this is what I mean by an audit of farm programs.
The second purpose of these audits is educational in
nature. I think it is important that our Committee learn just
how many programs we authorize in the farm bill, and the amount
of money we dedicate in each area. I want the Members of our
Committee to have a holistic view of farm policy before we move
forward. Too often in the past, Congress has considered a
piecemeal approach to farm programs, adding layer upon layer
while not looking at the overall picture to see how these
programs interact. We are starting with comprehensive audits so
we can examine each program within the broader context of farm
policy. These audits ensure that we are operating from the same
base of knowledge. We represent states ranging from Alabama to
Oregon, and the diverse constituencies that come with that, so
we all have unique priorities for farm policy. But while our
priorities may differ, our facts cannot. So these audits give
all of us the same data to use in decision making.
Having the best available data will help us better
understand farm programs so we can navigate the tough, and I
mean tough, road ahead. I hope that today we can start a
dialogue on how to root out inefficiencies so we can continue
supporting our farmers and ranchers while spending, yes, fewer
taxpayer dollars.
It is also important for all of us to understand our
priorities from the last two farm bills. Before we move forward
with new policies, we should understand how we got to where we
are today. Some of the circumstances that shaped past farm
bills are still relevant today. Others have changed. We all
know that this farm bill will be developed under a very
different fiscal climate than the 2008 Farm Bill. The simple
truth is, we must make some difficult decisions. There are no
sacred cows, so to speak, and during these tough fiscal times,
every program, every title will be on the table. This farm bill
gives the Committee an excellent opportunity to prioritize the
programs that are working, fix the programs that are broken,
eliminate the programs that are duplicative. We will make these
determinations with the help of these audits, along with the
input from our constituents. We will start this process today
by taking a serious look at crop insurance to ensure that our
funds are utilized economically, and the program delivery is
efficient for farmers and ranchers.
As we begin the process of developing the 2012 Farm Bill, I
know the challenge of doing more with less will be foremost in
our minds. I believe that we can meet this challenge and
develop thoughtful policies to keep American agriculture
productive and competitive in the 21st century.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Lucas follows:]
Prepared Statement of Hon. Frank D. Lucas, a Representative in Congress
from Oklahoma
Good morning.
I'd like to thank Chairman Conaway for holding the first in a
series of audit hearings to examine programs authorized in the farm
bill.
My goal with these hearings is two-fold. First, I want the
Department to present a spending snapshot of farm programs.
Our Subcommittees will examine spending trends and confirm whether
the purpose and goals of the programs we authorize are being met
successfully.
We will look for duplication within issue areas to determine
program overlap. We will also examine program eligibility and whether
those eligibility criteria meet the needs of our constituents.
And we will scrutinize waste, fraud and abuse, and look for ways to
build on the success the Department has already achieved in this area
of program integrity. In essence, this is what I mean by an ``audit''
of farm programs.
The second purpose of these audits is educational in nature. I
think it is important for our Committee to learn just how many programs
we authorize in the farm bill and the amount of money we dedicate to
each area.
I want the Members of our Committee to have a holistic view of farm
policy before we move forward. Too often in the past, Congress has
taken a piecemeal approach to farm programs, adding layer upon layer
while not looking at the overall picture to see how these programs
interact.
We are starting with comprehensive audits so that we can examine
each program within the broader context of farm policy.
These audits ensure that we are operating from the same base of
knowledge. We represent states ranging from Alabama to Oregon--and the
diverse constituencies that come with that--so we all have unique
priorities for farm policy. But while our priorities may differ, our
facts cannot. So these audits give all of us the same data to use in
decision making.
Having the best available data will help us better understand farm
programs so that we can navigate the tough road ahead.
I hope that today, we can start a dialogue on how to root out
inefficiencies so we can continue supporting our farmers and ranchers
while spending fewer taxpayer dollars.
It is also important for all of us to understand our priorities for
the last two farm bills. Before we move forward with new policies, we
must understand how we got where we are today.
Some of the circumstances that shaped past farm bills are still
relevant today. Others have changed. We all know that this farm bill
will be developed under a very different fiscal climate than the 2008
Farm Bill.
The simple truth is that we must make some difficult decisions.
There are no ``sacred cows,'' so to speak, and during these tough
fiscal times, every program, in every title, will be on the table.
This farm bill gives the Committee an excellent opportunity to
prioritize programs that are working, fix programs that are broken, and
eliminate programs that are duplicative. We will make those
determinations with the help of these audits, along with input from our
constituents.
We will start that process today by taking a serious look at crop
insurance to ensure that our funds are utilized economically and
program delivery is efficient for our farmers and ranchers.
As we begin the process of developing the 2012 Farm Bill, I know
that the challenge of doing more with less will be foremost in our
minds.
I believe that we can meet this challenge and develop thoughtful
policies to keep American agriculture productive and competitive in the
21st century.
The Chairman. Thank you, Mr. Chairman. We have one vote,
and I thought we would just try to do a rolling vote, but it
came quicker than I thought it was going to. After--do you have
any comments, Ranking Member? Okay.
Why don't we take a quick break, run across the street,
vote, and come back? Then all of us will have access to hear
you talk, and it won't be as disruptive that way. So we will
take--the meeting will recess, subject to call of the chair.
[Recess.]
The Chairman. I have one piece of administrative duty, the
gentleman from Indiana, Mr. Stutzman, is not a Member of the
Subcommittee, but has joined us today or will join us in a
moment. I have consulted with the Ranking Member, and am
pleased to welcome him in joining in questioning of the
witness.
So at this point in time, Mr. Murphy, you have the floor
for your opening comments. Thank you for being here.
STATEMENT OF WILLIAM J. MURPHY, ADMINISTRATOR, RISK MANAGEMENT
AGENCY, U.S. DEPARTMENT OF
AGRICULTURE, WASHINGTON, D.C.
Mr. Murphy. Chairman Conaway, Ranking Member Boswell,
Members of the Subcommittee, as Administrator of the Risk
Management Agency, I am pleased to meet with you today to
discuss the latest developments in RMA, and the progress and
challenges of the Federal Crop Insurance Program. Along with
Secretary Vilsack's leadership, I have the goal to administer
the Federal Crop Insurance Program in a manner that provides
effective risk management services to all farmers and ranchers,
regardless of their location or the size of their operation.
The Secretary and I are aware that in today's economy, it
is important that the program be cost effective and give a fair
value for taxpayers' dollars. I am proud that I can confidently
say that we are doing just that.
Crop insurance has become an integral part of the business
life of the large majority of American farmers and ranchers.
They would find it difficult, if not impossible, to continue
without the protection provided by this part of the farm safety
net. Many lenders now require crop insurance coverage in order
to make operating loans to crop and livestock producers. Many
producers use crop insurance as collateral for loans, as well
as provide support for forward pricing their crop.
Today, over 250 million acres of farms and ranches are
covered by Federal crop insurance, for an overall participation
rate exceeding 80 percent for the major crops. The value of
insured crops is at a record high. In 1994, program liability
was less than $14 billion. This year, it will exceed $100
billion. More producers buy higher levels of insurance now, and
more specialty crop producers participate in the program than
ever before.
Our unique and successful relationship with our private
partners, 15 insurance companies, and the agents who deal
directly with farmers and ranchers is the foundation of this
program. Producers purchase crop and livestock insurance from
an insurance agency operating and living in their communities.
This relationship levers the respective strengths of the public
and private sectors. The 2011 crop year, with widespread
flooding in some areas and record drought in others, has been a
true test to the crop insurance program. My staff and I are
closely watching all developments to ensure that producers get
all the protection provided by their policies.
The preventive planning coverage available in most policies
has been of extreme importance this year in areas where
standing water and water-logged soils have prevented producers
from getting into their fields. In drought-stricken areas, the
compensation provided for reduced yields will be extremely
important in helping producers to survive until next year. In
years like this one, the value of this critical safety net is
made clear.
The $6 billion in savings credit created through the
renegotiated Standard Reinsurance Agreement in 2010 went
towards reducing the Federal deficit and supporting high
priority risk management and conservation programs. By
containing program costs, these changes also ensure the
sustainability of the crop insurance program for American
farmers and ranchers for years to come.
RMA's Comprehensive Information Management System, CIMS, is
of clear importance to producers. Working with the Farm Service
Agency, RMA began in 2007 to provide access to over 12,000
users of RMA, FSA, and crop insurance companies as the single
source of RMA and FSA program information for producers, crop
acreage, and production. The next stage of this information
sharing is now underway, and the Department's efforts with
cross functional representation from RMA, FSA, NRCS, and NASS
one-stop reporting for farmers, and standardizing programs
across the Department is our goal.
As those of you acquainted with the dairy farmers may be
aware, the Livestock Gross Margin dairy plan of insurance ran
out of funding this year. Congress makes $20 million available
a year for all livestock programs, and the popularity of a
newly-designed dairy program exhausted these funds in March,
halfway through the fiscal year. We look forward to again
funding LGM dairy in the new fiscal year.
RMA continues to make significant progress in preempting
fraud, waste, and abuse through the expanded use of data
mining. RMA, FSA, and the crop insurance companies have
preempted tens of millions of dollars of improper payments
through quality control, data mining, and other measures. RMA
is constantly identifying ways to balance competing needs to
make our product less susceptible to fraud, while seeking to
provide responsive, useful risk protection tools for farmers.
Again, thank you for the opportunity to participate in this
important hearing. I look forward to discussing the Crop
Insurance Program with you, and to responding to any questions
you may have.
[The prepared statement of Mr. Murphy follows:]
Prepared Statement of William J. Murphy, Administrator, Risk Management
Agency, U.S. Department of Agriculture, Washington, D.C.
Chairman Conaway, Ranking Member Boswell, and Committee Members, I
am pleased to meet with you today to discuss the latest developments in
the Risk Management Agency (RMA), the progress and challenges of the
Federal crop insurance program, and the status of the Standard
Reinsurance Agreement (SRA) and its benefits to the agricultural
community and the American taxpayer. My staff and I work daily to
validate the utility of current insurance products--making certain we
offer the best risk management protection possible for all of America's
farmers and ranchers. The agency, along with our fifteen approved crop
insurance companies, provide risk management tools that are compatible
with international trade commitments, create products and services that
are actuarially sound and market driven, harness the strengths of both
the public and private sectors, and reflect the diversity of the
agricultural sector.
Crop insurance is a vital part of the farm safety net and has
become an integral part of business life for a large majority of
American farmers and ranchers. They would find it difficult to continue
providing the United States and the world with an abundant supply of
food, fiber and fuel without the protection provided by this part of
the farm safety net. Many lenders now require crop insurance coverage
in order to make operating loans to crop and livestock producers, and
many producers use crop insurance as collateral for the loans.
There is a unique and successful relationship between RMA and our
private partners, the 15 approved insurance companies, and the agents
who deal directly with farmers and ranchers. Producers purchase Federal
crop or livestock insurance from insurance agents operating in their
communities, who sell the insurance on behalf of the 15 insurance
companies. This relationship leverages the respective strengths of the
public and private sectors. The insurance companies provide Federal
crop insurance under reinsurance agreements with the Federal Crop
Insurance Corporation (FCIC), administered by RMA.
The 2011 crop year, with widespread flooding in some areas
accompanied by severe drought in other areas, has been a test of the
crop insurance program. My staff and I are closely watching all
developments to insure that producers get the protection provided by
their policies. The Prevented Planting coverage available in most
policies has been of extreme importance this year in areas where
standing water or waterlogged soil prevented producers from getting
into their fields until past the time for planting. In drought stricken
areas, the compensation provided for reduced yields will be extremely
important in helping producers to survive. In years like this one, the
value of this critical safety net is made clear.
Brief History
Participation in the crop insurance program increased significantly
following changes enacted in 1994 by Congress. For example, fewer than
100 million acres of farmland were insured under the program in 1994.
Today, over 250 million acres of farm and ranch lands are covered by
Federal crop insurance, for an overall participation rate exceeding 80
percent for the major crops.
As the amount of insured acreage has increased, so too has the
liability, or value of the insurance in force. In 1994, program
liability was less than $14 billion. Industry estimates suggest 2011
program liability could exceed $100 billion. The crop insurance program
has seen sustained growth as demonstrated by the increasing proportion
of acres insured at buy up levels over the last decade. Today, over 90
percent of all policyholders purchase buy-up levels of coverage. Of
note is the significant level of participation by specialty crop
producers. The overall participation rate for specialty crop producers
is about 75 percent, which is fairly comparable to the 83 percent
participation rate for the major program crops. Important fruit, nut
and vegetable states California (71%), Florida (91%), and Washington
(68%) each score well in Federal crop insurance program participation.
This growth has been accomplished in an actuarially sound manner as
required by Congress and the program is working well. Over the last 2
decades, premiums (producer premiums added to premium subsidies) have
been sufficient to cover the indemnities paid to producers plus a
reasonable reserve, as directed by the Federal Crop Insurance Act.
In 2000, Congress enacted the Agricultural Risk Protection Act
(ARPA) that expanded the role of the private sector allowing entities
to participate in conducting research and development of new insurance
products and features. With the expansion of contracting authority, RMA
can enter into contracts for research and development of new and
innovative insurance products. Private entities may also submit
unsolicited proposals for insurance products to the FCIC Board of
Directors (Board) for approval. If approved by the Board, these
unsolicited insurance products are eligible to receive reimbursement
for research, development and maintenance costs, in addition to any
approved premium subsidies and reinsurance.
ARPA also removed restrictions on the development of insurance
products for livestock. Authority was added to allow the Board to
create an expert review panel to provide assistance to the Board and
RMA in evaluating proposed insurance products for feasibility and
actuarial soundness. Premium subsidies to farmers were increased to
encourage producers to purchase higher insurance coverage levels and to
make the insurance program more attractive to prospective producers.
Throughout all of this, RMA has implemented many innovations to keep up
with industry advances as well as customer demands.
Standard Reinsurance Agreement
On June 10, 2010, USDA released the new reinsurance agreement and
announced that $6 billion in savings were created through this action.
Two-thirds of this savings went toward paying down the Federal deficit,
and the remaining \1/3\ was used to support high priority risk
management and conservation programs. By containing program costs,
these changes also ensure the sustainability of the crop insurance
program for America's farmers and ranchers for years to come.
CIMS & ACRSI
The 2002 Farm Bill required the Secretary of Agriculture to develop
a Comprehensive Information Management System (CIMS) to be used by the
Farm Service Agency (FSA) and RMA in the farm programs they administer.
CIMS was made available for use in September 2007. It provides access
for over 12,000 users from RMA, FSA and the crop insurance companies as
a single source of RMA and FSA program information for producers, crop
acreage and production. The next stage of information sharing is now
underway with the Acreage/Crop Reporting Streamlining Initiative
(ACRSI). This is a Departmental effort with cross functional
representation from RMA, FSA, Natural Resources Conservation Service,
andNational Agricultural Statistics Service.
The objective of ACRSI is to establish a common USDA framework for
producer commodity reporting in support of USDA programs and to
establish common data standards of information used for producer
commodity reporting. ACRSI and CIMS will facilitate `one-stop'
reporting of producer information and greater data sharing of data
among government agencies. This will provide for greatly improved
integrity and accuracy of the data collected and reported to USDA. RMA
and FSA will be able to efficiently identify discrepancies, cases of
misreporting, and potential fraud, waste, and abuse, thus reducing the
potential for improper payments. Furthermore, these efforts will save
time and money for the government, producers and companies by reducing
reporting and data management burdens.
Livestock Products
ARPA authorized RMA to offer insurance products for livestock
producers and provided $20 million in funding to cover administrative
and operating (A&O) and premium subsidy costs for pilot livestock
insurance plans each fiscal year. RMA currently reinsures eight
livestock products, all of which were developed and submitted by
private parties through the authorities contained in Section 508(h) of
the Federal Crop Insurance Act. There are two basic insurance models
used to offer livestock insurance: Livestock Risk Protection (LRP) and
Livestock Gross Margin (LGM). LRP provides protection against
unexpected declines in the price of certain livestock--feeder cattle,
fed cattle, lamb, and swine. LGM provides protection to livestock
producers against unexpected increases in feed costs or unexpected
declines in prices for the insured livestock product. Gross margin is
the market value of the insured livestock product minus feed costs. As
we have noted previously, the $20 million in annual funding for all
livestock programs was exhausted in March because of the increased
popularity of LGM-Dairy. Thus, none of the livestock programs are
currently available. They will be offered again in Fiscal Year 2012
when an additional $20 million in funding becomes available.
Program Integrity and Data Mining
In conjunction with the improved quality control requirements in
the new SRA, RMA Compliance has revised its work plans to reflect a
more balanced approach between quality assurance and investigating
program abuses. In a time of declining resources and increased
responsibilities, effective internal controls provide a significant
cost-benefit compared to identifying and prosecuting program abuse
alone. RMA is reviewing company operations and internal controls to
determine the success of their efforts to address crop insurance
program vulnerability concerns.
RMA continues to make significant progress in preempting fraud,
waste and abuse through the expanded use of data mining. ARPA directed
RMA to employ data mining technologies to program compliance and
integrity efforts, and provided the funding necessary to support these
activities. ARPA also provided a role for FSA to assist RMA in further
program compliance and integrity. RMA subsequently entered into a
contract with the Center for Agribusiness Excellence (CAE) at Tarleton
State University to develop and maintain appropriate data warehousing
and data mining capabilities. Annually, CAE produces a spot-check list
of producers engaging in questionable behaviors which is provided to
FSA for further investigation. With the assistance of FSA offices, RMA
and the insurance companies conduct growing season spot checks to
ensure that claims for losses are legitimate.
These efforts have been highly successful as the cumulative cost
avoidance from data mining and related activities from 2001 through
2010 is estimated to be almost $840 million, based on our analysis of
the changes in loss experience for those people placed on the spot-
check list. In light of the success of the spot-check program, the new
SRA broadens the use of data mining to help direct company efforts at
detecting and investigating suspect behaviors. We believe the targeted
company reviews enabled by data mining will be more effective and
efficient than the random review process of previous years.
While RMA, FSA and the crop insurance companies have preempted tens
of millions of dollars of improper payments through quality controls,
data mining, and other measures, RMA is constantly identifying ways to
balance competing needs to make our products less susceptible to fraud
while seeking to provide responsive, useful risk protection to farmers.
We still have work to do and improvements to make, but we are making
good progress in our fight against waste, fraud and abuse in the
Federal crop insurance program.
Premium Rates
One of the most important considerations for the Federal crop
insurance program is the premium cost for producers. If premium rates
are too high, producers will not participate in the crop insurance
program. If premium rates are too low, actuarial performance will
deteriorate. RMA continually seeks to improve its premium rating
methodology and maintain actuarial balance. RMA recently commissioned a
comprehensive review of its rating methodology by a panel of outside
experts. A preliminary draft of the review was posted for public
comment. The final draft, as well as the response to public comments,
is available on RMA's website. The review supported RMA's overall
approach to generating premium rates based on historical loss
experience, and provided a number of recommendations for potential
improvements that RMA is pursuing. The most critical of these
recommendations is for RMA to determine if all historical losses should
be given the same weight in determining current premium rates. Work on
the reweighting of historical loss experience is currently ongoing.
Concept Proposals
The 2008 Farm Bill provided an alternative for producers and
private entities to submit to the FCIC Board, proposals for insurance
coverage for agricultural commodities not traditionally served, and to
improve current insurance coverage. Private entities are authorized to
submit Concept Proposals for plans of insurance to the Board for
approval of an advance payment of up to half of their estimated
research and development costs to assist them in developing a completed
508(h) insurance product. Completed 508(h) products receive
reimbursement of the balance of their research and development costs
and up to 4 years of maintenance expenses if approved by the Board. To
date, the Board has received 23 Concept Proposals and approved 11 for
advance payments totaling approximately $1.7 million.
Combination Policies (COMBO)
On March 30, 2010, RMA published the final rule for the Common Crop
Insurance Policy, commonly known as the COMBO policy, to be effective
for the 2011 crop year. The COMBO policy combines five plans of
insurance into a single plan of insurance. This new policy makes risk
management decisions simpler for the producer and enhances program
efficiency by reducing inconsistencies, duplication, and paperwork.
Furthermore, by combining the previous five plans of insurance into a
single plan RMA eliminated a primary source of confusion and error in
the administration of the Federal crop insurance program. Another
benefit of the COMBO policy is the use of a single rating and pricing
component so all coverage is consistent in terms of protection and
cost. Similar efforts are underway to combine RMA's area-based programs
(Group Risk Plan--GRP, and Group Risk Income Protection--GRIP) into a
single plan of insurance.
Information Technology Modernization
The Information Technology Modernization (ITM) project, RMA's
technology reengineering initiative, began in earnest in FY 2008, based
on funding received in the farm bill. Phase I was completed in FY 2010,
and included significant achievements to deploy the majority of the
actuarial tools required to generate 2011 insurance offers and provide
for validation of detailed policy data received from crop insurance
companies that is used as the basis for calculation of expense
reimbursement and risk sharing between RMA and the companies in
accordance with the SRA. Accepted data is also used for future rating
and publicly generated reports. Rollover of the 2011 crop year
actuarial data was accomplished and the first filing for the 2012 crop
year took place on April 30, 2011.
Phase II development continues and focuses on corporate reporting
providing data reporting and analysis capabilities. On-demand analysis
and standardize reporting will be available on multiple years of
actuarial, policy, and financial data. The analytical environment has
been set up and development has begun on standardized reports. ITM
Phase II also includes Regional Office Exceptions (ROE) written
agreement processing. ITM Phase II is progressing towards scheduled
operations in July 2011. Enhancements to the ITM production system have
been implemented for actuarial processes, policy processing, premium
calculations, and other Phase I capabilities.
RMA supports many information technology functions using private
contractors. The contract for IT services is generally for 5 years and
is due to expire in 2011. In January 2011, RMA competitively awarded a
new contract for IT services until 2015. Accounting and other corporate
reporting capabilities will be implemented in the new system as part of
this contract, and is scheduled to be complete at the end of the
calendar year.
Organic Crops
RMA continues to move forward in improving crop insurance coverage
for organic producers so they will have viable and effective risk
management options like many of the conventional crop programs.
Consistent with the 2008 Farm Bill, RMA contracted for research into
whether or not sufficient data exists upon which RMA could determine a
price election for organic crops, and if such data exists, to develop a
pricing methodology using that data. Also included in the contract was
research into the underwriting, risk and loss experience of organic
crops as compared with the same crops produced in the same counties
during the same crop years using nonorganic methods. Three reports have
been completed from this study.
The first report outlined research into data that exists today that
could support price elections for various organic crops. The second
report outlined a proposed methodology for development of a price
election for organic cotton, corn and soybeans. The third report
presented the results of the contractor's comparative analysis of loss
experience for organic crops and conventional crops that were produced
in the same counties during the same crop years.
RMA intends to establish dedicated price elections for organic
crops where supported by data and sound economic pricing principles.
The first of these organic price elections became available for the
2011 crop year. In addition, RMA will continue to capitalize on
improved data collection and sharing of organic production and price
data occurring throughout USDA, an initiative to better leverage the
resources of all of our agencies to address this important segment of
agriculture.
RMA will continue to evaluate the loss experience of both organic
and conventional practices to ensure that premium rating is
commensurate with the level of risk for each. This includes revising
surcharges for those areas or situations that merit such consideration.
Quality Adjustment
Another area of continued challenge to the program involves
providing coverage for reduced quality in a harvested crop. RMA
provides quality adjustment for many crops, based primarily on
standards contained in the Official United States Standards for Grain,
such as test weight, kernel damage, etc. Wheat, for example, is
eligible for quality adjustment when poor quality results in a grade
worse than U.S. No. 4. While producers and the crop insurance companies
have been generally supportive of RMA's quality adjustment provisions,
in some instances producers would like to see quality adjustment begin
when their grain quality loss is not as severe as current rules
require. Additionally, producers contend that quality adjustments in
the program do not always reflect what they are actually discounted in
the market place. This is most often heard earlier in the harvest
season when the extent of poor quality is not fully known and grain
buyers tend to have more severe discounts.
One of the challenges for RMA's organic program is to assure that
the availability of Federal crop insurance does not inappropriately
affect market dynamics, such as buyers imposing larger quality
discounts and relying on Federal crop insurance to make producers
whole. Similarly, crop insurance is not meant to provide coverage for
the marketing errors of producers or for a general deterioration in
market conditions--unless, of course, such deterioration is a covered
cause of loss. RMA continually strives to provide standard quality
discounts that apply to all producers nationwide so everyone is treated
equitably and the crop insurance program does not promote or become
subject to abusive market practices. RMA has continued to work with
grower associations and others to continually improve the effectiveness
of its quality adjustment provisions.
* * * * *
Mr. Chairman, this concludes my statement. Thank you for the
opportunity to meet with you today. We look forward to working with you
and Committee Members and will be pleased to provide whatever
assistance you may request. I would be pleased to answer any questions
you and other Members of the Committee may have.
The Chairman. Well thank you, Mr. Murphy, being under the
wire at the 5 minute mark. I appreciate that.
The chair reminds Members they will be recognized for
questioning in order of seniority of Members who were here at
the time of the start of the hearing. After that, Members will
be recognized in order of arrival. I appreciate Members
understanding.
I will now recognize myself for 5 minutes. In my opening
statement, and Mr. Boswell, in yours as well, you talked about
the importance of the private-public partnership for delivery
of crop insurance. From time to time, we hear rumors of--that
partnership may need to go just totally public, and with the
public delivery of the system. Are you and your staff committed
to this public-private partnership, because it sure looks like
it works to us.
Mr. Murphy. Yes, indeed. In fact, the Secretary reiterated
that when meeting with one of the trade groups a couple weeks
ago in his office. There is no doubt in my mind that we are
enjoying this participation level today, due to that unique
relationship with private agents and their companies.
The Chairman. All right. You mentioned the importance of
your information technology improvements. Will you be able to
finish all of that under the existing budget authorities?
Mr. Murphy. We will do the best we can, sir. It is moving
along. We are having some very good success. I am glad to see
we had it up and running. We were able to bring the COMBO
product up this year. So it is functioning. I am concerned for
the out-years. Next year, we don't have the funding anymore
that was provided in the farm bill. I am sure I will be up here
asking for additional funding for that project, but that is of
great concern to us.
The Chairman. Well, I think it is going to be important,
Mr. Murphy, that you lay that out for us specifically because
we have choices to make, and those need to be informed choices.
That information has an impact on that, and the Committee needs
to understand that.
Mr. Murphy. I would like to add that also the more complex
our programs become, we really need that IT capacity in order
to deliver these programs to farmers.
The Chairman. Well, also the impact on this budget on FSA
and their ability to deliver their side of the house is in the
same way impacted by that.
At one point in time, speaking of data mining, there were
some barriers between RMA and FSA data so that the folks at
Tarleton could not fully exploit everything available. Have
those barriers been taken down? Is there anything left that we
need to do?
Mr. Murphy. No, actually we are making a lot of progress.
There are--continues to be problems between the data between
RMA's data and FSA's. We are actually working through the SURE
Program. We are fixing a lot of that data. I think as CIMS
comes up and running, it will be extremely helpful in
identifying where we have differences between the two
programs----
The Chairman. But in terms of legal barriers?
Mr. Murphy. Oh, no, we are working through that. In fact,
FSA is just about prepared to publish their new rule, which
will provide us the flexibility we need.
The Chairman. Okay. So there is something in that regard to
fully exploit that, it benefits all of us.
Mr. Murphy. Right.
The Chairman. Can you walk us through a little bit about
how the 508(h) program is working, and maybe some examples
currently in the pipeline?
Mr. Murphy. Okay. Actually, we have three different ways
that we can develop programs. One of them is that we can go out
and contract ourselves for the development. The other way is
where the private sector actually comes into the board of
directors and presents a program. They can go the 508(h) route,
which is that they bring a fully developed program to the board
of directors for approval. Another route with the last farm
bill was the concept proposals where folks can actually come
into the board of directors, explain what they would like to
develop, and then we can get partial funding for that
development, and then it follows the 508(h) procedure after
that.
It seems we are getting new programs out in the street.
That seems to be working well to that effect. There are some
issues or some concerns being raised about some other programs
that are higher priority that should be done first, but that is
just the way the system is established. But we are working
along at it.
The Chairman. All right. The Members know that there is a
questionnaire that asks about each of the major components. You
sent yours in. I would like to go to the question on page 5,
number 10. It says Utilization (Participation) Data. If you
could walk us through that, the number of policies stayed
exactly the same for 10 years. Can you just walk across that--
those columns and help us understand what each one of them
means?
Mr. Murphy. Okay. I think--actually, I think the next chart
is much better for looking at the changes over years.
The Chairman. Well just tell us what that means. What is
the--we talked about $100 billion in coverage out there, but
that bottom line for--just says $71 billion.
Mr. Murphy. Okay, yes. Well that's actually in 2010 it was
in the $70 billion range, $78 billion I think is what it is at
right now. But with the increase in commodity prices between
2010 and 2011 is where we expect to see the increase to over
$100 billion.
The Chairman. Well, we have talked about participation, but
the number of policies has stayed dramatically the same for
that----
Mr. Murphy. No, it is actually--well, there hasn't been a
lot of variation since 2001.
The Chairman. Okay. And then the loss ratio and the loss
cost columns, can you explain them to us real quick?
Mr. Murphy. Okay. Loss ratio is just the experience of the
program. That is the ratio of premiums to indemnities paid. The
good story here is that you can see the 10 year average, we are
at .837. That means for every dollar in premium, we pay out
83 cents, so that the program is actually performing very
soundly at this time. In fact, if you go back 20 years, you are
still under a dollar loss ratio. So we are very proud of the
changes in that.
Loss cost ratio is just a measure of how much of the
indemnity--how much of the liability is being used by the
indemnity. We actually use both of these ratios in order to
come up with the rates for the program.
The Chairman. All right, thank you, and I will yield back.
Mr. Boswell, 5 minutes.
Mr. Boswell. Thank you.
Again, going to our continuing or running conversation, Mr.
Murphy. We found, in our hearings across the country a month
ago, what we need out there, available to our producers, is
affordable, and viable crop insurance. I think you are trying
very hard to do that. I am not--this is extremely important.
You think of the high cost inputs, and out in cotton country,
wheat country, and so on, but you know, they like to talk about
the price per bushel of corn when it is doing well. You never
hear any conversation about the cost of input, and I think it
has become important for all of us on this Committee that we
ought to be making an issue of that. The public out there
doesn't really get the idea of what it costs to put that crop
in. It is capital intensive and this crop insurance is terribly
important.
So anyway, I want to ask you this question that we referred
to, and then I will leave it with you. The Risk Management
Agency has redefined the definition of agent compensation
relative to the release of the 2011 Standard Reinsurance
Agreement. The restrictions outline the acquisition section of
the manager's bulletin on agent compensation are very troubling
because they restrict an agent's ability to sell his agency or
her agency at the full market value. In many instances, the
sales of these family-owned crop insurance agencies are relied
upon for retirement income and for future financial planning.
In addition, such restrictions will also hinder a company's
ability to grow. The only option for company expansion will be
through the acquisition process, which favors large companies
over small companies, and will lead to less choice for
consumers.
So how does the agency acquisition provision in the 2011
SRA improve the Federal Crop Insurance Program and strengthen
the safety net for farmers and is the RMA willing to revisit
this provision to address these concerns? I will give you this
in writing as well after this is over with, but I would like
for you to comment on it.
Mr. Murphy. Actually, that provision is not in the SRA
itself. That provision is actually in follow-up procedures that
we provided after the----
Mr. Boswell. Well, let us address the point then.
Mr. Murphy. Right. There is nothing in there that restricts
the sale of an agency. What they are talking about there, and
where this becomes an issue is if a company buys an agency and
then employs the principle of that agency and continues to pay
the agents--all we are saying there is that that sale, if the
principle stays involved in that agency as it becomes part of
the company, is that that counts toward compensation. There is
a great concern that that particular scheme was being utilized
to evade the caps on each commission.
So you know, I want to make clear that there is nothing
that restricts it.
Mr. Boswell. Well, at least----
Mr. Murphy. Okay, that----
Mr. Boswell. It limits----
Mr. Murphy. It limits potential sales. You could say that.
Mr. Boswell. Okay.
Mr. Murphy. You could say that. Now this is in a procedure
that we actually got--we just finished getting comments from
the agents. We sent it out to the agents to get their comments
as well. We are incorporating all of that now. We have not
issued it yet as a final procedure, but----
Mr. Boswell. I hope we can have some conversation on that.
I would look forward to that. Seriously, when I share with you
the person that I talked to, I didn't call him. He called me. I
talked to him for--at any other time during this whole process
we have not had conversations.
Mr. Murphy. I am sure it is because of----
Mr. Boswell. But anyway, he comes in with this concern, and
coming from this individual, as I am sure many others, it is a
genuine concern and we need to talk to him about. So I would
trust you to do that, and if you might give us a few points on
how--what you might have to say about the pilot program,
concerning livestock.
Mr. Murphy. The livestock programs?
Mr. Boswell. Yes.
Mr. Murphy. Actually, the big news has been the dairy gross
margin coverage. Historically, we get $20 million a year for
the livestock program since ARPA, since 2000. We have actually
only been spending about--of that $20 million, about $3 or $4
million a year. What changed this year is that the dairy
industry requested through the developer of that program to
make two changes. One of them, to provide a subsidy, which was
not in there before and is not really in any livestock
programs. We do have a small one in some of the others, but
that is just to offset some additional costs. So there is no
true subsidy like we see in the crop programs. They requested a
subsidy and they also requested that the premium payment be
changed from the beginning of the insurance period to the end,
like the rest of the Crop Insurance Program. The developers
agreed to that and we sent it--we put it out just 4 months ago.
Growers were extremely interested in the program. Like I said,
they have used up all of the funding that we had available for
dairy, which was about 75 percent of that $20 million.
Mr. Boswell. Thank you. I will do a follow-up later.
I yield back.
The Chairman. Thank you, Mr. Boswell.
Mr. Neugebauer, 5 minutes.
Mr. Neugebauer. Thank you, Mr. Chairman.
Administrator Murphy, this will come of no surprise to you.
I want to talk about something that has been a big concern of
mine for a number of years, and that is shallow losses. For
some of my colleagues that are new to the Committee, basically
a lot of producers can purchase an APH policy and get 65, 70
percent coverage, but in many cases if they want to buy up that
coverage, when you get above that level, the premium becomes
extremely expensive. In fact, it is almost a 1:1, a dollar of
premium for a dollar of benefit. Obviously that makes the
economics--so what in many cases can happen for our producers,
they can have anywhere from a 25 to 30, 35 percent loss, and
not receive any coverage from their policy. You know, obviously
there are very few businesses I know that can sustain a 30, 35
percent loss in their margin and be profitable.
So there are a lot of potential solutions to that out
there, and some have said to offer additional premium support
for APH to make it more cost effective to buy up. Others have,
as you know, I have a plan that would provide a supplemental
opportunity, based on area yield or county yield.
So what are your thoughts? Do we stick with the APH, or do
we look at some of these supplemental opportunities?
Mr. Murphy. Well, I know the SURE Program that was
instituted with the last farm bill was actually supposed to
address that, and basically utilizing the crop insurance
indemnity for an additional payment under--as a disaster
payment. I have not gotten too involved in SURE. Anecdotally I
understand there are concerns in different parts of the
country, whether it is achieving what it was intended to do.
You know, how it is actually working day-to-day, I really am
not the best person to talk to, but I would be very happy to
work with you towards the farm bill and look for some----
Mr. Neugebauer. Yes, I think part of the SURE Program is it
is triggered on a state-wide basis, and you know, Texas is a
pretty big state, and so you can have one condition in one area
of our state and others. Well, I think that is going to be an
important part of that, because I think as we begin to look at
the basket of safety net for producers, price, it doesn't do
you any good to have any price safety net if you don't produce
a crop.
Mr. Murphy. I think also it requires a disaster declaration
in the county and the adjacent counties. So if only a small
percentage of farmers gets hit with a problem, it potentially
is not going to trigger the county.
Mr. Neugebauer. Absolutely, and I want to go on to another
area. I know that Plains Cotton Growers initiated an effort on
cotton seed, pilot program, and I guess this was the first year
of that program. Can you kind of give us a little thumbnail of
how that program has worked and the results of that?
Mr. Murphy. We haven't gotten the acreage information in
yet. That is probably going to be another couple months away,
but I can tell you anecdotally from our offices down there and
the companies there, it is extremely popular. This is something
that those growers are very interested in. That seed is
becoming--especially when the prices drop, that seed becomes a
bigger part of their revenue for the year. So it is critical to
not only have the lint, but the seed as well, get the offset
for the seed.
So from what I understand, the growers are very happy with
it. We worked with the developers and we actually made it
extremely simple to administer the program, so I think the
agents are happy with it. So overall, I think it has been a
success.
Mr. Neugebauer. You know, recently when they renegotiated
the SRA, I think RMA kind of divided the country into three
groupings. Group one was Illinois, Indiana, then group two was
Alabama, soon to be some of the other states, and group three
was kind of the hodge podge, all the way from Alaska to Nevada
to Vermont.
Can you kind of give me some perspective of how those were
grouped?
Mr. Murphy. Okay. The reason we had done that--and that was
something new we introduced for the first time with this array.
In the past, the underwriting--the ability to make underwriting
gains or loss were equal across the country. What we tried to
do this time, as an effort to try to get that same high level
of service we see in the Midwest and other parts of the
country, we reduced the company's ability to make underwriting
gains in the five--what normally are referred to as the I
States in the Midwest. Actually, we increased the opportunity
to make underwriting gains in other parts of the country, and
what--so we just--for the first year in 2011 we are going
through it. I think, from the modeling we have so far, it seems
to be working. We have talked to agents who were saying that
actually in some of the parts that historically had low
commissions--that this is actually making it--more companies
are becoming interested in getting into these other parts of
the country, and that is what we wanted to do. So we wanted to
spread that competition as well.
Mr. Neugebauer. Were the premiums different in the
groupings?
Mr. Murphy. Pardon?
Mr. Neugebauer. Were the premiums different in those----
Mr. Murphy. Only by nature of whatever the experience was
for those crops, yes.
Mr. Neugebauer. Nothing to do with groups?
Mr. Murphy. No, not from the grower's standpoint. No, no
difference at all.
Mr. Neugebauer. Thank you, Mr. Chairman.
The Chairman. I thank the gentleman. Mr. Courtney, from
Connecticut.
Mr. Courtney. Thank you, Mr. Chairman. Thank you for
holding this hearing.
Mr. Murphy, I wanted to go back to the dairy pilot program
that you were talking about earlier. Obviously, the high demand
is an interesting signal that the interest is there. You know,
one of the farms in my district that was one of the subscribers
to the insurance was sharing with me his experience with it,
which you know, he has a moderate-sized herd farm. He signed up
for it kind of as a test run, because looking out on the
horizon, it is pretty clear that risk insurance is going to be
part of the world of that industry.
His concern obviously was cost, a little bit, which I think
a lot of the smaller farms are nervous about, but the other
issue was the complexity of the product. I mean, he was
describing to me the system for calculating the monthly
premiums, and you know, we are pretty comfortable in
Connecticut with insurance products----
Mr. Murphy. Right.
Mr. Courtney.--as you can imagine, but this one was pretty
sophisticated. The message was that they got to run a farm. I'm
trying to sort of calculate what their payments are. It took
some fairly difficult and time consuming efforts.
I wonder if you could walk through about whether that is a
complaint that you are hearing, and whether there are ways to
address it. You know, simplicity is always a good thing.
Mr. Murphy. Yes, indeed. You know, I haven't heard too many
complaints about that, but it does not surprise me, because it
is a great Gilmore complex and our normal Crop Insurance
Program for corn or soybeans or something like that. Because
what you are actually doing, you are looking forward into the
next 11 months and you are comparing the prices of the feed
versus the price of the milk itself using the futures contract,
and that is what makes the margin. So you are insuring that
margin month to month in the out-years.
So instead of looking at--if I was a corn grower, I am
looking at one insurance period. When you are actually a dairy
farmer, you are looking at potentially 11. They have to go out
there, so it has a great deal of complexity.
The program has not been evaluated yet. That will probably
occur within the next couple years. What I encourage is they
can either send comments in to us and we can share them with
the developer, or we can get the address of the developer and
the grower can go directly to them. But like I said, these--
they instituted a major change just this year, so I believe
they will be open to looking at comments that growers might
have, but I think the very nature of that type of a program is
going to be more complex than something like the corn the guy
probably insures already.
Mr. Courtney. I mean, is it too soon to say whether people
have been actually filing claims?
Mr. Murphy. Yes, it is.
Mr. Courtney. Okay.
Mr. Murphy. Yes, it is too soon now, definitely. But I
think it certainly shows their concern with the volatility that
they have been seeing in pricing for the product. And I
understand that the industry has put forward something very
similar, something that they would like to see potentially in
the farm bill. I have not seen what they are suggesting, but I
know they have been working on a product.
Mr. Courtney. Right. Thank you, Mr. Chairman. I yield back.
The Chairman. I thank the gentleman. Before we move to our
side, the Ranking Member of the full Committee has slipped in.
Do you have any comments?
Mr. Peterson. Yes, thank you, Mr. Chairman.
I guess what I would like to know, we made these
significant changes in the farm bill and the SRA. When are you
going to have solid information about how this actually sorted
out? You probably don't have that yet, I assume.
Mr. Murphy. No, no. We are already seeing some of the
effects, Congressman, especially in the area of agent
compensation. This has been a bit tricky for the companies who
try to get through. We are doing it new for the first time at
cap and how it is implemented. We are exceeding the cap, as no
surprise for 2011, with the way the commodity prices are going.
We are seeing areas like California, where commissions had
dropped a good deal more than we thought they would. The
industry, the companies themselves have expressed some concern
here, so we are going to take a look at that to try to even out
the pain of reducing the A&O overall in the program. Some of
the companies are interested in having that discussion.
On the underwriting gains side, all I have seen is some
studies that have been done on the new underwriting gain
potential, underwriting loss potential, and they have not been
bad at all, especially with the prices we are seeing this year.
Now we are getting off to a bad start, and so I guess--I
imagine that has the companies nervous. But it is probably
going to be, I would say, November or December before we have a
good handle on what the impacts would be on underwriting, gains
or losses.
Mr. Peterson. Okay. And then how about on the agent
situation, the same timeframe?
Mr. Murphy. Yes, we are already hearing the concerns from
the agents on it, and we are already talking to some agents.
They are coming up with some ideas. We are getting questions,
can anything be done since this is sort of locked in place?
Basically, as long as we don't increase the costs, we do have
some flexibility, all right, but it would require all the
companies to agree to make the change. And those discussions
will probably just get started within the next couple months.
Mr. Peterson. So you know, depending on when we actually
write the farm bill, but say it is next year, we will probably
have pretty good information?
Mr. Murphy. Certainly on the A&O side, yes, the
administrative and operating expense side that would provide
the companies, and we will have some preliminary information on
the underwriting gain potential, underwriting loss potential as
well.
Mr. Peterson. Okay. Thank you, Mr. Chairman.
The Chairman. Thank you, Mr. Peterson.
Mr. Austin Scott, of Georgia, for 5 minutes.
Mr. Austin Scott of Georgia. Thank you, Mr. Chairman, and
Administrator Murphy, thank you for joining us today.
Thinking back to when I was a child, I can remember quite
vividly my grandfather, who was a producer, telling me that he
thought the insurance program was the most important thing that
the Federal Government did for the farmer, and was, quite
honestly, maybe the only thing that we would have to do for the
farmer if we had it right. I also majored in risk management
and insurance at the University of Georgia, which is the best
school on the face of the Earth, I might add.
But my question gets back to this. One is I would say, and
you can check these numbers, while the average loss ratio is
83.7 percent, the total loss ratio over 10 years is even a
little better and closer to 77 percent, is that----
Mr. Murphy. Yes.
Mr. Austin Scott of Georgia. So our total loss ratio is
even a little better than our average loss ratio, because of
the years where we got hit so hard. I also remember my
grandfather talking about people who had learned to game the
insurance system, if you will, and so as we work forward with
this insurance program, I want to make sure that we have the
best program possible for the good farmer. It gets back to
something you have talked about a little bit before and I would
like you to expand on. Is somebody whose claims ratio--and I
know you have talked about it more from the standpoint of a
discount for consistently good producer----
Mr. Murphy. Right.
Mr. Austin Scott of Georgia.--but virtually every insurance
product out there in America is risk-adjusted, based on the
conduct of the individual. And so, as we go forward with that,
would you talk with us about your ideas for having somebody who
makes multiple claims versus somebody who is not making those
claims, someone whose loss ratios are out of line, if you will,
consistently. How do you intend to handle them paying more into
the system, the risk adjustment there?
Mr. Murphy. Okay. Overall, first I will just say that from
a standpoint of integrity, it is actually imbedded in every
function for the program. It is critical that we continue to
try to do the best we can to combat fraud, waste, and abuse. We
have some very advanced tools, data mining, which has been very
successful, which has helped us identify schemes going on. We
have some very large cases occurring right now with tobacco in
North Carolina as a result of the findings of data mining. That
is an important tool, so that will help us, but you are
absolutely right. When you get down to the county level of this
program, if somebody is abusing that program, that county is
paying for it. The neighbors are paying for it. We rate on a
crop county basis in this program, and so as a result, next to
data mining, probably the most important tool that we have in
identifying and fighting fraud are neighbors who do not want to
see their premiums go up because of something somebody is
doing.
We keep working more and more. We work very closely with
FSA on a spot-check list that we use to identify anomalies
through data mining. FSA spot-checks those through the year.
That has been extremely effective. And so I think as long as we
try to keep up with the new schemes, because as you tighten
things up, a certain group of people will always look for ways
to get money for doing little. We will keep addressing that,
going forward.
Mr. Austin Scott of Georgia. I think you are right, I mean,
with what you said. I think my FSA agents could probably
predict for you who was going to file the claim.
Mr. Murphy. Who you need to watch.
Mr. Austin Scott of Georgia. And so could the majority of
the farmers in the community. And so I guess I hope that we
will work towards an adjustment in that, and make sure that we
are creating the program that works for the good producer. And
I understand that a good producer is going to have some losses.
That is just the facts of life, but I just hope that you will
keep moving down that path and keep us informed. And I do,
again, want to point out the importance, I believe, in the
private-public partnership here where we are the insurer, but
we have private agents out there actually handling the
insurance product.
Thank you, I yield back the rest of my time.
The Chairman. Thanks, Mr. Scott.
Mrs. Roby for 5 minutes.
Mrs. Roby. Thank you, Mr. Chairman, and thank you, Mr.
Murphy, for being with us today.
Just to build upon what Mr. Scott was talking about, in
preparation for this hearing we heard from our folks back home
who shared similar concerns, that we should be rewarding
farmers for good performance history with crop insurance,
either through lower premiums or increased coverage levels.
More consideration needs to be given to the individual
experiences that would not disadvantage good producers in a bad
county experience situation.
I want to ask you a specific question about the group risk
insurance program. It was very, very popular throughout the
South and was used pretty heavily in Alabama. And the RMA stops
the program in many counties, due to insufficient data. So I
want to know is RMA currently exploring any avenues that would
allow reintroduction of this program, or a similar program in
areas that previously lost access to those products?
Mr. Murphy. Right. I think there is a two-part answer. One
of them is I think NASS is working harder with farm groups,
realizing the importance of getting this data into NASS. So I
think there is an emphasis on growers of making sure that
everybody in the county reports to NASS the correct numbers.
The second thing we are doing is we are looking at our
group risk plan, as well as a few other changes to the actual
production history basis of the program. One of the things we
will be looking at is perhaps having area group plan
participants provide their yields every year, that way we would
be able to use our own data instead of having to rely on NASS's
program alone. So we are looking at that as a way to address
that.
Another thing we could do is look at combining districts.
That gets a little tricky if you have a lot of changes in the
geography of the area, but that is another thing we can take a
look at. But we are very aware of that and we are looking at
ways that we can bring the program back into those counties, as
well as expand into other counties.
Mrs. Roby. Good. Thank you for that.
I just want to make this as a comment. You can respond if
you want, but right now under the current rules, in some
situations a farmer is required to carry a failed crop to
harvest, and you know, this comes from our groups back home, so
they spend more money to actually harvest the crop than the
crop is going to bring. I just want to point that out, that
that needs to be addressed. It is detrimental in some
situations.
But I want to go back and--let me see, I have a little bit
more time. You mentioned in your testimony that lenders now
require crop insurance coverage in order to make operating
loans, and many producers use collateral for loans. Can you
tell us why crop insurance has become so important to the
producers in securing financing?
Mr. Murphy. I think it is because the grower knows up front
what his protection is going to be, and the banker knows up
front that the production is there. It is not only their
knowledge of the crop insurance, but bankers have become
extremely knowledgeable of the actual mechanics of the
programs, and so they will suggest certain types of products
that they want the grower to purchase.
Another thing that they can do is that they can have the
indemnity sent to the bank, or make the indemnity payable to
both the bank and the grower. Now the grower does not always
like that, but if it helps secure a loan, I think it is a good
thing. So it has just become something the bank can depend on.
Now with the advance of revenue coverage as well as yield
coverage, I mean, for a grower to be able to go into a banker
and say I am guaranteed to make this much money per acre, that
is pretty powerful source of collateral for that bank. So I
believe that is why it has become--we don't need Congress to
take any action during the year. We don't need the Secretary to
take action. The program just works, and if a grower has a
loss, he gets paid.
Mrs. Roby. Thank you so much, Mr. Chairman. I yield back.
The Chairman. I thank the gentlelady.
Mr. Schilling for 5 minutes.
Mr. Schilling. Thank you, Mr. Chairman.
What I wanted to just address--thank you for coming out--
duplication and overlapping of services, basically. One of the
concerns about the duplication of the acreage reporting,
including the cost of administering and the frustration that it
causes our producers. Given that many of the producers have
multiple farms with differing acres and crop rotations on each
farm, it seem the process drastically increases the margin of
error and creates twice as many opportunities for the mistakes.
Why can't we just avoid--I think you know where I am going with
that.
Mr. Murphy. Yes, I understand your point exactly, sir, and
I am very pleased to tell you we are making progress in this
area. Through the Comprehensive Information Management System,
the CIMS Program, we are pulling together the acreage reporting
dates for both FSA and RMA. I think next year, spring crops
2012, will see the first dates of that, and they will be in the
northern tier of the country. That has always been a source of
angst to growers out there.
We are working toward, through that same project, a single
port reporting. If the farmer wants to go to his FSA county
office and report, why can't the agent download that
information and use it himself, and vice versa? If it is a
rainy Thursday afternoon, why can't the grower sit and certify
at home and have it sent to both programs? That is the end goal
of the CIMS project. Under Secretary Scuse is the primary
proponent of it in the Department, and I am happy to say that
we are moving very quickly toward that.
Mr. Schilling. Very good. And then just my last--have there
been any issues in reconciling a crop insurance reduction? We
talked a little bit about that, so I am going to pass on that.
One of the things I am a big proponent, like Mr. Scott had
indicated, is the public-private partnerships. I think those
are huge. One of the things in the Illinois 17th District where
I am from, that is the one thing I continue to hear from the
farmer is leave our insurance alone. But with that, I
appreciate your time, sir.
Mr. Murphy. Thank you.
The Chairman. I thank the gentleman.
Mr. Crawford, from Arkansas, for 5 minutes.
Mr. Crawford. Thank you, Mr. Chairman, and thank you, Mr.
Murphy, for being here.
Can you provide any insight into differences in
participation rates between crops and/or regions? For example,
in 2010, according to RMA data about 68 percent of rice,
particularly in Arkansas, acres were insured. By contrast,
nearly all of Texas cotton acres were insured. Are there unique
concerns with certain crops or regions?
Mr. Murphy. Actually, there is indeed. I am happy to report
that we are seeing increases. One of the concerns we often get
is between major program crops and specialty crops. We are at
83 percent participation on the major program crops. We have
come up to 75 percent for specialty crops, so we are seeing
progress there.
I think the introduction of the additional subsidy for
enterprise units has also been extremely helpful, especially in
your area, for both rice and cotton down there. It reduces the
premium tremendously. Growers have flocked to those programs
and we are seeing increases there. That alone is not going to
solve it. We are seeing probably Arkansas, Mississippi,
Alabama, that area is where we are seeing lower participation
than other parts of the country. We are actively working with
commodity groups down there to try to improve the programs. We
are looking at the dates in the program to make sure that they
are the correct dates we should or should not be using, such as
planting dates, reporting dates, end of insurance dates. We are
taking a look at that. We are even getting into the policies
themselves. We have been having great meetings with the rice
growers and working at some additional coverage the growers
would like to see for downed rice, which results when
hurricanes come through the area and they have to deal with the
additional costs of harvest. Hopefully that is going to see
some progress in the next couple years. It has been very
successful work between us and the group down there.
So we are using multiple ways to do it. I think it is
slowly coming along, I just think we have to keep working with
it. Program integrity is another big issue. There have been
issues with program integrity in the past. Farmers have to be
convinced that their premium dollars that they are paying out
is going only to the legitimate losses. Our compliance office
is putting extra effort into that area to show that.
So we are doing a number of things, going forward, and as
we get into the farm bill, I would be more than happy to work
with you and your staff in additional ways we could look at
increasing participation.
Mr. Crawford. Excellent. I have just got half of my time
left here, so let me ask you this. Is that flooding that has
resulted from the Army Corps of Engineers breaching levies
along the Mississippi and Missouri Rivers an insurable cause of
loss under the Federal Crop Insurance Program?
Mr. Murphy. Yes, it was, and there was some consternation
at the beginning when the Corps first had decided to
intentionally breach some of those levies. We worked with the
Corps. They provided us with some information of what would
happen if they did not breach the levies where they did.
Additional damage would occur to crops downstream, uncontrolled
damage where they couldn't tell us what additional damage would
occur, especially in the northern part, the Missouri levy. The
water was actually topping the plugs at the point that they
blew them. If a levy is topped, the integrity of that structure
is compromised severely and will probably fail anyway. As we
moved further down along the Mississippi, the Corps was able to
show that actually if they did not breach those levies where
they did, the potential for the levies alongside with more
intensive cropping, higher value cropping would be compromised.
We were able to make the determination up and down the
Mississippi River that they were insurable events. The
companies have been informed. They tell me that they are moving
loss adjusters in now to start working with the growers there.
Yes, we were able to address all those concerns.
Mr. Crawford. Excellent. Okay. Real quick, back to rice.
You covered that pretty well, but I just want to ask, what is
the current participation rate of rice and buy-up coverage and
levels of protection, and how does this participation rate
compare to other major crops like corn, soybeans, wheat, and
cotton?
Mr. Murphy. I don't have that information right with me. I
can tell you it is lower than you see in the major crops. I
will get that to you, though.
[The information referred to is located on p. 35.]
Mr. Crawford. Any ideas what we can do to increase that?
Mr. Murphy. Again, I think it is working with the growers
and seeing how we can improve that program. I mean, it was the
development of revenue coverage that brought in the corn and
soybean growers to the levels we have seen, so program
improvements will bring in growers, once they believe their
risks are being addressed by our programs. So I think it is a
matter of just continuing to work until we get it right.
Mr. Crawford. Excellent. Thank you, Mr. Murphy. I
appreciate it, and I yield back.
The Chairman. I thank the gentleman.
Mr. Huelskamp, for 5 minutes.
Mr. Huelskamp. Thank you, Mr. Chairman. I appreciate your
appearance here today, Mr. Murphy, and I come from a fairly
large district, and doing town halls across the district, you
learn not to complain about certain things. You complain about
water, in my area it is a drought, and in the other end of the
district it is flooding. We had both of those. But here
consistently is the important piece, crop insurance and the
product you produce and we will be watching that very closely.
As one proponent noted, that given the situation, this is
really going to test the program and we are really going to
have to perform like we never have before.
With that in mind, particularly with the--not only the
currently higher but much more volatile commodity prices, how
does that impact, in your mind, and how do you adjust for that
and maintain the solvency of a program with the type of changes
we have seen and are likely to see in the next 6 months.
Mr. Murphy. Right. Actually, there is a lot of data
available for us to go back and stress test our rates against
historic results of the futures market, which we do. In 2008, I
think we saw the biggest drop ever for the major commodities on
the futures market from the beginning of the year to the end of
the year. We actually ended up with a positive loss ratio
nationwide, even though the companies probably did a claim on
just about every corn or soybean policy out there that had
revenue. And so we ended up with a positive price.
We continue to work with--have others review our actuarial
rating methods, so we have outsiders look at what we are doing
and validate or suggest changes, which is done and we
incorporate the changes. It is a constant work in progress, and
I am very happy that it has been successful to date. With the
commodity prices we are seeing today, if a farmer goes ahead
and forward contracts his price, he has a massive risk and crop
insurance is just necessary to protect that grower in the event
that the price is to drop or go considerably higher.
Mr. Huelskamp. I appreciate that. How much room for margin
of error do you have? I mean, there are suggestions out there
with the current economic environment with items--whether it is
in this building or the Federal Reserve, that impact
volatility. How much margin of error--I mean, 2008 was a year,
2011 might be one for the books as well.
Mr. Murphy. Yes, indeed. We take volatility into account
when doing the rating of the program. That is what--in 2008,
that is what led to such large premium bills for farmers. It
wasn't the yield portion of the risk, it was the volatility
factor associated with the revenue portion of the risk that
they saw. So I think we have well-addressed the margin of
error. Only experience will let us know, but like I said, we
have a lot of data we can go back and take a look at, and
again, stress test the program, which we do.
Mr. Huelskamp. I appreciate that, and 2008 is a good year--
an appropriate year to talk about. I think 2011 might be one we
talk about for many years as well.
The second question would be--and I had looked through the
materials closely and didn't see this--but as far as taxpayer
costs and other programs, how does that vary across the crops,
and is that in the information you provided us?
Mr. Murphy. We can provide more information on that. The
taxpayer costs of the program changes dramatically on the
experience that we have for that year. For the last 10 to 20
years, except for a little blip in 2002, we have had positive
loss ratios, so I think the program is well worth the money.
The subsidy--the premiums are subsidized and average between 60
or 70 percent--60 and 65 percent. So if we have $10 billion in
premium this year, well the subsidy is going to be up about $6
billion in the program. So the cost goes along with the
commodity prices as well. There are a lot of variables in the
program, the loss ratio, the losses that the companies pick up
versus the government, so----
Mr. Huelskamp. And the high cost over the last decade would
have been how much in what year?
Mr. Murphy. As far as the total cost of the program? I
would have to pull that together for you. I can do that, the
last 10 years.
[The information referred to is located on p. 35.]
Mr. Huelskamp. Okay, I appreciate that.
Thank you, Mr. Chairman. I yield back my time.
The Chairman. Thanks, Mr. Huelskamp.
Mr. Gibson, 5 minutes.
Mr. Gibson. Thanks, Mr. Chairman, and I appreciate, Mr.
Murphy, you being here today.
I represent a district in upstate New York, and your agency
enjoys a good reputation up there for how quickly you process
claims and--so given the current climate, the natural disasters
that have hit across the country, including in my district, we
have had flooding along the Hudson River. It mentioned in your
assessment whether or not you will be able to keep up with the
timeliness of the pay-outs and is there something about that
program that I should carry back? I am about ready to meet with
all my farmers; I have a quarterly panel. So if you want to
give me some assessment as to how you think that is going to
go, and if there are any best practices that you think I should
carry back, I would welcome them.
Mr. Murphy. Okay. Because of the nature of the losses we
are seeing this year, just about every part of the country is
dealing with something this year. I don't think I have ever
seen anything like it, and I have been with the program for 30
years. A lot depends on how the rest of the year goes, the
total amount of claims that will have to occur. I have talked
to the companies. They feel very confident that they have an
adequately trained workforce. They are moving people around the
country, which they routinely do to be able to address
situations like this. I do believe we will be able to make the
30 day turnaround required, once the insured signs the claim to
the payment of the claim. The companies have told me that they
feel good about it, so I am confident going through we will be
able--the companies will be able to provide that same level of
service that growers have become accustomed to.
Mr. Gibson. That is encouraging. Is there anything that in
this period that would be helpful for me to convey to the
farmers in terms of best practices?
Mr. Murphy. If they have a loss, notify their company
immediately. That is probably the most important thing you
could bring back. You don't want to get into a situation where
the company is notified late in the year and they don't have
the ability to look at that crop. That becomes extremely
problematic, so I would say stay in touch with your company,
stay in touch with your agent.
Mr. Gibson. Thanks very much.
The second area I would like to cover is, like every place
else around the country, our dairy farmers and beef farmers,
the beef industry in the 20th, we are having issues with input
costs. I am curious to get your assessment as the ongoing
activities in the Senate with regard to ethanol. Your
assessment, how significantly that would impact input costs?
Mr. Murphy. Okay. Again, that is a little bit out of my
area of expertise. I usually look toward economists for their
advice on it, and I will continue to do so. I am happy to
report that we do have programs for livestock that are gross
margin. Basically you are insuring that margin between the
price of the finished product and the price of the input cost.
It has been a slower uptake in cattle than we have seen in
dairy, but it is an excellent program for times like these, so
I would encourage growers to take a look at that, if they are
concerned about both input and future price for their
commodity.
Mr. Gibson. Thanks very much, Mr. Murphy, and I appreciate
your being here.
I yield back.
The Chairman. I thank the gentleman.
Mrs. Hartzler, for 5 minutes.
Mrs. Hartzler. Thank you, Mr. Chairman. Thank you, Mr.
Murphy, and I would like to echo the comments that have already
been said here by my farmers. Your part of the farm bill is
probably the most popular part, and everyone, all of us--I am a
farmer, too--appreciate what you do.
I wanted to ask regarding the cost--of course, we are
looking at budget issues now. In Fiscal Year 2010, it says the
crop insurance costs were $4.7 billion. I just wondered, can
you give me kind of a rough breakdown of how much of that went
to claims and how much went to the administrative costs and
operating costs?
Mr. Murphy. Actually, we are a very small agency. We have
less than--we have about 500 employees overall, so when you are
talking discretionary costs of the program, we are only talking
$78 million to $80 million being the overall cost of the
program of discretionary.
The major costs that we see in the program are the
producer's subsidy that they get paid, the potential
underwriting gains that the companies can make on a good year,
and then the administrative and operating expense that we
provide to the companies in order to deliver the program. Crop
insurance, unlike private property and casualty insurance, you
don't--the farmers don't pay that in their premium bill. We
provide a separate payment to the companies to deliver the
program for it. In the negotiation of the Standard Reinsurance
Agreement, we actually reduced both the potential underwriting
gains for the companies, as well as the administrative and
operating costs provided to the companies, so we are certainly
going to see a reduction. Probably the wildcard in the whole
thing is the premium subsidy, going forward. Like I said, as we
have seen these record commodity prices, that brings up the
producer premium subsidy payment.
Mrs. Hartzler. But in Fiscal Year 2010, how much money for
those various things, or maybe you could get that to me later?
Mr. Murphy. I can provide that to you on a year basis. I
will break it out for 2010 and get that up to your office.
The information referred to is located on p. 36.]
Mrs. Hartzler. Yes, that would be fine.
Another question, we have about an 80 percent crop
insurance participation, right, on your major crops, and Fiscal
Year 2009, about $79 billion worth of crops were insured, but
yet, the overall value of crops in the U.S. that year was $169
billion. So in other words, about 53 percent of the value of
crop production was actually insured. So how does that
reconcile that 80 percent participation rate, and given the
price volatility and extreme weather, does that concern you?
Mr. Murphy. Yes, it always concerns me. There are quite a
few crops we haven't reached yet. That is a priority with the
Agency, to figure out how we can expand coverage to the
remaining crops out there. Another thing to keep in mind is
that our yield guarantees are based on a 10 year average, all
right, so that basically makes the APH guarantee lower than
expectations. If you have seen some of the modeling on how
yields have been increasing, especially over the last 10 years,
so you are going to see a lag with the guarantee compared to
what expectations of the crops are today. I think that adds a
lot to it.
Mrs. Hartzler. Definitely, that is true. Your testimony
states there is only $20 million available annually to cover
administrative and operating costs and premium subsidy costs
for the pilot livestock insurance plans, so can you tell me a
little bit about that? Are there pilot livestock insurance
plans generally available, are they limited geographically now?
How are they--given the finite resources, are they based on a
first come, first served principle to sign up? How much would
livestock insurance plans cost the government if it was widely
available, given its popularity? Three questions there.
Mr. Murphy. Well, I think there are a couple issues
available here. I wouldn't look at livestock programs that we
have, such as the revenue programs and the dairy program being
the only--we have a pasture range land forage program out there
now, that is widely available. We are expanding it as we have
the funding to do so. That is something I think livestock folks
generally participate in. A lot of livestock farmers also grow
corn, alfalfa, soybeans. They can insure those.
We only got the authority to actually start insuring
livestock in the ARPA Act in 2000, so it has been a slow ramp-
up. I think Congress wanted to limit how much we wrote until
they could see the experience of the programs. I think that
impacts--that is why they limited it to $20 million. That is
something I think I would be very interested in discussing with
the Committee as we get into the farm bill, taking a look at
that and seeing if that is realistic anymore.
I think cattle guys have been slow to come into the program
overall. Cattle folks are very independent, as I am sure you
are aware, if you work with cattle guys out there. It is a
different breed. I think that is maybe a barrier as well.
Mrs. Hartzler. Okay. Thank you very much.
Thank you, Mr. Chairman.
The Chairman. Thanks, Mrs. Hartzler.
Mrs. Schmidt, 5 minutes.
Mrs. Schmidt. Thank you, Mr. Chairman, and thank you, Mr.
Murphy, for coming today.
In the last few years of higher commodity prices, and given
the flooding and drought across the country this year,
including the flooding in my own district, how do you ensure
that farmers claims are adjusted, processed, and reviewed in a
timely manner, and are there ways to speed up that process?
Mr. Murphy. Well, the companies themselves who reentered
into the reinsurance agreement, they are responsible for that
part of the program. They keep a core of well-trained
individuals in claims adjusting on board. When we have a year
like this, they bring others in the community who have worked
in the past on loss adjustment, have been farmers themselves or
farm managers. They bring them on to help to bring their
numbers up, and they get it done. Rarely do I hear, even in
2008, do I hear concerns that it has taken too long to get a
claim paid.
There are some concerns that the audits that have to go on
in some of these claims, that has been voiced in the past. What
I do to address that is I do what I can to inform farmers that
this whole program is predicated on you having records to
support your yields. Please make sure you have those together,
and that way the audit will go quicker in the event that the
grower is chosen.
So I think overall the industry is well geared up to
address these challenges across the nation. I think things will
go smoothly, as they have in the past.
Mrs. Schmidt. Thank you. Along the same lines, I understand
that risk sharing between the USDA and the private insurance
companies is spelled out in the Standard Reinsurance Agreement.
However, can you please give a general explanation of the risks
borne by the government and those borne by the insurance
companies, and do you think the current arrangement is an
appropriate balance of risk sharing?
Mr. Murphy. Yes, I can do my best. We take a look at, of
course, the lower the loss ratio of the year, the lower the
claims, the more the companies assume the risks; the higher it
gets, the more the government assumes the risks. That is why
the government is involved in this program. If there wasn't a
need, we would not be here. The industry would be able to
handle the problem. They are concerned that such a systemic
loss would occur in the Midwest and the high plains that they
would not be able to address it, that is why we are here. So
that is where we put the majority of our protection on the
higher levels, once you get above $1.20 loss ratio where we are
paying $1.20 for every dollar we get in.
What we have seen over the last 10 years, the companies
have been picking up most of those losses because it has been
very good loss ratios nationwide. It is a very complex formula
in the program, but I think generally as the higher the loss
ratio is, the more the government assumes, the more risk the
government assumes.
I think it is also important that the private reinsurance
market worldwide participates in this program by taking some of
that residual risk after it passes through the SRA, so we
actually have some of that being sent off into the worldwide
international market.
Mrs. Schmidt. Thank you. For several crops, while a large
percentage of planted acres are insured, they are insured at a
minimum CAT or buy-up coverage levels. Cotton and rice are good
examples of this. What can be done to increase coverage for
these crops?
Mr. Murphy. Yes. I think, especially if you look at
geographical areas, that is where you see the lower amount of
coverage. Rice growers, especially in the central South, they
have wells to get their water so they are always going to be
able to get water. It is a perception of risk. Their big
concern is hurricane or disease that comes through, and how
often that occurs? It is all in perception of risk. I think it
is just continuing working with the growers, that is what we
can do? We have not always had high participation in corn,
soybeans and wheat. It is only by making changes to the
program, ensuring that the program addresses their risks that
they have to deal with that we have seen the participation
increase. I think it is the same with these other crops. It is
just constantly working with them.
Mrs. Schmidt. Thank you, and one final--and this is more a
personal view. Some of the critics back home that are fiscal
hawks think that all of this is nonsense and it is not needed.
How would you address that?
Mr. Murphy. I think this year is an excellent example of
how important the farm safety net is to farmers out there. Food
security is a priority with this country. I would say all these
programs are extremely important.
Now, I agree the cost of government has gotten high. I
think everybody does. We are looking for ways to become
efficient and ways to reduce the costs to taxpayers, but the
farm safety net is critical. I would hate to be put in a
position where we do not have these programs available, and
there would be widespread losses across the country.
Mrs. Schmidt. Excellent answer, thank you.
The Chairman. I thank the gentlelady.
Mr. Murphy, on the statutory loss ratio is one, I guess,
which would mean we lose a dollar for every dollar of a premium
we put in. Right now, it comes to average 83 cents on every
dollar. If we push that 83 cents up to a dollar, do you think
that would increase--would that have an impact on
participation, getting other people into the program by
lowering the costs?
Mr. Murphy. You mean if you get----
The Chairman. Lower the premium down to that 83 cents----
Mr. Murphy. Yes, I think once you get under--our target
loss ratio now over time is $1. Once you start getting below
that as your target, it starts getting very complex.
The Chairman. How do you push it up? How do you get to that
dollar?
Mr. Murphy. You--there are a number of different ways,
participation, working with the rate itself. Now, we also have
a reserve in there, okay, because the law requires we keep a
reserve. So even though the 83 cents is there, that means we
have a 20 cents reserve for future years.
The Chairman. Well, let me ask if the--I get that, because
you are going to have a year like 2 years ago when it was
$1.40. If your loss ratio was closer to the dollar, would you
have greater participation in the program because the premiums
would be lower?
Mr. Murphy. Yes, I think generally you can say that.
The Chairman. Okay.
Mr. Murphy. But again, you have to look at the length of
time you are looking at to do that analysis. When we do rate
making, we actually use about 30 to 35 years of data.
The Chairman. Okay. The reserve is pegged at what?
Mr. Murphy. The reserve is just required by statute that we
have so much money----
The Chairman. How much? Is that per----
Mr. Murphy. It doesn't actually say in the law. We try to
stay around 10 to 20 percent.
The Chairman. Of premium?
Mr. Murphy. Of premium reserve in there, yes. That means
you want to be around 90 cents loss ratio. Once you start
getting up above 90 cents, then we would be concerned that we
had the correct----
The Chairman. All right. You never ever hardly hear about
actual production histories, I bet. What are you doing to try
to--given how long it takes those to move and the impact it
has, and continued droughts in our part of the world, pushing
those down. What is on the table?
Mr. Murphy. Okay. We are doing a number of different
things. We are taking a look at the rating itself, and how we
weight the years. Like I said, we use 30 years of data to rate
the program. There has been a big issue we have had, especially
with soybean and corn growers, is how you rate those individual
years. I think we all now are on the same page, and that is
probably the most recent years need to be weighted more than
the earlier years. We are working in that direction. We are
trying to adjust the yield drag on individual yields. If I am a
corn grower in Illinois, 10 years ago my yield and my APH, is
that really relative to what the expectations are this year? We
have movement going on in that, and hopefully growers will see
some of that progress in 2012.
So we are doing things like that to try to address it. We
are also working with growers, manufacturers, how we can
incorporate some of this GPS technology to improve some of the
efficiencies in the program. For instance, as a farmer is
planting, why can't that information not be sent directly to
the agent and start populating the acreage database? As I am
harvesting and I have a loss, why can't that data start
populating a claims form for me? So it is looking at
efficiencies like that in the program to make it more--a better
product for farmers out there.
The Chairman. This may sound a little self-serving. Earlier
Mr. Scott made some unfounded specious comments about some
small university in Georgia. Tarleton State has the data mining
program. Do you know off the top of your head what that value
gets pushed back to the taxpayers as a result of that work?
Mr. Murphy. Sure. We are looking at cost avoidance, since
the inception, to now of about $840 million.
The Chairman. Versus the cost of----
Mr. Murphy. Probably--we are $4 million a year, probably
$40 million at the most.
The Chairman. Okay. I guess the point being that as we move
into these austerity programs, I am hopeful that programs that
actually--I don't want to say make money--you say cost
avoidance.
Mr. Murphy. Exactly.
The Chairman. Exactly. Most of the folks out there want to
do it right, and there are a few that don't. And so as you--as
we trim your budget, so to speak, I am hopeful that the data
mining issue is one that we see value in. It won't score that
way necessarily, because of the way our complex rules work, but
that data mining program, wherever it is, is fully exploited,
not only in this part of the farm bill, but I suspect there is
some applications in food stamps or SNAP and other programs in
which that data mining concept could be used and exploited.
Mr. Murphy. Yes, indeed.
The Chairman. Mr. Boswell, do you have any further
questions?
Mr. Boswell. No further questions.
The Chairman. Mr. Murphy, thank you. This is one of those
rare circumstances where we actually got the entire hearing
done in a reasonable time, in spite of a vote. I have some
official words to read here somewhere.
All right. Before we go on, I want to ask the Ranking
Member if he wanted to say anything. Under the rules of the
Committee, the record of today's hearing will remain open for
10 calendar days to receive additional materials, supplementary
written responses, a couple of questions that were asked, from
the witness to the questions posed by a Member.
This hearing on the Subcommittee on General Farm
Commodities and Risk Management is adjourned.
[Whereupon, at 11:38 a.m., the Subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
Supplementary Material Submitted by William J. Murphy, Administrator,
Risk Management Agency, U.S. Department of Agriculture
During the June 24, 2011 hearing entitled, Agricultural Program
Audit: Examination of Crop Insurance Programs, requests for information
were made to William J. Murphy. The following are the information
submissions for the record.
Insert 1
Mr. Crawford. Excellent. Okay. Real quick, back to rice. You
covered that pretty well, but I just want to ask, what is the
current participation rate of rice and buy-up coverage and
levels of protection, and how does this participation rate
compare to other major crops like corn, soybeans, wheat, and
cotton?
Mr. Murphy. I don't have that information right with me. I
can tell you it is lower than you see in the major crops. I
will get that to you, though.
For information on program participation by crop, see spreadsheet
entitled, Largest Crops Insured by Federal Crop Insurance, Reinsurance
Year 2010, follows.
Largest Crops Insured by Federal Crop Insurance, Reinsurance Year 2010
----------------------------------------------------------------------------------------------------------------
Share of Share of Share of
Crop Liablilty Liability Premium Premium Subsidy Subsidy
----------------------------------------------------------------------------------------------------------------
Corn $31,673,245,782 41% $2,854,569,648 38% $1,748,845,970 37%
Soybeans $17,968,268,248 23% $1,746,840,208 23% $1,068,744,370 23%
Wheat $6,426,634,955 8% $1,123,672,475 15% $685,193,684 15%
Cotton $2,986,974,144 4% $488,627,636 6% $319,399,594 7%
Nursery $2,310,476,269 3% $49,806,802 1% $40,080,416 1%
Citrus $2,053,384,518 3% $64,728,939 1% $44,317,648 1%
Rice $1,226,342,119 2% $69,298,862 1% $50,108,540 1%
Grapes $1,049,323,716 1% $46,628,400 1% $33,311,279 1%
Potatoes $962,357,453 1% $81,774,552 1% $54,825,864 1%
Other $10,949,219,926 14% $1,066,169,977 14% $663,500,752 14%
----------------------------------------------------------------------------------------------
Total All Crops $77,606,227,130 $7,592,117,499 $4,708,328,117
----------------------------------------------------------------------------------------------------------------
Insert 2
Mr. Huelskamp. I appreciate that, and 2008 is a good year--an
appropriate year to talk about. I think 2011 might be one we
talk about for many years as well.
The second question would be--and I had looked through the
materials closely and didn't see this--but as far as taxpayer
costs and other programs, how does that vary across the crops,
and is that in the information you provided us?
Mr. Murphy. We can provide more information on that. The
taxpayer costs of the program changes dramatically on the
experience that we have for that year. For the last 10 to 20
years, except for a little blip in 2002, we have had positive
loss ratios, so I think the program is well worth the money.
The subsidy--the premiums are subsidized and average between 60
or 70 percent--60 and 65 percent. So if we have $10 billion in
premium this year, well the subsidy is going to be up about $6
billion in the program. So the cost goes along with the
commodity prices as well. There are a lot of variables in the
program, the loss ratio, the losses that the companies pick up
versus the government, so----
Mr. Huelskamp. And the high cost over the last decade would
have been how much in what year?
Mr. Murphy. As far as the total cost of the program? I would
have to pull that together for you. I can do that, the last 10
years.
See worksheet ``Program Expenditures Table'' that follows. As
regards program costs by crop, in general those would be roughly
proportionate to their share of program liability/premium/subsidy, as
provided in the worksheet ``Largest Crops Table.'' It is otherwise
difficult number to obtain as only premium subsidy is calculated and
directly available on a by-crop basis. We do not directly calculate A&O
by crop. Underwriting gains/losses are based solely on a state's
underwriting performance, not on that of any individual crop.
Other Program Expenditures, Fiscal Years 2001 to 2010
------------------------------------------------------------------------
ARPA & FCIA Interest & Other
Fiscal Year RMA A&O Initiatives *
------------------------------------------------------------------------
(Million Dollars)
------------------------------------------------------------------------
2001 $65.60 $43.78 $0.00
2002 $73.73 $40.68 $0.95
2003 $70.22 $48.61 $0.00
2004 $70.99 $46.22 $35.59
2005 $70.48 $45.23 $0.00
2006 $75.94 $37.51 $0.00
2007 $75.44 $39.61 $0.00
2008 $75.17 $47.79 $0.00
2009 $76.83 $53.37 $0.00
2010 $79.99 $53.05 $0.00
2011 ** $78.84 $68.50 $0.00
------------------------------------------------------------------------
* Related to the dissolution of American Growers Insurance Company.
** Estimated.
Insert 3
Mrs. Hartzler. Thank you, Mr. Chairman. Thank you, Mr.
Murphy, and I would like to echo the comments that have already
been said here by my farmers. Your part of the farm bill is
probably the most popular part, and everyone, all of us--I am a
farmer, too--appreciate what you do.
I wanted to ask regarding the cost--of course, we are looking
at budget issues now. In Fiscal Year 2010, it says the crop
insurance costs were $4.7 billion. I just wondered, can you
give me kind of a rough breakdown of how much of that went to
claims and how much went to the administrative costs and
operating costs?
Mr. Murphy. Actually, we are a very small agency. We have
less than--we have about 500 employees overall, so when you are
talking discretionary costs of the program, we are only talking
$78 million to $80 million being the overall cost of the
program of discretionary.
The major costs that we see in the program are the producer's
subsidy that they get paid, the potential underwriting gains
that the companies can make on a good year, and then the
administrative and operating expense that we provide to the
companies in order to deliver the program. Crop insurance,
unlike private property and casualty insurance, you don't--the
farmers don't pay that in their premium bill. We provide a
separate payment to the companies to deliver the program for
it. In the negotiation of the Standard Reinsurance Agreement,
we actually reduced both the potential underwriting gains for
the companies, as well as the administrative and operating
costs provided to the companies, so we are certainly going to
see a reduction. Probably the wildcard in the whole thing is
the premium subsidy, going forward. Like I said, as we have
seen these record commodity prices, that brings up the producer
premium subsidy payment.
Mrs. Hartzler. But in Fiscal Year 2010, how much money for
those various things, or maybe you could get that to me later?
Mr. Murphy. I can provide that to you on a year basis. I will
break it out for 2010 and get that up to your office.
See worksheet Program Expenditure table.
Federal Crop Insurance Program Expenditures, Reinsurance Years 2001 to 2010
----------------------------------------------------------------------------------------------------------------
Company
A&O+LAE Paid Premium Cost Share Premium Program Share of Cost of Crop
Reins. Year to AlPs Subsidy Subsidy Discount Underwriting Gains & Insurance
Gain or Loss * Losses Program
----------------------------------------------------------------------------------------------------------------
(Million Dollars)
----------------------------------------------------------------------------------------------------------------
2001 $635.87 $1,781.22 $0.42 $2.81 ^$10.99 $346.00 $2,755.33
2002 $625.89 $1,737.94 $0.38 $0.00 $1,150.42 ^$47.31 $3,467.33
2003 $733.66 $2,044.94 $0.37 $0.00 ^$174.68 $377.85 $2,982.15
2004 $889.42 $2,472.26 $4.22 $0.00 ^$893.62 $689.43 $3,161.71
2005 $829.25 $2,334.66 $4.11 $0.00 ^$1,604.41 $914.97 $2,478.58
2006 $958.58 $2,779.01 $0.00 $0.00 ^$1,167.48 $818.85 $3,388.95
2007 $1,332.53 $3,812.23 $0.00 $0.00 ^$3,082.33 $1,572.47 $3,634.89
2008 $2,009.25 $5,678.56 $0.00 $0.00 ^$1,112.57 $1,095.14 $7,670.38
2009 $1,618.51 $5,424.16 $0.00 $0.00 ^$3,732.14 $2,297.77 $5,608.30
2010 * $1,367.74 $4,708.61 $0.00 $0.00 ^$3,409.89 $1,930.38 $4,596.84
----------------------------------------------------------------------------------------------------------------
Reinsurance Year = July 1 to June 30 of following year.
* Negative number = program underwriting gain, positive number = program underwriting loss.
______
House Committee on Agriculture Farm Bill Audit Questionnaire
1. Program Name
The Federal crop insurance program is managed by the Risk
Management Agency (RMA) which is under the Farm and Foreign
Agricultural Services mission area of the United States Department of
Agriculture.
2. Subprograms/Department Initiatives
None.
3. Brief History
FCIC was created in 1938, under the Federal Crop Insurance Act
(Act), to carry out the crop insurance program to help agriculture
recover from the combined effects of the Great Depression and the Dust
Bowl. The program was started as an experiment and was delivered by the
FCIC until 1980. During the formative years of the program,
participation was low and crop insurance activities were limited to
major crops in the main producing areas.
The crop insurance program continued to evolve and the Federal Crop
Insurance Act of 1980 expanded the program and introduced the public-
private partnership whereby private insurance companies would sell and
service Federal crop insurance policies reinsured by FCIC. To encourage
participation in the expanded crop insurance program, the Act
authorized a premium subsidy be paid on behalf of insured producers. In
1994 the Federal Crop Insurance Reform Act of 1994 was enacted, which
introduced the catastrophic risk protection (CAT) level coverage.
Producers did not pay a premium for CAT coverage and instead paid a
small per crop, per county administrative fee. The Federal Crop
Insurance Reform Act of 1994 introduced the concept of linkage within
the program. Linkage required a producer to purchase crop insurance at
least the CAT level of coverage in order to qualify for the benefits of
another farm safety net program in an effort to increase participation
and eliminate the need for competing ad hoc disaster programs. The
linkage requirement was eliminated after 2 years, though there have
since been numerous ``linkage'' requirements for disaster assistance or
other farm safety net programs. The Federal Crop Insurance Reform Act
of 1994 also introduced higher subsidy rates for ``buy-up'' coverage
(insurance coverage above the CAT level for which producers pay some
portion of the premium), as well as providing authority for revenue
insurance products. Further, the Federal Crop Insurance Reform Act of
1994 expanded the role of the private sector, allowing entities to
participate in research and development of new insurance products and
features. A process was also created to allow private entities to
submit unsolicited proposals for insurance products to the FCIC Board
of Directors (Board) for approval. This allowed the introduction of the
first revenue products.
In 1996, the Risk Management Agency (RMA) was created to administer
FCIC programs and other non-insurance-related risk management and
education programs that help support U.S. Agriculture. In 2000,
Congress enacted legislation that allowed private entities to be
eligible for reimbursement of research, development and operating costs
for their private submitted products approved by the Board. This
legislation also removed restrictions on the development of insurance
products for livestock; provided authority for the FCIC Board to create
an expert review panel to assist the Board in evaluating new insurance
products for feasibility and actuarial soundness; and significantly
increased premium subsidies, by more than 50 percent, to encourage
producers to purchase higher insurance coverage levels, and to make the
insurance program more attractive to prospective producers.
4. Purpose/Goals
Federal crop insurance serves America's agricultural producers
through effective, market-based risk management tools and solutions to
strengthen the economic stability of agricultural producers and rural
communities and provides world class agricultural risk management
products, tools, education, and outreach.
5. Success in Meeting Programmatic Purpose/Goals
In the 2010 crop year, Federal crop insurance was available for
approximately 350 commodities, in over 3,141 counties, covering all 50
states and Puerto Rico. Insured acreage in the program exceeded 256
million acres. As the amount of insured acreage has increased, so too
has the liability, or value of the insurance in force. In 1994 program
liability was less than $14 billion. Industry estimates suggest that
for 2011 program liability could exceed $100 billion. Of special
significance is the level of participation in specialty crops programs.
Seventy-five percent of producers are participating, which compares
well to the 83 percent participation levels for the major program
crops. Important fruit, nut and vegetable states like California (71%),
Florida (91%), and Washington (68%) each score well in Federal crop
insurance program participation.
Many banks now require or at least encourage crop insurance
coverage in order to make operating loans to producers. Federal crop
insurance has become a fact of life for many farmers--without which
American farmers would find it difficult to continue providing America
and the world with an abundant supply of food, fiber and fuel. The crop
insurance program has seen sustained growth as demonstrated by the
increasing proportion of acres insured at buy up coverage levels over
the last decade to a record-high of 90 percent.
The type of coverage being purchased is also shifting to the more
comprehensive revenue coverage. In 2010, revenue coverage accounted for
65 percent of the insured acres, compared to just 33 percent in 2000.
In addition, the average coverage level (percent of the total crop
covered) for buy up insurance has increased to approximately 73 percent
for 2010, compared to 68 percent in 2000. Improvements to the program
have been accomplished in an actuarially sound manner. Over the last 2
decades, premiums (producer premiums added to premium subsidies) have
been sufficient to cover the indemnities paid to producers plus a
reasonable reserve. For example, the program's loss ratio from 1994
through 2010 has averaged about 0.82.
6. Annual Budget Authority (FY 2002-FY 2011)
(dollars in thousands)
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
--------------------------------------------------------------------------------------------------------------------------------------------------------
A&O $74,232 $70,248 $71,001 $71,468 $76,278 $76,658 $76,121 $77,177 $80,325 $78,842
FCIC Fund $2,820,926 $2,910,966 $3,366,433 $2,242,167 $3,295,458 $4,379,256 $4,145,091 $6,765,663 $6,898,215 $6,992,896
----------------------------------------------------------------------------------------------------------------------------------
Total Authority.... $2,895,158 $2,981,214 $3,437,434 $2,313,635 $3,371,736 $4,455,914 $4,221,212 $6,842,840 $6,978,540 $7,071,738
--------------------------------------------------------------------------------------------------------------------------------------------------------
The FCIC fund includes Budget Authority only. It does not include carryover balances or offsetting collections.
7. Annual Outlays (FY 2002-FY 2011)
(dollars in thousands)
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
--------------------------------------------------------------------------------------------------------------------------------------------------------
A&O $83,801 $75,849 $71,482 $66,739 $73,824 $79,091 $76,254 $72,799 $78,002 $82,000
FCIC Fund $2,946,551 $3,254,184 $3,197,568 $2,883,272 $3,371,615 $3,471,225 $4,074,814 $7,888,892 $4,706,125 $6,989,000
----------------------------------------------------------------------------------------------------------------------------------
Total Outlays...... $3,030,352 $3,030,033 $3,269,050 $2,950,011 $3,445,439 $3,550,316 $4,151,068 $7,961,691 $4,784,127 $7,071,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
Outlay amounts differ from Budget Authority due to timing. The general rule of thumb for FCIC outlay spend rates (current year/past year) is 90/10 for
ARPA, Delivery Expenses, and Underwriting Gains/Losses and 35/65 for Indemnities. For the A&O Account, RMA currently estimates a 90/10 split.
8. Annual Delivery Cost (FY 2002-FY 2011)
See [following tables] from Explanatory Notes provided to the
Congress in recent years as part of the President's annual budget
proposal. The pages provided display information on program costs
including costs associated with program delivery. Note that in each
case, the earliest fiscal year shown is an actual amount and the other
2 years are estimates.
Explanatory Notes, President's Budget Proposal for RMA (FY 2009), p. 22-
25
Risk Management Agency
Full Cost By Strategic Objective
Strategic Objective 2.3: Provide Risk Management and Financial Tools to
Farmers and Ranchers
FY 2007 FY 2008 FY 2009
($000) ($000) ($000)Program
Program ItemsFederal Crop Insurance
Corporation Fund Research and Development $40,000 $40,000 $40,000
Program
Pilot Programs $21,000 $21,000 $21,000
Policy Consideration and $3,500 $3,500 $3,500
Implementation
Premium Program $2,727,720 $3,846,559 $4,100,446
A&O Expenses/Delivery $1,110,750 $1,479,566 $1,471,876
Expenses
Risk Management Assistance $5,000 $5,000 $5,000
Program
Excess Crop Losses $466,286 ($1,250,534) $936,123
---------------------------------------
Total $4,374,256 $4,145,091 $6,577,945Administrative and Operating
Expenses Administrative Costs $58,369 $62,332 $63,461
(direct)
Information Technology 17,075 13,716 13,716
---------------------------------------
Total $75,444 $76,048 $77,177 Performance measure:
Increase the normalized
value of FCIC risk
protection coverage
provided through FCIC
sponsored insurance (in
billions) Performance target: $50.7 $53.7 $54.8
Unit Cost: N/A N/A N/A
=======================================
Total Program $4,449,700 $4,221,139 $6,655,122
Total FTEs 488 553 553
Explanatory Notes, President's Budget Proposal for RMA (FY 2010), p. 19-
22
Risk Management Agency
Full Cost By Strategic Objective Strategic Objective 2.3: Provide Risk Management and Financial Tools to
Farmers and Ranchers
FY 2008 FY 2009 FY 2010
($000) ($000) ($000)Program
Program ItemsFederal Crop Insurance
Corporation Fund Agricultural Risk $42,791 $68,500 $68,500
Protection Act
Initiatives
Premium Program $4,377,350 $6,892,983 $8,837,530
A&O Expenses/Delivery $1,994,615 $1,621,679 $1,545,767
Expenses
Risk Management Assistance $5,000 $6,000 $6,000
Program
Excess Crop Losses $1,577,759 $967,415 $914,732
---------------------------------------
Total $7,997,515 $9,556,577 $11,372,529Administrative and Operating
Expenses Administrative Costs $61,863 $63,606 $66,754
(direct)
Information Technology $13,303 $13,571 $13,571
---------------------------------------
Total $75,166 $77,177 $80,325 Performance measure:
Increase the normalized
value of FCIC risk
protection coverage
provided through FCIC
sponsored insurance (in
billions) Performance target: $53.7 $54.8 $50.7
Unit Cost: N/A N/A N/A
=======================================
Total Program $8,072,681 $9,633,754 $11,452,854
Total FTEs 480 553 568
Explanatory Notes, President's Budget Proposal for RMA (FY 2011), p. 23-
24
Risk Management Agency
Full Cost By Strategic Objective Department Strategic Goal: USDA will assist rural communities to create
prosperity so they are self sustaining and economically thriving.
FY 2009 FY 2010 FY 2011
Amount Amount Amount
($000) ($000) ($000)Program
Program ItemsFederal Crop Insurance
Corporation Fund Agricultural Risk $47,371 $68,500 $68,500
Protection Act
Initiatives
Premium Program $8,416,173 $7,669,250 $9,040,243
A&O Expenses/Delivery $1,601,807 $1,567,145 $1,683,633
Expenses
Risk Management $6,000 $6,000 $6,000
Assistance Program
Excess Crop Losses $1,962,597 $1,167,759 $1,204,771
Projected Savings from -- -- ^$782,000
Negotiations of SRA
-----------------------------------------
Total Costs $12,033,948 $10,478,654 $11,221,147Administrative and Operating
Expenses Administrative Costs $63,606 $66,754 $67,493
(direct)
Information Technology $13,571 $13,571 $15,571
-----------------------------------------
Total Costs $77,177 $80,325 $83,064
FTEs 481 568 568 Performance measure:
Increase the normalized
value of FCIC risk
protection coverage
provided through FCIC
sponsored insurance (in
billions) BY Performance $53.7 $54.8 $50.7
Cost per measure (unit N/A N/A N/A
cost)
------------------------------------------------------------------------
Total for Department Strategic Goal 1
------------------------------------------------------------------------
Total Costs for $12,111,125 $10,558,979 $11,304,211
Department Strategic
Goal
FTEs 481 568 568
Explanatory Notes, President's Budget Proposal for RMA (FY 2012), p. 23-
24
Risk Management Agency
Full Cost By Department Strategic Goal Department Strategic Goal: Assist Rural Communities to Create Prosperity
so They Are Self-Sustaining, Repopulating, and Economically Thriving.
FY 2010 FY 2011 FY 2012Program
Program ItemsFederal Crop Insurance
Corporation Fund (FCIC) Premium Subsidy $4,089,811 $4,600,900 $3,082,875
Delivery Expenses $1,567,145 $1,325,000 --
Underwriting Gains $1,167,759 $999,496 --
Federal Crop Insurance $74,500 $68,500 $59,500
Act Initiatives
Other Authority ($2,352,096) -- --
Withdrawn
-----------------------------------------
Total Costs $4,547,119 $6,993,896 $3,142,375Administrative and Operating
Expenses Administrative Costs $66,045 $66,045 $66,045
(direct)
Information Technology $14,280 $14,280 $16,280
-----------------------------------------
Total Costs $80,325 $80,325 $82,325
FTEs 501 568 568 Performance Measure:
The normalized value
of: BY Performance Dollars Dollars Dollars
Cost per measure $51.9 $52.4 $52.9
(unit cost)
------------------------------------------------------------------------
Total for Strategic Goal
------------------------------------------------------------------------
Total Costs for Priority $4,627,444 $7,074,221 $3,224,700
(program, direct, indirect)
FTEs 501 568 568
9. Eligibility Criteria
In general, anyone producing a crop or livestock for which premium
rates have been published in the counties actuarial documents is
eligible to purchase crop insurance. Basic requirements such as legal
competency and being of legal majority apply. The person purchasing
crop insurance must also have an insurable interest in the crop and
must provide the required identification number and other required data
to the agent from whom the policy was purchased.
Any farmer or rancher can become ineligible to participate in the
program. Circumstances that may cause a person to become ineligible
include having a delinquent debt, such as unpaid premium or failure to
timely repay an indemnity that was overpaid. That person again becomes
eligible when the debt is resolved. Persons who are disqualified,
suspended, or debarred under the Act and applicable regulation, are
ineligible for crop insurance for the period of disqualification,
suspension or debarment. Any person who is convicted of violating the
controlled substance provisions of the Food Security Act of 1985, as
amended, is ineligible for crop insurance from the beginning of the
crop year of conviction and the 4 subsequent consecutive crop years.
There are no carve-outs in the Federal crop insurance program.
10. Utilization (Participation) Data
Additional Coverage Only
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of
Reinsurance Year Policies Insured Acres Liability (Value) Premium Claims Payments Loss Ratio Loss Cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2001 1.1 million 170.5 million $30.1 billion $2.7 billion $2.9 billion 1.069 0.097
2002 1.1 million 176.6 million $30.5 billion $2.7 billion $4 billion 1.485 0.131
2003 1.1 million 183.8 million $34 billion $3.2 billion $3.2 billion 1.003 0.095
2004 1.1 million 189 million $39.5 billion $4 billion $3.2 billion 0.811 0.081
2005 1.1 million 217.7 million $37.2 billion $3.7 billion $2.3 billion 0.609 0.061
2006 1 million 213.7 million $45.4 billion $4.4 billion $3.5 billion 0.782 0.077
2007 1 million 243.3 million $59.8 billion $6.3 billion $3.4 billion 0.544 0.057
2008 1 million 242.2 million $81.1 billion $9.5 billion $8.6 billion 0.909 0.107
2009 1.1 million 242.5 million $71.6 billion $8.6 billion $5.2 billion 0.597 0.072
2010 1.1 million 236.2 million $71 billion $7.3 billion $4.1 billion 0.565 0.058
Maximum 1.1 million 243.3 million $81.1 billion $9.5 billion $8.6 billion 1.485 0.131
Minimum 1 million 170.5 million $30.1 billion $2.7 billion $2.3 billion 0.544 0.057
Ten-year average 1.1 million 211.6 million $50 billion $5.2 billion $4 billion 0.837 0.084
--------------------------------------------------------------------------------------------------------------------------------------------------------
Catastrophic Coverage Only
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of
Reinsurance Year Policies Insured Acres Liability (Value) Premium Claims Payments Loss Ratio Loss Cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2001 236,669 41 million $6.9 billion $247.7 million $48.9 million 0.197 0.007
2002 208,563 38.2 million $6.8 billion $229.5 million $78.7 million 0.343 0.012
2003 175,393 33.7 million $227 million $44.1 million 0.194 0.007
2004 156,004 31.7 million $241.3 million $95 million 0.394 0.013
2005 138,464 28.1 million $236.4 million $81.3 million 0.344 0.012
2006 125,786 28.3 million $261.2 million $64.5 million 0.247 0.007
2007 120,100 28.3 million $268.4 million $50.6 million 0.188 0.007
2008 120,405 30 million $332.7 million $80.4 million 0.242 0.010
2009 93,099 22.3 million $305 million $59.3 million 0.194 0.008
2010 79,687 20.3 million $262.2 million $39.6 million 0.151 0.006
Maximum 236,669 41 million $332.7 million $95 million 0.394 0.013
Minimum 79,687 20.3 million $227 million $39.6 million 0.151 0.006
Ten-year average 145,417 30.2 million $261.1 million $64.2 million 0.249 0.009
--------------------------------------------------------------------------------------------------------------------------------------------------------
11. Duplication or Overlap with Other Programs
The public-private partnership between RMA and private crop
insurance companies for the delivery of subsidized crop insurance is
unique. The Federal crop insurance program is different from disaster
funding because farmers are contributing to the costs of the program
through the payment of premium for an actuarially sound program.
12. Waste, Fraud and Abuse
Waste--The crop insurance program is currently reporting a 4.7
percent average error rate in accordance with the Improper Payments
Information Act. This rate is consistent with the program's
historically reported error rates of between four to six percent. While
the goal is to continue to reduce crop insurance program errors, the
closely related private Property and Casualty lines of insurance
typically report error rates of all types, intentional and
unintentional, between 15 and 20 percent. RMA recently renegotiated the
Standard Reinsurance Agreement (SRA) to include targeted quality
control reviews to assist in identifying and correcting individual and
program errors. RMA also is completing an Information Technology
Modernization project that has new built in internal controls and
checks of data to identify and correct data errors before indemnities
are paid. Advances in technology will continue to provide opportunities
to improve the way we assign insurance guarantees and assess loss
events that will continue to improve RMA's ability to limit program
errors.
Fraud and Abuse--RMA is in its eleventh year of conducting annual
spot checks of producers identified through Congressionally authorized
data mining as being anomalous when compared to their neighbors. Once
identified, these producers are notified that they will be checked
during the year by the Farm Service Agency (FSA). RMA has documented
that this effort reverses the observed anomalous behavior resulting in
a reduction of expected indemnity payments of almost $840 million to
date. The 2011 SRA includes an expansion of this effort to include
checks of an additional tier of producers by their insurance company.
RMA also dedicates significant resources to assisting USDA's Office
of Inspector General (OIG) in investigating and prosecuting criminal
program violations and imposing administrative sanctions when
indicated. Although RMA continues to believe the percentage of
producers engaged in criminal behavior is relatively small, these
producers create a negative impression of the program with the public
and as such RMA believes the aggressive identification and prosecution
of those who abuse the program is essential to maintaining program
integrity. Currently, RMA is assisting OIG and the Department of
Justice with identifying violations in the tobacco insurance program
that includes criminal activity by a significant number of producers,
agents, and loss adjusters across several states. The termination of
the tobacco quota program created vulnerabilities in the tobacco
marketing system that left the insurance program exposed to abuse. RMA
is working to correct these vulnerabilities, while identifying those
who have taken advantage of them in the interim and prosecuting and
sanctioning those persons to the fullest extent of the law.
13. Effect of Administrative PAYGO
In 2005, the Office of Management and Budget released Memorandum M-
05-13 (``Budget Discipline for Agency Administrative Actions'')
requiring that for ``any proposed discretionary agency administrative
action that would increase mandatory spending, the agency must include
one or more proposals for other administrative actions to be taken by
the agency that would comparably reduce mandatory spending''. This is
commonly referred to as ``PAYGO.''
There have been a number of Administrative PAYGO actions in the
crop insurance program. For example, last year's renegotiation of the
Standard Reinsurance Agreement generated a significant amount of
budgetary savings, $2 billion of which was applied to Administrative
PAYGO (the remainder was applied to debt reduction). Conversely, a
number of crop insurance products have been added or expanded, like the
Pasture, Rangeland, and Forage product--a critical product for
livestock producers--using Administrative PAYGO offsets.
AGRICULTURAL PROGRAM AUDIT
(EXAMINATION OF CONSERVATION PROGRAMS)
----------
THURSDAY, JULY 7, 2011
Subcommittee on Conservation, Energy, and
Forestry,
House of Representatives,
Committee on Agriculture,
Washington, D.C.
The Subcommittee met, pursuant to call, at 10:04 a.m., in
Room 1300 of the Longworth House Office Building, Hon. Glenn
Thompson [Chairman of the Subcommittee] presiding.
Members present: Representatives Thompson, Goodlatte,
Gibbs, Southerland, Roby, Huelskamp, Hultgren, Ribble, Noem,
Lucas (ex officio), Holden, Schrader, Owens, McIntyre, Walz,
Pingree, Fudge, and Peterson (ex officio).
Staff present: Brent Blevins, Tamara Hinton, Josh Maxwell,
Debbie Smith, Lauren Sturgeon, Suzanne Watson, Nona S. Darrell,
Liz Friedlander, Anne Simmons, John Konya, and Jamie Mitchell.
OPENING STATEMENT OF HON. GLENN THOMPSON, A REPRESENTATIVE IN
CONGRESS FROM PENNSYLVANIA
The Chairman. Well, good morning, everyone. This hearing of
the Subcommittee on Conservation, Energy, and Forestry
entitled, Agricultural Program Audit: Examination of
Conservation Programs, will come to order. I will start out
with my opening statement.
I want to welcome everyone to this Subcommittee hearing to
examine the farm bill conservation programs. This is one of a
series of hearings the six Subcommittees of the House
Agriculture Committee will be holding to audit farm bill
programs in advance of writing the next farm bill. Though the
current farm bill doesn't expire until September of 2012, it is
important that we begin the review process now. I believe it is
imperative that we have a sound knowledge base from which to
make responsible decisions as we address these programs.
Now, I don't think I need to remind anyone in this room
that we face many challenges in drafting the next farm bill. In
the current fiscal environment, we will be faced with some
difficult decisions regarding the fate of programs in all parts
of the farm bill, including Title II. Moreover, Title II
programs, including the Wetlands Reserve Program and the
Grasslands Reserve Programs do not have a budget baseline
beyond the expiration of the current farm bill. Given the
challenging decisions ahead of us and a number of new faces on
the Subcommittee, I think this is an excellent opportunity for
everyone to ask questions about specific programs, as well as
general program delivery and familiarize themselves with
programs under the Subcommittee's jurisdiction.
Congress offered the first conservation programs for
farmers and ranchers in the 1930s and we have seen a tremendous
growth in programs since then. The conservation title was first
introduced in the farm bill in 2002 and the Title was further
revised and expanded in the 2008 Farm Bill.
Today, USDA offers more than 20 separate active land and
land retirement programs that account for billions in spending
annually. This hearing gives us the chance to hear directly
from those at USDA who are responsible for the implementation
of conservation programs, and we have a chance to learn about
these programs and to ask questions about how they are
implemented and in what manner we could improve the delivery in
the future. When the time comes to make decisions about
conservation programs, we will all be better placed to do so if
we have a thorough understanding of how each program operates.
Our witnesses today will provide information about these
various programs that we need to move forward in a legislative
process. We will learn about basic information about the amount
of money that is being spent on each program, program
participation, as well as examples of duplication with other
programs, and examples of waste, fraud, and abuse.
I want to welcome Chief Dave White of the NRCS and Mr.
Bruce Nelson, the Administrator of FSA. It is good to see you
both. I am certainly eager to hear your testimony on these
programs. And I look forward to working with you both in the
months ahead to draft aa conservation title that fulfils its
core goals while utilizing taxpayer dollars in a responsible
manner.
[The prepared statement of Mr. Thompson follows:]
Prepared Statement of Hon. Glenn Thompson, a Representative in Congress
from Pennsylvania
Good morning. I want to welcome everyone to the Conservation,
Energy, and Forestry Subcommittee hearing to examine farm bill
conservation programs.
This is one of a series of hearings the six Subcommittees of the
House Agriculture Committee will be holding to audit farm bill programs
in advance of writing the next farm bill.
Though the current farm bill does not expire until September of
2012, it is important we begin the review process now.
I believe it is imperative we all have a sound knowledge base from
which to make responsible decisions in how we address these programs.
I don't think I need to remind anyone in this room that we face
many challenges in drafting the next farm bill.
In the current fiscal environment, we will be faced with some
difficult decisions regarding the fate of programs in all parts of the
farm bill, including Title II.
Multiple Title II programs, including the Wetlands Reserve Program
and the Grasslands Reserve program, do not have a budget baseline
beyond the expiration of the current farm bill.
Given the challenging decisions ahead of us and the number of new
faces on this Subcommittee, I think this is an excellent opportunity
for everyone to ask questions about specific programs as well general
program delivery and familiarize themselves with programs under the
Subcommittee's jurisdiction.
Congress offered the first conservation programs for farmers and
ranchers in the 1930s and we have seen a tremendous growth in programs
since then.
The conservation title was first introduced to the farm bill in
2002. The title was further revised and expanded in the 2008 Farm Bill.
Today, USDA offers more than 20 separate active land and land
retirement programs that account for billions in spending annually.
This hearing gives us the chance to hear directly from those at
USDA who are responsible for the implementation of conservation
programs.
We will have a chance to learn about these programs and to ask
questions about how they are implemented and in what manner we could
improve their delivery in the future.
When the time comes to make decisions about conservation programs,
we will all be better placed to do so if we have a thorough
understanding of how each program operates.
Our witnesses today will provide information about these various
programs that we need to move forward in the legislative process.
We will learn basic information about the amount of money that is
being spent on each program, program participation, as well as examples
of duplication with other programs and examples of waste, fraud and
abuse.
I want to welcome Chief Dave White of NRCS and Mr. Bruce Nelson,
Acting Administrator of FSA. It is good to see you both and I am eager
to hear your testimony on these programs.
I look forward to working with you both in the months ahead to
draft a conservation title that fulfills its core goals while utilizing
taxpayer dollars in a responsible manner.
I now yield to my friend, the Ranking Member from Pennsylvania, Mr.
Holden, for his opening statement.
The Chairman. And I will yield to my friend, the Ranking
Member from Pennsylvania, Mr. Holden, for his opening
statement.
OPENING STATEMENT OF HON. TIM HOLDEN, A REPRESENTATIVE IN
CONGRESS FROM PENNSYLVANIA
Mr. Holden. Thank you, Mr. Chairman. I would like to thank
our witnesses and guests for being here this morning.
This hearing presents an important and timely opportunity
for Members of this Subcommittee to review the state of USDA
conservation programs. The Natural Resources Conservation
Service and the Farm Service Agency, through the authority of
this Committee and the farm bill, currently administer over 20
programs to assist producers and landowners who wish to
practice conservation on agricultural lands.
These conservation practices have expanded over the years
from early efforts to reduce high levels of soil erosion and
address water quality and quantity issues to address other
natural resources concerns such as wildlife habitat, air
quality, wetlands restoration and protection, and energy
efficiency. As the economic and regulatory pressures have
increased in recent years, agriculture producers and private
forest landowners have come to rely on these farm bill
conservation programs to help them stay in business.
I am concerned that recent reductions in conservation
program funding is resulting in USDA having to deny producers
the tools they need to combat these burdens effectively due to
insufficient funding. Lack of assistance to meet regulatory
requirements imposes an unfunded mandate on producers and harms
our landowners' ability to run their businesses and efficiently
implement conservation practices on their land.
Bottom line, access to funds is vital and so is the
delivery of these funds. Whether it is through FSA, NRCS, or a
technical service provider, a consistent message we are hearing
across the country is that more people are needed in the field
to assist producers in making land-management decisions and
implementing conservation practices.
As we focus on deficit reduction and the streamlining of
Federal programs, it is important that we ensure USDA remains
able to deliver effective conservation programs with fewer
resources and respond to the demand for those landowners who
depend on them. Farmers and ranchers have always been the
original stewards of the land and continue to be the best
advocates for research conservation.
I look forward to today's expert testimony and the
opportunity to listen and learn and ask questions of those
responsible for ensuring that that remains true in the future.
Thank you, Mr. Chairman.
The Chairman. I thank the gentleman. We are also joined in
the hearing by the Chairman of the Agriculture Committee. I now
recognize Chairman Lucas for an opening statement.
OPENING STATEMENT OF HON. FRANK D. LUCAS, A REPRESENTATIVE IN
CONGRESS FROM OKLAHOMA
Mr. Lucas. Thank you, Chairman Thompson and Ranking Member
Holden for holding today's hearing to examine conservation
programs.
During the past two farm bills, I served as Chairman and
Ranking Member respectively of the Subcommittee with
jurisdiction over the Conservation Title. My, aren't free
elections a wondrous thing? Both in 2008 and in the 2002 Farm
Bill saw exponential growth in conservation programs. In 2002,
we increased conservation spending in the 2002 Farm Bill by $17
billion over 10 years, an 80 percent expansion that created one
of the greenest farm bills in history. This legislation
increased our commitment to important programs like CRP, EQIP,
and helped multiply participation in conservation practices.
In the 2008 Farm Bill, we built upon the historic
Conservation Title by adding $4 billion over 10 years. That
Conservation Title included new regional and cooperative
partnership programs, as well as reauthorization and increased
funding for existing programs. These programs have created many
new ways for producers and conservation organizations to
achieve shared goals. Farmers and ranchers, with the assistance
of these programs, have worked voluntarily to help reduce soil
erosion, increase wetlands, improve water quality, and preserve
farmland and wildlife habitat.
However, as we work towards the next farm bill, this
Committee will be faced with a very different budget situation.
Not only will the Agriculture Committee have to do our part
within the overall deficit situation, but as all of us know, we
literally have dozens of programs, as has been alluded to by
the Chairman and the Ranking Member, with no baselines, many
under the umbrella of conservation. Conservation is an
important element of farm policy. Farmers and ranchers make
their living off the land and they are committed to preserving
and protecting it for future generations.
As lawmakers, we have a responsibility to ensure that
conservation policy is effective without being duplicative or
too costly. This is especially important in the current fiscal
environment. Today's audit will help us evaluate our current
policy so that we can determine what is working, what needs to
be adjusted, and what can be eliminated. This is a critical
step in the process of developing the next farm bill.
I thank all of you for being here and participating today,
and I can only say that I have the greatest of confidence in
the gentlemen from Pennsylvania when we make those tough
decisions in the coming days, months, and year.
I yield back the balance of my time, Mr. Chairman.
[The prepared statement of Mr. Lucas follows:]
Prepared Statement of Hon. Frank D. Lucas, a Representative in Congress
from Oklahoma
Good morning.
I'd like to thank Chairman Thompson for holding today's hearing to
examine conservation programs.
During the past two farm bills I served as the Chairman and Ranking
Member, respectively, for the Subcommittee of jurisdiction for the
conservation title. Both the 2008 and 2002 Farm Bills saw exponential
growth in conservation programs.
In 2002, we increased conservation spending in the 2002 Farm Bill
by $17 billion over 10 years--an 80 percent expansion that created the
greenest farm bill in history. This legislation increased our
commitment to important programs like CRP and EQIP and helped multiply
participation in conservation practices.
In the 2008 Farm Bill, we built upon the historic conservation
title by $4 billion over 10 years. That conservation title included new
regional and cooperative partnership programs as well as the
reauthorization and increased funding of existing programs.
These programs have created new ways for producers and conservation
organizations to achieve shared goals. Farmers and ranchers, with the
assistance of these programs, have voluntarily worked to help reduce
soil erosion, increase wetlands, improve water quality, and preserve
farmland and wildlife habitat.
However, as we work towards the next bill, this Committee will be
faced with a very different budget situation. Not only will the
Agriculture Committee have to do our part within the overall deficit
situation, but as all of us know, we literally have dozens of programs
with no baselines, many under the umbrella of conservation.
Conservation is an important element of farm policy. Farmers and
ranchers make their living off the land, and they are committed to
preserving and protecting it for future generations. As lawmakers, we
have a responsibility to ensure that conservation policy is effective
without being duplicative or too costly. That is especially important
in the current fiscal environment.
Today's audit will help us evaluate our current policy so that we
can determine what is working, what needs to be adjusted, and what can
be eliminated.
This is a critical step in the process of developing the next farm
bill, and I thank you all for being here today to participate in that
process.
The Chairman. Thank you, Mr. Chairman.
We are also joined by the Ranking Member for the full
Agriculture Committee. Mr. Peterson, any opening remarks, sir?
Okay. Very good.
The chair requests that the other Members submit their
opening statements for the record so that the witnesses may
begin their testimony and ensure that there is ample time for
questions.
And I am very pleased to welcome our panel of witnesses to
the table today. And we have Mr. Dave White, Chief of the
Natural Resource Conservation Services, Department of
Agriculture; and Administrator Bruce Nelson, Administrator of
Farm Service Agency with the Department of Agriculture.
Gentleman, you are the only two witnesses for this panel, so I
encourage you to take the time that you need. We are not going
to be using any lights today for your testimony, so I encourage
you to take the time that you need to cover the information so
that we will all benefit.
And Mr. Nelson, please begin when you are ready.
STATEMENT OF BRUCE NELSON, ADMINISTRATOR, FARM SERVICE AGENCY,
U.S. DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C.
Mr. Nelson. Mr. Chairman, thank you very much. I am new to
this so I have to learn how to punch the buttons.
Mr. Chairman, Ranking Members, Members of the Subcommittee,
thank you for the opportunity to discuss the conservation
programs administered by the Farm Service Agency here today. My
testimony will focus on FSA's conservation programs and our
collaboration with our conservation partners in ensuring high-
quality, cost-effective program delivery. And I am especially
glad to be here on my first occasion with Dave White, who did
an outstanding job as State Conservationist in my home State of
Montana before becoming Chief of NRCS.
Let me begin by talking about FSA's largest conservation
program, the Conservation Reserve Program, or CRP. CRP is a
voluntary program that provides a cost-effective means to
address conservation concerns on environmentally sensitive
lands. Currently, CRP contains more than 31 million acres and
FSA issues about $1.7 billion annually in rental payments to
CRP participants.
USDA recently announced the results of general Signup 41,
which was held this past spring. Of the 3.8 million acres
offered, 2.8 million acres were accepted. With 4.4 million
acres of contracts expiring on September 30 this year,
enrollment is anticipated to total 29.9 million acres on
October 1.
The Conservation Reserve Enhancement Program, or CREP, is a
component of the CRP continuous signup and is a partnership
among USDA, the tribes, states, and in some cases, private
groups. CREP agreements address high-priority conservation
issues, and in total, FSA has 45 CREP agreements in 33 states.
Another newer component of CRP is a Transition Incentives
Program. TIP provided $25 million through 2012 to provide
additional CRP payments for retiring owners or operators who
transition land to beginning farmers or socially disadvantaged
producers. In turn, the new operator must return some or all of
the land to production using sustainable farming techniques. As
of June 30, there were 506 approved TIP contracts accounting
for nearly 73,000 acres. I would note for the Committee that
those numbers are an update from my testimony submitted for the
record because 20 additional contracts were established in the
last 3 weeks of June.
FSA works closely with NRCS to administer the Emergency
Conservation Program, which provides emergency cost-share
funding and technical assistance to farmers and ranchers to
rehabilitate damaged farmland. Approximately $90 million has
been allocated nationwide under ECP for this fiscal year, about
$2 million remains available to fulfill an anticipated $134
million in requests, leaving a projected shortfall of $132
million. This estimate is also a minor update from my testimony
submitted for the record.
FSA also administers several other new conservation
programs that were created in the 2008 Farm Bill. The Voluntary
Public Access and Habitat Incentive Program provides grants to
states and tribal governments to encourage private landowners
to make their land available for recreation. Earlier this
month, USDA announced additional grants under this program,
bringing in the total number of states and tribes participating
to 26.
FSA and NRCS also jointly administer a Grassland Reserve
Program, or GRP. GRP participants limit cropping while
retaining the right to conduct grazing practices and
operations. Applications may be filed with either NRCS or FSA.
Generally, FSA implements rental contracts and NRCS administers
the easement program. Currently, 1.1 million acres are enrolled
in GRP at an annual cost of approximately $10 million.
FSA and NRCS are working hard together to make sure farmers
know their options and have the right technical assistance. I
am proud to report that the average government cost per
enrolled acre in inflation-adjusted terms is significantly
lower now than in the late 1980s, while at the same time, more
environmental and conservation benefits are being generated. We
have streamlined tasks and reduced signup costs by about 30
percent per contract for general signup and 18 percent per
contract for continuous signup.
In closing, we are committed to ensuring that our
conservation program benefits the agricultural sector as
intended by Congress. And we look forward to working closely
with you to ensure sustainable conservation for agriculture in
rural areas. Mr. Chairman, this concludes my statement, and I
would be happy to answer any questions you or Members of the
Subcommittee might have. Thank you very much.
[The prepared statement of Mr. Nelson follows:]
Prepared Statement of Bruce Nelson, Administrator, Farm Service Agency,
U.S. Department of Agriculture, Washington, D.C.
Mr. Chairman, Ranking Member, and Members of the Subcommittee,
thank you for the opportunity to discuss the conservation programs
administered by the Farm Service Agency (FSA).
FSA's largest conservation program, the Conservation Reserve
Program (CRP), which was first authorized by the 1985 Farm Bill, has a
long record of accomplishment. CRP is a voluntary program that provides
a cost-effective means to address many conservation concerns on
environmentally-sensitive lands (such as clean air, clean water, and
wildlife habitat). Currently, CRP contains more than 31 million acres
of grass, trees, riparian buffers, filter strips, restored wetlands,
and high-value wildlife habitat. The experience of the 1930's and
economic and societal impacts of the ``Dust Bowl'' demonstrates the
importance of protecting our nation's most environmentally sensitive
lands.
The Transition Incentives Program (TIP) provides up to two
additional CRP annual rental payments to a retired or retiring owner or
operator of land under an expiring CRP contract if the land is sold or
leased to a beginning or socially disadvantaged farmer or rancher for
the purpose of returning some or all of the land to production using
sustainable methods.
FSA also implements several programs that provide emergency
conservation assistance to producers. For example, the Emergency
Conservation Program (ECP)--which has been in existence for several
decades--provides emergency funding to farmers and ranchers to
rehabilitate farmland damaged by natural disasters and for carrying out
water conservation measures in periods of severe drought.
FSA administers several new programs created by the 2008 Farm Bill.
For example, the Voluntary Public Access and Habitat Incentive Program
(VPA-HIP) provides grants to states and tribal governments to encourage
owners and operators of privately held farm, ranch, and forestland to
voluntarily make their land available for public access for hunting,
fishing, and other wildlife-dependent recreation. These grants provide
funds to programs administered by state and tribal governments
FSA and the Natural Resources Conservation Service (NRCS) jointly
administer the Grassland Reserve Program (GRP), which is a voluntary
conservation program that emphasizes support for grazing operations,
enhancement of plant and animal biodiversity, and protection of
grassland under threat of conversion to other uses.
FSA also implements non-Conservation Title programs that have
conservation effects such as the Biomass Crop Assistance Program (BCAP)
and the Emergency Forest Restoration Program (EFRP) both of which
require that participants have a conservation plan.
For FSA's conservation programs, the agency relies on technical
assistance from NRCS, the Forest Service, the Fish and Wildlife
Service, state fish and wildlife agencies, state Forestry agencies,
state agricultural and environmental departments, conservation
districts, non-governmental organizations, and the private sector.
These partners help us with numerous activities, including technical
determinations, conservation plan development, engineering design,
outreach to farmers and ranchers, and monitoring the impacts of
conservation programs.
Today, I will not only discuss these conservation programs in more
detail, but will also discuss how we work with our many conservation
partners, and indicate how we are moving forward to ensure high-
quality, cost-effective program delivery.
Conservation Reserve Program
CRP was authorized by the 1985 Farm Bill with a strong commodity
supply control connection. CRP has evolved into a conservation program
that increasingly targets environmental need by ranking offers in a
general signup according to their environmental benefit and through a
continuous signup that focuses on relatively small acreages that
protect much larger areas such as buffer strips, riparian buffers and
grass waterways.
CRP also created the Conservation Reserve Enhancement Program
(CREP) which leverages scarce Federal dollars with state and non-
government organization funds to better meet local environmental needs.
Under CREP, CRP helps to protect the Chesapeake Bay, salmon in the
Pacific Northwest, Mammoth Cave in Kentucky and Hawaiian coral reefs.
More recently, CRP has targeted enrollment of lands to achieve the
goals of initiatives focused on the conservation of priority fish and
wildlife resources such as wetlands, quail, ducks, and longleaf pine.
CRP provides cost-share assistance and annual rental payments to
farmers and ranchers to establish long-term (10 to 15 years)
conservation cover (such as grass or trees) on eligible farmland.
Numerous conservation practices are available including filter strips,
riparian buffers, wetland restoration and high-value wildlife habitat.
Annual rental payments are based on the agricultural rental value of
the land, and cost-share assistance is provided for up to 50 percent of
the participant's costs in establishing approved conservation
practices. FSA issues about $1.7 billion annually in rental payments to
CRP participants.
USDA recently announced the results of Signup 41, which was held
this past spring. Of the 3.8 million acres offered, 2.8 million acres
were accepted. Signup 41 acceptances have no impact on this year's
crop; accepted land currently in crops can be harvested normally. For
next year, the price impacts of Signup 41 enrollment on the price of
corn, soybeans, and wheat are estimated to be very modest. With 4.4
million acres expiring on September 30, 2011, enrollment is anticipated
to total 29.9 million acres on October 1, 2011 (contracts for the
recently-accepted 2.8 million acres begin on that date).
A Fiscal Year (FY) 2012 general signup is assumed in the
President's Budget; however, no signup dates have been announced. The
Secretary is committed to a strong CRP program and feels the best way
to keep it strong is to accept acres with the highest environmental
benefit.
A conservation plan is required for each CRP contract. FSA partners
with NRCS which makes certain technical eligibility determinations and
develops conservation plans. FSA is responsible for all program
activities, makes compliance determinations, and consults with other
Federal agencies such as the U.S. Fish and Wildlife Service. FSA also
partners with the Forest Service to provide conservation planning for
participants installing tree practices under CRP and also the Emergency
Forestry Conservation Reserve Program (EFCRP).
The environmental benefits of CRP are substantial. Since the
beginning of the program, USDA estimates CRP has reduced soil erosion
by more than 8 billion tons, including an estimated 325 million tons in
2010. On fields enrolled in CRP, nitrogen and phosphorus losses were
estimated to be reduced by 607 million pounds and 122 million pounds,
respectively, in 2010. In addition, CRP acreage reduces the impacts of
downstream flood events and recharges groundwater aquifers.
There are two primary ways for farmers and ranchers to participate
in CRP: the general signup provisions, such as Signup 41, and
continuous signup provisions. Under the general signup, producers
compete nationally for enrollment during specified periods. Under
continuous signup, landowners and operators with eligible lands may
enroll certain high priority conservation practices, such as restored
wetlands, filter strips, and riparian buffers, at any time during the
year without competition. In addition to annual soil rental payment and
cost-share assistance, many continuous practices are eligible for
additional annual and one-time up-front financial incentives.
Continuous Signup
The Conservation Reserve Enhancement Program (CREP) is a component
of CRP continuous signup and is a partnership among USDA, tribes,
states and, in some cases, private groups. Partners (generally states)
generally provide 20 percent of estimated total project costs. CREP
agreements address high-priority conservation issues of both local and
national significance, such as impacts to water supplies, loss of
critical habitat for threatened and endangered wildlife species, soil
erosion and reduced habitat for fish populations such as salmon.
Enrollment in a state is limited to specific geographic areas and
practices. In total, FSA has 45 CREP agreements with its partner states
and organizations spanning areas in 33 states.
Most CREP agreements are designed to target assistance toward a
critical need or issue. Iowa's CREP agreement, for example, focuses on
constructed wetlands in the Mississippi River basin. These constructed
wetlands reduce nitrogen loadings in watersheds dominated by tile-
drained cropland. They consist of a treatment pool and grass buffer,
and range in size from 16-70 acres. Monitoring data from the Iowa
project indicate that these wetlands remove 40-90 percent of the
nitrate flowing into the wetlands. The cost to reduce nitrogen load by
a pound in such situations is projected to be less than $1.38 per year
for 50 years.
As another example, we have CREP agreements with all the states
that drain into the Chesapeake Bay watershed. Pennsylvania's CREP
agreement, which has the most acreage enrolled, provides financial and
technical assistance to voluntarily restore wetlands, riparian areas,
and grasslands; reduce erosion; and prevent sediment, nitrogen, and
phosphorus from reaching the Chesapeake Bay. The Conservation Effects
Assessment Program (CEAP) of the Chesapeake Bay estimates that nitrogen
loss is reduced by 79 pounds per acre per year from acreage enrolled in
CRP.\1\
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\1\ United States Department of Agriculture, Natural Resources
Conservation Service. 2011. Assessment of the Effects of Conservation
Practices on Cultivated Cropland in the Chesapeake Bay Region. Final
Draft. http://www.nrcs.usda.gov/technical/nri/ceap/chesapeake_bay/
index.html.
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Farmable Wetlands Program
The Farmable Wetlands Program (FWP) is another component of CRP
that is designed to restore up to one million acres of farmable
wetlands and associated buffers by improving the land's hydrology and
vegetation. Eligible producers in all states restore wetland benefits
by planting long-term, resource-conserving covers to improve the
quality of water, control soil erosion, and enhance wildlife habitat.
Participants must agree to restore the hydrology of the wetlands and to
establish vegetative cover, which may include planting bottomland
hardwoods, cypress and other appropriate tree or wetland species. FWP
practices receive the same benefits as other continuous practices such
as filter strips and riparian buffers.
CRP Initiatives
CRP further targets limited Federal funds by focusing on specific
goals such as wetlands, longleaf pine, or wildlife. CRP initiatives
include:
Wetlands Initiative. This initiative was created to restore
wetlands located within the 100 year floodplain, restore playa
lakes and wetland complexes located outside the 100 year
floodplain, and restore floodplains by establishing bottomland
hardwood trees. The initiative provides vital habitat for many
wildlife species, filters runoff, improves water quality, and
reduces downstream flooding.
Quail Initiative. This initiative was created because
Northern bobwhite quail populations have declined due to
habitat loss. The 350,000 acre initiative creates early
successional grass buffers along agricultural field borders in
the 35 states that encompass the historic ranges of the
bobwhite quail. The buffers also benefit many other species,
such as, grasshopper sparrow, dickcissel, and Henslow's
sparrow.
Longleaf Pine Initiative. The 250,000 acre longleaf pine
initiative was developed to address the decline of longleaf
pine in the Southeast. Its goal is to re-establish longleaf
pine stands to benefit wildlife species and protect water
quality.
Duck Nesting Habitat Initiative. This 150,000 acre
initiative was designed to restore wetlands and wetland
complexes that are located outside the 100 year floodplain in
the Prairie Pothole Region. It will provide critical habitat
and nesting cover for ducks, sandhill cranes and other wildlife
species, while filtering runoff, and reducing downstream
flooding.
State Acres for Wildlife Enhancement. This 850,000 acre
initiative is designed to target high priority wildlife
objectives on a state and/or regional level. The projects were
targeted to create habitat for threatened and endangered
species, species of special concern, and species of economic
interest such as sage-grouse, lesser prairie-chicken, and ring-
necked pheasant.
Transition Incentives Program
Another component of CRP is TIP which was created in the 2008 Farm
Bill and provides $25 million through 2012 to promote the transition of
expiring CRP land from a retired or retiring owner or operator to a
beginning or socially disadvantaged farmer or rancher to return some or
all of the land to production using sustainable farming techniques.
Under TIP, the retired party is eligible to receive annual rental
payments for up to 2 additional years beyond the contract expiration
provided that the land is not transitioned to a family member. Certain
conservation and land improvement work may begin on the transitioned
land during the last year of the CRP contract.
A retired or retiring CRP participant may apply for TIP beginning
one year before the date of the expiration of the CRP contract through
the end of the contract. TIP sign-up began on May 17, 2010, and as of
June 9, 2011, there were 486 approved TIP contracts accounting for
nearly 73,000 acres for expected outlays of $6.5 million.
Emergency Conservation Program
The Emergency Conservation Program (ECP) provides emergency cost-
share funding (generally, up to 75 percent) and technical assistance to
farmers and ranchers to rehabilitate farmland damaged by natural
disasters and for carrying out emergency water conservation measures in
periods of severe drought. For land to be eligible the natural disaster
must create new conservation problems that, if untreated, would impair
or endanger the land or materially affect the land's productive
capacity and for rehabilitation matters must be unusual damage for
which Federal assistance is required to return the land to productive
agricultural use. County FSA committees determine land eligibility
based on on-site inspections of damage. Funding for this program is
appropriated by Congress.
Timing of ECP assistance is critical to producers facing disasters
and FSA and NRCS employees work closely at the state and county level
to provide efficient and timely service. For instance, FSA and NRCS
employees in Alabama are working to provide assistance to farmers
affected by recent tornados. Approximately $67 million has been
allocated under ECP in FY 2011. FSA currently has approximately $9
million available with more than $167 million in pending or soon to be
submitted requests.
FSA provides technical assistance regarding debris removal, fence
restoration, and grading and shaping of damaged land and FSA has an
agreement with NRCS for it to provide technical assistance for
practices requiring greater conservation expertise, including
restoration of conservation structures and installations as well as
drought emergency measures. FSA also has an agreement with the Forest
Service to provide technical assistance for hurricane disasters that
affect tree stands.
Voluntary Public Access_Habitat Incentive Program
VPA-HIP provides grants to states and tribal governments to
encourage owners and operators to voluntarily make land available for
public access for wildlife-dependent recreation. Funding may be used to
expand existing, or create new, public access programs, or provide
incentives to improve wildlife habitat on enrolled lands. USDA
announced additional participating states earlier this month, bringing
the total number of states participating in the program to 25 (plus the
Yakima Nation). With the expanded participation in FY 2011, the program
is expected to have a total cost of $50 million.
Grassland Reserve Program
FSA and NRCS jointly administer GRP. GRP participants voluntarily
limit future development and cropping uses of the land while retaining
the right to conduct grazing practices and operations related to the
production of forage and seeding, subject to certain restrictions
during nesting seasons. Applications may be filed for a rental contract
or an easement with NRCS or FSA. Generally, FSA implements rental
contracts and NRCS administers easements. NRCS provides all on-the-
ground technical assistance for easements and rental contracts.
Currently, 1.1 million acres are enrolled in GRP, at an annual cost of
approximately $10 million.
Moving Forward
As you can see, FSA's programs cover a wide variety of conservation
and other related needs that have evolved over time. For example, CRP
has been very effective at enhancing habitat for lesser prairie-chicken
and sage-grouse both of which are candidate species for listing under
the Endangered Species Act. CRP also helps producers comply with
regulatory actions such as the Chesapeake Bay's total maximum daily
load requirements. CRP participation not only promotes the protection
of environmentally-sensitive land, but can also help reduce the need
for additional regulatory burdens on agricultural producers.
We are committed to ensuring that conservation programs benefit the
agricultural sector as intended and protect land, improve water and air
quality, and promote wildlife habitat. We are also committed to
ensuring that we efficiently and effectively manage stewardship over
our natural resources. In addition, we work with our partners including
NRCS and the Forest Service, to ensure compliance with the law by
thoroughly reviewing producer and land eligibility and needs.
We are working hard to innovate and improve program efficiency. The
average government cost per enrolled acre, in inflation-adjusted terms,
is significantly lower now than in the late 1980's while, at the same
time, more environmental benefits are being generated. Further, FSA and
NRCS have significantly reduced technical assistance costs over the
past 10 years. We have made changes that allow the automation of
eligibility determinations and further streamlined the tasks necessary
to implement technical assistance for CRP. Because of these changes,
the costs of signup activities have been reduced by about 30 percent
per contract for general signup and 18 percent per contract for
continuous signup.
We are also committed to evaluating CRP outcomes to ensure that we
best target assistance as we move forward. We undertake monitoring and
evaluation work with Federal, state, university, and other partners,
which provides the sound science to effectively administer CRP and
other conservation programs. These analytical results have been used to
develop new conservation initiatives and resulted in the Iowa CREP
findings noted earlier. These results are also used to develop
environmental goals for the FSA strategic plan and to guide other USDA
decision-making.
Final Thoughts
In an era of reduced resources, we look forward to working closely
with Congress to identify and meet critical conservation needs. We also
look forward to working more closely with not only our inter-agency
partners within USDA, but also with the private sector and other
government agencies. By doing so, we aim to better leverage resources,
share ideas, and deliver programs that ensure sustainable conservation
activities and programs for agriculture and rural areas.
The Chairman. Thank you, Mr. Nelson.
Chief White, begin when you are ready.
STATEMENT OF DAVE WHITE, CHIEF, NATURAL RESOURCES CONSERVATION
SERVICES, U.S. DEPARTMENT OF
AGRICULTURE, WASHINGTON, D.C.
Mr. White. Thank you, Mr. Chairman, Mr. Ranking Member, Mr.
Lucas, Mr. Peterson, Mr. Goodlatte, distinguished Members of
this Subcommittee. I am starting to feel a little bit
intimidated. I wasn't expecting quite this many Members here.
Anyway, you have asked me to talk about 15 programs, and I
have to tell you, I have been studying like a first-semester
freshman right before the exam time. Fifteen of them, I am
going to break them down into three categories for you. One, we
are going to have the mandatory-funded cost-share programs;
then, we will have a group of four, the mandatory easement
programs; and then we will have three discretionary.
So the eight mandatory cost-share programs, we will just
call this the big eight. The first one is EQIP, Environmental
Quality Incentives Program. This is the workhorse. This is the
big kid on the block. This is the most lushly funded. This is
the main bricks-and-mortar conservation cost-share program we
have in the United States of America. Since 2005, about \1/4\
million contracts have been written with farmers, ranchers, and
forest landowners in the United States of America--\1/4\
million since 2005. It has several components to it, some of
them I am going to address separately. So EQIP is really the
biggest program we have.
The Conservation Stewardship Program is the up-and-coming
kid. The Conservation Stewardship Program can enroll 12.7
million acres a year. We have had two enrollments. We are in
the tail end of the third enrollment. As of yesterday, the CSP
now has about 35 million acres. We are probably going to get
another 3 million acres in there. So it is going to be 38
million acres here in a month or so. So it is now
geographically the largest program. It is a completely
different program from the one it replaced, the Conservation
Security Program; Stewardship has a nationwide signup. It has a
focus on additionality.
Third cost-share program in the big eight, Wildlife Habitat
Incentive Program, $85 million a year baseline, frankly, it is
very, very similar to EQIP in how we operate it. It does have a
couple of distinct differences. One, it allows you to have a
higher cost-share rate for long-term enduring contracts. And
the second thing that is somewhat unique about it is that it
has a specific directive in there where we are to prioritize
the funding for state and national strategic objectives and
which we have done. And I will probably go into that later on.
Fourth program in the big eight, the Agricultural
Management Assistance, this was actually in part of the credit
title. It is only in 16 states. Sixteen states that have
historically low participation in crop insurance is where AMA
is offered. Again, it is very similar to EQIP. It does have a
couple of differences that I would bring forward to your
attention. This is a program that is really targeted towards
smaller specialty crop organic farmers. It has a baseline. It
is not in the Conservation Title, but it has its own baseline.
The funding is statutorily split between three agencies. Ten
percent of the funding goes to the Agricultural Marketing
Service, and they use that to help pay to transition to organic
farming. Forty percent of the funding goes to the Risk
Management Agency. They use that funding to help specialty
crops small farmers pay for crop insurance. Fifty percent comes
to NRCS and we help develop on-farm conservation systems. Two
things it does that really are fairly unique: one, you can use
the funding to install new irrigation systems, which is rather
unique; and second, you can use the funding to build irrigation
reservoirs, which, if you are in a drought, it is a pretty big
thing.
Fifth team in the big eight conference is the Agricultural
Water Enhancement Program, fondly called AWEP. AWEP is a
component of EQIP. It has its own distinct, separate baseline,
which at the end of the farm bill will be $60 million. AWEP is
focused on water conservation, water quality. There are some
specific instructions in the manager's report that gives us
targeted areas like the Ogallala Aquifer, Red River, Upper
Mississippi, Eastern Snake Plain Aquifer in Idaho, Bay Delta,
California, Puget Sound. And we have put funding in all of
those areas. A unique thing at AWEP is if you are in like an
exceptional drought area--I think that is a D3/D4--you can use
AWEP funds to build irrigation reservoirs. And some of you may
remember Mr. Everett from Alabama, that was a provision that he
really wanted to see in this 2008 Farm Bill.
Number six in the big eight, Conservation Innovation
Grants, this is a subcomponent of EQIP that does not have a
separate funding stream. All funding for this comes out of the
overall EQIP allocation. There are two components to
Conservation Innovation Grants. CIG A, which is really a grant
program, a 50 percent matching grant program, and it is
designed to take a research finding that is found in the lab
that shows promise and how do you get that to on-the-ground
application in a practical manner for farmers and ranchers.
This divide between discovery and application is called Death
Valley. So the Conservation Innovation Grants, Section A, is
designed to help you bridge that Death Valley and take
promising research results and put them on on-the-ground,
reasonable, technical applications that farmers can use around
the country.
The second part of CIG, Section B is air quality: $37.5
million is designated for this subsection and it is to be used
around the country in areas in air quality attainment areas.
There are several of them. I was detailed to Senator Harkin in
the 2008 Farm Bill process. This was brought forward on the
Senate side by Senators Boxer and Feinstein. Members of this
Committee, some of you may remember, Mr. Costa, Mr. Cardoza
brought it forward. This is designed to help producers
upgrade--part of it was to upgrade their engines. And when I
first heard about it, I scoffed at it. I mocked it. I laughed
at it. I thought this was the goofiest thing I have ever heard
of. And then I saw how it was working and I was wrong. I was
dead, flat, slap wrong.
I have been to California where the bulk of this funding
has gone. Central Valley, California, there is not one area in
the United States of America where farmers are more regulated
than they are in the Central Valley. And if you like peaches,
plums, grapes, raisins, broccoli, carrots, onions, lettuce, it
is very important for us to keep those producers in business.
The Central Valley is like a big bowl. Everything that comes in
there stays in there. Their air quality concerns are huge. And
these guys are going out of business. I was on a producer's
farm. His name was Don Cameron, and he had 30 irrigation pumps
lined up right behind his barn, 30 of them. Every single one of
them had a hole cut in the block. I was looking at a million
dollars of irrigation pumps that could maybe be sold for scrap
metal because they were too polluting for the California Air
Resources Board. And with this particular section of EQIP, we
are able to cost-share on a 50-50 basis. They are going from
Tier 0 to Tier 3 engines in the last 2 years. This is
astounding.
And farmers, they are putting in this money, too, where we
have done about 40 in EQIP; they have done about 40. It has
reduced emissions with the net effect of removing over 400,000
cars from the road in California every single year. We may be
at the point if we carry this on for a couple more years, we
will obviate the need for any further regulation of these guys
in the Central Valley.
Number seven in the big eight, Chesapeake Bay Watershed
Program, $50 million baseline, I had been up here before
talking about it. Many of you are extremely familiar with that.
Chesapeake Bay is ground zero for agriculture and regulation.
This is often viewed as the canary in the coal mine. I am much
more bullish on our chances than other people, and the
Chesapeake Bay Watershed Program is really equipping us with
some of the resources we need in this critical area.
Rounding out the big eight is not really a program per se,
but it is a mechanism. It is the Cooperative Conservation
Partnership Initiative. It is an authority which allows us to
use three different programs--EQIP, the Wildlife Habitat
Incentive Program, and the Conservation Stewardship Program--
for outside entities like universities and agricultural groups
and other partners to designate areas where they identify a
problem and we focus EQIP, WHIP, and CSP resources to solve
that identified problem. Right now, we have about 164 projects
around the country. There is a statutory limitation of no more
than six percent of EQIP, WHIP, and CSP that can be used in
CCPI. We are right now at 5.9 percent. So there probably won't
be a whole lot more. So that rounds out the big eight.
Now, the big 12, these are all four easement programs. The
big kid on the block is the Wetlands Reserve Program. In my
opinion, it is the single biggest reason this country has
achieved no net loss of wetlands. If you remember George
Herbert Walker Bush, Bush I, he announced it was going to be
the policy of the United States, no net loss of wetlands. This
program is one of the main reasons why that has occurred. There
are over 2 million acres right now. It is mostly marginal crop
land that guys have a hard time making money on anyway. And
that is one, Mr. Chairman, that you mentioned does not have a
baseline, going forward.
Second one is the Farm and Ranch Lands Protection Program.
I know that that is critical to Mr. Holden and other Members of
this Committee. This is a working lands easement program.
Essentially, you are purchasing development rights. So this
farm, this ranch is going to stay in agriculture forever. It is
not going to be an airport; it is not going to be subdivided;
it is not going to be little ranchettes. It is going to be in
agriculture. A lot of changes made in 2008 that have made this
program better, it will have a baseline of about $200 million,
going forward.
Third program, Grassland Reserve Program, this is kind of a
hybrid. It blends a little bit of WRP and a little bit of FRPP,
but again, it is a working lands program. Mr. Nelson very ably
described that, so I won't go into it. And it is jointly
administered between our two agencies.
Number 12 of the big 12 is the Healthy Forests Reserve
Program. This is actually located in the Forestry Title. It is
a permanent easement program--30 year contract for tribes--to
aid in the recovery of threatened and endangered species. What
is different about this is no-year money. We have to work with
Fish and Wildlife Service to get people who enrolled into Safe
Harbor Agreements. This is really focused on recovery of
endangered species. Very small, $10 million a year for the last
3 years and will not have a baseline, going forward.
All right. That leaves us with three more programs you
wanted me to talk about. That would take us to 15. I couldn't
think of a sports analogy for that so I am going to give you a
bonus program to take us to the Sweet 16 shifting from football
to basketball.
Number 13 is Resource Conservation and Development created
in the early 1960s. RC&D really created 501(c)(3) nonprofit
organizations whose mission was rural development broadly--
natural resource-based rural development. I worked with them
all of my career. I have a lot of respect for them. They have
done some tremendous work around the country. In the last Bush
Administration, OMB made an analysis and said it was
duplicative, and the last few years of the Bush Administration,
the Administration recommended it be zeroed out. That was
carried forward in the Obama Administration and Congress
adopted it this year. There is zero funding for this program.
We are in the process of doing an orderly closeout of that. It
is a very good program, but I recognize the necessity of the
hard choices that are being made.
Number 14 is the Small Watershed Program, which actually is
two other programs--P.L. 78-534 and P.L. 83-566. These date
from the 1940s and 1960s. Over that period of time, essentially
these were flood-control structures. There is also water
supply. These are the dams that are really flood control. There
have been about 1,800 projects over that amount of time, over
11,000 structures have been built. Now, when you go back to the
1940s and 1950s, fast-forward to today, we are in a bit of a
fix. These dams, structures if you will, most of them were
built with a 50 year life-span. That is not to say that at 51
years they fall down. They are perfectly good but they had a
design life of around 50 years. These structures are reaching
the end of their design life. In fact, every day for the next
20 years somewhere in the United States of America a watershed
dam will reach the end of its design life. That is not to say
that they are bad at that point in time; it just to say their
design life is over.
Which leads me into number 15, which is the Watershed
Rehabilitation Program. And I will give a nod to Chairman
Lucas, who has recognized this and acted very forcefully to
establish this particular program. What do you do with these
structures? These structures are providing about $2 billion in
prevented damages every year across America. What do you do
when they reach the end of their design life? What do you do
when they need rehabilitation? What do you do when there is a
safety issue? And this is a mechanism where we can go in and
fix these older structures. And they don't have to be at the
end of their design life either. In this country, urban
development has occurred where we have put a little dam out in
a farm field. It might be in a city now. A good example of that
is Atlanta. We have several watershed projects and Atlanta, as
of 2011, is not the Atlanta of 1950.
So when something like that occurs, we go in and we upgrade
those structures to high-hazard classifications so adding in
those extra safety features. There is not one earmark in this
program. This program is a cost-share 65-35. And NRCS has a
little criteria where we decide where to work. Number one on
the list is human health and safety. This had $100 million in
the farm bill and I think it has $18 million, going forward, in
this particular ag budget.
Bonus program number 16 is another easement program. This
is a discretionary easement program. This falls under the
Emergency Watershed Protection Program. It is for flood plain
easements. It allows us after a flood to go in and purchase
easements on these flood plains where guys are getting washed
out all the time. Actually, if you look at it, it really saves
us a lot of money because you are not paying disaster
assistance on that land or crop insurance year after year. And
if there is flooding in the future, the water can spread out,
be filtered, ground water recharged, good for wildlife. There
is a lot going for that program.
I have talked enough. One thing I would ask you, this is
your watch. This is going to happen under your control. Forty
years from now, nine billion new people will be in this world.
I have seen all kinds of projections for what it is going to
take. I have seen 50 percent increase of production, 70
percent, double production. Any way you slice it, we are going
to have to increase production. And conservation is one of the
key ways that we can ensure the future that those little
Americans who come after us will have the same bounty that we
enjoy today.
Thank you, Mr. Chairman.
[The prepared statement of Mr. White follows:]
Prepared Statement of Dave White, Chief, Natural Resources Conservation
Services, U.S. Department of Agriculture, Washington, D.C.
Mr. Chairman and Members of the Subcommittee, thank you for the
opportunity to appear before you today to discuss conservation programs
administered by the Natural Resources Conservation Service (NRCS).
The NRCS conservation portfolio contains a broad mix of authorities
providing programs for conservation technical assistance, environmental
improvement, stewardship, easements, and water resources. These
conservation investments, designed by Congress and implemented by USDA,
have a proven track record. They are good for farmers, ranchers and
private forest landowners and they work for all Americans--helping to
secure a high quality environment in concert with food security for our
nation and the world.
Last year we celebrated 75 years of service to the nation's
farmers, ranchers, and other land owners and managers, we looked back
at the landmark achievements, and continued to make some history of our
own. Before providing the Subcommittee with details about our
conservation programs, I would like to share a few of the benefits that
these programs delivered through our long, strong partnership with
America's farmers, ranchers, and private forest landowners.
Last year (Fiscal Year 2010) was a record year in conservation
program delivery. Of special note is the Wetlands Reserve Program
(WRP). A nationwide emphasis on wetlands conservation resulted in a
record-setting WRP enrollment of nearly 273,000 acres, exceeding the
next-highest yearly total by more than 58,000 acres and nearly doubling
our average annual enrollment. And while much work remains to be done
in completing restoration work associated with these record
enrollments, more than 129,000 acres of wetlands were created, restored
or enhanced in FY 2010. While acreage numbers are impressive, the more
important outcome is that these wetlands are now providing essential
habitat for at-risk species, such as the threatened Louisiana Black
Bear and the endangered Whooping Crane. The better job we do in
assisting in keeping candidate and other at-risk species off the List
of Endangered and Threatened Wildlife, the greater flexibility our
producers have in providing food, feed, and fiber for the nation and
the world.
Voluntary conservation on private lands works! USDA established the
Conservation Effects Assessment Project (CEAP) in 2003 to develop a
scientific understanding and methodology for estimating the
environmental effects of conservation practices on agricultural
landscapes at national, regional, and watershed scales. CEAP is built
on partnerships and working collaborations involving Federal agencies
inside and outside of USDA, land-grant universities, state agencies,
and nonprofit organizations.
The first CEAP assessments of the effects of conservation practices
on cultivated cropland were released in FY 2010. Two of the planned 14
regional reports, the Upper Mississippi River Basin (UMRB) and the
Chesapeake Bay Region CEAP Cropland Reports, quantify the great
progress farmers have made in reducing sediment and nutrient losses
from cropland, while emphasizing a continuing need for conservation
efforts to focus on nutrient management. A few key highlights from the
UMRB assessment include:
Voluntary, incentive-based conservation works. Reduced
tillage is used on 95 percent of the cropland--sediment losses
are reduced by an estimated 69 percent as compared to a
scenario where full conventional tillage is used.
Nutrient management is the greatest need. Much can be done
through expanded adoption of existing practices. About 60
percent of the cropland needs improved nutrient management;
Timing, rate and method of application are important factors in
managing nutrient application.
Targeting can greatly enhance program effectiveness.
Treating the most critical acres can have three to five times
the effect on sediment and nutrient reduction as compared with
treating acres with less serious problems.
Comprehensive conservation planning is essential. Suites of
practices that address multiple resource concerns are more
effective than single practices.
In FY 2010, NRCS used landscape-scale initiatives to address
priority resource concerns in working landscapes and watersheds
nationwide. Two of these initiatives began prior to FY 2010--the
Chesapeake Bay Watershed Initiative, supported by the statutory
Chesapeake Bay Watershed Program in the farm bill and the Great Lakes
Restoration Initiative, supported by financial assistance transferred
from the U.S. Environmental Protection Agency and the Great Lakes
Restoration Action Plan. The other initiatives are the Sage-Grouse, the
Longleaf Pine, California Bay-Delta, Lesser Prairie-Chicken,
Mississippi River Basin Healthy Watersheds, New England Forestry, and
the Migratory Bird Habitat. These initiatives reflect a common
objective of using targeted conservation assistance in addressing
priority natural resource concerns that are broader than a single state
and that will help to keep working lands working.
The Sage-Grouse Initiative (SGI) is a great example of how
landscape-scale conservation delivers broad benefits for agriculture.
SGI focused conservation delivery within habitat core areas to help
maintain large and intact grazing lands--important for the sage-grouse
and for the rancher. NRCS identified practices that can be implemented
through the Environmental Quality Incentives Program, the Wildlife
Habitat Incentive Program, the Grassland Reserve Program and the Farm
and Ranch Lands Protection Program to increase and protect grouse
habitat and populations on 640,000 acres in 11 western states. In FY
2010, NRCS contracted with 223 ranching operations for a total $18.5
million in financial assistance to remove sage-grouse threats and help
sustain working ranches. As a result, over 180 miles of high-risk
fencing near breeding sites were marked or removed, which prevented an
estimated 800 to 1,000 mortalities through fence collisions in just the
first year.
The SGI also resulted in a landmark agreement that provides
regulatory certainty to ranchers who take actions to improve sage-
grouse habitat on their land. In early 2010, the U.S. Fish and Wildlife
Service (FWS) determined sage-grouse to be a ``candidate'' species
under the Endangered Species Act (ESA), which means listing is
warranted but precluded by higher listing priorities and positive
management actions that address threats to the species need to be taken
to prevent listing. NRCS and FWS negotiated a first-of-its kind
regional agreement that lets landowners know the investments they make
today to benefit this declining species and the sustainability of their
ranching operation by implementing NRCS conservation practices
according to the SGI Conference Report can continue should sage-grouse
be listed at a future date.
This new conservation approach prioritizes assistance to ensure
that the best conservation practices are implemented in the right
landscapes for a positive sage-grouse population-level response. The
SGI is a perfect example of how conservation programs can respond to
critical natural resource issues by merging science and program
delivery, and targeting practices and geography to make a real
difference on the landscape for natural resources and for America's
farmers and ranchers.
NRCS Conservation Programs
This testimony provides an overview and status for 15 of NRCS'
conservation programs and authorities:
Environmental Quality Incentives Program
The Environmental Quality Incentives Program (EQIP) provides
financial and technical assistance on working lands to help producers
address environmental challenges. To meet these challenges, EQIP
provides incentives for the application of farming and other land use
practices that maintain or improve the condition of soil, water, air,
and other natural resources. The program assists agricultural and
forestland users in identifying natural resource issues and
opportunities to improve their agricultural operations and provides
technical and financial assistance to address them in an
environmentally beneficial and cost-effective manner. EQIP-promoted
practices meet a variety of environmental and natural resource
challenges.
In FY 2010, EQIP financial assistance obligations by states reached
almost $840 million in 36,500 contracts covering an estimated 13
million acres. In addition to regular EQIP projects, these funds also
supported projects in resource based initiatives such as air quality,
on-farm energy audits, migratory bird habitat, and the Mississippi
River Basin Initiative, and projects that emphasize environmental
protection and agricultural production as compatible goals such as
organic production and seasonal high tunnels.
In FY 2010, NRCS provided $37.5 million in financial and technical
assistance to 12 states through the national Air Quality Initiative to
help producers meet requirements of the Clean Air Act. Through this
initiative, NRCS provides assistance to farmers and ranchers to reduce
air pollution generated from agricultural operations in areas
designated by the U.S. Environmental Protection Agency as non-
attainment areas for ozone and particulate matter. During FY 2010, over
950 contracts supported some 3,800 practices on more than 220,000
acres. In the Central Valley of California alone, we estimate that
these air quality projects over the past 2 years have had the
equivalent impact of removing the NOX emissions from 400,000
vehicles from the area's roads each year.
In FY 2010, NRCS worked to provide financial assistance to more
than 240 producers for on-farm energy audits by offering the
Agricultural Energy Management Plan through EQIP. In partnership with
the private sector and other organizations, NRCS is developing
technical tools and training to evaluate and reduce agricultural energy
consumption through implementation of on-farm energy audit
recommendations and to help producers adapt plans and practices for
better energy efficiency and on-farm energy production.
The Organic Initiative is a nationwide special initiative within
EQIP to provide assistance to organic producers as well as producers in
the process of transitioning to organic production. In FY 2010, NRCS
obligated nearly $24 million in financial assistance to treat 148,000
acres in organic production or in transition to organic production. The
most often recommended practices include nutrient management, cover
crop, pest management, conservation crop rotation, and prescribed
grazing.
The FY 2012 President's budget includes $1.408 billion in mandatory
funding for financial and technical assistance for the Environmental
Quality Incentives Program.
Agricultural Water Enhancement Program
The Agricultural Water Enhancement Program (AWEP) is a component of
EQIP. The purpose of AWEP is to promote improved ground and surface
water conservation and water quality by leveraging the Federal
Government's investment in natural resources conservation with services
and resources of other eligible partners. The AWEP program was
specifically created to address serious surface and ground water
shortages as well as water quality concerns in many agricultural areas.
The security of the nation's food supply is dependent upon the
continued delivery of clean, reliable irrigation water to farms and
ranches.
This is the second year in which AWEP has been implemented and
interest from the agricultural sector has remained steady. In FY 2010,
NRCS obligated $60.8 million in 1,489 new contracts to implement
conservation practices on nearly 271,000 acres of agricultural land.
The ability to leverage funding through partnership agreements has also
remained strong. Partners provided approximately $50.5 million in
technical and financial assistance in FY 2010, nearly matching NRCS'
AWEP investment. Through AWEP, the agency approved 28 new partner
project areas during FY 2010, and continued to provide support for 63
existing project areas approved during FY 2009. Over \1/2\ of the
projects approved in FY 2010 are located in the high-priority water
quantity concern areas, where conservation practices will be applied to
conserve scarce water resources.
The FY 2012 President's budget includes $60 million in mandatory
funding for financial and technical assistance for the Agricultural
Water Enhancement Program.
Conservation Innovation Grants
Conservation Innovation Grants (CIG) is a component of the
Environmental Quality Incentives Program (EQIP) that is intended to
stimulate the development and adoption of innovative conservation
approaches and technologies while leveraging Federal investment in
environmental enhancement and protection, in conjunction with
agricultural production. CIG provides grants of up to 50 percent of the
total project cost on a competitive basis to non-Federal governmental
or non-governmental organizations, federally-recognized Indian tribes,
or individuals. Applicants must provide non-Federal funding for at
least 50 percent of the project cost, of which up to \1/2\ (25 percent
of the total project cost) may come from in-kind contributions.
CIG has two major components: National and State:
(1) The National Component emphasizes projects that have a goal of
providing benefits over a large geographic area. These projects
may be watershed based, regional, multi-state, or nationwide in
scope.
(2) The State Component provides flexibility to NRCS State
Conservationists to target CIG funds to individual producers
and smaller organizations that may possess promising
innovations, but may not compete well on the larger scale of
the national grants competition.
Funding for CIG is announced each year through a funding notice.
CIG funds single- or multi-year projects, up to 3 years in length.
CIG projects have resulted in new technologies and opportunities
for producers. A 2005 grant helped to demonstrate that precision
feeding of dairy cows could facilitate reductions in the protein
(nitrogen) and phosphorus being fed to dairy animals while maintaining
or even improving milk production and possibly improving animal health.
Based on the findings from these feeding trials, the Pennsylvania State
University Cooperative Extension developed the ``Dairy Tool'' to help
farmers identify the greatest opportunities to improve profitability on
their farms.
In FY 2010, NRCS received 388 applications requesting more than
$221.8 million. NRCS obligated about $18 million through 61 agreements
representing 43 states and U.S. territories of the Pacific. Grant
recipients provide matching funds to CIG bringing the total value of
the approved projects to more than $35 million.
Wildlife Habitat Incentive Program
The Wildlife Habitat Incentive Program (WHIP) provides assistance
to improve upland and wetland habitats to benefit priority wildlife
species, including threatened, endangered and other at-risk species.
Focused efforts on habitat for fish and wildlife also contribute to
more sustainable use of resources. By prioritizing specific geographic
areas through various efforts at the state level, WHIP is able to
target financial and technical assistance funds to benefit habitats for
specific declining wildlife species such as the sage grouse. For
example, WHIP funds helped to support a project in Somerset County,
Maine, to rebuild a wildlife and nature preserve. Following a dam
breach in 2000, the landowner committed to reclaiming the land. The
project is improving the forest stand, planting cover crops, installing
nesting boxes, among other practices to create open space and nesting,
brooding, and rearing habitat for the American woodcock, a species of
concern, as well as 50 other important wildlife species.
In FY 2010, NRCS obligated almost $63 million in financial
assistance in more than 4,700 agreements to enroll over one million
acres in WHIP. Sixty-eight of these contracts valued at over $3.7
million are with American Indian and Alaskan Natives participants to
benefit habitat for culturally important species. Since the program
began in 1998, national enrollment has included almost 37,000
agreements on over 6.5 million acres.
The FY 2012 President's budget includes $73 million in mandatory
funding for financial and technical assistance for the Wildlife Habitat
Incentive Program.
Agricultural Management Assistance
NRCS administers the conservation provisions of the Agricultural
Management Assistance (AMA) program, which provides financial
assistance to agricultural producers to address water management, water
quality, and erosion control issues by incorporating conservation into
their farming operations. AMA is available in 16 states where
participation in the Federal Crop Insurance Program is historically
low: Connecticut, Delaware, Hawaii, Maine, Maryland, Massachusetts,
Nevada, New Hampshire, New Jersey, New York, Pennsylvania, Rhode
Island, Utah, Vermont, West Virginia, and Wyoming.
With AMA funds, producers may construct or improve water management
structures or irrigation structures; plant trees for windbreaks or to
improve water quality; and mitigate risk through production
diversification or resource conservation practices, including soil
erosion control, integrated pest management, or transition to organic
farming. AMA may provide producers a first-time opportunity to address
natural resource concerns on their lands. For instance, producers that
cannot meet Environmental Quality Incentives Program (EQIP) irrigated-
land criterion may receive AMA assistance to install irrigation.
In FY 2010, $6 million was obligated into 429 contracts covering
11,102 acres.
The FY 2012 President's budget includes $2.5 million in mandatory
funding for the Agricultural Management Assistance program.
Chesapeake Bay Watershed Program
The Chesapeake Bay Watershed Program (CBWP) helps agricultural
producers improve water quality and quantity, and restore, enhance, and
preserve soil, air, and related resources in the Chesapeake Bay
Watershed through the implementation of conservation practices. These
conservation practices reduce soil erosion and nutrient levels in
ground and surface water; improve, restore, and enhance wildlife
habitat; and help address air quality and related natural resource
concerns. CBWP encompasses all tributaries, backwaters, and side
channels, including their watersheds, draining into the Chesapeake Bay.
This area includes portions of the states of Delaware, Maryland, New
York, Pennsylvania, Virginia, and West Virginia.
NRCS implements CBWP through the various natural resources
conservation programs authorized by subtitle D, Title XII of the Food
Security Act of 1985. In FY 2010, NRCS implemented CBWP through the
Environmental Quality Incentives Program (EQIP) and the Wildlife
Habitat Incentives Program (WHIP).
In FY 2010, nearly 2,900 agricultural producers submitted
applications to NRCS to participate in CBWP. NRCS approved more than
950 contracts for more than $33.5 million of financial assistance to
treat an estimated 156,700 acres of high priority agricultural land.
The balance of CBWP funds authorized in FY 2010 supported technical
assistance for the program.
The FY 2012 President's budget includes $50 million in mandatory
funding for financial and technical assistance for the Chesapeake Bay
Watershed Program.
Cooperative Conservation Partnership Initiative
The Cooperative Conservation Partnership Initiative (CCPI) enables
the use of certain conservation programs along with resources of
eligible partners to provide financial and technical assistance to
owners and operators of agricultural and nonindustrial private
forestlands. CCPI is designed to encourage investment in natural
resource conservation by non-Federal sources, foster coordination with
other partners, and achieve high-priority natural resource objectives.
Under CCPI, NRCS enters into multi-year agreements with eligible
partner organizations. Partners eligible to enter into a CCPI agreement
with NRCS include federally recognized Indian Tribes, state and local
units of government, farmer cooperatives, producer associations,
institutions of higher education, and other non-governmental
organizations with a history of working cooperatively with producers to
address conservation priorities related to agriculture and
nonindustrial private forestland.
In order to receive CCPI financial assistance, owners and operators
of agricultural and nonindustrial private forestlands must participate
within a project area defined in an approved CCPI agreement and enroll
in the Environmental Quality Incentives Program (EQIP); Wildlife
Habitat Incentive Program (WHIP), or the Conservation Stewardship
Program (CSP).
In FY 2010, about $42.3 million was obligated in 279 contracts with
producers to implement conservation practices on nearly 1.2 million
acres of agricultural lands. Through CCPI, NRCS approved 51 new partner
project areas in FY 2010, and continued to support 110 projects
approved during FY 2009.
CCPI does not receive specific funding. By statute, funding is
limited to no more than six percent of available program funds (EQIP,
WHIP) or acres (CSP). NRCS manages resources and allocations between
all three programs to assure obligations through CCPI will not exceed
funding authority.
Conservation Security Program
The Conservation Security Program was a voluntary program that
provided financial and technical assistance for the conservation,
protection, and improvement of natural resources on tribal and private
working lands. It provided payments for producers who practice good
stewardship on their agricultural lands and provided incentives for
those who wanted to do more. Under the 2008 Farm Bill, NRCS is not
authorized to enter into new Conservation Security Program contracts
but continues to make payments to producers with 5 to 10 year contracts
from prior years.
The FY 2012 President's budget includes $197 million in mandatory
funding for the Conservation Security Program.
Conservation Stewardship Program
The Conservation Stewardship Program (CSP) encourages agricultural
and forestry producers to adopt new conservation measures and maintain
existing conservation activities on their operations. CSP provides
opportunities to recognize excellent stewards and deliver valuable new
conservation. The program helps producers identify natural resource
problems in their operation and provides technical and financial
assistance to go beyond existing conservation and deliver new
environmental benefits in an environmentally beneficial and cost-
effective manner. CSP has helped participants take additional steps in
conservation, adopting new efficient technologies and generating
additional environmental benefits. A Pennsylvania dairy farm was able
to enhance their existing soil improvement efforts based on cover
crops, diversions, waterways, and strip cropping to incorporate a
simple yet effective cover crop mix enhancement to further their
benchmark level of conservation. Their next step was to upgrade to a
high residue vertical tillage implement that will increase surface
residue and further reduce soil erosion. All of these improvements--
increased plant diversity and improved erosion control were made
possible through participation in CSP.
CSP is a voluntary program available through a continuous sign-up
process, with announced cut-off dates for ranking and funding
applications. Applications are evaluated relative to other applications
addressing similar priority resource concerns to facilitate a
competitive ranking process.
In FY 2010, CSP supported conservation by obligating more than $320
million in financial assistance funding. These funds will be used to
treat 25,164,328 acres leading to more productive working lands,
improved water quality and energy efficiency. These are among the many
benefits of addressing the natural resource concerns of agricultural
and forestry producers.
The FY 2012 President's budget includes $788 million in mandatory
funding for financial and technical assistance for the Conservation
Stewardship Program to enroll 12 million acres.
Wetlands Reserve Program
The Wetlands Reserve Program (WRP) provides technical and financial
assistance to enable eligible landowners to restore, protect and
enhance valuable wetland ecosystems, including associated habitats such
as uplands, riparian areas, and forestlands. The goal of WRP is to
achieve the greatest wetlands functions and values, along with optimum
wildlife habitat, on every acre enrolled in the program. WRP addresses
wetland, wildlife habitat, soil, water and related natural resource
concerns on private lands in an environmentally beneficial and cost-
effective manner. The program achieves solutions to local community
issues related to farms, ranches, rural lands, and other areas by
establishing easements and long-term agreements on eligible farmlands
and by establishing 30 year contracts on Tribal lands. This unique
program offers landowners an opportunity to establish, at minimal cost,
long-term conservation and wildlife habitat enhancement practices and
protection.
During FY 2010, NRCS enrolled a total of 272,762 acres in WRP in
1,414 projects. Of these, the majority were in easements (206,094 acres
in 951 permanent easements and 61,935 acres in 30 year easements). Also
during FY 2010, NRCS restored and enhanced 129,082 acres of wetlands
that are part of WRP easements and contracts in prior years.
The FY 2012 President's budget includes $785 million in mandatory
funding for financial and technical assistance for the Wetlands Reserve
Program and NRCS expects to enroll 271,158 acres.
Farm and Ranch Lands Protection Program
The Farm and Ranch Lands Protection Program (FRPP) protects the
nation's highly productive agricultural lands by providing matching
funds to keep productive farm and ranch lands in agricultural uses.
Farm and ranch lands enrolled in FRPP are protected from threats of
conversion to non-agricultural uses, and remain productive and
sustainable sources of food, fiber, and feed for the nation. Keeping
land in agricultural use reduces the amount of urban pollution
(nitrogen, phosphorus and sedimentation) from land that would otherwise
be converted to lawns and impervious surfaces.
FRPP is helping to achieve landscape scale conservation objectives.
In FY 2010, nearly 19,000 acres of historic agricultural land, critical
wildlife habitat and iconic views in Sublette County, WY were protected
through an FRPP agreement. The Sommers-Grindstone Conservation Project
includes four separate conservation easements and public fishing access
on nearly 5 miles of the Green River. The agreement is a partnership
among landowners, the Wyoming Game and Fish Commission, the Wyoming
Stock Growers Agricultural Land Trust, and an extensive list of public
and private funders, including NRCS. The easement will allow the land
to remain undeveloped--benefitting cattle and wildlife--and will ensure
that the ranch passes to another generation of ranchers. The cattle
ranches are comprised of hay meadows, riparian areas, a diversity of
trees, sage-brush, high-grass prairie, and wetlands. The conservation
easements are held by the Wyoming Stock Growers Agricultural Land
Trust, and the ranches remain under the ownership and management of the
landowners. Additionally, FRPP supports the President's America's Great
Outdoors initiative by preserving the natural landscape features of
non-urbanized areas and encouraging the continued agricultural uses of
the lands.
In FY 2010, over 170,000 acres were enrolled in FRPP in 35 states.
The average size easement enrolled in FY 2010 was 423 acres.
The FY 2012 President's budget includes $200 million in mandatory
funding for financial and technical assistance for the Farm and Ranch
Lands Protection Program.
Grasslands Reserve Program
The Grasslands Reserve Program (GRP) helps landowners and operators
restore and protect rangeland, pastureland, and other grassland while
maintaining the land's suitability for grazing. Participants
voluntarily limit future development and cropping uses of the land
while retaining the right to conduct common grazing practices and
operations related to the production of forage and seeding.
Limiting development and providing habitat needed by threatened,
endangered, and other at-risk species, preserves agricultural heritage
and green space, provides for recreational activities and ensures the
nation's ability to produce its own food. For example, five GRP
projects in Phillips County, MT have protected nearly 30,000 acres
since 2009. These projects are preserving rural ranching operations
while protecting critical wildlife habitat for sage-grouse and other
grassland birds. More than 80 percent of the acres in the five ranches
are prime habitat for sage-grouse.
During FY 2010, the program obligated and committed $90.3 million
of the financial assistance funding allocated to the states and
enrolled 335,332 acres in the program. Of the funding provided,
approximately 60 percent enrolled GRP easements and 40 percent enrolled
rental contracts.
The FY 2012 President's budget includes $67 million in mandatory
funding for financial and technical assistance for the Grasslands
Reserve Program to enroll an estimated 203,515 acres.
Healthy Forest Reserve Program
Healthy Forest Reserve Program (HFRP) assists landowners in
restoring, enhancing, and protecting forest ecosystems to: (1) promote
the recovery of threatened and endangered species; (2) improve
biodiversity; and (3) enhance carbon sequestration.
HFRP provides financial assistance for specific conservation
actions completed by the landowner. As funds are made available, NRCS
solicits project proposals State Conservationists have developed in
cooperation with partnering organizations. States selected for funding
provide public notice of the availability of funding within the
selected area.
During FY 2010, NRCS received 164 applications in the 13 states
with approved projects. Fourteen landowners were enrolled, encompassing
5,583 acres, with financial assistance obligations valued over $6
million.
The FY 2012 President's budget includes $9.75 million in mandatory
funding for the Healthy Forest Reserve Program.
Watershed Rehabilitation Program
The purpose of the Watershed Rehabilitation Program is to extend
the service life of dams and bring them into compliance with applicable
safety and performance standards or to decommission the dams so that
they do not pose a threat to life and property. NRCS may provide
technical and financial assistance for the planning, design, and
implementation of rehabilitation projects that may include upgrading or
removing the dams.
Eleven dam rehabilitations were completed in FY 2010, and there are
23 dam rehabilitation projects currently under construction. There is
one dam that is being decommissioned. Additionally, there were 650
ongoing assessments of high hazard dams that provided communities with
technical information about the condition of their dams and
alternatives for rehabilitation for dams that do not meet Federal dam
safety standards.
The FY 2011 Final Continuing Resolution provided for $18 million in
Watershed Rehabilitation funding. The FY 2012 President's budget does
not include funding for the Watershed Rehabilitation Program,
reflecting the many difficult choices that were made in the budget
prioritizing process this year.
Watershed and Flood Prevention Operations Program
The Watershed and Flood Prevention Operations program authorizes
the Secretary of Agriculture to provide technical and financial
assistance to entities of state and local governments and Tribes
(project sponsors) for planning and installing watershed projects. The
Watershed Protection and Flood Prevention Program is available
nationwide to protect and improve watersheds up to 250,000 acres in
size. Currently there are approximately 300 active small watershed
projects throughout the country. The Flood Control Act of 1944 is
available only in areas authorized by Congress; and these areas cover
about 38 million acres in 11 states.
The FY 2011 Final Continuing Resolution did not include funding to
carry out the Watershed and Flood Prevention Operations program for the
remainder of the fiscal year. Further, the FY 2012 President's budget
does not include funding for the Watershed and Flood Prevention
Operations Program, including the Watershed Operations (P.L. 78-534)
and Small Watersheds (P.L. 83-566). NRCS is in the process of
conducting an orderly close-out of these programs, ensuring to the
maximum extent possible that the highest priority projects are
completed with the limited remaining funds.
Resource Conservation and Development
The Resource Conservation and Development (RC&D) Program objective
is to encourage and improve the capability of state and local units of
government and nonprofit organizations in rural areas to plan, develop,
and implement programs for resource conservation and development. NRCS
provided program administration and assistance to RC&D areas and their
volunteer nonprofit RC&D Councils.
The FY 2011 Final Continuing Resolution did not include funding to
carry out the Resource Conservation and Development program for the
remainder of the fiscal year. Further, the FY2012 President's budget
does not include funding for the Resource Conservation and Development
program. NRCS is in the process of conducting an orderly close-out of
its RC&D program operations. The elimination of funding, however, does
not eliminate RC&D Councils, which may continue to operate and compete
for assistance from state, local, and other Federal agencies, private
organizations, and foundations to carry out specific projects.
Conclusion
In conclusion, conservation programs play an essential role in the
nation's food security. Conservation helps to make farms and ranches
more resilient to risks--whether from pests, disease, floods, or
drought--and helps producers adapt to the challenges. Our farmers and
ranchers know better than anyone the value of clean water, clear air
and healthy soil for agricultural production. They know that land
stewardship secures the future, and they have made incredible strides
to protect the land they rely on. Through programs such as the
Environmental Quality Incentives Program and the Conservation
Stewardship Program, NRCS builds partnerships with farmers, ranchers,
and forestland owners to make their operations more sustainable. These
conservation efforts improve soil fertility and reduce soil erosion,
improve fertilizer use and water use efficiency, reduce energy use, and
enhance overall productivity.
These investments in private lands conservation are good for
farmers, ranchers, and forestland owners-reduced input costs directly
help the bottom line, while improved soil and water quality help
maintain and even enhance long-term productivity while minimizing
regulatory pressures. These same investments in conservation work for
all Americans, by contributing to healthy landscapes, healthy
communities, and to the food security of our nation and the world.
Thank you for the opportunity to be here today to discuss the work
of NRCS. I am happy to answer any questions from the Subcommittee
Members.
NRCS Cost-Share Programs
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Agricultural Cooperative Environmental
Management Agricultural Conservation Conservation Chesapeake Bay Quality Wildlife Habitat
Program/Initiative Assistance Program Water Enhancement Stewardship Partnership Watershed Program Incentives Incentive Program
(AMA) Program (AWEP) Program (CSP) Initiative (CCPI) (CBWP) Program (EQIP) (WHIP)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Purpose or Goal Provides cost- Provides Encourages CCPI is a Provides Provides Provides
share assistance financial and producers to conservation financial and financial and financial and
to agricultural technical address resource initiative that technical technical technical
producers to assistance to concerns in a enables the use assistance to assistance to assistance to
address issues agriculture comprehensive of certain agricultural agricultural develop fish and
such as water producers in manner by conservation producers to producers to wildlife habitat
management, water approved project improving, programs along help plan and help plan and on private
quality, and areas to maintaining, and with resources implement implement agricultural
erosion control implement water managing of eligible conservation conservation land,
by incorporating enhancement existing partners to practices that practices that nonindustrial
conservation into activities on ag conservation provide improve water address natural private
their farming land for the activities; and financial and quality and resource forestland, and
operations. purpose of undertaking technical quantity and concerns and for Tribal lands.
conserving additional assistance to restores, opportunities to All private or
surface and conservation owners and enhances, and improve soil, Tribal
ground water and activities. operators of preserves soil, water, plant, agricultural
improving water agricultural and air and related animal, air, and land is
quality. nonindustrial resources. related eligible, unless
private resources on it is currently
forestlands. Tribal land, enrolled in CRP,
agricultural WRP, HFRP, WBP,
land, and EWPP, GRP or a
nonindustrial similar program.
private
forestland. The
program does not
include land
enrolled in CRP,
WRP, or GRP.
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Length of 1-10 years 1-10 years 5 years Partners enter 1-10 years 1-10 years 1-10 years, or a
agreement/ into multi-year minimum of 15
contract agreements. years for
Project start and agreements for
end dates (not essential plant
to exceed a and animals.
period of 5
years)
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Acreage enrollment 11,102 270,667 25,164,327 1,193,967 156,704 13,034,363 1,054,095
level in FY 2010
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Cost of the FY 2011 $7.5 m FY 2011 $74m FY 2011 $600.8 m Funded from EQIP, FY 2011 $72 m FY 2011 $1.24 b FY 2011 $85 m
program FY 2012 $2.5 m per FY 2012 $60 m FY 2012 $787.6 m WHIP, CBWP, and FY 2012 $50 m FY 2012 $1.41 b * FY 2012 $73 m **
President's per President's CSP
budget budget
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2010 Backlog of 767 1,724 6,322 Included in 1,355 39,028 3,788
applications individual
program totals
--------------------------------------------------------------------------------------------------------------------------------------------------------
Eligible land AMA is available All private or All private or All private or Private and All private or
in 16 states Tribal land in Tribal Tribal land in Tribal Tribal
where agricultural agricultural agricultural agricultural agricultural
participation in production is land and production is land, including land is
the Federal Crop eligible. nonindustrial eligible. cropland, eligible, unless
Insurance Program Includes private Includes grassland, and it is currently
is historically cropland, forestland is cropland, nonindustrial enrolled in CRP,
low. grassland, and eligible unless grassland, and private WRP, HFRP, WBP,
nonindustrial it is enrolled nonindustrial forestland but EWPP, or GRP.
private in CRP, WRP, or private does not include Participants
forestland. GRP. forestland, but land enrolled in must have
does not include CRP, WRP, or GRP control of land
land enrolled in for the duration
CRP, WRP, or of the contract.
GRP.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Does funding Yes Yes Yes Yes No-year Yes Yes
expire October 1,
2012
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Payments Up to 75% or up to Up to 75% or up Annual payment Financial Financial Up to 75% for
90% for to 90% for based on level assistance to assistance to contracts with a
historically historically of conservation participants for participants for duration of 10
underserved underserved stewardship; the estimated the estimated years or less;
participants participants supplemental costs incurred costs incurred up to 90% for
payment for for performing for performing historically
participants or implementing or implementing underserved
that adopt a conservation conservation participants;
resource practices. Up to practices. Up to and up to 90%
conserving crop 75% and up to 75% and up to for contracts
rotation. 90% for 90% for having a
National average historically historically duration of at
cost not to underserved underserved least 15 years.
exceed $18/ac. participants. participants.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Producer Develop and follow Develop and Implement a In order for a Develop and Develop and Develop and
Responsibilities a plan that follow a plan conservation producer to be follow a plan follow a plan follow a plan
describes the that describes stewardship plan considered for that describes that describes for high quality
conservation and the conservation that encourages financial the conservation the conservation fish or wildlife
environmental and producers to assistance and and habitat.
objectives to be environmental address resource through a CCPI environmental environmental Contribute to
achieved. objectives to be concerns in a partner objectives to be objectives to be the installation
Contribute to achieved. comprehensive agreement, the achieved. achieved. costs and
installation Contribute to manner by land associated Contribute to Contribute to perform
costs. installation installing and with a program installation installation operation and
costs. adopting application must costs and costs and maintenance
additional be located perform perform during the
conservation within an operation and operation and lifetime of the
activities and approved CCPI maintenance maintenance installed
improving, project area. during the during the practices.
maintaining, and Only producers lifetime of the lifetime of the
managing who are eligible installed installed
existing for EQIP, WHIP, practices. practices.
activities. CBWP, or CSP may
receive
financial
assistance.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Appeals Process Non-Title XII Title XII Title XII Title XII Title XII Title XII Title XII
--------------------------------------------------------------------------------------------------------------------------------------------------------
Participants are Adjusted Gross Adjusted Gross Adjusted Gross Adjusted Gross Adjusted Gross Adjusted Gross Adjusted Gross
subject to: Income Income Income Income Income Income Income
limitations. limitations. limitations. limitations. limitations. limitations. limitations.
Reporting Reporting Reporting Reporting Reporting Reporting Reporting
requirements of requirements of requirements of requirements of requirements of requirements of requirements of
the Federal the Federal the Federal the Federal the Federal the Federal the Federal
Funding Funding Funding Funding Funding Funding Funding
Accountability Accountability Accountability Accountability Accountability Accountability Accountability
and Transparency and Transparency and Transparency and Transparency and Transparency and Transparency and Transparency
Act of 2006 Act of 2006 Act of 2006 Act of 2006 Act of 2006 Act of 2006 Act of 2006
Highly erodible Highly erodible Highly erodible Highly erodible Highly erodible Highly erodible
land and wetland land and wetland land and wetland land and wetland land and wetland land and wetland
compliance. compliance. compliance. compliance. compliance. compliance.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* EQIP funding authorized in the farm bill is $1.59 b for FY 2011 and $1.75 b for FY 2012.
** WHIP funding authorized in the farm bill for FY 2012 is $85 m.
NRCS Easement Programs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Emergency Watershed
Program Characteristic Wetlands Reserve Program Program--Flood Plain Grassland Reserve Farm and Ranch Lands Healthy Forest Reserve
Easement Program Protection Program Program (HFRP)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Purpose or Goal Restore, protect, or Restore, protect, Restore and protect Assists with the Restore, protect and
enhance wetlands on maintain and enhance rangeland, pastureland purchase of enhance forest
eligible lands. The the functions of the and other grassland conservation easements ecosystems to promote
goal is to achieve the floodplain; conserve while maintaining the to protect the recovery of T&E
greatest wetlands natural values land's suitability for agricultural species; improve
functions and values, including fish and grazing. Program productivity and biodiversity; and
along with optimum wildlife habitat, water emphasis is on related conservation enhance carbon
wildlife habitat on quality, flood water supporting grazing values of the land. sequestration.
every acre enrolled in retention, ground water operations, plant and
the program. The recharge and open animal biodiversity,
program accepts space; reduce long-term and grassland and land
eligible wetlands and Federal disaster containing shrubs or
associated habitats assistance; and forbs under the
such as uplands, safeguard lives and greatest threat of
riparian areas, and property from floods, conversion.
forestlands. drought, and the
products of erosion.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Length of easement/ Easements: Permanent and Permanent easements. Easements: Permanent and Permanent, unless state Easements: Permanent,
contract 30 years and maximum maximum duration under law prohibits a 30 year, and maximum
allowed under state state Law. permanent easement. allowed under state
Law. Contracts: 10 year, 15 law; 30 year contracts
Restoration cost-share year, and 20 year with Tribes; 10 year
agreements: generally rental contracts. cost-share agreements.
10 years; 30 year
contracts with Tribes.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Acreage enrollment level 2,347,128 187,876 1,206,953 809,098 691,860
Numbers through FY10
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cost of the program FY09 $1,065,850 EWP-FPE: $62,567 $147,766 $268,662 $10,143
and FY10 obligations FY11 projection: Recovery: $156,480
(in thousands FA and $611,312
TA)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Backlog of applications 2,715 applications 2,194 applications 401 applications 184 applications 150 applications
as of June 10, 2011 251,915 acres 215,920 acres * 209,058 acres 92,365 acres 24,565 acres
--------------------------------------------------------------------------------------------------------------------------------------------------------
Land valuation Lowest of Geographic Geographic Area Rate Lowest of Geographic Appraisals--Fair market Appraisals--Before and
Area Rate Cap, Cap, appraisals or Area Rate Cap, value less After appraisal
appraisals (seldom market analysis. appraisals conducted by agricultural value. method.
used) conducted by certified, general real
certified, general real property appraisers or
property appraisers, or landowner offer. Value
landowner offer. based on fair market
value less grazing
value.
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Landowner eligibility Must be a landowner to Must be a landowner to Must be a landowner for Program is implemented Must be the landowner
participate in the participate in the easement participation through eligible of eligible land for
program. Landowners program. or be a landowner or entities. Eligible which enrollment is
must comply with Highly Landowner does not need have control of entity requirements sought.
Erodible Land and to comply with Highly eligible land for found in 7 CFR part Landowner does not need
Wetland Conservation Erodible Land and rental contract 1491. to comply with Highly
provisions of FSA of Wetland Conservation participation. Must be a landowner to Erodible Land and
1985. provisions of FSA of Must comply with Highly sell an easement to an Wetland Conservation
Adjusted gross income 1985. Erodible Land and eligible entity. provisions of FSA of
provisions apply. Registration and Wetland Conservation Participating 1985.
Registration and reporting requirements provisions of FSA of landowners must comply Registration and
reporting requirements of the Federal Funding 1985. with Highly Erodible reporting requirements
of the Federal Funding Accountability and Adjusted gross income Land and Wetland of the Federal Funding
Accountability and Transparency Act of provisions apply. Conservation Accountability and
Transparency Act of 2006. Registration and provisions of FSA of Transparency Act of
2006. reporting requirements 1985 2006.
7 year ownership of the Federal Funding Adjusted gross income
requirement. Accountability and provisions apply.
Transparency Act of Registration and
2006. reporting requirements
GRP has an option where of the Federal Funding
easements can be Accountability and
acquired through Transparency Act of
eligible entities 2006.
similar to FRPP.
Criteria for
determining whether an
entity is ``eligible''
can be found in 7 CFR
part 1415.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Land Eligibility Marginal, frequently Any floodplain lands Grassland, land that Must be privately owned Eligible land includes
flooded agriculture damaged by flooding at contains forbs or land on a farm or private land that
lands and associated least once within the shrubland where grazing ranch and contain at contributes to the
uplands. previous calendar year, is the predominant use; least 50 percent restoration and
Note, the term or that have a history or land located in an prime, unique, enhancement of habitat
agriculture lands do of repeated flooding area that has been statewide, or locally or otherwise increase
include wooded lands. (i.e., flooded at least historically grassland, important farmland, the likelihood of
twice within the forbs, or shrubland, unless otherwise recovery for a
previous 10 years). and the land could determined by NRCS; selected species under
While NRCS normally provide habitat for contain historical or section 4 of ESA,
purchases floodplain animal or plant archaeological candidate species,
easements on populations of resources; furthers a state listed species
agricultural lands, on significant ecological; state or local policy or one identified by
a case-by-case basis contains historical or consistent with the the Chief for special
NRCS may purchase archeological purposes of the consideration.
floodplain easement in resources, or would program; and is
rural residential areas address issues raised subject to a pending
in lieu of traditional by state, regional, and offer by an eligible
EWP recovery work if a national conservation entity;
sponsor is acquiring priorities. (2) Must be cropland,
the underlying land rangeland, grassland,
rights and the cost of pastureland, or
the recovery work would forestland that
exceed the easement contributes to the
acquisition costs. In economic viability of
such situations, any an agricultural
structures are then operation or serves as
demolished or removed a buffer to protect an
from the easement area. agricultural operation
from development; Must
not include forestland
on greater than \2/3\
of the easement area.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Payments For easement: provides Provides acquisition For easement: provides Provides cost-share For easement: provides
acquisition costs; costs; administrative acquisition costs; assistance to eligible acquisition costs;
administrative costs costs associated with administrative costs entities to acquire an administrative costs
associated with acquiring an easement, associated with easement. associated with
acquiring an easement, and restoration costs. acquiring an easement, Single payment or up to acquiring an easement,
and restoration costs. Easement payments are and restoration costs. five installment and restoration costs.
For 30 year contracts: made as a single Easement payments are payments; first For 30 year contracts:
provides contract payment generally a single payment at closing provides contract
payment. payment however; followed by four payment.
Easement payments are landowners may request annual payments. Easement and contract
generally a single payment for up to 10 payments may be made
payment but may be made years in equal or in a single payment or
in annual payments for unequal amounts. for no more than ten
no more than 30 years. For rental contracts: annual payments of
For restoration cost- provides annual rental equal or unequal size.
share agreement: payment. If restoration For restoration cost-
provides restoration efforts are necessary, share agreement:
cost-share assistance. participant can receive provides restoration
cost-share assistance cost-share assistance.
through a restoration
agreement.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Special provisions for 30 year contract None None None 30 year contracts
Indian Tribes enrollment option
--------------------------------------------------------------------------------------------------------------------------------------------------------
Does funding expire Expires--annual funds No-year funds except for Expires--annual funds Expires--annual funds No-year funds
October 1, 2012 ARRA funds which are 2
year funds
--------------------------------------------------------------------------------------------------------------------------------------------------------
Appeals process Title XII Non-Title XII Title XII Title XII Non-Title XII
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Data is still undergoing quality assurance review.
Attachment 2
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. I thank the gentleman. Thank you both for
your testimony.
The chair would like to remind Members that they will be
recognized for questioning in order of seniority for Members
who were here at the start of the hearing. After that, Members
will be recognized in order of arrival. And I appreciate
Members understanding. I am going to reserve my time for
questioning.
I now recognize the Chairman of the Agriculture Committee,
Mr. Lucas, for 5 minutes.
Mr. Lucas. Thank you, Mr. Chairman.
And I do appreciate the presentation you gentlemen have
given. The challenge this Committee faces as we sit here in
preparation for a farm bill next year or perhaps if the grand
discussions between the President and the leadership of both
the House and the Senate come about, a rather quicker process
where the budget realities are going to come to bite very
challengingly. And clearly, it is not just going to be the
Commodity Title. It will be Conservation. It will be all the
programs. So I ask my questions in light of the Committee's
preparation to make some tough, tough decisions.
Administrator, how much are we going to spend on CRP this
year, round numbers?
Mr. Nelson. Congressman, it is $1.7 billion annual rental
payments.
Mr. Lucas. Chief, how much are we going to spend on CSP
this year?
Mr. White. Around $600 million.
Mr. Lucas. Six hundred million dollars. How much on WRP?
Mr. White. About $611 million.
Mr. Lucas. Six hundred eleven million dollars dollars?
Mr. White. Yes.
Mr. Lucas. Okay. And I would take note the Chief is exactly
right. The Dam Rehabilitation Program is one of those designed
to be administered strictly on a priority basis established by
the Department after review of all the structures, no earmarks,
no silly games from Congress, a very straightforward way to do
things. And it has been implemented in that way.
Chief, could you explain to the Committee for just a moment
about EQIP and the difference between the approach in EQIP and
CSP?
Mr. White. Mr. Lucas, I kind of think of them in two
different ways. EQIP I think is your bricks and mortar. That is
your pipeline. That is your animal facility. That is your
fence. That is your filter strip. That is your terrace. It is
things you put on the ground. The Conservation Stewardship
Program is more of management-related. It is going to be taking
nutrient management and going to precision nutrient management.
It is going to be taking prescribed grazing and advancing that.
So it is more of the management. That is the way I kind of look
at them, sir.
Mr. Lucas. So from the perspective of the countryside on
CRP, if you want to participate in the program, you have to
participate within the guidelines. If you are accepted, you are
signed up for 10 years. In CSP it is not so much just putting
your property into the program. You have to adjust your
practices to fit the goals of CSP?
Mr. White. Well, there are priority resource concerns that
vary around the country. Each state kind of, with their state
technical committee and local workgroups, will design those.
CSP is a 5 year contract. It is renewable for another 5 years.
And to get in you have to be meeting a resource concern like
soil erosion, water quality, and you have to agree to do
another one. There is a lot of additionality. In fact, in the
20,000 contracts we had at the end of last year, Mr. Lucas, we
had about 78,000 to 79,000 new practices in there that the
producers self-select. So there are things they want to do.
Mr. Lucas. And I would note to my friends on the
Subcommittee that as we work through the next farm bill, we
also have obligations under WTO, CRP being green-box compliant.
CSP, because it requires certain practices, it falls in a
different category. Just for a moment back to the cost of the
various programs, at a $1.7 for CRP, $600 million approximately
for CSP, and you said $550 million for the Wetlands Reserve
Program?
Mr. White. Yes, let me double-check that.
Mr. Lucas. Please. And the simple reason I bring that, in
times of tighter budgets, that looks like a pretty interesting
dollar figure per acre on WRP compared to the other two.
Mr. White. It has been averaging about $2,000 an acre.
Mr. Lucas. Averaging $2,000 an acre?
Mr. White. But that is long-term protection as well.
Mr. Lucas. And we signed up for how many years on the WRP?
The length of contract on the WRP?
Mr. White. WRP is permanent easements, which is the bulk of
them. It could be 30 year. There is also a provision that was
put in in 2008 for 30 year tribal contract. And then there is
one that is not used very much for restoration only, 10 year
contracts.
Mr. Lucas. Six hundred thirty million dollars on 10 million
acres.
Mr. White. Sorry.
Mr. Lucas. I will send you some more questions later about
that.
Mr. White. Thank you, sir.
Mr. Lucas. And I see my time is about to expire. I would
just note to the Committee that the challenges we face--the
conservation programs are the most popular. They do the most
good. They are the legacy programs, as our friends here have
stated. But the budget situation and the grand negotiations
going on are going to be so tough. We are going to have to make
some extremely tough decisions in all areas of the farm bill in
a lot of things we have done historically such as helping our
California friends meet their emissions standards brings
questions to light: Is it appropriate? How much should the
Federal Government spend to meet state standards in comparison
to what it does in the rest of the country?
With that I yield back the time I don't have. Thank you,
Mr. Chairman.
The Chairman. I thank the Chairman. I now recognize the
Ranking Member of the full Agriculture Committee, Congressman
Peterson, for 5 minutes.
Mr. Peterson. Thank you, Mr. Chairman.
First of all, Mr. White, I was having a discussion back
home this last week about CSP, and according to them, the way
this is rolled out that there is not flexibility for the states
to set their own priorities, that according to them, they are
having to follow national priorities, which do not work in
northwest Minnesota. And I heard you say that the state
technical committees were making these decisions and so forth,
but these are from local folks that are on the ground saying
that the way this has been put together does not work for them.
There are 25 practices that you can choose from to get
qualified and only three of the 25 actually work in that part
of the country. And so they were asking for more flexibility
for the states. So, if you would check into it, I don't know
what is going on exactly. Maybe the state made this decision
and they didn't recognize what was going on. I don't know.
Mr. White. There are about 80 or 90 enhancements, there are
some national priorities, but we do try to fit it so I will
have to get back to you.
Mr. Peterson. Well, for whatever reason, they claim there
is only like three things on that list that actually work in
that part of the world. So whatever.
And Chairman Lucas, you have to, when you go to sign up,
you have this list of all of these practices that you can pick
and some of them are worth more than others, but, supposedly,
there is flexibility there to make it work on your farm.
And I would also say on the CRP, I hope that everybody
recognizes what is going on. There has been talk out there
about CRP. But as we go through these signups, we are sorting
this out. We had 4.1 million acres come out this year, 4.4,
million acres something like that. Pardon?
Mr. Nelson. Congressman, that is 4.4 million acres of
contracts expiring this year.
Mr. Peterson. Right. And they only signed back up 2.9
million acres.
Mr. Nelson. Well, 2.8 million acres, yes.
Mr. Peterson. Oh, 2.8 million acres. And I think the number
was like you had to have 279 EBI or something to get qualified,
so this is significantly higher than what it has been, and so
there is a lot of this land out there that is coming back into
production just as we go through this process. Next year, there
are going to be 6 million acres coming out. We will probably
see a similar kind of situation where only \1/2\ of that is
going to get back in.
I think we have a process set up here that is sorting out
the land that should be farmed, the land that shouldn't be
farmed, and I hope we don't go off on some tangent where we are
doing some meat-ax thing where we end up putting a bunch of
land back in production that is going to cost us crop insurance
and disasters and other things. So that is just an editorial
comment.
The other thing I am concerned about is with these budget
deals that were made in the CR and so forth, there has been
talk out there that I read in news articles that you are not
going to be able to honor contracts. I just want to make sure
that you have enough money to--any contract that has been
signed that there is sufficient money to actually pay that
contract. Is that the case?
Mr. White. Mr. Peterson, that is the case. We will have
enough money to fund all of the contracts.
Mr. Peterson. But you probably have had to cut back on how
many additional contracts you couldn't offer because of this?
Mr. White. Not at this point.
Mr. Peterson. Well, I thought they cut back on your
appropriation. Didn't they?
Mr. White. The biggest cutback we had was in the
discretionary amounts like RC&D, the Watershed Program, there
were reductions in mandatory but they were just kind of the
normal CHIMPs. They were from the authorized levels. No program
actually got less. There was maybe some cut in WRP but a cut
from the authorized level, we still saw an increase in the
actual, at least for EQIP.
Mr. Peterson. So you weren't spending your authorized
level? I mean just because it has been CHIMPed every year.
Mr. White. For programs like EQIP, it has generally been
CHIMPed.
Mr. Peterson. So because they have been CHIMPing it every
year, you guys just don't spend what was authorized?
Mr. White. No, sir. We can only spend what is appropriated.
And this year it will be about $1.4 billion. And I think your
authorized level this year is $1.588.
Mr. Peterson. Well, I thought they CHIMPed some other
programs, too?
Mr. White. Yes, but I don't think that anything that is
going to result in a reduction in contracts to people.
Mr. Peterson. So that didn't change anything out there in
terms of----
Mr. White. No. The biggest cuts we are dealing with are for
discretionary with the RC&D Program, the Watershed, trying to
close those two. They affect about 400 people, 500 people. We
are offering a buyout, early-out offers. No one has lost their
job, and for this year at least I think we are okay. I guess
the biggest thing is WRP was capped at 202,000 acres. Last year
we enrolled like 270,000 acres, but that was an unbelievable
year. That was the biggest enrollment year in the history of
the program.
Mr. Peterson. Thank you.
Thank you, Mr. Chairman.
The Chairman. I thank the gentleman. I recognize myself for
5 minutes for questions.
Both of you mentioned the positive impacts conservation
programs are having on restoration efforts in the Chesapeake
Bay. Does NRCS have specific data on how much nitrogen,
phosphorus, and sediment has been reduced in recent years, and
are there projections for future reductions?
Mr. White. Yes, sir. Yes, sir, we do. We embarked on this
project called the Conservation Effects Assessment Project,
CEAP. We have done one in the Chesapeake Bay and it looked at
2003, 2004, 2005. So that is kind of the baseline. And I can
tell you that voluntary incentive-based conservation is having
huge reductions in nitrogen, phosphorus and sediment going into
the Bay. If you look at that 2005-06 baseline and you look at
just the conservation we put on since that time, we have had
like a 15 percent further reduction in phosphorus, like a 17
percent reduction in nitrogen, and I cannot remember the figure
for sediment, but we can get that to you. That has just
occurred since 2006. So farmers and ranchers really are making
huge strides in the Chesapeake Bay.
The Chairman. Very good. I hear a lot from aspiring young
farmers. Some of these folks, frankly, didn't grow up in a farm
family, which is very impressive, somebody that wants to go
into farming. And one of the concerns that I often hear--and I
have heard this in different parts of the district is that
there are often times USDA, the programs we are talking about
today offers a higher reimbursement or rental rates per acre to
put something into a conservation program than what those same
acres would fetch in an open market. And frankly, I had one
farmer that actually had to rent fields a long distance from
his home when there was adjoining property that his business
plan he put together, he couldn't compete with the government
was the bottom line. Is this something that you have heard
before? Is this something that we look at, that we monitor the
impact of?
Mr. Nelson. Mr. Chairman, I will learn how to use that talk
button yet, sir.
Mr. Chairman, with respect to the CRP program, the 2008
Farm Bill, as you know, now requires that the National
Agricultural Statistics Service do a survey of cash rental
rates in counties around the country, and that is used as a
basis for setting the CRP rental rates. And so we now have a
more solid statistical basis for defending those rates than we
might have had in the past.
And just to give you some anecdotal evidence putting CRP
rental rates in perspective, I come from Chouteau County,
Montana, dry land wheat farmer out there, hometown is Fort
Benton. And I was on the farm back in the 1980s when the CRP
program got started. And the rental rates at that time were
about $45 an acre. That is the biggest wheat-producing county
in the state and we still enrolled about 240,000 acres in CRP.
So $45 back in 1986. In the latest Signup 41 in Chouteau
County, the average rental rate in county was about $39. And if
you take into account the consumer price index that a dollar is
worth about half now what it was back in 1986, that means that
the real cash rental rates for my friends and neighbors there
in Chouteau County who participate in CRP, the real CRP rental
rate is about half now what it was. And I think part of that,
again, is that because we have a statistic service doing that
survey out there that we are pegging the CRP rental rates
closer to the market than perhaps they were in the past.
The Chairman. Very good. Thank you. My time has expired. I
am thinking we will probably get an opportunity for a second
round.
So I now recognize the gentleman from Pennsylvania, Mr.
Holden, for 5 minutes.
Mr. Holden. Thank you, Mr. Chairman.
Chief White, you mentioned in your opening statement the
Chesapeake Bay Program, and you know Mr. Goodlatte and I worked
hard on the last farm bill with the other Members of this
Subcommittee and the full Committee to get that program into
the farm bill. Has the 2011 CR, which cut mandatory spending by
$673 million hindered the ability to implement that program as
we envisioned it, due to the regulatory burdens that they were
facing. We thought it was so important to give them a little
extra investment to deal with what was coming down from EPA.
Have you been able to do what we asked you to do despite the
cuts in 2011?
Mr. White. Yes, sir. As part of that, the Chesapeake Bay
was fully funded. It was not CHIMPed or reduced.
Mr. Holden. We have no idea where the 2012 Appropriation
Bill is going to end up but we know what the House did. If it
ends up being around $1 billion in reductions in conservation,
do you think that will affect the Bay program?
Mr. White. Yes. Basically, what you will have, Mr. Holden,
is fewer contracts, less conservation on the land, probably
fewer people to do that.
Mr. Holden. And finally, Chief White, you mentioned
farmland preservation, and how important it is to the
Commonwealth of Pennsylvania. In the 2008 Farm Bill, as you
mentioned, we had to make some changes because we though there
were some administrative problems in Pennsylvania specifically.
And I was hearing everything was going fine, but I have one
county in my district, Lebanon County, who was complaining
about the ability to enter into contracts, that there seems to
still be some red tape. So this really isn't a question. If you
could have you or your staff look into it, is there still a
problem with getting someone in your agency to approve
contracts or what the exact problem is?
Mr. White. It is a problem, Mr. Holden. I take full
responsibility for it. We have not been as fast as we should
have been in getting that certified entity process out there.
We have advanced how we are looking at with Pennsylvania in
particular so we hopefully have taken care of that problem. But
the root cause lies with me and hopefully in the next 30 days
we will get those rules out there for certified entities, which
will greatly streamline the process across the country.
Mr. Holden. And you don't need anything further from us?
Mr. White. No, sir.
Mr. Holden. All right. Thank you.
Mr. White. I have to assume blame for that one.
Mr. Holden. Thanks, Mr. Chairman.
The Chairman. I thank the gentleman. I recognize the
gentleman from Florida, Mr. Southerland, for 5 minutes.
Mr. Southerland. Thank you, Mr. Chairman.
Mr. White, I find your testimony refreshing, very honest.
You are passionate about what you do and thank you. And you as
well, Mr. Nelson. I know that regarding the issues that I am
concerned with, it just seems that, Mr. White, you seem to be
speaking about quite a bit of the things that interest me.
But I wanted to ask you regarding Longleaf Pine
Restoration. I am from North Florida----
Mr. White. Yes.
Mr. Southerland.--and obviously Longleaf Pine restoration
is something that is a great concern to a lot of our landowners
there, as well as our National Forest there. I understand that
the Florida NRCS and the Wildlife Habitat Incentive Program has
been used to assist landowners, increasing planting of Longleaf
Pine. Can you just elaborate to me? I am still learning about
the program. Please elaborate a little bit on USDA efforts and
the services you are providing for these private landowners.
Mr. White. Thank you, sir. That is a great one. I love the
longleaf pine. When this nation was settled, we had 90 million
acres of longleaf pine. It is a gorgeous plant. It is more like
a savannah grass underneath, a tree that grew up under frequent
fire regimes. And now we are down to like 3 million acres. And
your area from Mr. Goodlatte's area to yours and swinging
across the Texas is where the longleaf were.
We are trying to work with the Forest Service, other
agencies outside of USDA, private landowners to try to restore
that particular forest. And we are using mostly the Wildlife
Habitat Incentive Program. And when I talked a little bit about
WHIP, I said the unique thing, one of the really cool things
about it is we have a directive there to use the funding for
state and national initiatives. This longleaf pine really came
from the bottom up. It wasn't from me down. It came from those
various states saying we need to do something about this. And
we are very pleased to cost-share with producers to plant
trees.
Another big thing is getting rid of the invasives like an
Alabama cogongrass and there is just a gob of invasive species
out there. Well, you know that being from Florida. You are like
ground zero for that. So it is helping with invasives and
helping to reestablish this tree. This tree built Williamsburg.
It kept the wooden ships afloat, built Savannah, straight,
long-grain, rot-resistant, a fabulous--it provides habitat for
I don't know how many hundreds of different creatures. It is
amazing.
Mr. Southerland. Well, thank you. I am going to move on to
Everglades restoration, a little bit farther down from my neck
of the woods, but still the Everglades is an important part of
our state. And I know that WRP is a popular program in Florida,
but tell me just a little bit because it is farther down, so
you understand more about that than I do even thought I still
have constituents in my neck of the woods who still reach out
to my office.
Share with me, though, and the Committee how the WRP
Wetland Restoration Program, it works down with the--and I know
that there are private landowners in and around the Everglades
working with you. Can you shed a little light on that? And,
again, I am asking because I don't know as much about the
program as I perhaps need to.
Mr. White. Right. I have to be careful what I say here. The
Everglades is a very, very ecologically important area and a
lot of different entities have done a lot of talk about how
important it is to restore it and we are doing something about.
And this is just private lands, working with ranchers, last
year, Mr. Southerland, we enrolled the largest contiguous block
of land ever enrolled at the WRP and it was in the northern
Everglades in a place called Fisheating Creek. It is going to
have a huge, huge positive impact on Lake Okeechobee and the
Everglades water system. The ranchers are going to work to
restore the natural hydrology. We are going to work with them
to control the invasive species. We are going to work with them
under compatible use to make sure there is still some
production. We need that land grazed periodically. There were I
can't remember how many landowners in this 26,000. It was just
very few. They were large landholders----
Mr. Southerland. Right.
Mr. White.--but a few years ago, this land probably would
have been in subdivisions. And now it is going to be restored.
The landowners keep the land. They control access to it. I
think it is going to be a big, big win for the Everglades. And
stay tuned for Part two.
Mr. Southerland. Thank you very much.
Mr. White. Yes, sir.
Mr. Southerland. Mr. Chairman, I yield back.
The Chairman. I thank the gentleman. I now recognize Ms.
Pingree for 5 minutes.
Ms. Pingree. Thank you, Mr. Chairman.
Well, thank you very much for your interesting testimony
this morning. As one of the new Members of the Committee, I
feel like much of this is a tutorial for me. And I look forward
to continuing to learn more about these programs.
Perhaps my only editorial comment really is sort of meant
for us generally. I understand the chair of the Committee when
he talks about the need to make cuts. The deficit issues that
we are facing in this country and the importance of tightening
our budget everywhere that we can. But considering that my
other committee happens to be the House Armed Services
Committee where we rarely think about making cuts and spend far
more money on what is an essential services, of course,
defense, but we also have to think about the security around
our food systems in this country. And as you mentioned earlier
this morning, our population is only increasing. The needs that
we are going to have for food produced in this country I think
are only going to grow. And much of what you do in the programs
that you administer are very critical to that.
So I thank you for your work, and I certainly will be doing
all I can as a brand new, highly junior Member of this
Committee to support many of these programs. And I do hear
about them in my home state. One question I want to bring
forward to you is really how one of the programs is
administered. And I apologize. I am reading off my phone so my
lettering is a little strong.
But in the 2008 Farm Bill, Congress recognized the
importance of making conservation programs accessible to all
farmers, including organic producers and conventional producers
interested in transitioning to organic. I represent the State
of Maine. Organic farming has been growing there for a long
time but increasingly is of great interest on the part of the
producers and consumers and is one of the areas where farmers
have been able to increase their profits, which is a wonderful
thing for all of us. We have managed to increase the amount of
farmland in our state, and the average age of the farmer is
going down. So that also is bucking a national trend and I
think showing that we can do more to produce our food locally.
But I want to talk about the EQIP program. It has a
specific provision to ensure that the program can be accessed
by organic and transitioning farmers in recognition of both the
conservation opportunities here, and I think also because of
the historic lack of participation of organic producers in the
conservation programs. So I am very supportive of the
implementation of this provision through the Organic
Initiative. As I said, it has been popular in Maine with over
$700,000 provided in the fiscal assistance to Maine producers
in Fiscal Year 2010, which in our small state is actually
great.
But while it has been popular, there have been some
barriers to implementation. And I hear about this not just in
Maine but with other producers I talk to about it to around the
country. One of these barriers includes the unfamiliarity with
NRCS with organic systems. Can you talk to me a little bit
about the training and educational efforts to overcome this and
other barriers? And to be a little more specific, I have heard
that sometimes when a transitioning farmer visits a field
office, they will find that the person that they are dealing
with isn't well trained in making that transition, doesn't
necessarily know how to help them make that, that the field
guide recommends some pesticides that wouldn't be qualified
under organic certification. And again, where I see both the
environmental but also great economic benefits to farmers who
have been able to make this transition, get a higher price for
their products, and also do good conservation work alongside,
it seems like an important initiative. So can you fill me in on
that?
Mr. White. Ms. Pingree, you are absolutely right. I
encountered this when I was in Montana. We are a traditional ag
agency and this has moved us outside of our comfort zone, and
it is going to take us a while to become more familiar with the
organic. I mean, we are heck on wheels when it comes to corn,
cotton, wheat, soybeans, cows, sheep, stuff like that, but then
all of a sudden you are talking organic, you go, ``Oh my
gosh.'' So we are doing training for our people. We are making
some changes at headquarters that is going to streamline it and
make it more accessible to organic producers.
What Ms. Pingree is talking about is a section of EQIP that
has organic the Secretary shall provide us. It is not a
``may,'' it is not a ``maybe,'' it is ``shall,'' and we are
trying to have the training and to equip ourselves to do a
better job.
I had mentioned the Conservation Innovation Grants. We did
one a couple years ago to a group of sustainable ag organic
producers who are to look at all our standards and to make sure
that we have adequately incorporated them. We have put our
standards out there to try and take care of those kinds of
issues. So we are trying to make some steps to that.
As far as funding goes, I set a $50 million limit for that.
For $50 million, we are using about half of it. The rest is
rolled back into other stuff. But you also need to think you
are an AMA state, ag marketing, which has some organic in it
and also the Conservation Stewardship Program has some organic
sections in it. In fact, if you look at that 35 million acres--
twice the size of the State of Maine--enrolled in a
conservation program. Pretty cool.
Ms. Pingree. That is great. Well, thank you for your
comments.
I will yield back the time I don't have.
The Chairman. I thank the gentlelady.
And I now recognize the gentleman from Wisconsin, Mr.
Ribble, for 5 minutes.
Mr. Ribble. Good morning. I appreciate your testimony this
morning. And I have a question, actually, for each of you, but
I will start with Mr. White.
I represent Wisconsin's 8th Congressional District, which
is one of the largest dairy-producing districts in the United
States. And Wisconsin dairy farmers rely pretty heavily on EQIP
and use it pretty regularly. I am wondering if you can just
talk about the current funding allocation for livestock. Do you
feel that funding is appropriate and necessary? And then as a
follow up, are there structural changes that need to be made to
the program to ensure that a wide range of producers can
benefit from the program?
Mr. White. Mr. Ribble, Wisconsin?
Mr. Ribble. Yes.
Mr. White. I got to tell you, when you go to Wisconsin, it
does your heart good if you are a conservationist, all of those
beautiful strip crop fields, those small little dairy farms. It
is just a fabulous part of the world. We do a lot of work with
dairy. EQIP has a statutory requirement in it that 60 percent
of the funds have to go to livestock operations. And we have
never had a problem meeting that. And frankly, most of that
money is beef production and dairy, followed by poultry, then
swine. I think that it is widely available in your state. I
know we do a lot of work with animal feeding operations, water
quality aspects. I have been there. I have seen some of the
stuff. I don't know of any access problems that we have.
Ms. Pingree mentioned the age of farmers are dropping in
her state. This Committee actually put into EQIP where five
percent of the funds have to go to beginning farmers and
ranchers and five percent has to go to socially disadvantaged
producers. So from that standpoint, we are trying to make it as
broadly applicable as possible, sir.
Mr. Ribble. Are there formulas between larger and smaller
producing dairies?
Mr. White. No, sir.
Mr. Ribble. No, okay. So the size of the dairy doesn't
matter?
Mr. White. Size-neutral.
Mr. Ribble. Okay. Very good. Thank you.
Mr. Nelson, as you know, farmers nationwide are facing an
ever-increasing regulatory burden, particularly from EPA, and I
hear quite a bit from them regarding EPA. Could you maybe give
some insight into what USDA programs in your view provide the
best assistance for producers as they strive to meet those
demands?
Mr. Nelson. Congressman, I appreciate that question because
our programs aren't necessarily always thought of in that
context. I think they should be because, look, I am a farmer
myself, and I think it is always good when we have the
opportunity as ag producers to have a variety of conservation
programs out there that we can tailor to our individual needs
on our farms and ranches. And if we can achieve compliance with
other regulations at the national or state level in that
manner, that is great. And so I think the approach of a
partnership between Federal Government, in some cases state
government, and individual farmers and ranchers out there on a
voluntary basis to achieve goals like preventing nitrates into
the Mississippi river or the Chesapeake Bay, that is a great
approach and is the kind of public-private partnerships that
are good for all of us.
Mr. Ribble. Are those partnerships available? Are you
working in a collaborative effort with producers around the
country?
Mr. Nelson. Yes. Virtually all of the programs that both
Chief White and I have talked about here today are
collaborative efforts. In some cases, Chief White's agency
works with organizations and larger entities. Farm Service
Agency, we work with individual agricultural producers on their
individual farms. And, for example, the Conservation Reserve
Enhancement Program, the first area we talked about Chesapeake
Bay a little bit before and what NRCS is doing there. FSA has a
Conservation Reserve Enhancement Program area that goes right
along, works hand-in-hand with NRCS that gives individual
producers the opportunity to enroll on a continuous basis on
CRP in that area. And that prevents the leaching of nitrates
into the Bay that is so problematic.
As a matter of fact, as Mr. White talked about earlier, the
assessment that they did earlier that we in FSA worked together
with them on shows that that effort alone has resulted in
reducing the levels of nitrogen off every acre down about 79
pounds an acre. And I tell you, 79 pounds of nitrogen an acre
would grow one heck of a lot of winter wheat out in Montana. So
it is significant.
Mr. Ribble. All right. Thank you very much.
The Chairman. I thank the gentleman.
I recognize Ms. Fudge from Ohio.
Ms. Fudge. Thank you very much, Mr. Chairman. And thank you
both, gentlemen, for your testimony today.
Chief White, I do want to follow up on a question that was
just asked by my colleague. Under EQIP, the 2008 Farm Bill
authorized increased payments for socially disadvantaged
farmers, ranchers, and beginning producers. There were also
incentives for organic operations. At that time there was a lot
of discussion, obviously, about these incentives which some may
have even called preferences at the time as best I can glean
from that. I wasn't on the Committee. I am a new Member.
A couple of questions. Was there some projection at the
time as to how many producers would take advantage of these
incentives and do you know to date how many socially
disadvantaged and beginning producers have, in fact, taken
advantage of the incentives?
Mr. White. Thanks, Ms. Fudge. I can get you those numbers
on how many are doing it. I can tell you we blow away that five
percent every year, far beyond, both beginners and socially
disadvantaged. And what it essentially means is if you are a
beginning farmer/rancher, socially disadvantaged, you can get
up to 90 percent cost-share or 15 percent above whatever the
prevailing rate is because rates vary, but a maximum of 90
percent. I can tell you it is very popular. You may know
Secretary Vilsack has embarked on his ``strike force'' where we
are trying to do specific, more targeted outreach to make sure
we reach our underserved communities. We are participating in
that. My personal feeling is it has been extraordinarily
successful, ma'am.
Ms. Fudge. So then, in fact, you do believe that there has
been a very positive impact with these programs?
Mr. White. Oh, yes, ma'am.
Ms. Fudge. And is there something that you think we should
consider changing that would make it--that there would be more
participation--which at this point I am not sure that you
really need--or include other groups? Do you think there needs
to be some change in it?
Mr. White. No, because we view that five percent as a
floor, not a ceiling.
Ms. Fudge. Okay. Thank you.
Mr. Nelson, Section 2101 of the 2002 Farm Bill provided for
use of Conservation Reserve Program, CRP, land to be used to
grow biomass or place wind turbines on that acreage. Businesses
in my district are working to place wind turbines and to
develop other renewable energy solutions. As you know,
renewable energy is important for job creation and to sustain
our environment. Have businesses and other organizations
approached NRCS about using this land to grow biomass or to
place wind turbines? Do you know?
Mr. Nelson. I am sorry, ma'am. I wasn't quite sure your
question, but we have implemented the provision of the farm
bill with respect to the placement of wind turbines on
Conservation Reserve Program acreage, and what we do in that
case is essentially the footprint of the wind turbine would be
penalty-free take-out of the CRP program. So we have
implemented that.
Ms. Fudge. All right. So have people taken advantage of it?
Mr. Nelson. Yes. Yes. And we will provide you with some
specific figures on that.
Ms. Fudge. Okay.
Mr. Nelson. Be more than happy to.
Ms. Fudge. Thank you. I look forward to it. Thank you.
Mr. Nelson. Thank you.
Ms. Fudge. Mr. Chairman, I yield back.
The Chairman. I thank the gentlelady and I recognize Mr.
Hultgren from Illinois for 5 minutes.
Mr. Hultgren. Thank you, Mr. Chairman.
Thank you. I apologize. It is a busy day with a lot of
committees going on, but I appreciate you being here,
appreciate the work that you're doing.
Question for you: I wonder if I could get a response from
both of you. Farmers and ranchers continue to face
environmental regulations that increase costs and can drive
producers out of business. We all know that. What program
provides the most benefit to producers to assist with these
mounting regulations?
Mr. Nelson. Well, with respect to Farm Service Agency, it
is a Conservation Reserve Program which is our largest program.
And that gives individual producers the opportunity to
participate in things like the continuous signup practices of
buffer strips and other practices where you enroll very highly
environmentally sensitive land that is actually protecting
larger acreages. And that helps with the individual producer's
compliance with other regulations. And I believe that any time
an individual farmer or rancher has the opportunity to enter
into a partnership with the Federal Government or state or
local agencies through, again, a voluntary program and achieve
not only the benefits of that program but compliance with other
environmental regulations, that is a good thing for all of us.
Mr. White. Mr. Hultgren, from my perspective, four letters:
EQIP, Environmental Quality Incentive Program. We have a
statutory provision in there that says one purpose of the
program is to help producers meet or avoid the need for
regulation. And with that statement, you have stood NRCS as the
shield arm between the regulatory agencies and our producers.
And you have arrayed the strategic forces of 11,000 or 12,000
highly trained technical people with billions of dollars at
their disposal to help producers meet or avoid regulation. And
I don't mean this in a pejorative sense, but we take that very
seriously. And I could die a happy person if I could turn the
regulatory community into the Maytag Repairman.
Mr. Hultgren. One of the things that we know is there is a
lot of overlap and some duplication in programs. I just wonder,
with overlap and duplication in conservation programs, does it
produce any challenges for producers who may participate in
multiple programs?
Mr. White. In a word, yes. But go ahead.
Mr. Nelson. Well, I think there is some duplication but
there are also complementary programs. And we will look forward
to working with you as you get into the farm bill and our
technical folks will provide you with all of the information
that we can and assistance that we can with respect to the
administration of programs and our experience working with
producers.
But one of the things that I would like to emphasize--and
again, this is coming from a producer point of view--is that it
is a good thing to have a lot of different alternatives out
there, alternatives that will work as well in Montana as they
will in Florida or in Illinois because some programs that work
in some parts of the country don't work in other parts of the
country. And the more alternatives that individual producers
have to voluntarily participate in these programs, the more you
can tailor and shape them to your individual farming operation.
And that gives us a better chance of getting more conservation
on the land, which is what the whole thing is about.
So again, we look forward to working with you and providing
you with any information that we can that will help you in
those deliberations, but we also want to make sure that we
continue to give the full range of options to producers in
every part of the country to increase the amount of
conservation on the land.
Mr. White. I will just briefly add to that. I agree with
what Administrator Nelson has said. It is good to have a full
toolbox. But that said, in each of your packets, we have
provided you with a matrix, and in that matrix it shows side-
by-side all the easement programs and it shows side-by-side all
the cost-share programs. If you are a field person, you have to
know the rules for all of them. You have to know which you need
AGI for, which are HEL-compliant, which don't need it, which
are no-year funds, which are one year--you can see the
differences across this matrix and it makes it very complex for
our people. It makes it complex for our producers. The matrix
will speak for itself, sir. And I think that while we need that
toolbox where you have enough implements in there, I don't know
that we need as many as we have.
Mr. Hultgren. Well, thank you both. My time is up but I do
appreciate you being here. I appreciate your answers to
questions. I look forward to continuing this discussion as we
go forward in the farm bill. I do think it is important for us
to be looking at. I think it has been kind of a piecemeal
approach in the past on this, but there are ways we can find
more of an understandable and easier-to-navigate process that
works. I am hoping we can get there with that.
I yield back. Thank you.
The Chairman. I thank the gentleman and I recognize Mr.
Schrader, from Oregon, for 5 minutes.
Mr. Schrader. Thank you, Mr. Chairman. Well, I really
appreciate Mr. White's final comments there because to the
uninitiated or relatively uninitiated, even though I am a
farmer, this is a pretty complex arena with multiple programs.
And I have never seen an agency yet or a program yet that
didn't think it was pure and important in and of itself and
does something terribly distinct and different than the other
program that is very similar and almost duplicative to it. So I
appreciate the emphasis on that.
I guess my challenge to both of you, both FSA and NRCS
would be to look at the outcomes. I mean instead of we as
legislators tend to come up with brilliant new programs that
are going to fit in a variety of areas, usually ours, and get
us great results, but I think to get past that sort of
multiplicity of management schemes and the duplication that is
evident there, maybe we should focus on outcomes. Which of
these different programs give us the biggest bang for the buck?
What is the cost per acre of each of these different programs?
What relative level of nitrates or phosphates are prevented
from going in the rivers and streams given the different types
of programs? What sediment doesn't occur or does occur as a
result? That would give us a much more informed input as to
which programs are the biggest bang for the buck in these tough
times and doing great work.
There are probably some other intangible concerns we also
want to know, but I guess I would really hope this Committee
would focus on helping the agency develop outcomes that we can
measure so that all the variety of programs--I don't care what
program you use if you get good results. You can go to Tahiti
for 2 weeks, I don't care, as long as the air quality and the
water quality gets a little better as a result of what you are
doing. So I just would challenge you in that regard.
A series of comments that I don't need answers to right now
but would like at some point a response. The TIP subprogram as
part of the CRP program, what is the management overlay or
duplication or whatever in that regard? It would seem that the
ECP program could be duplicative of other disaster relief
programs. I just need information as to how it is not, why we
need this particular one for farm and forestland. The VPA-HIP
program, while a nice program and I am a big fan of hunting and
fishing, too--I am not sure, given our budget limitations, that
is one I would put a whole heck of a lot of money in, but I
stand to be corrected on that. And the idea of having both NRCS
and FSA manage the Grassland Reserve Program seems a little
cumbersome to me, so I would be curious as to why we have
gotten into that area.
On the positive side, it is nice to see that some of the
programs that were enacted in the 1930s, 1940s, 1950s, and
1960s are transitioning away, not that they are not important
but perhaps less important than some of the programs that we
have identified for the 21st century. I think that is important
but hope that both agencies would continue to look at that.
I guess the big question I have is--I come from Oregon and
half my state is forestland. And 40 percent of that is private
forestland. And I think we are missing the mark on our
forestland programs. The information I have, only six percent
of EQIP funding goes to forestland, despite increases recently.
I recognize the increases. Only six percent with the emphasis
on carbon sequestration, air quality, wildfires, invasive
species ruining one of our greatest natural resources that
built this country, that has me greatly concerned. And the
Beginning Farmer and Rancher Development Program, only three
percent is dedicated towards forest stewardship and new
forestry.
So I am just very, very concerned that forestry is getting
a real short end of the stick in these conservation programs in
the Agriculture Department and Natural Resources Conservation
Service. I would hope that we would look at that a little more
closely and beef those programs up as we get rid of some of the
duplication in other areas.
So with that, I yield back, Mr. Chairman.
The Chairman. I thank the gentleman.
And I wanted to take the opportunity for a second round for
anyone that has questions. I exercise that liberty first for 5
minutes.
Chief White, you have expressed an interest in having more
employees on the farm rather than behind a desk at NRCS
offices. Can you give us an update on where you are in this
process?
Mr. White. Two items I will cover with you briefly, Mr.
Chairman, that I can think of off the top of my head is the
Conservation Delivery Streamlining Initiative. We are looking
at our whole business processes. The outcome goal, we want to
eliminate 80 percent of the administrative clerical tasks from
our field office and free up 75 percent of their time for
direct working with farmers. If we can pull this off, Mr.
Chairman, it is the equivalent of adding more than a thousand
people to our workforce. It is going to free up that much time.
The second thing I would add is that I have recently
challenged our State Conservationists. Hugh Hammond Bennett
created this agency back in the 1930s. When he retired in 1952,
90 percent of the Soil Conservation Service employees were in
direct field positions. And by golly, if Hugh Hammond Bennett
could do it, why can't we? So I asked the State
Conservationists, what are you going to have to do in Florida,
in Pennsylvania, or wherever you may be if we want 90 percent
of our technical staff be in direct service to producers? And
they came back with all kinds of cool ideas. We are going to
start implementing them, and my hope is that despite any budget
cuts we can actually end up with more people on those front
lines providing direct service to producers.
The Chairman. Well, I congratulate you for your efforts. I
think there is many of us that when you are successful, we may
want to replicate that process across all parts of the Federal
Government.
Mr. White. I am not running for President yet.
The Chairman. Okay. And this is just my observation and I
may be incorrect, but it seems like the last farm bill, in
terms of the balance between direct technical assistance at
what I would call boots on the ground in programs, there was an
emphasis more primarily on programs. And I am concerned that
perhaps we skewed too far and I just see a lot of value of
those boots on the ground, those folks that provide the
technical assistance to help the farmers make the right
decisions, to be that present resource.
And just to both panelists, I just want to get your
perspectives on that as we approach the next farm bill. Do you
see the 2008 Farm Bill kind of skewed in that direction, more
programs, less technical assistance, and should that be
something that we should move back if not a 50-50 at least more
technical assistance?
Mr. White. Well, I agree with you. And I think the 2008
Farm Bill made some clarifications in technical assistance we
are finding very valuable now. And technical assistance, I mean
we talk about it, but what does it really mean? There are some
books here that I brought just in case somebody would ask about
TA. Those two books at the end are for one animal confined
feeding operation, the technical documents it took for the
design specifications. This right here is a 29 head dairy
lining a pond, and a separator. This is the construction of a
5.3 mile pipeline for a rancher. This is converting a flood
irrigation system to a sprinkler.
And if you look at the technical drawings that are
throughout this, it is absolutely vital that we keep those
highly trained men and women out there on the land. I have been
in this business for a long time. I have yet to see a Keebler
elf come out and help us with this. This is done by highly
trained men and women. We need to keep them there. We need more
boots on the ground. But I will also say this, Mr. Chairman. I
don't care whose foot is in that boot. And if we can make
arrangements with state agencies, conservation districts,
nonprofit groups, ag organizations to get the feet in those
boots, that is what we will do. This past year we took $20
million--you may have heard of this Strategic Watershed Action
Teams--we leveraged it, that $20 million, turned into $30
million and it gave us, oh gosh, 450 boots on the ground. They
are non-Federal, but they are going to be working alongside of
us.
The Chairman. Very good. Mr. Nelson, any thoughts on this
issue?
Mr. Nelson. Well, yes, I think one of the interesting
things about this discussion is that is points out there are
some differences between Farm Service Agency and NRCS. NRCS is
a technical agency. And as Chief White said and I think
everybody would like to have, their folks do best when they are
out in the field. They arrange conservationists and engineers
who are out in the field and not in the offices doing
paperwork. And so we have already had discussions about how we
at FSA, which tends to be an administrative agency that is more
paperwork-oriented, can actually support and help that effort,
because in these times when we are tightening our belts, we are
all going to have to be more efficient in the way we do things.
The challenge for us in FSA is to how we can
technologically get to the point where we need to be. As you
know, we are going through a terrible transition from 1970s and
1980s computer technology to 21st century computer technology,
and that has been very difficult not only on our employees, but
it is actually difficult on the producers as well.
I was privileged a couple of weeks ago to come up here and
be part of a demonstration for folks of a project, a long-
overdue project in the Agency to update our computer systems
and our software so that we are actually into the 21st century
with this MIDAS project. And I appreciated everybody's
participation in that because it is going to make us a lot more
efficient. And it is going to make us not only better able to
serve producers but produce information in response to requests
from you folks because I can tell you right now that in putting
together the answer to these audit questionnaires because of
all of the different computer systems we are working with in
FSA, we had to put word out literally to our county offices
across the country in some cases to put this information
together. That doesn't make any sense.
And so this move, like I say, is not only going to be a big
help to the Agency, it is going to be a big help to you and to
our producers as well. So we have to operate more efficiently
and we have to get to a point where we do more online with our
producers so that they can sit at home and do their work with
not only Farm Service Agency but NRCS and other USDA agencies
as well, because our producers are in the 21st century but we
are not. And so we have to catch up with them in this case. And
we are working hard on that. And again, we really appreciated
the opportunity to come up here and visit with you about it and
look forward to the future opportunities to do that. And all of
that will help both of our agencies.
Mr. White. Can I respond one more time? I would like to put
to rest an old canard about the animosity or the conflict or
the turf battles that occur between NRCS and FSA. We really
don't have time for that. Mr. Nelson and I have talked on how
we can work better together, and our commitment to you is that
we will do that. And not only are we going to work better
together but we are going to work better together for the
benefit of the American producer and for the American taxpayer.
The Chairman. And I know we all appreciate that.
I now recognize the gentlelady from Alabama for 5 minutes
of questioning.
Mrs. Roby. Thank you so much, Mr. Chairman. Thank you both
for being here.
Just last Thursday, we held a 2 hour listening session with
farmers in Alabama, and I did it in conjunction with our
Agriculture Commissioner John McMillan, and the number one
issue that kept coming up over and over again was CRP. And this
isn't the first time I have heard it. And for Alabama, this
program was definitely useful in the beginning, taking marginal
lands out of production, but as time has gone on and more and
more viable land is being shifted out of production into
longleaf pine. And one of the issues that has been discussed is
Alabama, it would be much more valuable to have to option of
grass, which would make it easier to move that land back into
production if needed.
Another issue is that farmers are competing against the
Federal Government in finding land to rent and oftentimes, the
presence of the government causes the prices of land to
increase drastically. And interestingly enough, one of the
farmers who participated in our listening session last week
that brought up and had concerns about the CRP was a timber
owner, and he said that the conversion of cropland to longleaf
pine has hurt him because it impacts, of course, the price of
the timber produced. And so my question to both of you is
whether Alabama is unique in seeing the usefulness of CRP
diminishing? Or has CRP served its purpose and is no longer
needed? And what changes might we make to CRP to ensure that
much-needed land stays in productive agriculture?
Mr. Nelson. Well, I appreciate the question because we
just, as you know, finished with CRP general Signup 41, and I
think it is important to note that even in this time of high
commodity prices that producers voluntarily around the country
offered 3.8 million acres into that program. And so in response
to your question, I think the producers have shown that there
is still great interest in participation in CRP, at least
around the country.
Mrs. Roby. But the people operating the land are not
necessarily producers because there is so much land that our
farmers rent or lease to produce, and it is up to the landowner
to shift that into the CRP program and thus takes that
property, then, out of production for those farmers who just
want to farm.
Mr. Nelson. Congresswoman, we would be more than happy to
visit with you further about this and to provide you with the
information about the CRP participation in Alabama. And I think
it is important to note one other thing, too, that could be
affecting this, and that is that there was established down in
the Gulf Coast and Atlantic Coast region and including Florida
a national conservation priority area for longleaf pine. It
does, in fact, give producers additional environmental benefits
index points when they go to enroll land in the Conservation
Reserve Program. And certainly, before we will go forward with
another general signup, the question of whether these
conservation priority areas are one that I am sure you will
look at in Congress and we will certainly look at within the
Farm Service Agency. So I would look forward to talking further
with you about that.
Mrs. Roby. Well, as the Ranking Member pointed out, he said
there is what, 4.1 million acres coming out, but the problem is
is that it is very, very costly to then convert that property
back into productive farm use. And so that is a tremendous
concern in my State of Alabama because of this program.
Mr. White, do you have anything to add?
Mr. White. Earlier, when you were out, we had a discussion
about how wonderful longleaf pines were. NRCS is certainly
working with producers on cost-share programs, working lands
programs on a voluntary basis for producers who want to do
that. Certainly, Alabama is in the belt where those trees were
from.
I guess I hear this from time to time but the beautiful
thing about voluntary conservation programs, if you don't want
to do it, you don't have to. And I would not want to take the
right of someone else away to enter into a voluntary
conservation program of which the CRP certainly is one.
Mrs. Roby. And my time is expired but I just would add to
that that it is for our farmers, the concern is because of the
existence of the program, maybe its usefulness has run out
because we do need to provide for all of those, as you
referenced, millions----
Mr. White. Yes, ma'am.
Mrs. Roby.--of mouths that are going to need to be fed. So
that is the point of my question. And I appreciate both of you
being here. And Mr. Chairman, I yield back.
The Chairman. I thank the gentlelady.
I recognize the gentleman from Florida for any additional
questions.
Mr. Southerland. Just to kind of follow up on that
statement, I think one of the challenges of the longleaf pine,
as you know, the woodpecker issue down there in our area--so
when you have one agency that is trying to encourage you to
come in and help restore--and I agree with everything you said,
Chief, about the longleaf pine and how beautiful it is, and I
think we are doing some incredible things down in North
Florida, especially with the Tall Timbers organization down
there. When you assist in helping us plant longleaf pine only
to have the redheaded woodpecker come in, then you will never
be able to harvest your timber because of regulations. So if
they are identified on your property, please believe me, there
are many that say as a result of them coming here and making
them your home, you can't cut. But that is just a follow-up
comment to Mrs. Roby.
I want to ask a couple questions. I know regarding CRP, you
know--and again I am learning these programs--but what
penalties does a landowner face if he opts out of CRP contract
and what flexibility is currently available, if any, to allow
landowners out of a CRP contract?
Mr. Nelson. Well, I appreciate that question because CRP,
again, we just went through a general signup, and so the issue
has been in front of the Department and the country. And the
Secretary does have the authority to do penalty-free early-
outs----
Mr. Southerland. Okay.
Mr. Nelson.--under CRP. The policy at the present time is
that if a producer wants to voluntarily opt out of the program
that they would have to pay back the rental payments that they
had received and there would be liquidated damages of 25
percent on the rental payments they had received and 25 percent
liquidated damages on any cost-share assistance they had
received and possibly interest as well. So that is the current
policy.
Mr. Southerland. That sounds like that was designed by the
IRS.
Mr. White. Mr. Southerland, can I address that?
Mr. Southerland. Sure.
Mr. White. I am going to take you back a little bit. The
guys we are cost-sharing with for longleaf pine, they are going
to cut that thing or projected in, what, 20, 30 years?
Mr. Southerland. No, it is longleaf pine you are looking at
closer to 50 years.
Mr. White. Okay. Well----
Mr. Southerland. And that is another issue. You know, there
are some other crops, certainly, that one could say obviously
we need to address longleaf pine but maybe some other species
that we can also plant in order to return an investment for the
landowner.
Mr. White. But I am going to check on that, whether you can
cut them or not, because I think you can.
Mr. Southerland. Well, I know this. I know that we have a
National Forest down there and the National Forest because of
the woodpecker has been turned into basically a national park.
And in the rural county where having logging operations in
these rural counties has been shut down because of the
woodpecker, and they basically have taken a National Forest and
made it a national park, it is creating economic damage to
these communities. And so it something very near and dear to my
heart. And so I think some flexibility there would be good
because I do believe that the longleaf pine is worth pursuing.
I mean it is a great thing. But, yes, anything you can check on
that, that would be good.
Mr. White. I will get back to you, sir.
Mr. Southerland. Thank you.
And my follow-up question, what programs have wildlife
components--hold on. My question here is messed up. Let me
shift here. What percentage of funding under EQIP makes it to
the producer?
Mr. White. About 75 percent. About 20--the numbers vary
from year to year, sir, but it is normally--the technical
assistant generally runs from 20 to 25 percent.
Mr. Southerland. Okay.
Mr. White. And that is what buys these books that I just
showed.
Mr. Southerland. I got you. And last, on just a statement
on the budget cuts, I appreciate your can-do attitude because
the American people are given a dollar amount that they have to
live within and they have a can-do attitude that they are going
to make it work. And I have heard you display that this morning
and it is refreshing. And so I just want to tell you how much I
appreciate the way both of you have testified before us this
morning. Thank you very much.
Mr. White. Listen, I am an American. I am not going to
crawl up in a fetal position and cry myself to sleep.
Mr. Southerland. Well, that is not how this country was
founded and----
Mr. White. I am going to try to do what I can do.
Mr. Southerland.--and I don't believe you would. So thank
you very much. I yield back.
The Chairman. The gentleman yields back. And I recognize
the gentleman from Illinois for any additional questions.
Mr. Hultgren. Thank you, Mr. Chairman, just a couple.
I wondered if you could explain the Conservation Innovation
Grants. Tell me a little bit more what they are, and also let
me know, if you would, the success rate for these innovation
projects eventually becoming adopted conservation practices?
Mr. White. Yes, sir. I am assuming you are referring to the
one that is supposed to bridge Death Valley, to take promising
research and try and figure out how it can be broadly applied
to the land. We have had some spectacular successes and we have
had some spectacular failures. I can get you more of a rundown
on which is which on that, but I think in the area of feed
management, we have seen some extraordinary results from the
University of Washington. Odor control, I think that was
Wisconsin Department of Agriculture did some wonderful work on
how to do better odor control, precision agriculture, water
quality. We have had some really good stuff, but we have also
had some things that just did not work out. And I am trying,
frankly, to get my arms wrapped around it better and I will
have to get back to you on some of this, sir.
Mr. Hultgren. Is your sense that most of them are working,
most of them not working, just to kind of gauge a success rate?
Is it possible to do that? And again, it is for the
Conservation Innovation Grants.
Mr. White. Maybe 75-25.
Mr. Hultgren. Working to not working?
Mr. White. Yes, and that is kind of an estimate. So can I
revise and extend my remarks?
Mr. Hultgren. Yes.
Mr. White. Okay.
Mr. Hultgren. That would be good. Yes, and if you can let
us know if there is more feel to that. For me my concern is
money that is being spent, is it being useful?
Mr. White. Exactly.
Mr. Hultgren. So it is not numbers of success but dollars
being spent leading to real innovation that is actually being
used out in the field.
Mr. White. Got you.
Mr. Hultgren. Switching over to the Conservation
Stewardship Program, what percentage of funds for the
Conservation Stewardship Program are used to pay for things
farmers already have done and how much is used to encourage new
practices?
Mr. White. Okay. The law says you will pay to maintain
existing and to create additional. We have put an emphasis on
the additional. Right now, that annual payment is roughly split
60-40, 60 percent for new stuff, 40 for the maintenance of
existing.
Mr. Hultgren. Okay. Kind of wrapping up and getting back to
the first round of questions. I guess I would like to just get
some thoughts from you. We talked a little bit about going into
the farm bill and really looking for ways--certainly, we want
options out there, but at the same time we don't want to be
tripping over options and having it with limited resources
where we are not being as effective as we possibly can be. So I
wondered, do you think is there a more comprehensive way to
provide environmental benefits to our farmers and ranchers
instead of the piecemeal approach that Congress has provided
over the last 25 years? If you think there is, give me some
sense of what that would be.
Mr. White. You go first.
Mr. Nelson. Well, I think again, as I said earlier, the
challenge here is to look at all of these programs and figure
out ways which we absolutely need to do to both operate them
more efficiently and make them more effective to farmers. But
as I also talked about earlier, to do that in a way that we
don't take alternatives away from farmers and ranchers around
the country so that, again, a farmer in my State of Montana,
your State of Illinois, they are not going to need exactly the
same thing.
So it isn't an easy thing to do, but we need to figure out
a way to do it because like it or not, we are facing budget
challenges here. We have had to tighten our belts. You know, I
had to do that back on the farm. I had to do that when I was in
the Governor's office back in Helena. And we are going to have
to do it. So, again, the challenge is to figure out a way to
become more efficient in the administration of programs, make
them more effective for the individual producers, and not take
alternatives away so that we can continue to make sure our
producers in every area in the country have the full range of
options. And I think all of the programs need to be on the
table that both agencies are involved with, and we are
certainly looking forward to working with you on that and
providing you our technical assistance and our experience in
administration of the programs and working with producers on
the best ways to do that.
Mr. White. I think Mr. Nelson said that very well. One of
the things that we all have to recognize is every program is
there for a reason. And they have all done some great work and
they all have a constituent base and we need to respect that as
we move forward. But your challenge is, in this budget climate,
how do you increase the efficiency? How do we do a better job
and still provide the producers with what they need in the area
of conservation.
Mr. Hultgren. Yes, just in closing, I do think that is our
challenge. I think recognition that we want to see results for
money that is being spent, especially with limited dollars.
Programs that made sense 10 years ago may not make sense any
longer. And I get concerned when the focus is more on agenda
rather than on real results. And so, anyhow, I look forward to
working with you. I know this is just a first step of a long
process that is coming forward. Thank you both.
I yield back.
The Chairman. I thank the gentleman. I thank all Committee
Members. And Administrator Nelson, Chief White, thank you so
much for your service and your testimony here today. Your
preparation coming in, very well prepared. I think this hearing
was very informative. Frankly, we have a lot of work to do as
we continue down the road of preparing for this next farm bill.
And as has been mentioned many times, these are challenging
times with the debt and the fiscal situation we are in, but we
never should forget that as Americans we enjoy, frankly, the
most affordable, highest-quality, and safest food supply of
anywhere in the world. And the biggest threat to our national
security by far would be at whatever point we would rely on a
foreign country to provide that for us. So we are blessed not
to be in that position.
I certainly appreciate the work of FSA and NRCS and the
fact that you work together, collaboratively. And certainly we
look forward to working with you as we continue forward in this
process. So thank you all so much.
Under the rules of the Committee, the record of today's
hearing will remain open for 10 calendar days to receive
additional material and supplementary written responses from
the witnesses to any question posed by a Member. This hearing
of the Subcommittee on Conservation, Energy, and Forestry is
adjourned.
[Whereupon, at 11:56 a.m., the Subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
Submitted Letter by Mark G. Huntley, President, Irrigation Association
July 18, 2011
Hon. Glenn Thompson,
Chairman,
Subcommittee on Conservation, Energy, and Forestry
House Committee on Agriculture,
Washington, D.C.;
Hon. Tim Holden,
Ranking Minority Member,
Subcommittee on Conservation, Energy, and Forestry
House Committee on Agriculture,
Washington, D.C.
Chairman Thompson and Ranking Member Holden:
On behalf of the members of the Irrigation Association, thank you
for the opportunity to offer our perspective on USDA's conservation
programs. Our industry appreciates your focus and leadership on this
issue, as we believe that the conservation title of the farm bill is
important to the long-term viability of U.S. agriculture and meeting
the demands of our current and future generations, as well as a sound
and sustainable environment.
The Irrigation Association is a trade association representing
approximately 2,000 member companies in the irrigation industry. Our
members include irrigation product manufacturers, dealers,
distributors, contractors and end users in the agricultural and
landscape industries. The mission of the Irrigation Association is to
promote efficient irrigation technologies, products and services, and
our expertise lies in ensuring every drop of water applied to a crop is
done so in an efficient manner, thus leading to more agricultural
output per unit of input.
I would like to begin by discussing the USDA's Environmental
Quality Incentives Program. As you know, EQIP is a voluntary
conservation program, which provides financial and technical assistance
to farmers and ranchers who face threats to soil, water, air, and
related natural resources on their land. Through EQIP, the NRCS
develops contracts with agricultural producers to implement
conservation practices, which address on-farm environmental natural
resource opportunities and challenges. Even though this program is an
incentive program for agricultural producers, this is first and
foremost an environmental quality program. For example, if an
agricultural producer were to invest in more efficient irrigation
technologies and products; not only would that producer see a decrease
in the amount of water used to produce the same amount of yield, the
producer will also see a decrease in run-off (leading to an increase in
water quality) and an increase in energy efficiency (using the energy
embedded in the water used for irrigation in an efficient manner),
among other recognized environmental benefits. It is our belief that
the further investment in this environmental quality program is much
more effective than increased regulations placed on U.S. agricultural
producers.
From 1997 to 2010, EQIP has been a strong supporter of promoting
efficient irrigation technology and products. During this time, three
of the top ten projects funded by EQIP have been focused on irrigation:
Top 10 EQIP Funded Projects (1997-2010)
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Source: NRCS.
Specific to irrigation projects, EQIP works with the producer,
through the technical service provider program, to determine the best
technology, design and practices to ensure that every drop of water is
being used in the most efficient way possible, while ensuring that the
investment makes financial sense for the producer. In fact, the
Irrigation Association works collaboratively with the NRCS through a
Memorandum of Understanding that qualifies our certified irrigation
designers to participate in the TSP program.
Through these investments in efficient irrigation technologies and
products, the effects on the environment have been very positive, as
we've seen documented through the USDA's Conservation Effects
Assessment Program.
Next, I would like to spend a moment discussing some of the
challenges currently facing American agriculture.
According to the Global Harvest Initiative, the global population
is expected grow to more than nine billion people by 2040, an increase
of nearly 50 percent from today's level. In this same time period,
global agriculture will be required to double its productivity in the
face of limited water resources.
Feeding more than nine billion people will require substantial
increases in agricultural output and productivity. Irrigation is one of
the most powerful levers of agricultural productivity, so it is no
surprise that irrigation comprises a significant proportion of the
country's overall water use (37 percent of total water withdrawals
according to the U.S. Geological Survey 2005 Water Use Report). As more
farmers seek to leverage the productivity benefits of irrigation,
irrigated acreage in the United States will continue to grow. Irrigated
acreage in the United States has more than doubled from 25 million
acres in 1950 to over 60 million acres in 2005. At the same time
farmers are irrigating more acres, they are using less water for
irrigation. Water use for irrigation has dropped back to 1970 levels
(Source: NRCS Farm and Ranch Irrigation Survey 2008). The Irrigation
Association joins the USGS and the Department of the Interior in
attributing these decreases in irrigation water use to significant
increases in on-farm irrigation efficiency.
As the population continues to increase, regulations and aging
infrastructure are affecting the amount of water available for
irrigation. American farmers are among the most productive and
innovative in the world. Yet, if United States agriculture is to meet
this challenge, we must sustain, improve and expand efficiently
irrigated agriculture. The Irrigation Association recognizes that
United States agriculture will need to continue increasing productivity
to meet the future needs of the growing global population, while
optimizing the efficient use of natural resources.
As I mentioned earlier, fostering the adoption of efficient
irrigation technologies and practices is an effective way to improve
agricultural productivity, overall water-use efficiency and water
quality, thus sustaining water resources for future generations.
In conclusion, the irrigation industry highly values the variety of
benefits achieved with efficient on-farm water use. We've enjoyed our
historic partnership with the NRCS and look forward to working with the
Congress and the NRCS for years to come in promoting efficiencies in
agricultural production.
As the House Committee on Agriculture continues the audit of the
USDA, we encourage you to review EQIP, note the positive attributes of
the program and continue the promotion of the efficient use of water in
agricultural production.
If you have any questions regarding EQIP or any other irrigation-
related issue, please contact IA's Federal Affairs Director John Farner
at [Redacted] or [Redacted]. Thank you again for the opportunity to
submit comments.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mark G. Huntley,
John Deere Water,
President, Irrigation Association.
______
Submitted Questions
Response from Bruce Nelson, Administrator, Farm Service Agency, U.S.
Department of Agriculture
Questions Submitted By Hon. Frank D. Lucas, a Representative in
Congress from Oklahoma
Question 1. How many different conservation programs does FSA
administer?
Answer. FSA administers five primary conservation programs
including the:
Conservation Reserve Program (including Conservation Reserve
Enhancement Program, Farmable Wetlands Program and Transition
Incentives Program);
Emergency Conservation Program (ECP);
Grassland Reserve Program (GRP);
Grass Roots Source Water Protection Program; and
Voluntary Public Access and Habitat Incentive Program (VPA-
HIP).
FSA also administers programs under other Titles that support
conservation goals and purposes including:
Emergency Forest Restoration Program (EFRP) under the
Forestry Title;
Biomass Crop Assistance Program (BCAP) under the Energy
Title;
Conservation Loan Program under the Credit Title; and
Debt for Nature under the Credit Title.
Question 2. Do the current criteria to determine the Environmental
Benefit Index (EBI) for CRP eligibility ensure that the most productive
land stays in production and the environmentally sensitive land, or
highly erodible land, is enrolled?
Answer. The EBI is used to rank and select offers for enrollment in
the general signup component of CRP which includes about 26 million
acres of the CRP's 32 million acre enrollment authority. The general
signup accepts land based on eligibility criteria defined in the CRP
statute and the EBI ranking. Before any cropland may be considered for
general signup enrollment, it must have a recent cropping history and
meet other eligibility requirements which can be any of the following:
Highly erodible cropland (i.e., have an erodibility index of
8 or greater);
Located in a conservation priority area; or
Under an expiring CRP contract.
Each general signup offer is ranked with the EBI which uses data
collected for five environmental factors (wildlife benefits, water
quality benefits, soil conservation benefits, air quality benefits, and
enduring benefits) and a cost factor. There is no prohibition on
enrolling productive land in the CRP and certainly some lands in the
program are productive, but must have significant environmental
benefits to qualify. The productivity of the lands in the CRP is
reflected in the soil rental rates of the lands enrolled. For CRP
general signup, the higher the rental rate requested, the lower the EBI
points for the cost factor, as illustrated in the chart below.
Relationship Between Rental Rate and Cost Factor EBI Score
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
For general signup, the cost factor serves to discourage enrollment
of more productive lands, but if the environmental benefits are
sufficiently high, they may be accepted. For example, an offer with a
rental rate of $150 per acre would get 40 points for cost, while an
offer with a rental rate of $30 per acre would get 108 points. Thus,
the points for the five environmental factors of offers of the more
productive land ($150 per acre land) would have to be at least 68
points higher than the scores of land with lower productivity ($30 per
acre land) to be ranked higher.
Regarding keeping environmentally sensitive or highly erodible land
enrolled, the CRP is implemented using two basic approaches: the
competitive general signup discussed above and the continuous signup.
An assessment of the environmental sensitivity of the lands enrolled
under general signup begins with the erodibility index (EI).
Of the general signup acres currently enrolled, 19.9 million acres
are categorized as HEL (EI%8) based on the weighted average of the EI
of the soils on the contracted fields. The remaining 6.3 million acres
are non-HEL. However, ``environmental sensitivity'' is not based solely
on EI. Many non-HEL general signup CRP lands may be adjacent to
wetlands or streams, overlay at-risk groundwater, or are providing
significant wildlife benefits, and would be considered environmentally
sensitive.
Continuous signup specifically targets the most environmentally
sensitive lands and, includes the Conservation Reserve Enhancement
Program (CREP),\1\ wetland, conservation buffer, and wildlife
initiatives. There are about 5.1 million continuous signup acres
currently enrolled.
---------------------------------------------------------------------------
\1\ CREP agreements leverage Federal funding with funding provided
by state and local partners whose primary purpose is to target acres
for enrollment that will address environmental concerns specific to the
state. The outcome is that environmental sensitive lands of special
significance are enrolled in a CREP project area.
Question 3. What percentage of acres enrolled in CRP currently have
an EBI that is low enough that the land could be farmed productively
without significant environmental impact?
Answer. It is likely that much of the land enrolled in CRP can be
farmed productively because most were used for crop production prior to
enrollment; however, whether that land can be farmed without
significant environmental impact in not clear. HEL lands brought back
into production will need a conservation plan (to maintain eligibility
for commodity program payments). Even with a plan, however, many
environmental benefits would be lost including air and water quality,
sediment, carbon sequestration, and wildlife habitat. In addition, as
noted in the response to Question 2, many non-HEL lands are providing
significant environmental benefits, many of which would be lost if
returned to cropping.
In addition to HEL lands enrolled, non-HEL and continuous signup
enrollment currently includes:
2.0 million acres of conservation (streamside) buffers
2.2 million acre of wetland restoration practices
4.2 million acres of Prairie Pothole grass plantings
2.6 million acres in state conservation priority areas
165,000 acres of Longleaf Pine plantings
252,000 acres of volcanic or organic soils highly
susceptible to blowing
934,000 acres of grass plantings in 1930's Dust Bowl
counties
Since 1990, USDA has ranked the quality of general signup offers
using an EBI. Doing so helps USDA achieve environmental benefits in a
cost-effective manner. The EBI is a numeric score resulting from the
summation of five environmental indices \2\ and a cost factor which is
a function of the rental rate requested by the producer. As discussed
in Question 2, the lower the rental rate requested, the higher the cost
factor score. At the time general signup offers were selected, a
determination was made that the land was of sufficient environmental
sensitivity to be enrolled in CRP.
---------------------------------------------------------------------------
\2\ The environmental factors are wildlife, water quality, soil
erosion, air quality benefits, and the likelihood of benefits enduring
after the contract ends.
---------------------------------------------------------------------------
The EBI is used to rank CRP offers and provides a numeric score
that serves as a qualitative measure of environmental benefits relative
to cost. It provides information about whether one offer is likely to
provide more environmental benefits than another. The score provides an
indication of environmental sensitivity; however, it does not address
whether lands could be farmed productively without significant
environmental impact.
CRP is designed as a reserve program to safeguard the nation's
natural resources and is a major contributor to increased wildlife
populations in many parts of the country because enrolled acreage is
planted to resource-conserving vegetative covers. CRP also protects
groundwater and helps improve the condition of lakes, rivers, ponds,
and streams by reducing water runoff and sedimentation. Another benefit
is the protection of millions of acres of topsoil from erosion. In
addition, CRP sequesters more carbon on private lands than any other
federally-administered program.
Secondary objectives include protecting the nations' long-run
capability to produce food and fiber, curbing production of surplus
commodities, and providing income support for farmers. If it is in the
public interest, such as times of emergency, the Secretary may
authorize CRP acreage to be used for the production of agricultural
commodities.
Question 4. Do you think the goals of the Farmable Wetlands Program
(FWP) are consistent with the overall goals of the CRP program? Are the
eligibility criteria for FWP the same as the overall program? Where do
we see the most land being enrolled for FWP?
Answer. FWP is a voluntary program to restore up to one million
acres of farmable wetlands and associated buffers by improving the
land's hydrology and vegetation. Eligible producers in all states may
enroll eligible land in the FWP through the Conservation Reserve
Program (CRP). The majority of the land enrolled in the FWP is located
in Iowa, Minnesota, Mississippi, North Dakota, and South Dakota,
although enrollment is throughout the nation.
FWP is consistent with the overall goals of the CRP to improve the
quality of water, control soil erosion, and enhance wildlife habitat.
CRP wetland restoration practices utilize multiple buffer-to-wetland
ratios and size requirements due to the differing underlying purposes
of the wetland restoration. Buffer-to-wetland ratios and wetland or
tract size requirements differ not only within FWP practices but also
with other CRP wetland restoration practices.
For example, under the CRP Duck Nesting Habitat wetland restoration
practice the buffer-to-wetland ratio is 6:1 with no wetland or tract
size limitations; however, under the FWP Flooded Prairie wetland
restoration practice the buffer-to-wetland ratio is 4:1, and there is a
statutory limitation of 20 acres for the size of the wetland and 40
acres for the size of the tract.
Land eligibility and cropping history requirements are also
different under FWP. Land enrolled under CRP wetland restoration
practices must be cropland with a cropping history of 4 out of the
previous 6 years. For FWP, cropland enrolled has different cropping
history requirements and for certain practices the land may be marginal
pastureland.
Question 5. How much flexibility is allowed for haying and grazing
activities? Could CRP take on some of the same goals as the Grasslands
Reserve Program (GRP)?
Answer. The CRP authorizing legislation generally prohibits any use
of the forage including haying and grazing except for managed
harvesting, haying or grazing or other commercial use in response to a
drought or other emergency, routine grazing, or prescribed grazing for
the control of invasive species. The annual rental payment is reduced
by an amount commensurate with the economic value of the activity which
is generally 25 percent. Any haying or grazing must be conducted with
an appropriate cover management plan. By contrast, the GRP authorizing
legislation generally requires that a rental contract or an easement
permit common grazing practices and haying, mowing or harvesting for
seed production.
For CRP to take on some of the same goals as GRP, certain
provisions of the CRP authorizing legislation would need to be reviewed
including:
Land eligibility,
Permissible activities for haying and grazing of the land
subject to a GRP management plan,
Enrollment terms with longer contracts and/or easements, and
Landlord tenant provisions.
Question 6. How successful has the Transition Incentive Program
(TIP) been under CRP? Is this program being utilized and do you believe
this is a successful approach to getting workable land back into
production?
Answer. The regulation for the Transition Incentives Program (TIP)
was published May 14, 2010. The farm bill authorized $25 million for
TIP through fiscal year 2012.
FSA has implemented this program including a TIP Net website which
provides a web-based tool to connect interested retired or retiring
land owners or operators with interested beginning or socially
disadvantaged farmers or ranchers.
As of July 31, 2011, there are 575 approved TIP contracts with
85,956.6 acres enrolled. Currently, $7,580,705 in CRP annual rental
payments will be issued over the next 2 years for TIP to retired/
retiring farmers or ranchers.
Question 7. How much is being spent on cost-share assistance for
tree thinning activities?
Answer. As of July 7, 2011, FSA had 64 contracts with total
payments of $11,366 for the CRP tree thinning practice.
Question 8. How does the split administration of GRP work, do you
think this is the best way to administer this program?
Answer. National leadership for GRP is provided by the Chief, NRCS,
and the Administrator, FSA, and their designees. Specific agency
responsibilities are detailed in a Memorandum of Understanding.
NRCS and FSA at the national level jointly develop and evaluate
program policy and direction, monitor program implementation, ensure
that GRP information is made available to the public, formulate
budgets, and coordinate national GRP funding allocations to achieve
national program objectives. Obligations are tracked at the national
level to ensure 60 percent of the funding supports easements and 40
percent of the funding supports rental contracts over the life of the
farm bill.
FSA has lead responsibility for rental contract administration and
financial activities. FSA also provides all of the producer eligibility
determinations and implements the rental contract enrollment options.
NRCS has lead responsibility on conservation planning, technical
assistance to owners and operators, and easement administration.
National ranking criteria guide the development of state ranking
criteria to ensure GRP funds are focused on projects that support
grazing operations, protect grassland from conversion to other uses,
enhance plant and animal biodiversity, leverage non-Federal funds and
address that state's program priorities. Priority is given to expiring
Conservation Reserve Program (CRP) grasslands.
While shared administration responsibilities for GRP does create
some challenges, the agencies have worked together to implement this
program as efficiently as possible. The Department is always interested
in exploring more efficient and effective ways to implement our
programs and would welcome the opportunity to work with you and others
to achieve that end.
Question 9. What steps do your respective agencies take to ensure
that conservation practices are truly effective? Can you describe the
process you use, for example, to ensure that measures to prevent
streambank erosion are working?
Answer. We take a number of steps to ensure that conservation
practices are working--from our science-based technical standards and
conservation planning process to oversight for practice installation
and follow-up to validate performance.
The planning process used by USDA is site specific and our
technically trained staff works with the customer to identify
the resource problems and plan the right suite of science-based
practices to fix the problem (in this case it would likely be
our shoreline and streambank protection practice).
Conservation practices are developed by technical experts
and undergo thorough peer and public review before being
finalized and published through a Federal Register notice.
Practices are designed and installed to specifications by
technically qualified professionals (could be NRCS, State
Forester, a third party, or the landowner); where engineering
is involved there are additional review and approval
requirements and authorities.
Once installed, USDA follows up to ensure that the practice
was installed correctly and completely and that it is
performing as expected for the intended purpose and lifespan.
USDA implements a number of conservation practices that reduce
streambank erosion and modify the vegetation and hydrology to enhance
streambank stability. There are numerous examples and case studies that
demonstrate that conservation practices and systems can improve
streambank stability and improve water quality. A recent example is
Peacheater Creek-Northeast Oklahoma. The area is characterized by
poultry and cattle production and the downstream Illinois River and
Lake Tenkiller had been placed on the 303(d) list for elevated
phosphorus levels. Riparian area protection along with in-field
conservation practices and farmstead improvements were applied.
Measured decreases in streambank erosion were among the results, which
also included reductions in phosphorus and nutrient loading and
improved fish communities.
In addition to the technical requirements to ensure conservation
practice integrity, USDA collects natural resource trend data and
conducts short- and long-term analyses of the conservation benefits of
USDA conservation practices. The National Resources Inventory (NRI),
for example, provides statistically sound data on natural resource
status and trends on non-Federal lands, including trends in soil
erosion, land use change, and wetlands, among others.
USDA's Conservation Effects Assessment Project (CEAP) is a multi-
agency effort to quantify the environmental effects of conservation
practices and programs and develop the science base for managing the
agricultural landscape for environmental quality. CEAP literature
reviews and assessments document the effects of conservation practices
and related environmental benefits.
Monitoring and evaluation of conservation practice effectiveness in
all 43 CREP Projects also document the effectiveness of conservation
practices applied and the public the societal benefits. Another data
set developed in partnership with the U.S. Geological Survey has
quantified the benefits of conservation plantings and habitat
development to many grassland and waterfowl species in over 12 Great
Plain States.
Response from Dave White, Chief, Natural Resources Conservation
Services, U.S. Department of Agriculture
Questions Submitted By Hon. Frank D. Lucas, a Representative in
Congress from Oklahoma
Question 1. We have three different easement programs, two without
a baseline going into the new farm bill. Can you help me understand the
differences between the three and is it possible to look at ways of
combining any of them? Can consolidation be beneficial for program
delivery?
Answer. NRCS administers three easement programs under Title XII of
the Food Security Act of 1985, as amended, which include the Farm and
Ranch Lands Protection Program (FRPP), the Wetlands Reserve Program
(WRP), and the Grasslands Reserve Program (GRP). NRCS categorizes GRP
and FRPP as ``working lands'' programs and the WRP as an
``environmental restoration and protection'' program.
FRPP is used to assist eligible entities to purchase
conservation easements that prevent conversion of agricultural
land to non-agricultural uses. Easements are held by the entity
and USDA has a ``right of enforcement'' should the entity be
unable to fulfill its responsibilities associated with
enforcing the terms of the easement.
GRP is used to assist to landowners and operators to protect
grazing uses and conservation values by conserving and
restoring grassland resources on eligible private lands through
rental contracts, easements, and restoration cost-share
agreements. GRP prohibits non-agriculture uses of the enrolled
land and the conversion of grazing lands or grassland to
cropland. The U.S. Government holds the GRP easements but GRP
also offers an option where an eligible entity can either
assume title to the GRP easement or receive financial
assistance toward the purchase an easement under an arrangement
similar to FRPP.
WRP is used to restore, protect, and enhance wetlands and
associated habitats on eligible farmlands through easements
(permanent and 30 year), 30 year contracts with Tribes, and
restoration cost-share agreements. Compatible uses, such as
haying and grazing, may be permitted if they further the
purposes of the easement. For example, grazing may be
authorized if it was a natural part of the ecosystem or is
necessary to control invasive species. The United States
Government holds the WRP easements.
NRCS welcomes the opportunity to work with you in exploring
opportunities to consolidate programs to achieve efficiencies, while
preserving the natural resource conservation objectives that these
programs were designed to achieve.
Question 2. Could you tell us to your best of your ability what
percentage of time and funds are used simply on program administration
and do you think Congress could help the Department out on the
administrative side of things by combining like programs?
Answer. While the administrative tasks associated with the farm
bill conservation programs represent a marginal workload for our field
and state offices, these tasks are inextricably linked with the
successful delivery of these programs. Examples of the program
administration tasks include establishing a case file, developing
participant notifications and issuing correspondence, managing
contracts and agreements, and performing effective oversight of
contracts with producers. For customer service and program delivery to
be most successful, the technical aspects of program delivery must be
interconnected and coordinated with the administrative activities.
Recognizing the need to reduce the amount of staff time expended in
performing administrative tasks and the need to strengthen program
coordination, NRCS is implementing a Conservation Delivery Streamlining
Initiative to more cost-effectively deliver our programs and increase
the time our field staff has to work with farmers and ranchers. The
agency is also identifying opportunities to realign workload and
structure to increase the proportion of our staff that is in direct
field service delivery.
Question 3. What unique purpose does the Agricultural Management
Assistance Program (AMA) program serve and does it share any goals/
purposes with other programs? What assistance does the AMA provide to
producers that other conservation programs do not?
Answer. AMA provides assistance to agricultural producers to manage
risk and voluntarily address issues such as water management, water
quality, and erosion control by incorporating conservation practices
into their farming operation. Many of these practices are also
available through the Environmental Quality Incentives Program (EQIP).
Even so, AMA provides assistance to producers who have small-acreage or
specialty-crop farming operations that do not meet the land eligibility
guidelines for participation in other programs. For example, AMA
provides cost-share assistance for irrigation-related practices that
may be implemented on land that does not have an irrigation history,
whereas EQIP will only provide assistance for irrigation-related
practices on land that has an irrigation history. By helping to
mitigate the risks associated with these kinds of agricultural
enterprises, AMA helps agriculture remain a valuable segment of local
economies.
Question 4. What programs have wildlife components and what makes
the WHIP program different than these other programs? Are there ways to
incorporate those differences into the other programs currently
authorized to build on wildlife habitat success?
Answer. While many programs have wildlife components, the Wildlife
Habitat Incentive Program (WHIP) is the only conservation program that
focuses solely on wildlife habitat on private agricultural,
nonindustrial private forest, and tribal lands. WHIP is also the only
conservation program that addresses a wide range of aquatic wildlife
habitat resource concerns. WHIP is directed by statute to prioritize
projects that would address issues raised by state, regional, and
national conservation initiatives, such as State Wildlife Action Plans
or similar wildlife-oriented initiatives. While less direct than WHIP's
authority, the following conservation programs also have wildlife
components or contribute to wildlife-related resource concerns:
The Environmental Quality Incentives Program (EQIP). EQIP
participants may adopt practices for the benefit of fish and
wildlife-related resource concerns on working agricultural
lands. While EQIP eligibility requires lands to be in
agricultural use, WHIP focuses on habitat development. Although
projects on publicly owned land are not eligible for WHIP,
under certain conditions, such projects may be eligible for
EQIP. WHIP has a $50,000 annual payment limitation while EQIP
has a $300,000 contract and payment limitation.
The Conservation Stewardship Program (CSP). CSP offers 31
enhancements that benefit wildlife to provide improvements to
cover, food, habitat connectivity and access to water for
terrestrial and aquatic wildlife including rare and declining
habitats. In comparison, WHIP provides basic self-sustaining
prioritized habitats by the implementation of various
conservation practices. After the implementation of a complete
WHIP conservation plan the land is then eligible to participate
in CSP to further enhance the land for wildlife. CSP would have
to add the component of first developing the land for fish and
wildlife habitat and then enhance the lands.
The Wetlands Reserve Program (WRP). WRP provides for long-
term restoration and protection of valuable wetland and
associated upland habitat through permanent and 30 year
easements, 30 year contracts, and restoration cost-share
agreements. However, WHIP land eligibility is much broader than
WRP providing for habitat development benefiting species beyond
those associated with wetland habitats. While WHIP allows for
contract periods of up to 15 years for certain projects, it
does not provide an easement option and only provides cost-
share assistance.
The Healthy Forest Reserve Program (HFRP). HFRP provides for
long-term protection and restoration of forestland habitat
resources through permanent and 30 year easements, 30 year
contracts, and restoration agreements in order to benefit
species with special status such as those listed as threatened
or endangered under the Endangered Species Act (ESA), proposed
or candidate species for ESA listing, or species of special
concern within the state. HFRP is primarily confined to the
restoration and protection of forest land resources while WHIP
eligibility is much broader, providing for habitat development
benefiting species beyond those associated with forestland
habitats. Unlike the various HFRP enrollment options, WHIP can
only provide long term cost-share contracts.
The Grassland Reserve Program (GRP). GRP provides for long-
term protection of grazing uses and related conservation values
through conservation easements, rental contracts, and
restoration agreements. GRP emphasizes support for working
grazing operations, enhancement of plant and animal
biodiversity, and protection of grassland under threat of
conversion to other uses. WHIP eligibility is much broader and
provides for habitat development benefiting species beyond
those associated with grassland habitats. While WHIP provides
for long-term contracts (15 years), it does not contain rental
agreement or easement enrollment options.
The Conservation Reserve Program (CRP). Under CRP, FSA
enters into contracts with agricultural producers to retire
highly erodible and other environmentally sensitive land.
During the 10 to 15 year contract period, eligible land is
converted to grass, trees, wildlife cover, or other
conservation uses to improve soil, air, and water quality and
improve wildlife habitat. Participants receive annual rental
payments and half the cost of establishing conservation covers
CRP enrolls land to create wildlife habitat. All of the lands
eligible for CRP could be enrolled in WHIP if they fall within
the WHIP priority areas but not all lands eligible for WHIP
could be enrolled in CRP. While WHIP allows for contract
periods of up to 15 years for certain projects, it does not
provide a rental contract option and only provides cost-share
assistance.
USDA welcomes the opportunity to work with the Committee in
evaluating opportunities to incorporate the unique elements of WHIP
into other programs that have wildlife components, while preserving the
natural resource conservation objectives that those programs are
designed to achieve. Features of WHIP that are lacking in other
programs include: broader land use eligibility; emphasis on wildlife
habitat development; ability to undertake aquatic-related habitat
measures; and priority for projects that support state, regional, and
national initiatives.
Question 5. EQIP funding has grown exponentially over the last 10
years, can you talk about the backlog and do you think the Department
is able to effectively manage the program as the funding has increased?
Answer. The farm bill increased funding for EQIP by 337 percent
from its authorized level of $400 million in 2002 to $1.75 billion
authorized for 2012. With this increased level of funding, program
participation also increased dramatically. In FY 2002, producers
enrolled 19,682 EQIP contracts at an average contract value of $15,700.
In FY 2010, we added 36,499 new EQIP contracts at an average contract
value of $23,000, resulting in about 150,000 active EQIP contracts.
Despite the increase in participation, demand for program assistance
remains high. The number of unfunded applications for EQIP at the end
of FY 2010 was 7,777.
While farm bill program participation has increased significantly,
the number of staff years available to support these programs has not
followed suit. Since FY 2002, the amount of financial assistance
administered by NRCS has increased by 390 percent across all programs
while the staff years available to deliver this assistance increased by
10 percent (see following chart).
The increase in program delivery workload for the field office has
created challenges. We recognize that in order to deliver conservation
services NRCS needs to have adequate ``boots on the ground'' and we are
taking aggressive steps to address the increased program workload.
These steps include:
Making improvements to the farm bill technical service
provider (TSP) provision that will increase the number of
technical experts available to assist producers with their
conservation planning and implementation.
Implementing a Conservation Delivery Streamlining Initiative
(CDSI) that will reduce the number of administrative tasks
performed by field staff and allow them to be working in the
field up to 75 percent of the time, and
Initiating a process to increase the proportion of agency
technical staff in direct field service delivery positions.
Change in Program Funding and Staff Years Since 2002
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Question 6. What percentage of EQIP funding is carved-out by set
asides or subprograms?
Answer. The 2008 Farm Bill requires the following funding set
asides for the Environmental Quality Incentives Program for each of
fiscal years 2009 through 2012:
Socially Disadvantaged Farmers and Ranchers--5 percent
Beginning Farmer and Ranchers--5 percent
Cooperative Conservation Partnership Initiative--6 percent
Air Quality--$37.5 million
Organic--Payments are authorized to assist organic or
transition to organic production, but there is no specified
minimum. The NRCS Chief has set aside $50,000,000 annually.
Conservation Innovation Grants--Competitive grants are
authorized to stimulate innovative approaches to leveraging the
Federal investment in environmental enhancement in concert with
agriculture, but there is no specified amount. Since 2008, NRCS
has set aside between $20 and $30 million annually for national
CIG awards.
Livestock--60 percent of EQIP must be obligated to practices
related to livestock production.
Question 7. I am concerned that while EQIP receives fewer funds
than authorized every year, these subprograms do not receive the same
cuts. Can you explain if these cuts to mandatory spending have any
further impact on subprograms?
Answer. Where the subprograms are provided a percentage of the
available funds, they receive proportionally the same reductions as the
overall program. For subprograms where the statute requires a specific
amount of funding, such as the $37.5 million set aside for air quality
(1240H(b)), an overall reduction in EQIP funding is absorbed by the
general program and may potentially impact other EQIP priorities. For
subprograms that are authorized, but no specific funding is set aside,
such as for the organic initiative, NRCS has discretionary authority to
adjust the amount of funding as appropriate, so as to avoid adverse
impacts to other EQIP program priorities.
Question 8. The 2008 Farm Bill included ``bidding down'' language
like that in the EQIP program which states: ``If the Secretary
determines that the environmental values of two or more applications
for payments are comparable, the Secretary shall NOT assign a higher
priority to the application only because it would present the least
cost to the program.'' Does this seem like language that makes sense in
this fiscal environment?
Answer. The ``bidding down'' language was incorporated in the 2002
Farm Bill to address concerns from agricultural stakeholders that
wealthier landowners whose main income was from non-agricultural
sources were out-competing farmers and ranchers for conservation
program contracts because they could afford to take less Federal cost-
share for the installation of practices. As a result, farmers and
ranchers had a harder time successfully getting in to EQIP.
NRCS implements this provision in a manner that ensures
applications are evaluated and prioritized on the least-cost
alternative to achieve the highest environmental benefits and thus NRCS
is able to make cost-effective project selections. The ``bidding down''
requirement allows EQIP to select projects that achieve the highest
environmental benefit and treat all applicants in a fair and equitable
manner regardless of their financial status.
Question 9. How much money has come out of EQIP to fund the CCPI
program?
Answer. As directed by the 2008 Farm Bill, no more than six percent
of the funds made available for the Environmental Quality Incentives
Program (EQIP) are used for the Cooperative Conservation Partnership
Initiative (CCPI). EQIP funds made available through CCPI go to
producers participating in the project, delivered in accordance with
the EQIP authorities. The following amounts were obligated in contracts
with producers participating in CCPI projects in:
FY 2010: $70,800,000
FY 2011: $74,280,000 (estimated)
Question 10. How has the Department used the EQIP program in
regards to organics and do you think the money used for that purpose is
an effective use of conservation dollars. What are the comparative
environmental benefits?
Answer. The 2008 Farm Bill included a provision within EQIP
intended to assist organic producers as well as producers in the
process of transitioning to organic production. In FY 2010, NRCS
obligated $24 million in contracts with producers to treat 148,000
acres in organic production or in transition to organic production.
The most commonly used practices included:
Nutrient Management
Cover Crop
Pest Management
Conservation Crop Rotation
Prescribed Grazing
Seasonal High Tunnel (interim conservation practice)
Assisting organic producers and those in the transition to organic
farming with conservation practices furthers EQIP purposes with this
new and growing segment of the agricultural sector. While many
observers interpret organic production alone to be the most sustainable
form of farming, NRCS has found that there are many conservation needs
in the organic sector. Helping these operators to integrate
conservation approaches in their production system ensures that
critical environmental benefits are realized by helping organic growers
remain economically viable so that they may sustain the natural
physical, biological, and chemical properties of the soil and other
natural resources, which is vital to organic production.
Question 11. Congress created the Conservation Security Program
(CSP) in the 2002 Farm Bill. This program was then replaced with the
Conservation Stewardship Program in the 2008 Farm Bill. Can you discuss
the changes that were made to the new CSP?
Answer. The Conservation Stewardship Program reflects many changes
from its predecessor, the Conservation Security Program. Overall the
changes made the program more accessible and accountable and include:
Providing continuous nationwide enrollment.
Establishing an enrollment cap of 12.769 million acres each
fiscal year at an average cost of $18/acre/year.
Making nonindustrial private forestland (NIPF) eligible for
enrollment while establishing a limit of 10 percent of total
acres per year.
Ensuring that a minimum of 5 percent of acres are dedicated
to assist Beginning Farmers or Ranchers and a minimum 5 percent
of acres are dedicated to assist Socially Disadvantaged Farmers
or Ranchers.
Requiring contract offers to include all eligible land under
the effective control of the producer.
Limiting the contract length to 5 years with an opportunity
for one renewal for a 5 year term.
Allowing producers to initiate organic certification during
the contract period.
Allowing for annual and supplemental payments.
Limiting each person or legal entity to $40,000 per year.
Contract limitations for formal joint operations are $400,000
for the contract period and from $40,000 to $80,000 per year.
Question 12. A major issue with CSP was paying farmers for the
status quo? How much more environmental benefit have we seen from the
implementation of the new CSP program? What does the new CSP program
offer that other working lands programs cannot provide?
Answer. The Conservation Stewardship Program (CSP) is resulting in
agricultural producers applying thousands of additional conservation
activities on enrolled lands in conjunction with maintaining existing
stewardship levels, generating sizable environmental benefits to the
public. For example, under the 20,567 contracts enrolled during FY
2010, participants will apply and maintain an additional 78,947
conservation activities--an average of 3.8 additional activities per
contract over all land uses in the contract. Additionally, CSP requires
a participant to apply at least one additional activity for each land
use, such as cropland and pasture, in order to be eligible to receive
payment for the enrollment of that particular land use. An individual
contract often has more than one land use, and thus an average of 2.8
additional activities will be applied per land use across all land
uses.
The purpose of other programs is to meet conservation standards
while CSP focuses on achieving an additional, higher level of
management. This higher level of conservation management is achieved
through a comprehensive approach to working lands conservation where
all of a participant's eligible land must be enrolled. Of the enrolled
land, CSP encourages the participant to implement additional
conservation activities while maintaining existing conservation
activities.
Question 13. What is the Administration's position on the situation
with WRP having no baseline and what priority does the Administration
put on the continuation of the program. Where should Congress look to
fund this program?
Answer. Demand for WRP continues to be high and WRP has proven
itself to be a valuable program for meeting the nation's objectives
related to protecting and restoring wetlands on private lands. Over the
last 20 years, more than 11,000 private landowners have voluntarily
enrolled in WRP to restore, protect and enhance wetlands and wildlife
habitat on over 2.3 million acres nationwide. Through WRP, NRCS,
landowners, and many partners work together to achieve long-term
benefits on a landscape scale that will ensure our wetland resources
are available for future generations.
NRCS welcomes the opportunity to work with the Committee in
exploring opportunities to achieve efficiencies that would allow
funding of WRP while preserving the full array of natural resource
conservation objectives that the broader suite of conservation programs
are intended to achieve.
Question 14. In terms of environmental benefits, do you see working
lands or easement programs providing the biggest bang for the buck?
Answer. Both program approaches deliver their intended
environmental benefits. With a variety of program approaches, it is
possible for participants to find a conservation path that fits their
personal economic situation and environmental objectives. Working land
programs offer a valuable tool for assisting producers to address
natural resource concerns that affect the viability and productivity of
their operations. For example, working lands programs can provide
technical and financial assistance needed to help producers meet or
eliminate the need for regulatory requirements on their operations.
These investments--voluntarily shared by the program participant--also
provide a public benefit such as better water, air, or habitat quality.
Some working lands programs, such as the Grasslands Reserve Program or
Farm and Ranch Lands Protection Program, offer easements, but ensure
that enrolled lands will remain in agricultural uses over the long
term--retaining important agricultural lands is a critical component
for ensuring food security for the nation.
Other easement programs emphasize the retirement of sensitive or
environmentally significant lands. These conservation easements
recognize the rights reserved to private landowners, compensate these
landowners for the rights they voluntarily forego, and create valuable
enduring environmental benefits for society. For example, establishing
easements that protect and improve essential habitat can help to
prevent a candidate species, like the sage-grouse, from being listed.
These protections need to be in place for the long-term which an
easement program can provide.
Program approaches also can be used in tandem. For example, land
retirement easements and working lands programs are valuable tools for
addressing hypoxia in the Gulf of Mexico. Working lands programs can
help producers improve nutrient management and reduce potential losses
of nutrients into the riverine system, while land retirement easement
programs can restore and protect wetlands and floodplain areas in
strategic areas that best trap the nutrients that have left the farm
prior to reaching the Gulf. Using program approaches together can
achieve the landscape-scale transformation needed to address larger
conservation challenges such as hypoxia or candidate species
protection.
Question 15. Do you think the benefit outweighs the cost to the
Federal Government when acquiring permanent easements on lands at huge
costs during this fiscal environment?
Answer. Conservation easements provide significant and enduring
benefits. These benefits are increased by ensuring that project
location and purpose are part of the selection process. NRCS ranks and
selects projects based upon several resource concern factors that
consider the resource potential of the site itself and its location in
the watershed. These factors are key to identifying valuable
opportunities as the quality of any easement project will depend on its
location as well as its intrinsic attributes.
While initial easement acquisition costs may appear high, they
should be considered in the context of the enduring public benefits.
For example, based on the Benefit Cost Analysis for WRP, the estimated
value of benefits per acre of permanent wetland was $10,935 and the
estimated cost was $3,000. This means that the program has a cost
benefit ratio of 3.6. This indicates that the value of estimated
benefits from wetlands is considerable.
Easements may also provide benefits through avoided costs. For
example, for frequently flooded lands where producers routinely lose
crops, the producer typically receives crop insurance or disaster
payments. Retiring these lands through floodplain easements eliminates
the insurance and disaster payments, reduces overall damages downsteam
from flooding; and improves water quality.
Question 16. Do the carve-outs in the law for certain groups get
fully used or do you often have to roll those funds back in?
Answer. The set asides for socially disadvantaged and beginning
farmers and ranchers, as authorized under the 2008 Farm Bill for the
Environmental Quality Incentives Program (EQIP) and the Conservation
Stewardship Program (CSP), are fully used. Each year we have exceeded
the funding target goals. In 2010, the funding for these certain groups
was:
EQIP--$57,736,481 or 6.9 percent of total funds obligated in
2,109 contracts for socially disadvantaged farmers and ranchers
EQIP--$ 134,944,240 or 16 percent of total funds obligated
in 5,450 contracts for beginning farmers and ranchers
CSP--1,695,890 acres or 6.7 percent of acres in 378
contracts for socially disadvantaged farmers and ranchers.
CSP--1,038,269 acres or 4.1 percent of acres in 1,496
contracts for beginning farmers and ranchers
Question 17. How does regional equity affect the way you run the
conservation programs and are they a hindrance to getting money to the
places that need it the most?
Answer. Regional equity ensures that each state receives an the
opportunity for a minimum level of $15 million in aggregate funding
under subtitle D programs, excluding the Conservation Reserve Program,
Wetlands Reserve Program, and Conservation Security Program. The intent
is to ensure that states are able to meet producers' needs and address
priority natural resource concerns. The provision allows that funds not
obligated in contracts by April 1st of each year may be recalled by the
Chief to meet demand in other states. While ensuring that a minimum
level of funding is provided to all states is an important
consideration, the establishment of a fixed level may create disharmony
should overall program funding be reduced. Establishing a proportion of
funding rather than a fixed number could create a more balanced
approach to ensuring that all states receive the mandatory resources
needed to achieve conservation objectives.
Question 18. What is the Administration's opinion on priority areas
and do you think they match with the priorities of the Administration?
Do you feel that funds go to these priority areas solely because of
their inclusion in the law?
Answer. Focusing scarce resources on priority issues is an
effective method for accelerating progress. NRCS' Conservation Effects
Assessment Project (CEAP) reports have documented that risks to natural
resource quality may be concentrated in specific areas and treating
those can generate disproportionate benefits. The 2008 Farm Bill
identified a number of priorities:
geographically based (e.g., Agriculture Water Enhancement
Program's (AWEP) Eastern Snake Plain Aquifer, Puget Sound,
Ogallala Aquifer, Sacramento River watershed, Upper Mississippi
River Basin, Red River of the North Basin, and the Everglades;
Chesapeake Bay Watershed Program; and Conservation Reserve
Program priority areas);
production-oriented (EQIP and CSP organic initiatives);
producer-focused (Conservation Access for beginning and
socially disadvantaged producers); and
resource-specific (EQIP air quality initiative, AWEP's water
quality and quantity focus).
These farm bill priorities align well with Administration
priorities for conservation and strengthening rural America. For
example:
The emphasis on serving historically underserved communities
mirrors USDA's Strike Force initiative;
the Administration's Chesapeake Bay Executive Order further
emphasizes the priorities outlined in the Chesapeake Bay
Watershed Program;
USDA's focus on strengthening rural economies is supported
by priorities for assisting beginning farmers and ranchers in
their conservation needs.
While funds go to these farm bill priorities because of statutory
direction, they are nonetheless areas of considerable conservation need
and deserving of conservation funding irrespective of their
establishment as priority areas within the statute.
Question 19. How does the split administration of GRP work, do you
think this is the best way to administer this program?
Answer. National leadership for GRP is provided by the Chief, NRCS,
and the Administrator, FSA, and their designees. Specific agency
responsibilities are detailed in a Memorandum of Understanding.
NRCS and FSA at the national level jointly develop and evaluate
program policy and direction, monitor program implementation, ensure
that GRP information is made available to the public, formulate
budgets, and coordinate national GRP funding allocations to achieve
national program objectives. Obligations are tracked at the national
level to ensure 60 percent of the funding supports easements and 40
percent of the funding supports rental contracts over the life of the
farm bill.
FSA has lead responsibility for rental contract administration and
financial activities. FSA also provides all of the producer eligibility
determinations and implements the rental contract enrollment options.
NRCS has lead responsibility on conservation planning, technical
assistance to owners and operators, and easement administration.
National ranking criteria guide the development of state ranking
criteria to ensure GRP funds are focused on projects that support
grazing operations, protect grassland from conversion to other uses,
enhance plant and animal biodiversity, leverage non-Federal funds and
address that state's program priorities. Priority is given to expiring
Conservation Reserve Program (CRP) grasslands.
While shared administration responsibilities for GRP does create
some challenges, the agencies have worked together to implement this
program as efficiently as possible. The Department is always interested
in exploring more efficient and effective ways to implement our
programs and would welcome the opportunity to work with you and others
to achieve that end.
Question 20. What steps do your respective agencies take to ensure
that conservation practices are truly effective? Can you describe the
process you use, for example, to ensure that measures to prevent
streambank erosion are working?
Answer. We take a number of steps to ensure that conservation
practices are working--from our science-based technical standards and
conservation planning process to oversight for practice installation
and follow-up to validate performance.
The planning process used by USDA is site specific and our
technically trained staff works with the customer to identify
the resource problems and plan the right suite of science-based
practices to fix the problem (in this case it would likely be
our shoreline and streambank protection practice.
Conservation practices are developed by technical experts
and undergo thorough peer and public review before being
finalized and published through a Federal Register notice.
Practices are designed and installed to specifications by
technically qualified professionals (could be NRCS, State
Forester, a third party, or the landowner); where engineering
is involved there are additional review and approval
requirements and authorities.
Once installed, USDA follows up to ensure that the practice
was installed correctly and completely and that it is
performing as expected for the intended purpose and lifespan.
USDA implements a number of conservation practices that reduce
streambank erosion and modify the vegetation and hydrology to enhance
streambank stability. There are numerous examples and case studies that
demonstrate that conservation practices and systems can improve
streambank stability and improve water quality. A recent example is
Peacheater Creek-Northeast Oklahoma. The area is characterized by
poultry and cattle production and the downstream Illinois River and
Lake Tenkiller had been placed on the 303(d) list for elevated
phosphorus levels. Riparian area protection along with in-field
conservation practices and farmstead improvements were applied.
Measured decreases in streambank erosion were among the results, which
also included reductions in phosphorus and nutrient loading and
improved fish communities.
In addition to the technical requirements to ensure conservation
practice integrity, USDA collects natural resource trend data and
conducts short- and long-term analyses of the conservation benefits of
USDA conservation practices. The National Resources Inventory (NRI),
for example, provides statistically sound data on natural resource
status and trends on non-Federal lands, including trends in soil
erosion, land use change, and wetlands, among others.
USDA's Conservation Effects Assessment Project (CEAP) is a multi-
agency effort to quantify the environmental effects of conservation
practices and programs and develop the science base for managing the
agricultural landscape for environmental quality. CEAP literature
reviews and assessments document the effects of conservation practices
and related environmental benefits.
Monitoring and evaluation of conservation practice effectiveness in
all 43 Conservation Reserve Enhancement Program (CREP) Projects also
document the effectiveness of conservation practices applied and the
public the societal benefits. Another data set developed in partnership
with the U.S. Geological Survey has quantified the benefits of
conservation plantings and habitat development to many grassland and
waterfowl species in over 12 Great Plain States.
Questions Submitted By Hon. Martha Roby, a Representative in Congress
from Alabama
Question 1. Representative Terry Everett, who held my seat from
1993-2009 and during his tenure on this Committee, was very active in
regards to irrigation. During the last farm bill, Representative
Everett worked tirelessly in the creation of the Agricultural Water
Enhancement Program under EQIP. This program has provided technical and
financial assistance for agricultural water enhancement activities on
farms. In particular, on-site off-stream reservoir was an initiative
that many of our farmers were excited about participating in when it
was passed into law.
Unfortunately, the implementation of the program has been difficult
to access in Alabama due to the requirement that the pond should be on
high ground which much of our farm land is flat.
Additionally, Alabama has had difficulty in accessing USDA's
irrigation programs due to the traditional lack of historical
irrigation. Many of our farmers do not own the land that they are
farming and therefore it is not cost-effective to build irrigation
system. In a recent survey conducted by a team of Alabama Agricultural
Experiment Station researchers at Auburn University, six out of ten
farmers without irrigation in the state said they would be more likely
to install or improve irrigation systems if a cost-share or subsidized
loan program were available.
What can we do to improve EQIP to ensure that farmers are able to
find assistance in irrigation?
Answer. The agency has authority through EQIP and AWEP to provide
financial and technical assistance to producers for improvements to
existing irrigation systems that address water conservation or water
quality resource issues. Such assistance may include development of
irrigation storage reservoirs, ponds, and in-ground dugouts for new
sources of water. Although water storage facilities on high ground are
more ideal as these practices allow for use of less expensive efficient
gravity flow irrigation, this is not the only alternative that may be
available. For locations with relatively flat topography, EQIP and AWEP
can be used to install water storage facilities along with pumping
systems to transport the water to area for application of irrigation
water. Under AWEP, the 2008 Farm Bill encourages development of
irrigation storage facilities for areas experiencing drought in
accordance with applicable EQIP program rules and on eligible on-farm
agricultural land. This includes assistance to establish on-farm
irrigation storage practices, which may be off-stream, but still on
eligible land that is either owned or under the control of the
producer.
According to the statute, financial assistance through EQIP and
AWEP many only be provided to achieve a measurable water conservation
or water quality environmental benefit. Correspondingly, there is a
requirement that EQIP and AWEP program applicants demonstrate
irrigation history on cropland as a condition for approval of
irrigation system improvements. This standard is in place to help meet
the statutory requirement to validate a resulting environmental
benefit. Demonstration of irrigation history, however, is not limited
to evidence of in-field irrigation equipment. Producers that may be
using other, transportable means to irrigate may document those methods
as evidence of irrigation history.
Question 2. As a report that the American Forest Foundation
recently produced highlights, Alabama is spending quite a bit of its
EQIP funds, roughly 17% and about 33% of WHIP funds on family forest--
this is great, given how heavily forested my state is and given many of
the forest health and fire challenges we are dealing with. What do you
think is the reason for my state's focus on forests, as compared with
other states, that average about 4% spending on forests?
Answer. The focus of program assistance on forest related issues in
your state is reflective of the locally-led process where conservation
partners and producers provide recommendations to the agency for the
kind and scope of assistance needed. Through local work groups and
State Technical Committee's, the State Conservationist is provided
latitude to focus program assistance to identified priority natural
resource concerns. This flexibility allows each State Conservationist
to prioritize funding on those geographic locations which have
significant need for assistance to address resource concerns.
______
House Committee on Agriculture Farm Bill Audit Questionnaire
1. Program Name
Conservation Reserve Program (CRP).
Prepared by the U.S. Department of Agriculture's (USDA) Farm
Service Agency (FSA).
2. Subprograms/Department Initiatives
FSA enters into contracts with agricultural producers to retire
highly erodible and other environmentally sensitive land. During the 10
to 15 year contract period, eligible land is converted to grass, trees,
wildlife cover, or other conservation uses to improve soil, air, and
water quality and improve wildlife habitat. The program was initially
authorized by the 1985 Farm Bill and amended by every subsequent farm
bill.
FSA is responsible for overall implementation and has entered into
agreements for technical assistance with the Natural Resources
Conservation Service (NRCS), the Forest Service acting on behalf of
State Foresters, and other technical service providers. Participants
receive annual rental payments and half the cost of establishing
conservation covers.
Since the 1985 Farm Bill, CRP has evolved from a program with a
commodity supply control component to a conservation program that has
increasingly focused or targeted limited program resources.
General Signup
Producers may offer land for CRP general sign-up enrollment during
designated signup periods and all offers compete and are ranked against
all other offers nationwide using an Environmental Benefit Index (EBI)
which is used to rank offers based on a number of environmental factors
and cost.
Continuous Signup
Continuous signup targets environmentally-desirable land which
could be devoted to conservation practices such as filter strips, grass
waterways, and other practices that protect larger acreages. Offers may
be made at any time.
Conservation Reserve Enhancement Program (CREP)
CREP is a state and Federal partnership to address environmental
issues of importance to the state and nation. CREP combines state and
Federal dollars with funding from nongovernment sources and provides a
framework for USDA to work closely with state, tribal, and local
governments to address specific environmental issues and goals.
Farmable Wetlands Program (FWP)
FWP is designed to restore up to one million acres of farmable
wetlands and associated buffers by improving the land's hydrology and
vegetation. This includes constructed wetlands developed to receive
flow for row-crop agriculture drainage systems for the purpose of
providing nitrogen removal; land that was devoted to commercial pond-
raised aquaculture; and cropland that was subject to the natural
overflow of a prairie wetland.
Transition Incentive Program (TIP)
TIP is designed to facilitate the transition of expiring CRP land
from a retired or retiring owner or operator to a beginning or socially
disadvantaged farmer or rancher to return the land to production for
sustainable grazing or crop production. TIP provides annual rental
payments for up to 2 additional years after the expiration of the CRP
contract to facilitate this transition.
Emergency Forestry Conservation Reserve Program (EFCRP)
EFCRP was designed to help restore and enhance forest resources
that were damaged by the 2005 hurricanes. By planting trees, such as
longleaf pine and bottomland hardwoods, landowners and operators could
enhance wildlife habitat and improve the ability of at-risk land to
withstand future storms. Enrollment for EFCRP ended in January 2009.
Wetland Restoration Floodplain Initiative
This initiative was designed to restore the functions and values of
wetland ecosystems that have been devoted to agricultural use. This
500,000 acre initiative enrolls wetlands and buffers within a 100 year
floodplain. These wetlands prevent degradation of the wetland area,
increase sediment trapping efficiencies, improve water quality, prevent
erosion and provide vital habitat for waterfowl and other wildlife.
Wetland Restoration Non-Floodplain Initiative
This initiative restores wetlands and playa lakes, which are
shallow, depressional wetlands that are located outside a 100 year
floodplain. This 250,000 acre initiative provides vital habitat for
many wildlife species, filters runoff, recharges groundwater supplies
and sequesters carbon.
Bottomland Hardwood Initiative
This initiative is designed to restore flood plains through the
restoration of primarily bottomland hardwoods. This 250,000 acre
initiative improves air and water quality and provides carbon
sequestration benefits through reduction of greenhouse gases as well as
increasing wildlife habitat.
Quail Initiative
This 350,000 acre initiative is designed to create habitat for the
northern bobwhite quail and other grassland dependent birds. Bobwhite
populations have declined with their habitat disappearing due to
urbanization, increased grassland cultivation, and succession. This
initiative provides successional grass buffers along agricultural field
borders.
Longleaf Pine Initiative
This 250,000 acre initiative is designed to restore and re-
establish longleaf pine stands that benefit wildlife species and
protect water quality.
Duck Nesting Habitat Initiative
This 150,000 acre initiative is designed to restore wetlands
located outside the 100 year floodplain in Iowa, Minnesota, Montana,
North Dakota, and South Dakota. Restoring these wetlands will provide
nesting ducks with critical habitat, nesting cover, security from
predators, and food.
State Acres for Wildlife Enhancement Initiative (SAFE)
SAFE is an 850,000 acre initiative designed to target high priority
state and regional wildlife objectives. SAFE provides the flexibility
to meet the specific needs of high-value wildlife species in a
participating state or region by targeting the restoration of vital
habitat.
3. Brief History
Title XII of the Food Security Act of 1985, as amended (1985 Farm
Bill), authorized CRP to enroll 40 to 45 million acres by 1990 with a
primary goal of reducing soil erosion on highly erodible cropland.
Secondary objectives included protecting the nation's long-run
capability to produce food and fiber, reducing sedimentation, improving
water quality, fostering wildlife habitat, curbing production of
surplus commodities, and providing income support for farmers.
The Food, Agriculture, Conservation, and Trade Act of 1990 (1990
Farm Bill) extended CRP through 1995 and expanded the types of land
eligible for enrollment to include lands that could reduce on-site or
off-site threats to water quality if removed from production. Following
1990 Farm Bill enactment, FSA adopted new rental rates based on soil-
specific productivity and developed an EBI to rank offers.
The Federal Agriculture Improvement and Reform Act of 1996 (1996
Farm Bill) re-authorized CRP enrollment through 2002 and set a maximum
enrollment of 36.4 million acres. After 1996 Farm Bill enactment, FSA
modified the EBI to include a wildlife benefits component. To better
target the program, FSA began enrollment of selected practices such as
filter strips and riparian buffers on a continuous basis without
competition which included an incentive payment to encourage
enrollment. In 1997, FSA created CREP which furthered targeting through
state-Federal conservation partnerships that address specific state and
nationally significant water quality, soil erosion, and wildlife
habitat concerns related to agriculture. Additional incentives are
generally provided. An up-front signing payment and a practice
incentive payment were established in 2000 to further enhance
continuous enrollment, including CREP.
The 2001 agriculture appropriations act authorized FWP which
provided for non-competitive enrollment under continuous sign-up
provisions and incentives for up to 500,000 acres of small non-flood
plain wetlands and adjacent uplands in six states (Nebraska, Iowa,
Minnesota, North Dakota, South Dakota, and Montana). Enrollment was
limited to 100,000 acres per state.
The Farm Security and Rural Investment Act of 2002 (2002 Farm Bill)
extended CRP enrollment authority through 2007 and increased the
enrollment cap by 2.8 million acres to 39.2 million acres. An
administrative requirement that cropland must have been recently
cropped was added by the 2002 Farm Bill to require that cropland must
have been cropped or considered cropped in at least 4 of the 6 years
preceding enactment. The 2002 Farm Bill also generally authorized
managed harvesting of forage, expanded FWP from the original six states
to all states, and raised the enrollment cap to 1 million acres while
keeping the 100,000 acre state maximum.
During 2006, FSA offered CRP participants the opportunity to re-
enroll or extend contracts set to expire between 2007 and to 2010 on
about 28 million acres. FSA ranked the acreage based on the EBI score
when the land was enrolled. The highest ranked were offered new 10 or
15 year contracts. Lower ranking contracts were offered extensions of
2-5 years depending upon the relative ranking. This preserved farmers'
ability to protect America's most sensitive agricultural lands. Holders
of about 82 percent of expiring contract acres were approved for re-
enrollment or extension.
The 2006 supplemental emergency appropriations act authorized the
EFCRP to provide assistance to timberland damaged by the 2005
hurricanes. Acreage enrolled does not count against the CRP enrollment
cap.
The Food, Conservation, and Energy Act of 2008 (2008 Farm Bill)
extended CRP enrollment authority through September 30, 2012, and
required that enrollment be no more than 32 million acres beginning
October 1, 2009. Other changes included:
Expansion of practices under FWP;
50 percent cost-share for tree thinning activities;
New payment limitation applicability and adjusted gross
income eligibility criteria;
Updated cropping history to 4 of 6 years between 2002 and
2007;
Added new routine grazing authority;
Added TIP; and
Added authority to exclude continuous and CREP acreage from
the 25 percent county cropland enrollment limit.
4. Purpose/Goals
CRP's purpose is ``to assist owners and operators of land to
conserve and improve the soil, water, and wildlife resources of such
land and to address issues raised by state, regional, and national
conservation initiatives.''
5. Success in Meeting Programmatic Purpose/Goals
CRP environmental benefits include:
Total Land Enrolled and Land Enrolled in Certain Categories
----------------------------------------------------------------------------------------------------------------
Fiscal Year (FY)
Measure Unit ----------------------------------------------------------------
2006 2007 2008 2009 2010
----------------------------------------------------------------------------------------------------------------
Total Land Enrolled million acres 36.0 36.8 34.6 33.8 31.3
In Buffers million acres 1.84 1.90 2.00 2.01 2.02
Wetlands million acres 2.01 2.06 1.98 1.98 2.05
HEL 1 million acres 25.2 25.5 23.6 22.8 20.5
----------------------------------------------------------------------------------------------------------------
Reductions (not leaving field or intercepted by buffers)
----------------------------------------------------------------------------------------------------------------
Sediment million tons 210 216 219 220 220
Nitrogen million lbs 607 623 616 611 607
Phosphorus million lbs 121 124 123 123 122
----------------------------------------------------------------------------------------------------------------
Greenhouse Gas Reduction (Carbon Dioxide (CO2) equivalent/Year)
----------------------------------------------------------------------------------------------------------------
CO2 sequestered million metric tons 51 50 48 47 44
Energy and Fertilizer million metric tons 9 9 9 8 8
----------------------------------------------------------------
Total million metric tons 60 60 57 55 52
----------------------------------------------------------------------------------------------------------------
1 HEL means highly erodible land.
CRP improves water quality.
CRP reduces the nitrogen and phosphorus leaving a field by
runoff and percolation. Using models developed by the Food and
Agricultural Policy Research Institute (FAPRI), in FY 2010, 607
million pounds less nitrogen and 122 million pounds less
phosphorus left fields due to CRP, which accounted for 95 and
86 percent reductions, respectively, as compared to cropped
land conditions in 2005/2006.
Grass filters and riparian buffers (partial field
enrollments) intercept sediment, nutrients, and other
contaminants before they enter waterways. FAPRI's model
estimates that in 2010, 356 million pounds of nitrogen and 72
million pounds of phosphorus were intercepted by 2.0 million
acres of CRP buffers, nationally.
In 2010, grass and tree plantings reduced nitrate loss by
109 million pounds. Nitrate is a form of nitrogen that is
biologically available to algae. Excess nitrate contributes to
the formation of hypoxic zones in the Gulf of Mexico,
Chesapeake Bay, and other waters.
Wetlands restored and constructed by CRP improve water
quality by converting nitrate/nitrogen into benign atmospheric
nitrogen. In 2010, Iowa's 65 CREP constructed wetland projects
on 1,808 acres reduced nitrate runoff by nearly 650,000 pounds.
CRP enhances wildlife habitat. The 31.3 million acres of grass,
trees, and wetlands established by CRP benefit numerous wildlife
species. Several independent studies have identified benefits to
multiple bird populations including:
Prairie Pothole Ducks--Researchers from the U.S. Fish and
Wildlife Service (USFWS) estimated that the CRP contributed to
a net increase of about two million additional ducks per year
(30 percent increase in duck production) since 1992 in North
Dakota, South Dakota, and Northeastern Montana. Populations
fluctuate on a year-to-year basis due to differences in
precipitation patterns.
Ringed-Neck Pheasants--Western EcoSystems Technology, Inc.,
found that, in prime pheasant habitat, a four percent increase
in CRP herbaceous vegetation was associated with a 22 percent
increase in pheasant counts.
Sage Grouse--The Washington Department of Natural Resources
found that CRP enrollment was associated with halting a decline
(25 percent between 1970-1988) in sage grouse populations. The
study found that a region without substantial CRP enrollment
had continued sage grouse population decline.
Northern Bobwhite Quail--Mississippi State University found
that quail observations were positively related to CRP
enrollment. The quail population response varies by cover and
region.
Grassland Birds--The CRP was identified as a ``Reason for
Hope'' for grassland birds in the 2009 ``State of the Birds''
report, which documented serious declines in grassland birds.
Researchers from the United States Fish and Wildlife Service,
U.S. Geological Survey, and the University of Montana found
that CRP had a large impact on grassland bird populations,
including two birds designated as species of continental
importance by Partners in Flight.
CRP sequesters carbon. CRP sequesters more carbon on private lands
than any other federally administered program. In 2010, CRP resulted in
the equivalent of a 52 million metric ton net reduction in carbon
dioxide (CO2) from CO2 sequestration, reduced
fuel use, and nitrous oxide emissions avoided from not applying
fertilizer. Carbon sequestration helps offset the release of greenhouse
gases (GHG) into the atmosphere. GHG have been associated with
anthropogenic climate change.
CRP protects and enhances soil productivity. CRP conservation
covers reduce erosion and protect soil productivity. By targeting
fragile cropland and placing these lands into protective conservation
covers, the CRP greatly reduces sheet, rill, and wind soil erosion.
Each year since 2002, CRP reduced soil erosion by 325 million tons or
more from pre-CRP levels. Since 1986, CRP has reduced more than 8
billion tons of soil erosion. (Note: Erosion rates and total sediment
provided at the beginning of this section are not comparable
measurements because erosion includes the rate of soil loss through
wind and water erosion.)
CRP reduces downstream flood damage. CRP lands reduce downstream
flood damage by helping to reduce peak flows after storm events by
holding and slowly releasing the storm water.
FSA is using CRP enrollment data, the USDA soils and natural
resource inventories, and cooperative agreements with Federal, state,
and other partners to refine these performance measures and to estimate
the benefits from CRP. For more information see: http://
www.fsa.usda.gov/FSA/webapp?area=home&subject=
ecpa&topic=nra.
Other sources of information related to the topics discussed above
include the following:
http://www.fsa.usda.gov/Internet/FSA_File/factsheet_crp_bennies.pdf
http://www.fsa.usda.gov/FSA/webapp?area=home&subject=ecpa&topic=nra
http://www.fsa.usda.gov/Internet/FSA_File/duck_report.pdf
http://www.fsa.usda.gov/Internet/FSA_File/pheasant_study.pdf
http://www.fsa.usda.gov/Internet/FSA_File/sage_grouse.pdf
http://www.fsa.usda.gov/Internet/FSA_File/quail_study.pdf
http://www.fsa.usda.gov/Internet/FSA_File/grassland_birds_fws.pdf
http://www.stateofthebirds.org/2009/habitats/game-birds
http://www.fsa.usda.gov/Internet/FSA_File/fyannual2009.pdf
http://www.fsa.usda.gov/Internet/FSA_File/606586_hr.pdf
6. Annual Budget Authority (FY 2002-FY 2011)
FY 2002 Through FY 2011 Budget Authority
(Dollars in thousands)
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011
Actual Actual Actual Actual Actual Actual Actual Actual Actual Estimated
--------------------------------------------------------------------------------------------------------------------------------------------------------
Conservation Reserve Program $1,784,665 $1,788,852 $1,798,522 $1,863,004 $1,930,723 $1,948,248 $1,990,178 $1,933,660 $1,910,630 $1,997,496
Emergency Forestry Conservation 0 0 0 0 5,500 6,060 9,944 9,881 8,297 9,291
Reserve Program
--------------------------------------------------------------------------------------------------------------------------------------------------------
7. Annual Outlays (FY 2002-FY 2011)
---------------------------------------------------------------------------------------------------------------------------------------------------------
CRP is funded by Commodity Credit Corporation (CCC). Budget authority for CCC programs is based on obligations. Funds that are obligated in one
fiscal year may not be disbursed until a succeeding fiscal year or fiscal years.
FY 2002 Through FY 2011 Outlays
(Dollars in thousands)
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011
Actual Actual Actual Actual Actual Actual Actual Actual Actual Estimated
--------------------------------------------------------------------------------------------------------------------------------------------------------
Conservation Reserve Program $1,785,059 $1,789,258 $1,800,675 $1,828,470 $1,895,872 $1,963,161 $1,990,867 $1,916,468 $1,910,630 $1,997,496
Emergency Forestry Conservation 0 0 0 0 5,500 6,060 9,524 9,846 8,297 9,291
Reserve Program
--------------------------------------------------------------------------------------------------------------------------------------------------------
8. Annual Delivery Cost (FY 2007-FY 2011)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual delivery cost is reported consistent with the President's 2012 Budget and USDA's Strategic Plan:
FY 2007 Amount FY 2008 Amount FY 2009 Amount FY 2010 Amount FY 2011 Amount
($000) ($000) ($000) ($000) ($000) Department Strategic Goal: Ensure our National Forests and private working lands are conserved, restored,
and made more resilient to climate change, while enhancing our resources.
Program
Program ItemsConservation Conservation Reserve 974,124 1,990,178 1,872,881 1,910,630 1,997,496
Program
Grassroots Source Water 1,856 3,687 5,000 5,000 5,000
Protection Program
State Mediation Grants 1 526 1,092 1,092 1,092 1,092
Direct Conservation Loans 0 0 0 114 1,065
1
Guaranteed Conservation 0 0 0 1 278
Loans 1
Other Conservation 4,600 3,247 46 ^4 33,334
Payments 2
-------------------------------------------------------------------------------
Administrative Costs 107,118 240,070 256,932 278,940 278,825
(direct)
Indirect costs 9,773 82,642 63,352 68,779 72,804
-------------------------------------------------------------------------------
Total Costs 1,097,997 2,320,916 2,199,303 2,264,552 2,389,894
FTEs 1,228 3,023 2,015 2,928 2,885
FY 2007 Amount FY 2008 Amount FY 2009 Amount FY 2010 Amount FY 2011 Amount
($000) ($000) ($000) ($000) ($000) Department Strategic Goal: Assist rural communities to create prosperity so they are self-sustaining,
repopulating, and economically thriving.
Program
Program ItemsIncome Support and Disaster
Assistance Emergency Conservation 149,727.00 128,456.00 0.00 92,459.00 39,719.00
Program 3
Administrative costs 776,465.00 683,795.00 694,980.00 744,303.00 753,934.00
(direct)
Indirect costs 47,548.00 234,633.00 226,905.00 242,967.00 246,299.00
-------------------------------------------------------------------------------
Total Costs 973,740.00 1,046,884.00 921,885.00 1,079,729.00 1,039,952.00
FTEs 8,905.00 8,620.00 9,528.75 8,355.00 8,140.00Conservation Emergency Conservation 0 0 153,044.00 0 0
Program 3
Administrative costs 0 0 8,344.00 0 0
(direct)
Indirect costs 0 0 0 0.00 0
-------------------------------------------------------------------------------
Total Costs 0.00 0.00 161,388.00 0.00 0.00
FTEs 0.00 0.00 0.25 0.00 0.001 FSA has programs related to supporting the conservation goal that are not part of the specific request.
2 Grassland Reserve Program (GRP) payments are reported by NRCS for budget purposes. FSA administrative costs
related to GRP and Voluntary Public Access and Habitat Incentive Program are included.
3 The information related to the Emergency Conservation Program (ECP) is reported as an emergency program under
Goal 1. We have broken out the program information but the administrative costs relate to all programs for the
Income Support and Disaster Assistance Goal.
9. Eligibility Criteria
Eligible Producers
An eligible producer must have owned or operated eligible land for
at least 12 months prior to enrollment. In cases where the land was not
acquired to enroll in the CRP, a waiver may be authorized.
Eligible Land
Land that may be offered includes cropland that is planted or
considered planted to an agricultural commodity 4 of the 6 crop years
from 2002 through 2007, and is physically and legally capable of being
planted in a normal manner to an agricultural commodity.
For continuous signup, land may be certain marginal pasture land.
Additional Cropland Requirements
In addition to cropping history, for general signup, cropland must
meet one of the following:
Have a weighted average erosion index of 8 or greater;
Be expiring CRP acreage; or
Be located in a national or state CRP conservation priority
area.
10. Utilization (Participation) Data
Total enrollment of 31.31 million acres in 750,000 contracts
on 416,000 farms.
Consists of 26.2 million acres in 338,000 contracts on
222,000 farms in general signup enrollment and 5.0 million
acres in 412,000 contracts on 239,000 farms.
CRP Enrollment by State as of April 2011
----------------------------------------------------------------------------------------------------------------
Annual Rental Payments
State Number of Number of Farms Acres ----------------------------------
Contracts ($1,000) ($/Acre)
----------------------------------------------------------------------------------------------------------------
U.S. 749,913 415,953 31,213,510 1,720,354 55.12
Alabama 9,108 6,488 398,166 18,286 45.93
Alaska 45 28 19,037 671 35.25
Arkansas 5,956 3,289 250,780 14,971 59.70
California 506 390 124,510 4,712 37.84
Colorado 12,744 6,125 2,251,395 74,324 33.01
Connecticut 16 13 163 13 78.44
Delaware 666 349 6,850 754 110.13
Florida 1,318 1,067 56,382 2,262 40.12
Georgia 9,069 6,440 318,782 14,973 46.97
Hawaii 9 9 167 10 57.64
Idaho 5,200 2,960 668,317 29,619 44.32
Illinois 82,044 44,833 1,035,931 118,474 114.36
Indiana 38,168 21,360 286,447 31,196 108.91
Iowa 106,489 53,422 1,673,364 214,169 127.99
Kansas 47,139 26,794 2,738,960 109,973 40.15
Kentucky 17,649 9,459 360,295 40,039 111.13
Louisiana 5,036 3,210 327,661 20,172 61.56
Maine 679 472 17,972 931 51.83
Maryland 6,427 3,518 79,041 10,891 137.78
Massachusetts 4 4 15 3 172.53
Michigan 15,185 8,695 229,140 20,198 88.15
Minnesota 63,002 33,112 1,640,921 110,574 67.39
Mississippi 19,808 12,458 850,134 40,870 48.07
Missouri 36,459 21,063 1,364,524 101,211 74.17
Montana 15,257 5,982 2,863,105 92,025 32.14
Nebraska 28,306 15,872 1,081,185 65,850 60.91
New Hampshire 5 5 58 3 55.46
New Jersey 275 194 2,449 170 69.29
New Mexico 1,978 1,283 453,819 15,221 33.54
New York 2,866 2,032 53,136 3,713 69.87
North Carolina 8,076 5,263 117,457 8,049 68.53
North Dakota 34,254 16,766 2,650,455 95,825 36.15
Ohio 38,008 21,227 343,596 40,952 119.19
Oklahoma 7,500 5,074 861,360 28,902 33.55
Oregon 4,279 2,253 551,279 28,710 52.08
Pennsylvania 12,115 7,625 220,750 22,729 102.96
Puerto Rico 19 19 2,032 130 63.93
South Carolina 7,649 4,323 159,731 6,129 38.37
South Dakota 31,613 14,790 1,165,373 65,084 55.85
Tennessee 7,321 4,883 205,282 13,775 67.10
Texas 22,107 16,234 3,465,165 124,839 36.03
Utah 875 543 167,952 5,206 31.00
Vermont 384 271 2,875 288 100.18
Virginia 5,839 4,464 63,416 3,760 59.29
Washington 12,406 5,168 1,453,510 81,116 55.81
West Virginia 447 363 5,840 431 73.73
Wisconsin 24,642 15,107 400,679 32,064 80.02
Wyoming 965 653 224,020 6,087 27.17
Not Reported 1 1 28 2 82.00
----------------------------------------------------------------------------------------------------------------
Note: ``Not Reported'' includes a contract with a data anomaly.
11. Duplication or Overlap with Other Programs
CRP is not a duplicate of other USDA conservation programs. Certain
programs may share some common eligibility, but each program provides
producers a unique set of options for the short and long-term
management of the farm or ranch. Generally, the same parcel of land
cannot be enrolled in more than one program at the same time. These
programs are complementary because they provide choices for producers
in how they voluntarily protect their land and provide conservation
benefits to their community and beyond.
CRP enrolls land to create wildlife habitat. All of the lands
eligible for CRP could be enrolled in Wildlife Habitat Incentive
Program (WHIP) if they fall within the WHIP priority areas but not all
lands eligible for WHIP could be enrolled in CRP.
CRP and WRP address the restoration and long term conservation of
wetland resources. However, CRP is directed primarily to cropland and
marginal pastureland, and many CRP participants with wetland resources
are unwilling to have an easement placed on the land.
In the case of Grasslands Reserve Program (GRP), most of the land
is either native sod or pasture but some cropland may be enrolled into
easements or long-term contracts. There is some potential overlap of
eligible acres in riparian areas near streams or rivers, but this gives
producers the flexibility to enroll in the program that best suits
their needs.
CREP targets specific resource concerns in a state CREP project
area while providing additional incentives for enrollment above and
beyond what is available under continuous CRP and Initiatives. These
additional incentives are made possible through USDA and state
government partnerships.
Initiatives and continuous CRP are available nationwide or in
certain selected geographic areas.
Both Environmental Quality Incentives Program (EQIP) and CRP
address natural resource concerns, the land uses on which the practices
are applied generally are distinct. There could be minimal overlap
where CRP enrolls windbreaks, shelterbelts and shallow water
impoundments for wildlife.
There are many examples of FSA and NRCS programs working together
to achieve conservation goals. For example, in the Chesapeake Bay,
combinations of land retirement and conservation practices/systems are
used to achieve nutrient, sediment and other resource objectives.
12. Waste, Fraud and Abuse
There has been no extensive Office of Inspector (OIG) or Government
Accountability Office (GAO) audit of the program during the past 5
years. Although occasional cases of producer misconduct may have been
identified and addressed through investigations in the past, we do not
have a current audit that indicates on-going systemic waste, fraud or
abuse. FSA conducts its own internal investigation through its county
office review process and through its internal review audit process. In
2008, 2009 and 2010 the amount of improper payments for CRP was .77
percent, 1.2 percent, and 1.77 percent, respectively.
13. Effect of Administrative PAYGO
Exhibit 1 shows the costs and savings related to USDA's
Administrative PAYGO Scorecard.
______
1. Program Name
Emergency Conservation Program (ECP).
Prepared by USDA's FSA.
2. Subprograms/Department Initiatives
None.
3. Brief History
ECP was authorized by the Agricultural Credit Act of 1978, as
amended, to provide financial assistance to agricultural producers to
rehabilitate farmlands damaged by natural disaster when new
conservation problems have been created that: (1) if not treated, will
impair or endanger the land; (2) materially affect the productive
capacity of the land; (3) represent damage that is unusual in character
and is not the type that would recur frequently in the same area; and
(4) will be so costly to rehabilitate that Federal assistance is or
will be required to return the land to productive agricultural use.
Funding is appropriated by Congress. ECP generally is funded through
periodic supplemental appropriations that remains available until
expended.
4. Purpose/Goals
ECP provides emergency funding and technical assistance for farmers
and ranchers to rehabilitate farmland damaged by natural disasters and
for carrying out emergency water conservation measures in periods of
severe drought.
5. Success in Meeting Programmatic Purpose/Goals
ECP successfully provides financial assistance to agricultural
producers to rehabilitate farmlands damaged by natural disasters. In FY
2010, nearly $54 million was allocated to help producers throughout the
country address damage from drought, floods, hurricanes, wildfire,
tornados and other disasters. As of June 20, 2011, in FY 2011, nearly
$65 million (see 2011 allocations table below) has been allocated to
assist with similar disasters, including the devastating tornados that
have hit states such as Alabama, Arkansas, Alabama, Georgia, North
Carolina, Pennsylvania, Virginia and others, and floods in Arkansas,
California, Colorado, Iowa, Kentucky, Oregon, Minnesota, New York,
North Carolina, Tennessee, Virginia, Wisconsin and other states. If
funds allocated to a state are not used within a reasonable period of
time, the funds are withdrawn and reallocated to meet ECP needs
elsewhere.
6. Annual Budget Authority (FY 2002-FY 2011)
FY 2002 Through FY 2011 Budget Authority
(Dollars in thousands)
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011
Actual Actual Actual Actual Actual Actual Actual Actual Actual Estimated
--------------------------------------------------------------------------------------------------------------------------------------------------------
Emergency Conservation Program 0 0 $11,929 $150,000 $161,800 $18,000 $204,413 0 0 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
7. Annual Outlays (FY 2002-FY 2011)
--------------------------------------------------------------------------------------------------------------------------------------------------------
The Emergency Conservation Program (ECP) receives no-year discretionary appropriations. Actual ECP cost-share outlays are made when practices are
completed.
FY 2002 Through FY 2011 Outlays
(Dollars in thousands)
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011
Actual Actual Actual Actual Actual Actual Actual Actual Actual Estimated
--------------------------------------------------------------------------------------------------------------------------------------------------------
Emergency Conservation Program $32,365 $46,980 $23,100 $57,123 $88,311 $72,166 $27,730 $71,084 $76,879 $71,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
8. Annual Delivery Cost (FY 2007-FY 2011)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual delivery cost is reported consistent with the President's 2012 Budget and USDA's Strategic Plan:
FY 2007 Amount FY 2008 Amount FY 2009 Amount FY 2010 Amount FY 2011 Amount
($000) ($000) ($000) ($000) ($000) Department Strategic Goal: Ensure our National Forests and private working lands are conserved, restored,
and made more resilient to climate change, while enhancing our resources.
Program
Program ItemsConservation Conservation Reserve 974,124 1,990,178 1,872,881 1,910,630 1,997,496
Program
Grassroots Source Water 1,856 3,687 5,000 5,000 5,000
Protection Program
State Mediation Grants 1 526 1,092 1,092 1,092 1,092
Direct Conservation Loans 0 0 0 114 1,065
1
Guaranteed Conservation 0 0 0 1 278
Loans 1
Other Conservation 4,600 3,247 46 ^4 33,334
Payments 2
-------------------------------------------------------------------------------
Administrative Costs 107,118 240,070 256,932 278,940 278,825
(direct)
Indirect costs 9,773 82,642 63,352 68,779 72,804
-------------------------------------------------------------------------------
Total Costs 1,097,997 2,320,916 2,199,303 2,264,552 2,389,894
FTEs 1,228 3,023 2,015 2,928 2,885
FY 2007 Amount FY 2008 Amount FY 2009 Amount FY 2010 Amount FY 2011 Amount
($000) ($000) ($000) ($000) ($000) Department Strategic Goal: Assist rural communities to create prosperity so they are self-sustaining,
repopulating, and economically thriving.
Program
Program ItemsIncome Support and Disaster
Assistance Emergency Conservation 149,727.00 128,456.00 0.00 92,459.00 39,719.00
Program 3
Administrative costs 776,465.00 683,795.00 694,980.00 744,303.00 753,934.00
(direct)
Indirect costs 47,548.00 234,633.00 226,905.00 242,967.00 246,299.00
-------------------------------------------------------------------------------
Total Costs 973,740.00 1,046,884.00 921,885.00 1,079,729.00 1,039,952.00
FTEs 8,905.00 8,620.00 9,528.75 8,355.00 8,140.00Conservation Emergency Conservation 0 0 153,044.00 0 0
Program 3
Administrative costs 0 0 8,344.00 0 0
(direct)
Indirect costs 0 0 0 0.00 0
-------------------------------------------------------------------------------
Total Costs 0.00 0.00 161,388.00 0.00 0.00
FTEs 0.00 0.00 0.25 0.00 0.001 FSA has programs related to supporting the conservation goal that are not part of the specific request.
2 Grassland Reserve Program (GRP) payments are reported by NRCS for budget purposes. FSA administrative costs
related to GRP and Voluntary Public Access and Habitat Incentive Program are included.
3 The information related to the Emergency Conservation Program (ECP) is reported as an emergency program under
Goal 1. We have broken out the program information but the administrative costs relate to all programs for the
Income Support and Disaster Assistance Goal.
9. Eligibility Criteria
County FSA committees determine land eligibility based on on-site
inspections of damage, taking into account the type and extent of
damage. For land to be eligible, the natural disaster must create new
conservation problems that, if untreated, would:
impair or endanger the land;
materially affect the land's productive capacity;
represent unusual damage which, except for wind erosion, is
not the type likely to recur frequently in the same area; and
be so costly to repair that Federal assistance is or will be
required to return the land to productive agricultural use.
Conservation problems existing prior to the applicable disaster are
ineligible for ECP assistance.
ECP program participants receive cost-share assistance of up to 75
percent of the cost to implement approved emergency conservation
practices, as determined by county FSA committees. Socially-
disadvantaged producers may be eligible for up to 90 percent cost-share
assistance.
Individual or cumulative requests for cost-sharing of $50,000 or
less per person, per disaster are approved at the county committee
level. Cost-sharing from $50,001 to $100,000 is approved at the state
committee level. Cost-sharing over $100,000 must be approved by FSA's
national office. Further, there is a payment limitation of $200,000 per
person or legal entity per disaster.
10. Utilization (Participation) Data
Since 1978, ECP has provided assistance to help producers on
between 2,000 to nearly 38,000 farms a year. The wide range of
assistance stems from the fact that ECP is an appropriated program that
is only utilized when needed by farmers and ranchers after disasters
strike.
As of June 20, 2011, about $167 million is estimated in unmet ECP
needs primarily related to recent natural disasters including flooding,
tornadoes, drought, and wildfires.
11. Duplication or Overlap with Other Programs
Although the Emergency Watershed Protection Program (EWP) and ECP
have similar goals, generally, ECP is farm level, and EWP is watershed
level. Through ECP, USDA works directly with farmers to cost-share on
practices to restore land and return it to production after a natural
disaster. Under EWP, USDA works with states, counties, or other local
sponsors to provide financial assistance to address problems caused by
natural disasters that affect area wide issues. Sponsors must provide a
share of the resources to support the project.
ECP also works in concert with the Emergency Forest Restoration
Program (EFRP), authorized by the 2008 Farm Bill, Forestry Title, to
address all eligible private agricultural land after a natural
disaster. EFRP addresses the critical need to restore nonindustrial
private forestland after a natural disaster such a hurricane or
tornado.
12. Waste, Fraud and Abuse
Although occasional cases of producer misconduct may have been
identified and addressed through investigations in the past, no current
systemic waste, fraud or abuse has been identified related to this
program. Due to the nature of ECP funding, ECP has been audited often.
Most recently, following appropriations under the 2008 supplemental
appropriations act and the 2008 disaster relief and recovery
supplemental appropriations act as well as transfer authority provided
in the 2009 supplemental appropriations act, OIG conducted the
following audits:
a. Review of Emergency Disaster Assistance for 2008 Disasters:
Emergency Conservation Program, (Audit 03702-1-TE). This audit,
which focused on ECP assistance to address damages from
Hurricanes Ike and Gustav, did not find many significant
issues.
b. Review of Emergency Disaster Assistance for the 2008 Natural
Disasters: Emergency Conservation Program (Audit 03702-1-TE).
This audit, which focused on ECP assistance to address damage
from the 2008 Midwest Floods, had a number of findings, which
could only be addressed with additional funding and staff
salary.
13. Effect of Administrative PAYGO
None.
______
1. Program Name
Voluntary Public Access and Habitat Incentive Program (VPA-HIP).
Prepared by USDA's Farm Service Agency.
2. Subprograms/Department Initiatives
None.
3. Brief History
VPA-HIP is a competitive grant program authorized by the 2008 Farm
Bill. Up to $50 million is available through FY 2012. Funding is
limited to state and tribal governments establishing new public access
programs, expanding existing public access programs, and/or enhancing
wildlife habitat on lands enrolled in public access programs.
4. Purpose/Goals
The primary objective of the VPA-HIP is to encourage owners and
operators of privately-held farm, ranch, and forestland to voluntarily
make that land available for access by the public for wildlife-
dependent recreation, including hunting or fishing, under programs
implemented by state or tribal governments. VPA-HIP will provide
environmental, economic and social benefits including, but not limited
to, enhanced wildlife habitat, improved wildlife populations, increased
revenue for rural communities, and expanded opportunities for re-
connecting Americans with the great outdoors.
5. Success in Meeting Programmatic Purpose/Goals
Funding was first obligated under VPA-HIP in 2010. It is too soon
to assess the success in meeting programmatic goals.
6. Annual Budget Authority (FY 2002-FY 2011)
FY 2002 Through FY 2011 Budget Authority
(Dollars in thousands)
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011
Actual Actual Actual Actual Actual Actual Actual Actual Actual Estimated
--------------------------------------------------------------------------------------------------------------------------------------------------------
Voluntary Public Access and 0 0 0 0 0 0 0 0 $11,756 $21,578
Habitat Incentives Program
--------------------------------------------------------------------------------------------------------------------------------------------------------
7. Annual Outlays (FY 2002-FY 2011)
FY 2002 Through FY 2011 Outlays
(Dollars in thousands)
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011
Actual Actual Actual Actual Actual Actual Actual Actual Actual Estimated
--------------------------------------------------------------------------------------------------------------------------------------------------------
Voluntary Public Access and 0 0 0 0 0 0 0 0 0 $33,334
Habitat Incentives Program
--------------------------------------------------------------------------------------------------------------------------------------------------------
8. Annual Delivery Cost (FY 2007-FY 2011)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual delivery cost is reported consistent with the President's 2012 Budget and USDA's Strategic Plan:
FY 2007 Amount FY 2008 Amount FY 2009 Amount FY 2010 Amount FY 2011 Amount
($000) ($000) ($000) ($000) ($000) Department Strategic Goal: Ensure our National Forests and private working lands are conserved, restored,
and made more resilient to climate change, while enhancing our resources.
Program
Program ItemsConservation Conservation Reserve 974,124 1,990,178 1,872,881 1,910,630 1,997,496
Program
Grassroots Source Water 1,856 3,687 5,000 5,000 5,000
Protection Program
State Mediation Grants 1 526 1,092 1,092 1,092 1,092
Direct Conservation Loans 0 0 0 114 1,065
1
Guaranteed Conservation 0 0 0 1 278
Loans 1
Other Conservation 4,600 3,247 46 ^4 33,334
Payments 2
-------------------------------------------------------------------------------
Administrative Costs 107,118 240,070 256,932 278,940 278,825
(direct)
Indirect costs 9,773 82,642 63,352 68,779 72,804
-------------------------------------------------------------------------------
Total Costs 1,097,997 2,320,916 2,199,303 2,264,552 2,389,894
FTEs 1,228 3,023 2,015 2,928 2,885
FY 2007 Amount FY 2008 Amount FY 2009 Amount FY 2010 Amount FY 2011 Amount
($000) ($000) ($000) ($000) ($000) Department Strategic Goal: Assist rural communities to create prosperity so they are self-sustaining,
repopulating, and economically thriving.
Program
Program ItemsIncome Support and Disaster
Assistance Emergency Conservation 149,727.00 128,456.00 0.00 92,459.00 39,719.00
Program 3
Administrative costs 776,465.00 683,795.00 694,980.00 744,303.00 753,934.00
(direct)
Indirect costs 47,548.00 234,633.00 226,905.00 242,967.00 246,299.00
-------------------------------------------------------------------------------
Total Costs 973,740.00 1,046,884.00 921,885.00 1,079,729.00 1,039,952.00
FTEs 8,905.00 8,620.00 9,528.75 8,355.00 8,140.00Conservation Emergency Conservation 0 0 153,044.00 0 0
Program 3
Administrative costs 0 0 8,344.00 0 0
(direct)
Indirect costs 0 0 0 0.00 0
-------------------------------------------------------------------------------
Total Costs 0.00 0.00 161,388.00 0.00 0.00
FTEs 0.00 0.00 0.25 0.00 0.001 FSA has programs related to supporting the conservation goal that are not part of the specific request.
2 Grassland Reserve Program (GRP) payments are reported by NRCS for budget purposes. FSA administrative costs
related to GRP and Voluntary Public Access and Habitat Incentive Program are included.
3 The information related to the Emergency Conservation Program (ECP) is reported as an emergency program under
Goal 1. We have broken out the program information but the administrative costs relate to all programs for the
Income Support and Disaster Assistance Goal.
9. Eligibility Criteria
Only states and tribal governments are eligible for Federal VPA-HIP
funding. States and tribal governments may propose to use VPA-HIP grant
funding to expand existing public access programs, create new public
access programs, and/or provide incentives to enhance wildlife habitat
on lands enrolled in state or tribal government public access programs.
10. Utilization (Participation) Data
States and tribal governments participating in VPA-HIP are Arizona,
California, Colorado, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas,
Kentucky, Michigan, Minnesota, Montana, Nebraska, New Hampshire, North
Dakota, Oregon, Pennsylvania, South Dakota, Texas, Utah, Virginia,
Washington, Wisconsin, Wyoming and the Confederated Tribes and Bands of
the Yakama Nation.
11. Duplication or Overlap with Other Programs
VPA-HIP is unlike any other USDA program as it specifically targets
public access. Incentives for enhancing wildlife habitat under VPA-HIP
are limited to those private land owners and operators who make land
available for public access. The Department of Interior Federal Aid in
Wildlife Restoration Act makes funds available from an 11 percent
excise tax on sporting arms and ammunition through the Secretary of
Interior to states. Activities eligible under the Landowner Incentive
Program (LIP) of the USFWS for such funding include acquisition and
development of access and improvement of wildlife habitat. VPA-HIP has
proven complementary to state public access program initiated as a
result of LIP funding.
12. Waste, Fraud and Abuse
No such instances have to date been identified.
13. Effect of Administrative PAYGO
None.
______
1. Program Name
Grass Roots Source Water Program (Source Water).
Prepared by USDA's Farm Service Agency.
2. Subprograms/Department Initiatives
None.
3. Brief History
Source Water is a grant program implemented for State Rural Water
Associations and is designed to help prevent source water pollution in
states through voluntary practices installed by producers and other
landowners at the local level.
Source Water uses onsite technical assistance capabilities of each
state rural water association that operates a source water program in
the state. State rural water associations deliver assistance in
developing source water protection plans within watersheds for the
common goal of preventing the contamination of drinking water supplies.
Source water is surface and ground water that is consumed by rural
residents. According to the National Rural Water Association, ground
water is the primary source of drinking water for some 44,000
communities in the United States. Through the program, state rural
water associations hire, for every participating state, a full-time
source water specialist who possesses knowledge and experience in rural
issues. The technician works with FSA's state and county leadership,
NRCS technicians, local leaders, and communities to create operating
plans that identify priority areas where local pollution prevention
efforts are needed most in their respective states.
This collaboration is intended to result in the development of a
source water protection plan that outlines voluntary measures for
farmers, ranchers, and local communities that can be installed on their
lands to prevent source water pollution. Voluntary measures may range
from storing herbicides, pesticides, or other substances in more secure
containers to relocating waste lagoons. By working at the grassroots
level, local team members inform and educate participants about source
water protection measures that benefit their neighbors and communities.
Additionally, the plans also establish steering committees to evaluate
voluntary practices that have been implemented. FSA monitors the
overall performance of the program.
4. Purpose/Goals
Source Water's goal is to implement source water protection plans
in each state by assisting small and rural communities in protecting
their drinking water resources. There are source water protection plans
in 43 states. The ultimate goal of the project is to assist public
water utilities and the agricultural community in coordinating efforts
by taking a proactive approach to maintain and/or improve water quality
within their source water protection planning areas.
5. Success in Meeting Programmatic Purpose/Goals
Between October 1, 2009, and September 30, 2010, source water
protection plans were completed in 119 communities which provide
protection measures for 470 public drinking water sources (415 wells
and 55 surface water intakes).
6. Annual Budget Authority (FY 2002-FY 2011)
FY 2002 Through FY 2011 Budget Authority
(Dollars in thousands)
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011
Actual Actual Actual Actual Actual Actual Actual Actual Actual Estimated
--------------------------------------------------------------------------------------------------------------------------------------------------------
Grassroots Source Water $0 $0 $0 $0 $3,713 $3,713 $3,687 $5,000 $5,000 $3,577
Protection Program
--------------------------------------------------------------------------------------------------------------------------------------------------------
7. Annual Outlays (FY 2002-FY 2011)
FY 2002 Through FY 2011 Outlays
(Dollars in thousands)
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011
Actual Actual Actual Actual Actual Actual Actual Actual Actual Estimated
--------------------------------------------------------------------------------------------------------------------------------------------------------
Grassroots Source Water $0 $0 $0 $0 $3,713 $3,713 $3,687 $5,000 $5,000 $4,242
Protection Program
--------------------------------------------------------------------------------------------------------------------------------------------------------
8. Annual Delivery Cost (FY 2007-FY 2011)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual delivery cost is reported consistent with the President's 2012 Budget and USDA's Strategic Plan:
FY 2007 Amount FY 2008 Amount FY 2009 Amount FY 2010 Amount FY 2011 Amount
($000) ($000) ($000) ($000) ($000) Department Strategic Goal: Ensure our National Forests and private working lands are conserved, restored,
and made more resilient to climate change, while enhancing our resources.
Program
Program ItemsConservation Conservation Reserve 974,124 1,990,178 1,872,881 1,910,630 1,997,496
Program
Grassroots Source Water 1,856 3,687 5,000 5,000 5,000
Protection Program
State Mediation Grants 1 526 1,092 1,092 1,092 1,092
Direct Conservation Loans 0 0 0 114 1,065
1
Guaranteed Conservation 0 0 0 1 278
Loans 1
Other Conservation 4,600 3,247 46 ^4 33,334
Payments 2
-------------------------------------------------------------------------------
Administrative Costs 107,118 240,070 256,932 278,940 278,825
(direct)
Indirect costs 9,773 82,642 63,352 68,779 72,804
-------------------------------------------------------------------------------
Total Costs 1,097,997 2,320,916 2,199,303 2,264,552 2,389,894
FTEs 1,228 3,023 2,015 2,928 2,885
FY 2007 Amount FY 2008 Amount FY 2009 Amount FY 2010 Amount FY 2011 Amount
($000) ($000) ($000) ($000) ($000) Department Strategic Goal: Assist rural communities to create prosperity so they are self-sustaining,
repopulating, and economically thriving.
Program
Program ItemsIncome Support and Disaster
Assistance Emergency Conservation 149,727.00 128,456.00 0.00 92,459.00 39,719.00
Program 3
Administrative costs 776,465.00 683,795.00 694,980.00 744,303.00 753,934.00
(direct)
Indirect costs 47,548.00 234,633.00 226,905.00 242,967.00 246,299.00
-------------------------------------------------------------------------------
Total Costs 973,740.00 1,046,884.00 921,885.00 1,079,729.00 1,039,952.00
FTEs 8,905.00 8,620.00 9,528.75 8,355.00 8,140.00Conservation Emergency Conservation 0 0 153,044.00 0 0
Program 3
Administrative costs 0 0 8,344.00 0 0
(direct)
Indirect costs 0 0 0 0.00 0
-------------------------------------------------------------------------------
Total Costs 0.00 0.00 161,388.00 0.00 0.00
FTEs 0.00 0.00 0.25 0.00 0.001 FSA has programs related to supporting the conservation goal that are not part of the specific request.
2 Grassland Reserve Program (GRP) payments are reported by NRCS for budget purposes. FSA administrative costs
related to GRP and Voluntary Public Access and Habitat Incentive Program are included.
3 The information related to the Emergency Conservation Program (ECP) is reported as an emergency program under
Goal 1. We have broken out the program information but the administrative costs relate to all programs for the
Income Support and Disaster Assistance Goal.
9. Eligibility Criteria
States are selected based on a formula that ranks states based on
total maximum daily loads, impaired waters, total farm acres, and total
toxic discharges.
10. Utilization (Participation) Data
States participating in Source Water include: Alaska, Alabama,
Arizona, Arkansas, California, Colorado, Connecticut, Delaware,
Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana,
Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi,
Missouri, Montana, Nevada, New Hampshire, New Mexico, North Carolina,
North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South
Carolina, Texas, Utah, Vermont, Virginia, Washington, West Virginia,
Wisconsin, and Wyoming. The 43 participating states were chosen based
on objective technical criteria relating to water quality and
population.
11. Duplication or Overlap with Other Programs
There is no overlap with Rural Development (RD) programs which
provide support grants and loans for water and wastewater treatment,
distribution, and collection systems.
The FSA source water program is not a duplication but is
complementary of the Environmental Protection Agency's (EPA) source
water initiatives. The EPA source water program is targeted to
compliance of community water supplies with Safe Drinking Water Act
regulations. FSA authorized source water efforts focuses incorporating
the agriculture community into prevention of contamination in source
waters through FSA programs such as the CRP and education of the
agriculture community and non-governmental entities.
12. Waste, Fraud and Abuse
No such instances have to date been identified.
13. Effect of Administrative PAYGO
None.
______
1. Program Name
Grassland Reserve Program (GRP).
Prepared by USDA's NRCS and FSA.
2. Subprograms/Department Initiatives
None.
3. Brief History
GRP was authorized in section 2401 of the 2002 Farm Bill and was
reauthorized by section 2403 of the 2008 Farm Bill. NRCS and FSA
jointly administer this program. Both agencies share policy
development, NRCS administers the easements, and FSA implements the
rental contracts. Funding for GRP comes from the Commodity Credit
Corporation (CCC).
Legislative Changes. The 2008 Farm Bill:
Increased the acreage that may be enrolled in the program by
1.2 million acres during the years 2009 through 2012.
Provided priority for enrollment of expiring acreage from
the Conservation Reserve Program (CRP), limited to ten percent
of the total acres enrolled in any year.
Authorized eligible lands to be enrolled into either a
permanent easement (or maximum allowed under state law); or a
10, 15, or 20 year rental contract.
Authorized restoration agreements on lands, enrolled under a
either a rental contract or an easement, to receive up to 50
percent cost-share.
Expanded the definition of eligible to include land that
contains historical or archeological resources and land that
addresses state, regional, or national conservation priorities.
Required a grazing management plan for GRP participants.
Required that valuation of an easement be at the lower of
either an appraisal or market survey, a rate set by the
Secretary of Agriculture, or the landowner's offer.
Defined ``eligible entities'' as units of state, local, or
tribal government or nongovernmental organizations that have a
charter describing a commitment to conserving ranchland,
agricultural land, or grassland for grazing and conservation
purposes.
Allowed that easements may now be acquired by eligible
entities based on a 50 percent cost-share with the Federal
Government.
Established an annual payment limitation of $50,000 for both
rental and restoration agreements.
Waived a minimum acreage limitation for enrollment.
Excluded land from the GRP if it is currently enrolled in
another conservation program or is already protected by an
existing easement, contract or deed restriction or is owned by
a conservation organization.
Allowed interested landowners to submit applications under a
continuous sign-up.
4. Purpose/Goals
The purpose of the Grassland Reserve Program (GRP) is to assist
landowners and operators in protecting grazing uses and related
conservation values by conserving and restoring grassland resources on
eligible private lands through rental contracts, easements, and
restoration agreements. The program emphasizes support for working
grazing operations; enhancement of plant and animal biodiversity; and
protection of grassland and land containing shrubs and forbs under
threat of conversion.
5. Success in Meeting Programmatic Purpose/Goals
Montana: GRP Enrollments Support Agency Commitment to Sage Grouse
Habitat. In Phillips County, Montana, five GRP projects enrolled in the
last 2 years protect 29,485 acres. These projects help preserve rural
ranching operations while providing critical wildlife habitat for sage
grouse and other grassland birds. The USFWS announced this species as a
candidate for listing on the Endangered Species List. NRCS is taking
proactive steps to protect and improve habitat in order to prevent
listing of this bird in significant decline. More than 80 percent of
the acres in these five ranches are prime habitat for of sage grouse.
These ranchers have embraced management activities that continue to
provide food, clean water, and habitat for mule deer, elk, pronghorn,
and a multitude of neo-tropical grassland birds and one of the
healthiest populations of sage grouse in the nation.
Pennsylvania: GRP Helps Landowners Manage for Conservation.
Conservation-minded landowners are interested in protecting and
improving pastures for grazing management, while maintaining wildlife
habitat for ground nesting birds. These landowners see the GRP program
as a good fit for their management goals. These conservation easements
protected nearly 400 acres of grasslands in areas subject to increasing
development pressure.
Wyoming: A 2,412 acre GRP easement was placed on land in central
Wyoming, adjacent to the Medicine Bow National Forest. The upper
meadows are used by an elk herd. Cows and calves graze during late
spring and stay all summer. Good feed and water nourish both domestic
animals and wildlife, with escape cover on the west end of the pasture.
During fall and winter, elk cows and bulls spend days on the pasture.
Pronghorn antelope and mule deer are often seen in the lower
elevations. Approximately 25 to 35 sage grouse forage in the lower
elevation habitat.
Sage-Grouse Recovery: USDA provided $2.5 million in GRP financial
assistance to five western states for Greater Sage-Grouse conservation
and recovery on lands identified by state wildlife agencies as
containing critical sage grouse habitat. The funds were used for
enrollment of GRP easements on private lands in California, Colorado,
Montana, Utah and Wyoming, with technical assistance and additional
financial assistance provided through state and local partnerships.
Conservation on the Ground--GRP in Kansas. Kansas has very
productive native grasslands. During FY 2007, ranchers in Kansas signed
47 GRP conservation easements that will protect 22,600 acres of the
state's native grassland. GRP conservation easements are one way to
prevent the destruction of the Kansas tall-grass prairie. And, Kansas
ranchers have demonstrated a keen interest in the program by enrolling
22,600 acres in GRP easements that will forever remain in tall-grass
prairie.
Washington State protecting historic grazing lands. The Colvin
family has ranched on their 530 acres family homestead along Scatter
Creek in Washington State since Ignatius Colvin arrived over the Oregon
Trail in the 1850's. GRP easements allow the current generation of the
Colvin family to keep the land as a working ranch in perpetuity. Urban
development pressures in western Washington make maintaining large
tracts of grazing lands very difficult. By granting GRP easements, the
entire 530 acres grazing area soon will be protected. The contiguous
easements were funded through Fiscal Year 2004, 2005, and 2009
allocations. The Colvin family's grazing management plan, developed
with NRCS, maintains and enhances native prairie habitat.
6. Annual Budget Authority (FY 2002-FY 2011)
------------------------------------------------------------------------
FY Apportionment ($ in millions)
------------------------------------------------------------------------
2002 --
2003 $85
2004 $115
2005 $128
2006 $54
2007 $16
2008 $3
2009 $48
2010 $101
2011 $79
------------------------------------------------------------------------
7. Annual Outlays (FY 2002-FY 2011)
------------------------------------------------------------------------
FY Outlays ($ in millions)
------------------------------------------------------------------------
2002 --
2003 $34
2004 $55
2005 $71
2006 $27
2007 $29
2008 $3
2009 $46
2010 $93
2011 $80
------------------------------------------------------------------------
NRCS GRP financial assistance (FA) funds support eligibility
determinations, rental contracts, easement acquisition, and monitoring.
FA for easement acquisition is obligated when the acres to be placed
under easement are enrolled but are not expended until the easement has
been perfected which is a process that may take over a year. Technical
Assistance (TA) funds obligated in a given year are used for workload
generated by the enrollment of new acres and acreage already enrolled.
The majority of TA funding usually is expended in the year of
obligation. FA funding represents the majority of program budget
authority.
8. Annual Delivery Cost (FY 2007-FY 2011) Annual delivery cost is reported consistent with the President's 2012 Budget and USDA's Strategic Plan: Annual delivery cost for NRCS includes:
Grassland Reserve Program Conservation Planning and 453 155 2,021 2,047 5,880
Technical Consultation
Conservation 330 203 835 846 2,430
Implementation
Financial Assistance-- 1,079 445 3,240 3,281 9,425
Program Administration
Indirect Costs 1,282 200 520 526 1,512
-------------------------------------------------------------------------------
Sub-total Technical 3,144 1,003 6,616 6,700 19,247
Assistance
-------------------------------------------------------------------------------
Financial Assistance--Cost 9,843 1,810 41,042 93,408 98,126
Share & Monetary
Incentive
===============================================================================
Total Costs 12,987 2,813 47,658 100,108 117,373
FTEs 21 7 30 28 55Notes: These numbers are consistent with the published ``Full Cost by Secretary's Strategic Priorities'' section
of the Explanatory Notes for Fiscal Years 2009 through 2012 President's Budget submissions. In the table
above, Fiscal Years 2007 through 2010 amounts are actual obligations; Fiscal Year 2011 is an estimate from the
Fiscal Year 2012 President's Budget submission.
Financial assistance funding is identified on the line titled, ``Financial Assistance--Cost Share and Monetary
Incentives.'' Funds associated with technical assistance are on the remaining four lines.
FY 2007 Amount FY 2008 Amount FY 2009 Amount FY 2010 Amount FY 2011 Amount
($000) ($000) ($000) ($000) ($000) Annual delivery cost for FSA includes: Department Strategic Goal: Ensure our National Forests and private working lands are conserved, restored,
and made more resilient to climate change, while enhancing our resources.
Program
Program ItemsConservation Conservation Reserve 974,124 1,990,178 1,872,881 1,910,630 1,997,496
Program
Grassroots Source Water 1,856 3,687 5,000 5,000 5,000
Protection Program
State Mediation Grants 1 526 1,092 1,092 1,092 1,092
Direct Conservation Loans 0 0 0 114 1,065
1
Guaranteed Conservation 0 0 0 1 278
Loans 1
Other Conservation 4,600 3,247 46 ^4 33,334
Payments 2
-------------------------------------------------------------------------------
Administrative Costs 107,118 240,070 256,932 278,940 278,825
(direct)
Indirect costs 9,773 82,642 63,352 68,779 72,804
-------------------------------------------------------------------------------
Total Costs 1,097,997 2,320,916 2,199,303 2,264,552 2,389,894
FTEs 1,228 3,023 2,015 2,928 2,885
FY 2007 Amount FY 2008 Amount FY 2009 Amount FY 2010 Amount FY 2011 Amount
($000) ($000) ($000) ($000) ($000) Department Strategic Goal: Assist rural communities to create prosperity so they are self-sustaining,
repopulating, and economically thriving.
Program
Program ItemsIncome Support and Disaster
Assistance Emergency Conservation 149,727.00 128,456.00 0.00 92,459.00 39,719.00
Program 3
Administrative costs 776,465.00 683,795.00 694,980.00 744,303.00 753,934.00
(direct)
Indirect costs 47,548.00 234,633.00 226,905.00 242,967.00 246,299.00
-------------------------------------------------------------------------------
Total Costs 973,740.00 1,046,884.00 921,885.00 1,079,729.00 1,039,952.00
FTEs 8,905.00 8,620.00 9,528.75 8,355.00 8,140.00Conservation Emergency Conservation 0 0 153,044.00 0 0
Program 3
Administrative costs 0 0 8,344.00 0 0
(direct)
Indirect costs 0 0 0 0.00 0
-------------------------------------------------------------------------------
Total Costs 0.00 0.00 161,388.00 0.00 0.00
FTEs 0.00 0.00 0.25 0.00 0.001 FSA has programs related to supporting the conservation goal that are not part of the specific request.
2 Grassland Reserve Program (GRP) payments are reported by NRCS for budget purposes. FSA administrative costs
related to GRP and Voluntary Public Access and Habitat Incentive Program are included.
3 The information related to the Emergency Conservation Program (ECP) is reported as an emergency program under
Goal 1. We have broken out the program information but the administrative costs relate to all programs for the
Income Support and Disaster Assistance Goal.
9. Eligibility Criteria
--------------------------------------------------------------------------------------------------------------------------------------------------------
Land is eligible if it is privately owned or Tribal land and it is: (1) grassland that contains forbs or shrubs (including rangeland and
pastureland) for which grazing is the predominant use; or (2) located in an area that has been historically dominated by grassland, forbs, or shrubs.
The land must also have potential to provide habitat for animal or plant populations of significant ecological value if the land is retained in the
current use or restored to a natural condition.
10. Utilization (Participation) Data
Contract Fiscal Year 2010
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rental Contracts Easements
------------------------------------------------------------------------------
Obligations Dollars
for Due Allocated Technical
Number 1 Acres 1 Obligations Number 1 Acres 1 Diligence for Assistance
and Market Easements
Analysis
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total 424 273,516 $29,288,185 144 95,907 $3,232,610 $52,318,210 $3,437,072
--------------------------------------------------------------------------------------------------------------------------------------------------------
1 Numbers currently reported in National Easement Staging Tool (NEST) are undergoing an intense quality assurance review. Numbers are subject to change
during this process.
11. Duplication or Overlap with Other Programs
GRP provides for the long-term conservation/preservation of
critical grassland resources that are under pressure from conversion.
Other long-term conservation programs such as CRP, WRP, and Farm and
Ranch Land Protection Program share the common objective to enhance and
improve the grassland resources through short-term (10+ year
contracts--CRP) or through the purchase of easements under FRPP.
Generally, the same parcel of land cannot be enrolled in more than one
program at the same time. These programs are complementary because they
provide choices for producers in how they voluntarily protect their
land and provide conservation benefits to their community and beyond.
These programs share a common goal of restoring and protecting the
natural resources benefits of grassland ecosystems to provide wildlife,
water quality erosion and other natural resource benefits. In some
cases, the restoration of the grassland resources requires the
development of grassland habitat or the development of the
infrastructure (fences, springs etc.) that will enable the long-term
management of these resources. In the cases where infrastructure or
management changes are needed, there may be some overlap with EQIP,
Stewardship, and/or WHIP.
Some of the practices offered through Stewardship to meet the
minimum threshold at the end of the contract are also offered through
other programs such as EQIP. Utilizing Stewardship for this purpose
increases the additionality intent and uniqueness of the program.
12. Waste, Fraud and Abuse
No such instances have to date been identified.
13. Effect of Administrative PAYGO
None.
______
1. Program Name
Chesapeake Bay Watershed Program (CBWP).
Prepared by USDA's NRCS.
2. Subprograms/Department Initiatives
None.
3. Brief History
The CBWP was authorized by section 2602 of the 2008 Farm Bill. The
Chief of NRCS may implement CBWP in the watersheds of all tributaries,
backwaters, and side channels draining into the Chesapeake Bay. These
areas include lands in Delaware, Maryland, New York, Pennsylvania,
Virginia, and West Virginia.
As of 2010, CBWP participants have enrolled nearly 270,000 acres in
about 1,800 agreements in the Chesapeake Bay watershed.
4. Purpose/Goals
The purpose of CWBP is to assist producers in implementing
conservation activities on agricultural lands in the Chesapeake Bay for
the purposes of (1) improving water quality and quantity in the
Chesapeake Bay watershed and (2) restoring, enhancing, and preserving
soil, air, and related resources in the Chesapeake Bay watershed.
5. Success in Meeting Programmatic Purpose/Goals
In FY 2010:
NRCS enrolled over 950 agreements on over 156,000 acres.
The value of the contracts was over $33.5 million.
The average agreement size is 164 acres.
On average, NRCS agreed to reimburse participants
approximately $35,000 for each long-term agreement.
6. Annual Budget Authority (FY 2002-FY 2011)
------------------------------------------------------------------------
FY Apportionment ($ in millions)
------------------------------------------------------------------------
2002 --
2003 --
2004 --
2005 --
2006 --
2007 --
2008 --
2009 1 $23
2010 $43
2011 $72
------------------------------------------------------------------------
1 Chesapeake Bay Watershed Program funding began in FY 2009. Prior to
this time, discretionary funds were received through Congressionally
designated projects.
7. Annual Outlays (FY 2002-FY 2011)
------------------------------------------------------------------------
FY Outlays ($ in millions)
------------------------------------------------------------------------
2002 --
2003 --
2004 --
2005 --
2006 --
2007 --
2008 --
2009 1 $3
2010 $23
2011 $41
------------------------------------------------------------------------
1 Chesapeake Bay Watershed Program funding began in FY 2009. Prior to
this time, discretionary funds were received through Congressionally-
designated projects.
CBWP FA funds are obligated the year a contract is entered into,
and this initial obligation is applicable to the entire multi-year span
of the contract. As the years pass, FA for contracted practices is not
expended until the practices are installed and inspected for quality
control by NRCS personnel. For this reason, FA funds tend to outlay for
multiple years after obligation. TA funds obligated in a given year are
used for workload generated by the enrollment of new contracts and
workload generated by prior year contract implementation. The vast
majority of TA funding tends to outlay in the year of obligation. FA
funding represents the majority of program budget authority.
8. Annual Delivery Cost (FY 2007-FY 2011)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual delivery cost is reported consistent with the President's 2012 Budget and USDA's Strategic Plan:
FY 2007 FY 2008 FY 2009 FY 2010 FY 2011Chesapeake Bay Watershed Program Conservation Planning and -- -- 209 676 1,234
Technical Consultation
Conservation -- -- 1,083 3,501 6,393
Implementation
Financial Assistance-- -- -- 727 2,350 4,292
Program Administration
Indirect Costs -- -- 1,228 3,970 7,251
-------------------------------------------------------------------------------
Sub-total Technical -- -- 3,247 10,497 19,170
Assistance
-------------------------------------------------------------------------------
Financial Assistance--Cost -- -- 18,595 33,539 52,830
Share & Monetary
Incentive
===============================================================================
Total Costs -- -- 21,842 44,036 72,000
FTEs -- -- 25 85 172Notes: These numbers are consistent with the published ``Full Cost by Secretary's Strategic Priorities'' section
of the Explanatory Notes for Fiscal Years 2009 through 2012 President's Budget submissions. In the table
above, Fiscal Years 2009 and 2010 amounts are actual obligations; Fiscal Year 2011 is an estimate from the
Fiscal Year 2012 President's Budget submission.
Financial assistance funding is identified on the line titled, ``Financial Assistance--Cost Share and Monetary
Incentives.'' Funds associated with technical assistance are on the remaining four lines.
9. Eligibility Criteria
Congress provided the authority to deliver CBWP funds through
applicable programs in the Chesapeake Bay. Since the purpose of CBWP is
similar to the purpose of the Environmental Quality Incentives Program
(EQIP), CBWP is administered using the same programmatic rules as EQIP.
To participate in CBWP, both the land and the applicant must be
eligible. Eligible land includes cropland, rangeland, pastureland,
private nonindustrial forestland, and other farm or ranch lands in the
Chesapeake Bay watershed. The land must have an identified natural
resource concern that poses a serious threat to soil, water, air, or
related resources by reason of land use practices, soil type, terrain,
climatic conditions, topography, flooding, saline characteristics, or
other natural resource factors or natural hazard. Publicly-owned land
is eligible only if: (1) the land is under private control for the
contract period; (2) is included within the participant's operating
unit; and (3) must have written authorization from the government
agency that owns the land to apply conservation practices. For
irrigation-related practices, the land must have a history of actively
irrigating the land unit for 2 out of the last 5 years.
Applicants must be an agricultural producer, have control of the
land for the life of the contract, be in compliance with farm bill
provisions (highly erodible land, wetland conservation, protection of
tenants and sharecroppers), be within appropriate program payment
limitations and adjusted gross income requirements, and develop an EQIP
plan of operations. Applications are accepted year round at local USDA
Service Centers, but there are application cut-off dates that vary from
state to state.
10. Utilization (Participation) Data
CBWP Application/Contract Status data include:
------------------------------------------------------------------------
Number of Active Financial
Fiscal Year and Completed Assistance Total Treated
Contracts Obligated Acres
------------------------------------------------------------------------
2009 826 $18,592,739 110,327
2010 953 $33,517,624 156,704
-----------------------------------------------------
Total........... 1,779 $52,110,363 267,031
------------------------------------------------------------------------
11. Duplication or Overlap with Other Programs
CBWP is a mechanism for focusing funding for maximum impact, is
delivered through existing programs such as the EQIP, and is focused in
the Chesapeake Bay watershed and on priorities related to controlling
nutrient and sediment and habitat conservation.
12. Waste, Fraud and Abuse
No such instances have to date been identified.
13. Effect of Administrative PAYGO
None.
______
1. Program Name
Watershed Operations Program (Small Watershed).
Prepared by USDA's NRCS.
2. Subprogram/Department Initiatives
None.
3. Brief History
The Watershed Operations programs operate under Public Law 83-566,
the Watershed Protection and Flood Prevention Act of 1954, as amended
(P.L. 83-566); and Public Law 78-534, the Flood Control Act of 1944
(P.L. 78-534). Both of these laws authorize the Secretary of
Agriculture to install watershed improvement measures to reduce
flooding, sedimentation, and erosion damage; and improve the
conservation, development, utilization, and disposal of water; and
advance the conservation and proper utilization of land.
4. Purpose and Goals
The program sets out to develop Watershed Project Plans, with
specific actions and schedules that will meet local sponsor and
resource concerns and that are physically, environmentally, socially,
and economically defensible. The three general purposes set out in P.L.
83-566 include: (a) Preventing damage from erosion, floodwater, and
sediment; (b) Furthering the conservation, development, utilization,
and disposal of waters; and (c) Furthering the conservation and proper
utilization of land. The general purposes set out in P.L. 78-534 are
(a) Run-off and water-flow retardation and (b) Soil-erosion prevention.
NRCS provides technical and financial assistance to install watershed
improvement measures through three means: technical assistance, land
treatment measures, and easement and construction measures.
These programs (P.L. 83-566 & P.L. 78-534) provide for cooperation
between the Federal Government and the states and their political
subdivisions for purposes of:
Agricultural Watershed Water Quality
Water Protection Management
Management Fish and Flood Municipal &
Wildlife Prevention--Flood Industrial Water
Damage Reduction Supply
Public
Recreation
5. Success in Meeting Programmatic Purpose/Goals
Program Benefits. Estimates of flood prevention and other annual
benefits to the environment and communities from P.L. 83-566 and P.L.
78-534 that occurred in FY 2010 are shown below.
Monetary Benefits. Benefits include:
Agricultural Benefits (not related to flood control): $404
million. Benefits associated with erosion control, animal waste
management, water conservation, water quality improvement,
irrigation efficiency, change in land use, etc.
Non-Agricultural Benefits (not related to flood control):
$899 million. Benefits associated with recreation, fish and
wildlife, rural water supply, water quality, municipal and
industrial water supply, and incidental recreation uses, etc.
Agricultural Flood Protection Benefits: $320 million. This
value includes all crop and pasture damage reduction benefits
as well as all other agricultural damage reduction benefits.
Non-Agricultural Flood Protection Benefits: $434 million.
Non-agricultural flood damage prevented to roads, bridges,
homes, and other structures that exist in the floodplain.
Natural Resources Benefits include:
Acres of nutrient management: 674,283
Tons of animal waste properly disposed: 4,801,640
Tons of soil saved from erosion: 90,038,700
Miles of streams and corridors enhanced, or protected:
54,190
Acres of lakes and reservoirs enhanced, or protected:
2,518,613
Acre-feet of water conserved: 1,842,813
Acres of wetlands created, enhanced, or restored: 279,326
Acres of upland wildlife habitat created, enhanced, or
restored: 9,149,776
Social and Community Benefits:
Number of people: 48,316,354
Number of farms and ranches: 181,248
Number of bridges: 61,678
Number of public facilities: 3,650
Number of businesses: 46,583
Number of homes: 610,983
Number of domestic water supplies: 27,857
6. Annual Budget Authority (FY 2002-FY 2011)
(Watershed and Flood Prevention Operations, P.L. 78-534, and Small
Watershed, P.L. 83-566)
------------------------------------------------------------------------
FY Appropriation ($ in millions)
------------------------------------------------------------------------
2002 $106
2003 $109
2004 $86
2005 $75
2006 $74
2007 $9
2008 $30
2009 $24
2010 $30
2011 --
------------------------------------------------------------------------
7. Annual Outlays (FY 2002-FY 2011)
(Watershed and Flood Prevention Operations, P.L. 78-534, and Small
Watershed, P.L. 83-566)
------------------------------------------------------------------------
FY Outlays ($ in millions)
------------------------------------------------------------------------
2002 $85
2003 $80
2004 $73
2005 $86
2006 $81
2007 $78
2008 $44
2009 $42
2010 $19
2011 $15
------------------------------------------------------------------------
Watershed Operations program TA funds generally outlay in the year
the funds are obligated. The only exception to this is when TA funds
are obligated through an architecture and engineering services contract
to provide planning, design or quality assurance inspection during
construction. FA funds are obligated after permitting and/or land
rights are obtained. Outlays for these funds are generally expended
over a fiscal year, but can extend over multi-years for a complex
watershed operations project or for a project whose contract was
awarded toward the end of the fiscal year. Given the nature of
construction projects, it is possible for outlays to carryon for
multiple years after the initial appropriation or obligation of the
funds. Watershed Operations program funds are no-year funds.
8. Annual Delivery Cost (FY 2007-FY 2011)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual delivery cost is reported consistent with the President's 2012 Budget and USDA's Strategic Plan:
FY 2007 FY 2008 FY 2009 FY 2010 FY 2011Watershed and Flood Prevention
Operations Conservation Planning and 771 1,027 3,802 824 824
Technical Consultation
Conservation 2,514 4,654 18,130 3,827 3,827
Implementation
Financial Assistance-- 271 337 1,326 280 280
Program Administration
Indirect Costs 1,779 4,715 11,876 3,133 3,133
-------------------------------------------------------------------------------
Sub-total Technical 5,335 10,733 35,134 8,064 8,064
Assistance
-------------------------------------------------------------------------------
Financial Assistance--Cost 3,540 19,057 134,155 21,936 21,936
Share & Monetary
Incentive
===============================================================================
Total Costs 8,875 29,790 169,289 30,000 30,000
FTEs 139 90 94 28 120Notes: These numbers are consistent with the published ``Full Cost by Secretary's Strategic Priorities'' section
of the Explanatory Notes for Fiscal Years 2009 through 2012 President's Budget submissions. In the table
above, Fiscal Years 2007 through 2010 amounts are actual appropriations; Fiscal Year 2011 is an estimate from
the Fiscal Year 2012 President's Budget submission.
Financial assistance funding is identified on the line titled, ``Financial Assistance--Cost Share and Monetary
Incentives.'' Funds associated with technical assistance are on the remaining four lines.
Fiscal year 2009 includes $145 million in budget authority and associated FTE from the American Recovery and
Reinvestment Act of 2009.
9. Eligibility Criteria
Sponsor: All watershed projects must have at least one outside
sponsor which must be a state or local organization/agency (i.e.,
state, city, town, conservancy district, tribal) that has legal
authorities to acquire and hold land rights, condemn land if necessary,
and perform continuing operations and maintenance. The sponsor(s) must
also be able to raise, expend, and publicly account for funds as these
projects have a local match or share required.
Project/Structures: Watershed projects involving an estimated
Federal contribution in excess of $5 million for construction, or
construction of any single structure having a capacity in excess of
2,500 acre-feet of water storage require authorization by Congressional
Committee. Watershed projects are limited to 250,000 acres and cannot
include any single structure which provides more than 12,500 acre-feet
of floodwater detention capacity, or more than 25,000 acre-feet of
total capacity. The Chief of NRCS authorizes the use of Watershed
Operations funds for all other projects.
Federal financial assistance may be applied to installation costs
when land treatment measures are installed primarily to achieve
environmental and public benefits such as surface and ground water
quality improvement, water conservation, and flood mitigation. The
Federal share may not exceed the rate of assistance for similar
practices under other USDA conservation programs.
Land treatment measures are installed through project agreements
with local sponsoring organizations or through long-term contracts
between the landowner and NRCS. In the first case, the local sponsors
arrange for and accomplish the work by contract or force account and
NRCS makes payments to the local sponsoring organizations as the land
treatment measures are installed. In the second case, NRCS contracts
directly with landowners.
10. Utilization (Participation Data)
At the end of FY 2010, of the 1,757 projects authorized by the
Watershed Protection and Flood Prevention Act, NRCS has assisted
sponsors complete implementation on over 1,066 watersheds and are
implementing works of improvement in 300 active watershed projects.
11. Duplication or Overlap with Other Programs:
The program was not funded under the 2011 Full-Year Continuing
Appropriations Act. The Agency is in the process of closing out
operations.
Watershed Operations program payments cannot be applied to payments
on land for the same conservation purposes funded through other USDA
conservation programs.
12. Waste, Fraud and Abuse:
No such instances have to date been identified.
13. Effect of Administrative PAYGO
None.
______
1. Program Name
The Watershed Rehabilitation Program.
Prepared by USDA's NRCS.
2. Subprogram/Department Initiatives
None.
3. Brief History
The Watershed Rehabilitation Program (P.L. 106-472) is administered
by NRCS to assist project sponsors with rehabilitation of aging project
dams. Only dams installed under P.L. 83-566, the Pilot Watershed
Program, P.L. 78-534, or Resource Conservation and Development (RC&D)
Programs are eligible. This program provides technical and financial
assistance to watershed project sponsors in rehabilitating aging dams
in their communities.
4. Purpose/Goals
The purpose of P.L. 106-472 is to extend the service life of dams
and meet applicable safety and performance standards. Priority is given
to those structures that pose the highest risk to life and property.
Projects are eligible when hazard to life and property increases due to
downstream development and when there is need for rehabilitation to
extend the planned life of a structure. Watershed Rehabilitation
Program work can consist of repairing or replacing deteriorated
components, repairing damages from catastrophic events, upgrading the
structure to meet state dam safety laws, or to decommission a
structure.
5. Success in Meeting Programmatic Purpose/Goals
The Natural Resources Conservation Service has authorized the
rehabilitation of 162 of these high hazard dams in 22 states as of the
end of FY 2010. Many of these structures were originally set in rural
areas and designed and constructed as ``low hazard'' structures. As a
result of land use change and downstream development, many of these
dams now represent a ``high hazard'' to surrounding communities. These
rehabilitated structures are constructed to high hazard standard which
provide millions of dollars of flood protection. Through this program,
NRCS is making sure that the rehabilitation of these dams will not only
ensure that these watershed dams remain safe and protect the lives of
people, property, and infrastructure, but continue to provide flood
control, recreation and wildlife habitat to the citizenry and
communities for an additional 50 to 100 years.
6. Annual Budget Authority (FY 2002-FY 2011)
------------------------------------------------------------------------
FY Appropriation ($ in millions)
------------------------------------------------------------------------
2002 $10
2003 $30
2004 $30
2005 $27
2006 $31
2007 $31
2008 $20
2009 $40
2010 $40
2011 $18
------------------------------------------------------------------------
7. Annual Outlays (FY 2002-FY 2011)
------------------------------------------------------------------------
FY Outlays ($ in millions)
------------------------------------------------------------------------
2002 $6
2003 $10
2004 $19
2005 $21
2006 $21
2007 $22
2008 $31
2009 $24
2010 $32
2011 $17
------------------------------------------------------------------------
The Watershed Rehabilitation Program TA funds are generally
expended in the year the funds are obligated. The only exception to
this is when TA funds are obligated through a services contract to
provide planning, design or quality assurance inspection during
construction. FA funds are obligated after permitting and/or land
rights are obtained. These funds are generally expended over a fiscal
year, but can extend over multi-years for a complex dam rehabilitation
project or for a project whose contract was awarded toward the end of
the fiscal year. Given the nature of constructions projects, it is
possible for outlays to carryon for multiple years after the initial
appropriation or obligation of the funds. Watershed Rehabilitation
Program funds are no-year funds.
8. Annual Delivery Cost (FY 2007-FY 2011)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual delivery cost is reported consistent with the President's 2012 Budget and USDA's Strategic Plan:
FY 2007 FY 2008 FY 2009 FY 2010 FY 2011Watershed Rehabilitation Program Conservation Planning and 2,573 845 4,739 1,994 1,368
Technical Consultation
Conservation 2,799 2,972 16,667 7,008 4,805
Implementation
Financial Assistance-- 1,193 342 1,918 806 553
Program Administration
Indirect Costs 10,460 3,135 17,581 7,392 5,070
-------------------------------------------------------------------------------
Sub-total Technical 17,025 7,294 40,905 17,200 11,796
Assistance
-------------------------------------------------------------------------------
Financial Assistance--Cost 14,284 12,566 49,095 22,961 28,365
Share & Monetary
Incentive
===============================================================================
Total Costs 31,309 19,860 90,000 40,161 40,161
FTEs 113 65 72 82 71Notes: These numbers are consistent with the published ``Full Cost by Secretary's Strategic Priorities'' section
of the Explanatory Notes for Fiscal Years 2009 through 2012 President's Budget submissions. In the table
above, Fiscal Years 2007 through 2010 amounts are actual appropriations; Fiscal Year 2011 is an estimate from
the Fiscal Year 2012 President's Budget submission.
Financial assistance funding is identified on the line titled, ``Financial Assistance--Cost Share and Monetary
Incentives.'' Funds associated with technical assistance are on the remaining four lines.
Fiscal year 2009 includes $50 million in budget authority and associated FTE from the American Recovery and
Reinvestment Act of 2009.
9. Eligibility Criteria
A dam must be under proper and active maintenance, and only dams
installed under P.L. 83-566, the Pilot Watershed Program, P.L. 78-534,
or RC&D Programs are eligible.
Each project requires a local cooperating sponsor that works
closely with NRCS to complete the rehabilitation of each dam. Each
sponsor must provide thirty-five (35) percent of the costs to
rehabilitation a dam. Through several means, sponsors in these
communities contribute their funds through the collection bonds, County
budgets, state appropriations, state park division, Municipal taxing
authority, Watershed taxing authority, and through In-kind technical
services.
11. Duplication or overlap with other programs
There is no duplication or overlap with other USDA conservation
programs.
12. Waste, Fraud and Abuse
No such instances have to date been identified.
13. Effect of Administrative PAYGO
None.
______
1. Program Name
Healthy Forests Reserve Program (HFRP).
Prepared by USDA's NRCS.
2. Subprograms/Department Initiatives
None.
3. Brief History
Title V of the Healthy Forests Restoration Act of 2003 (Public Law
108-148) authorized the establishment of the Healthy Forests Reserve
Program (HFRP) which was reauthorized by the 2008 Farm Bill.
HFRP provides financial assistance for specific conservation
actions completed by the landowner. As funds are made available, the
NRCS Chief solicits project proposals State Conservationists have
developed in cooperation with partnering organizations. States selected
for funding provide public notice of the availability of funding within
the selected area. HFRP offers four enrollment options:
10 year restoration agreement for which the landowner may
receive 50 percent of the average cost of the approved
conservation practices;
30 year contract (equivalent to the value of a 30 year
easement) for which the landowner may receive 75 percent of the
easement value of the enrolled land plus 75 percent of the
average cost of the approved conservation restoration
practices. This option is available to Indian Tribes only;
30 year easement for which the landowner may receive 75
percent of the easement value of the enrolled land plus 75
percent of the average cost of the approved conservation
practices; or
Permanent easement for which landowners may receive 100
percent of the easement value of the enrolled land plus 100
percent of the average cost of the approved conservation
practices.
4. Purpose/Goals
HFRP assists landowners in restoring, enhancing, and protecting
forest ecosystems to: (1) promote the recovery of threatened and
endangered species; (2) improve biodiversity; and (3) enhance carbon
sequestration. HFRP supports the NRCS Mission Goal of Healthy Plant and
Animal Communities.
5. Success in Meeting Programmatic Purpose/Goals
The following provides examples of HFRP results:
Oregon: Partnership Protects Working Forest and Enhances Habitat.
In FY 2010, NRCS partnered with the USFWS and the Oregon Department of
Forestry (ODF) to provide private landowners the opportunity to create
a northern spotted owl (NSO) habitat while maintaining a working
forest. NSO habitat in the Pacific Northwest is an important criterion
for defining healthy forests, making HFRP an excellent vehicle for this
effort. NRCS developed HFRP long term management requirements and
sideboards as a supplement to the ODF Forest Stewardship Plan on 11
properties being offered for permanent easements.
The supplements specify the long term management requirements and
sideboards of each individual property; some properties opted for even-
age stand management and others for the uneven-age stand management
regime. The FSP-HFRP supplement recognizes the requirements of a State
of Oregon Stewardship Agreement and will require that the landowner
intends to meet or exceed all Oregon Forest Practices Act standards
current at the time of approval including provisions for Riparian
Management Areas. The information contained in the supplement provides
guidance and requirements to reach landowner and program goals and
objectives. The supplements include area regulation timelines and
overall forest management practices for thinning, patch cuts, planting,
canopy cover requirements and specific management regimes for each
property.
NRCS worked closely with USFWS and ODF to ensure consistency among
agencies' requirements while developing the supplements. The
supplements use forest management to enhance future NSO habitat and
maintain existing habitat. NRCS, USFWS, and ODF entered into a
programmatic Safe Harbor Agreement to provide assurances to the
landowner if they manage the property according to the Forest
Stewardship Plan supplement. NRCS develops conservation plans and
landowner conservation program contracts to implement the conservation
practices necessary for restoration, enhancement, and management for
NSO as planned in the Forest Stewardship Plan supplement. NRCS has
completed the supplement plans for 11 properties in western Oregon
totaling 1,852 acres of valuable habitat for the endangered NSO on
these potential permanent easements. The HFRP work has been an
excellent demonstration of one-on-one conservation planning resulting
in detailed landowner decisions while allowing management flexibility
for plans that will stretch into perpetuity. This has been an excellent
model for all nonindustrial forest planning.
6. Annual Budget Authority (FY 2002-FY 2011)
------------------------------------------------------------------------
Appropriation/Apportionment ($ in
FY millions)
------------------------------------------------------------------------
2002 --
2003 --
2004 --
2005 --
2006 $2
2007 $2
2008 $2
2009 $10
2010 $10
2011 $10
------------------------------------------------------------------------
Note: FY 2006 through 2008 is Discretionary appropriations. FY 2009
through 2011 is the Mandatory apportionments.
7. Annual Outlays (FY 2002-FY 2011)
------------------------------------------------------------------------
FY Outlays ($ in millions)
------------------------------------------------------------------------
2002 --
2003 --
2004 --
2005 --
2006 --
2007 --
2008 $1
2009 $1
2010 $3
2011 $6
------------------------------------------------------------------------
Note: FY 2006 to 2008 is Discretionary funding and Mandatory funding
from 2009 to 2011.
HFRP FA funds support easement acquisition and restoration. Funds
are expended when the easement is perfected or the practices necessary
for restoration are installed and verified by NRCS personnel, both
processes which may take over a year to complete. TA funds obligated in
a given year are used for workload generated by the enrollment of new
easements and workload generated by easements enrolled in prior years.
The vast majority of TA funding tends to be expended in the year of
obligation. FA funding represents the majority of program budget
authority.
8. Annual Delivery Cost (FY 2007-FY 2011)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual delivery cost is reported consistent with the President's 2012 Budget and USDA's Strategic Plan:
FY 2007 FY 2008 FY 2009 FY 2010 FY 2011Healthy Forests Reserve Program Conservation Planning and 19 12 180 187 301
Technical Consultation
Conservation 21 15 382 398 641
Implementation
Financial Assistance-- 9 58 459 478 770
Program Administration
Indirect Costs 78 66 314 328 529
-------------------------------------------------------------------------------
Sub-total Technical 127 151 1,335 1,391 2,241
Assistance
-------------------------------------------------------------------------------
Financial Assistance--Cost 2,349 1,835 1,191 6,226 7,509
Share & Monetary
Incentive
===============================================================================
Total Costs 2,476 1,986 2,526 7,617 9,750
FTEs 1 2 5 6 23Notes: These numbers are consistent with the published ``Full Cost by Secretary's Strategic Priorities'' section
of the Explanatory Notes for Fiscal Years 2009 through 2012 President's Budget submissions. In the table
above, Fiscal Years 2007 and 2008 are the discretionary appropriations. The 2009 and 2010 are actual mandatory
obligations; and Fiscal Year 2011 is an estimate from the Fiscal Year 2012 President's Budget submission.
Financial assistance funding is identified on the line titled, ``Financial Assistance--Cost Share and Monetary
Incentives.'' Funds associated with technical assistance are on the remaining four lines.
9. Eligibility Criteria
Only privately held land, including acreage owned by an Indian
Tribe, is eligible for enrollment in HFRP. In addition, to be eligible,
the landowner must commit to restoring, enhancing, or measurably
increasing the likelihood of recovery of a threatened or endangered
species or candidates for the Federal or state threatened or endangered
species list, and must improve biological diversity or increase carbon
sequestration. Land enrolled in HFRP must have a restoration plan that
includes practices necessary to restore and enhance habitat for species
listed as threatened or endangered or species that are candidates for
the threatened or endangered species list. NRCS provides technical
assistance to help owners comply with the terms of their HFRP
restoration plans.
Landowners may receive safe harbor assurance for land enrolled in
the HFRP who agree, for a specified period, to protect, restore, or
enhance their land for threatened or endangered species habitat. In
exchange, landowners avoid future regulatory restrictions on the use of
that land under the Endangered Species Act.
10. Utilization (Participation) Data
Contract Fiscal Year 2010
------------------------------------------------------------------------
10 Year
Restoration 30 Year Permanent
Agreements Easements Easements
------------------------------------------------------------------------
Number 1 1 2 9
Acres 1 2,747 1,416 1,472
Dollars Obligated $599,988 $882,139 $4,994,249
------------------------------------------------------------------------
1 Numbers currently reported in NEST are undergoing an intense quality
assurance review.
11. Duplication or Overlap with Other Programs
To the extent that these programs each allow for 10 year
restoration agreements to improve wildlife habitat, there is
duplication and overlap with the WHIP program and the 10 year
restoration agreement portion of HFRP.
12. Waste, Fraud and Abuse
No such instances have to date been identified.
13. Effect of Administrative PAYGO
None.
______
1. Program Name
Conservation Security Program (Security).
Prepared by USDA's NRCS.
2. Subprograms/Department Initiatives
None.
3. Brief History
The 2002 Farm Bill authorized the Security. Except for existing
program contracts, it was replaced by the Conservation Stewardship
Program (Stewardship) by the 2008 Farm Bill.
Security is a voluntary program that provides financial and
technical assistance through 5 to 10 year contracts to promote the
conservation and improvement of soil, water, air, energy, plant and
animal life, and other conservation purposes on Tribal and private
working lands.
The Chief of NRCS was authorized to implement Security in all 50
states, the Caribbean Area, and the Pacific Basin area. The program
provides equitable access to benefits to all producers, regardless of
size of operation, crops produced, or geographic location.
4. Purpose/Goals
Security's goal is to identify and reward those farmers and
ranchers who are meeting the highest standards of conservation and
environmental management on their operations and to support ongoing
stewardship of private agricultural lands by providing payments for
maintaining and enhancing natural resources.
5. Success in Meeting Programmatic Purpose/Goals
In Fiscal Year 2011, a total of $180,292,191 was expended to cover
the obligations of 15,031 prior year contracts (2004-2008).
6. Annual Budget Authority (FY 2002-FY 2011)
------------------------------------------------------------------------
FY Apportionment ($ in millions)
------------------------------------------------------------------------
2002 --
2003 $4
2004 $41
2005 $202
2006 $259
2007 $297
2008 $379
2009 $283
2010 $234
2011 $204
------------------------------------------------------------------------
7. Annual Outlays (FY 2002-FY 2011)
------------------------------------------------------------------------
FY Outlays ($ in millions)
------------------------------------------------------------------------
2002 --
2003 --
2004 $38
2005 $186
2006 $263
2007 $294
2008 $309
2009 $276
2010 $220
2011 $205
------------------------------------------------------------------------
Security's FA funds are obligated separately for each year of the
contract with the producer. They are expended during the year of
obligation. TA funds obligated for a given year are used for workload
generated by prior year contract implementation. The vast majority of
TA funding also are expended in the year of obligation. FA funding
represents the majority of program budget authority.
8. Annual Delivery Cost (FY 2007-FY 2011)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual delivery cost is reported consistent with the President's 2012 Budget and USDA's Strategic Plan:
FY 2007 FY 2008 FY 2009 FY 2010 FY 2011Conservation Security Program Conservation Planning and 2,033 2,228 1,264 941 990
Technical Consultation
Conservation 2,348 2,920 1,657 1,233 1,297
Implementation
Financial Assistance-- 17,204 11,714 6,647 4,947 5,205
Program Administration
Indirect Costs 4,321 27,728 20,315 15,120 13,446
-------------------------------------------------------------------------------
Sub-total Technical 25,906 44,590 29,883 22,241 20,938
Assistance
-------------------------------------------------------------------------------
Financial Assistance--Cost 268,451 272,461 246,121 199,928 182,468
Share & Monetary
Incentive
===============================================================================
Total Costs 294,357 317,051 276,004 222,169 203,406
FTEs 200 367 220 154 132Notes: These numbers are consistent with the published ``Full Cost by Secretary's Strategic Priorities'' section
of the Explanatory Notes for Fiscal Years 2009 through 2012 President's Budget submissions. In the table
above, Fiscal Years 2007 through 2010 amounts are actual obligations; Fiscal Year 2011 is an estimate from the
Fiscal Year 2012 President's Budget submission.
Financial assistance funding is identified on the line titled, ``Financial Assistance--Cost Share and Monetary
Incentives.'' Funds associated with technical assistance are on the remaining four lines.
9. Eligibility Criteria
Applicants must have submitted an application applied prior
to Oct. 1, 2008.
Eligible applicants include an individual producer,
partnership, association, corporation, estate, trust, other
business or other legal entities controlling eligible lands.
The term producer means an owner, operator, landlord, tenant or
sharecropper that shares in the risk of producing any crop or
livestock; and must be entitled to share in the crop or
livestock available for marketing from an agricultural
operation.
An applicant must be in compliance with highly erodible land
and wetland conservation provisions, and average adjusted gross
income requirements.
Working lands include cropland, grassland, prairie land,
improved pasture, and range land, as well as forested land that
is an incidental part of an agriculture operation.
10. Utilization (Participation) Data
Security Dollars Obligated on Active/Completed Contracts data
include:
------------------------------------------------------------------------
Financial Assistance Technical Assistance
Obligated Obligated
------------------------------------------------------------------------
Total $199,927,828.26 $16,985,614.49
------------------------------------------------------------------------
11. Duplication or Overlap with Other Programs
Because Security is available only for contracts that were entered
into prior to the enactment date of the 2008 Farm Bill, a producer who
receives Security payments cannot also receive payments under the
Stewardship.
12. Waste, Fraud and Abuse
In July 2009, OIG issued an audit report on the Conservation
Security Program. They noted potential improper payments made to
participants that were ineligible and participants that received
payments for more than one Security contract at a time. The audit
involved review of 20,653 contracts. Of those contracts, 37 percent
(7,666) contained errors, mostly minor or technical in nature. Three
contracts (less than one percent of all the contracts) were found to be
fraudulent. Corrective actions were taken on all errors and were
completed by December 31, 2009.
To recover the improper payments that were made, NRCS sent demand
letters and bills to participants. For certain participants, liquidated
damages have also been assessed. NRCS has recovered $4.618 million to
date as result of these corrective actions. To remediate the situation,
updated procedures were issued to require field verifications prior to
funds being obligated. NRCS continues to work to recover all improper
payments made.
13. Effect of Administrative PAYGO
None.
______
1. Program Name
Conservation Stewardship Program (Stewardship).
Prepared by USDA's NRCS.
2. Subprograms/Department Initiatives
None.
3. Brief History
The 2008 Farm Bill authorized Stewardship with an enrollment of
12,769,000 acres for each fiscal year (FY) for the period beginning
October 1, 2008, and ending on September 30, 2017.
The Chief of NRCS makes Stewardship available to all producers,
regardless of operation size or crops produced, in all 50 states, the
District of Columbia, and the Caribbean and Pacific Island areas.
Since it was first funded in 2008, Stewardship has enrolled 20,567
contracts on over 25.1 million acres.
4. Purpose/Goals
The purpose of Stewardship, as a voluntary program, is to encourage
agricultural and forestry producers to address resource concerns by:
(1) undertaking additional conservation activities; and (2) improving
and maintaining existing conservation systems. Stewardship provides
financial and technical assistance to help land stewards conserve and
enhance soil, water, air, and related natural resources on their land.
Stewardship participants receive payments for conservation
performance--the higher the performance, the higher the payment. It
provides two possible types of payments. An annual payment is available
for installing new conservation activities and maintaining existing
practices. A supplemental payment is available to participants who also
adopt a resource conserving crop rotation. Through 5 year contracts,
NRCS makes payments as soon as practical after October 1 of each fiscal
year for contract activities installed and maintained in the previous
year.
5. Success in Meeting Programmatic Purpose/Goals
In FY 2010:
NRCS enrolled 20,567 contracts on 25,164,327 acres.
The value of the contracts is $320,399,890.
The average contract size is 1,224 acres.
On average, NRCS agreed to reimburse participants $15,578
for each contract.
6. Annual Budget Authority (FY 2002-FY 2011)
------------------------------------------------------------------------
FY Apportionment ($ in millions)
------------------------------------------------------------------------
2002 --
2003 --
2004 --
2005 --
2006 --
2007 --
2008 --
2009 $10
2010 $469
2011 $601
------------------------------------------------------------------------
7. Annual Outlays (FY 2002-FY 2011)
------------------------------------------------------------------------
FY Outlays ($ in millions)
------------------------------------------------------------------------
2002 --
2003 --
2004 --
2005 --
2006 --
2007 --
2008 --
2009 $5
2010 $51
2011 $389
------------------------------------------------------------------------
Stewardship's FA funds are obligated separately for each year of
the 5 year contract for installing new or maintaining existing
conservation activities. FA funds are expended one year after
obligation, after NRCS personnel perform a field visit to site-verify
that the conservation activities are installed and maintained to
specifications. TA funds obligated in a given year are used for
workload generated by the enrollment of new contracts and workload
generated by prior year contract implementation. The vast majority of
TA funding tends to be expended in the year of obligation. FA funding
represents the majority of program budget authority.
8. Annual Delivery Cost (FY 2007-FY 2011)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual delivery cost is reported consistent with the President's 2012 Budget and USDA's Strategic Plan:
FY 2007 FY 2008 FY 2009 FY 2010 FY 2011Conservation Stewardship Program Conservation Planning and -- -- 398 2,939 3,356
Technical Consultation
Conservation -- -- 520 3,849 4,397
Implementation
Financial Assistance-- -- -- 2,086 15,440 17,645
Program Administration
Indirect Costs -- -- 6,374 47,187 45,581
-------------------------------------------------------------------------------
Sub-total Technical -- -- 9,378 69,415 70,979
Assistance
-------------------------------------------------------------------------------
Financial Assistance--Cost -- -- -- 320,398 529,855
Share & Monetary
Incentive
===============================================================================
Total Costs -- -- 9,378 389,813 600,834
FTEs -- -- 75 496 540Notes: These numbers are consistent with the published ``Full Cost by Secretary's Strategic Priorities'' section
of the Explanatory Notes for Fiscal Years 2009 through 2012 President's Budget submissions. In the table
above, Fiscal Years 2009 and 2010 amounts are actual obligations; Fiscal Year 2011 is an estimate from the
Fiscal Year 2012 President's Budget submission.
Financial assistance funding is identified on the line titled, ``Financial Assistance--Cost Share and Monetary
Incentives.'' Funds associated with technical assistance are on the remaining four lines.
9. Eligibility Criteria
Eligible land includes cropland, grassland, prairie land,
improved pastureland, rangeland, nonindustrial private
forestland, and agricultural land under the jurisdiction of an
Indian tribe.
Eligible applicants include individuals, legal entities,
joint operations, or Indian tribes. Applicants must be the
operator of record in the USDA farm records management system
for the eligible land being offered for enrollment and have
effective control of the land for the term of the proposed
contract.
Applicants must be in compliance with the highly erodible
land and wetland conservation provisions requirements and
adjusted gross income provisions prior to receiving program
payments.
Stewardship contract provisions provide:
A person or legal entity may have more than one Stewardship
contract but, for all Stewardship contracts combined, may not
receive more than $40,000 in any year or more than $200,000
during any 5 year period.
The contract limit is the same as the payment limit except
in the case of joint operations, for which the contract limit
is $80,000 per fiscal year and $400,000 over the term of the
contract period.
10. Utilization (Participation) Data
2010 Stewardship Application/Contract Status data includes:
------------------------------------------------------------------------
Number of
Active and Financial Total Technical
Completed Assistance Treated Assistance
Contracts Obligated Acres Obligated
------------------------------------------------------------------------
Total 20,567 $320,397,871 25,164,327 $59,940,382
------------------------------------------------------------------------
11. Duplication or Overlap with Other Programs
Some of the practices offered through Stewardship to meet the
minimum threshold at the end of the contract are also offered through
other programs such as EQIP. Utilizing Stewardship for this purpose
increases the additionality intent and uniqueness of the program.
12. Waste, Fraud and Abuse
In an effort to implement lessons learned from the 2009
Conservation Security Program OIG audit, NRCS undertook an independent
inquiry of FY 2010 Conservation Stewardship Program Contracts. The
agency reviewed ten random contracts from 15 selected states after all
states completed a ``Checklist to Address Conservation Stewardship
Program O&E Review Findings.'' The results of the review showed
inconsistencies in the calculation of additional activity points. To
address these matters NRCS has undertaken an extensive follow-up regime
with all states providing additional guidance, training, written
directives and net conferences to alleviate the problem. Finally, each
new contract entered into must now have a NRCS conservationist field
review the operation's on-the-ground compliance prior to enrollment.
13. Effect of Administrative PAYGO
None.
______
1. Program Name
Wetlands Reserve Program (WRP).
Prepared by USDA's NRCS.
2. Subprograms/Department Initiatives
None.
3. Brief History
Congress first authorized WRP in the 1990 Farm Bill and has
reauthorized it with little change in the three farm bills since. WRP
is a voluntary program that provides technical and financial assistance
to enable eligible landowners to address wetland, wildlife habitat,
soil, water and related natural resource concerns on private lands in
an environmentally beneficial and cost effective manner. The program
achieves solutions to local community issues related to farms, ranches,
rural lands and other areas by establishing easements and long-term
agreements on eligible farmlands and establishing 30 year contracts on
Tribal lands. Over the last 20 years, WRP's voluntary, private lands
approach has made it the Federal Government's private lands wetland
restoration and conservation program. Year after year, WRP has
delivered benefits to both the individuals participating and the
American public benefitting from the services the WRP wetlands provide.
4. Purpose/Goals
The primary purpose of WRP is the restoration, protection and
enhancement of wetlands and associated habitats for the benefit of
wetland-dependent wildlife, with an emphasis on migratory birds and
special status species. The WRP goal is to achieve the greatest wetland
functions and values, along with optimum wildlife habitat, on every
acre enrolled in the program. WRP is most suited for frequently flooded
agricultural lands, where restoration will maximize habitat for
migratory birds and other wildlife, and improve water quality. WRP
focuses on:
Enrolling marginal lands that have a history of crop
failures or low production yields;
Restoring and protecting wetland values on degraded
wetlands;
Maximizing wildlife benefits;
Achieving cost-effective restoration with a priority on
benefits to migratory birds;
Protecting and improving water quality; and
Reducing the impact of flood events.
5. Success in Meeting Programmatic Purpose/Goals
WRP has become the preeminent Federal private lands program for
protecting and restoring wetlands. Over the last 20 years, WRP has
helped more than 11,000 private landowners voluntarily restore, protect
and enhance wetlands and wildlife habitat on over 2.3 million acres
nationwide. Currently, about 30 percent of those acres are in the
restoration process and will require continued conservation assistance
in order to reach full restoration. WRP has proven to be a program
under which NRCS, landowners and many various partners can work
together to achieve truly cooperative conservation resulting in long-
term benefits on a landscape scale that will ensure our wetland
resources are available for future generations.
6. Annual Budget Authority (FY 2002-FY 2011)
------------------------------------------------------------------------
FY Apportionment ($ in millions)
------------------------------------------------------------------------
2002 $275
2003 $306
2004 $280
2005 $273
2006 $273
2007 $283
2008 $184
2009 $571
2010 $675
2011 $611
------------------------------------------------------------------------
7. Annual Outlays (FY 2002-FY 2011)
------------------------------------------------------------------------
FY Outlays ($ in millions)
------------------------------------------------------------------------
2002 --
2003 $98
2004 $231
2005 $205
2006 $234
2007 $154
2008 $249
2009 $131
2010 $278
2011 $348
------------------------------------------------------------------------
WRP TA funds support staff time needed to conduct eligibility
determinations, finalize easement transactions, complete restoration
designs, develop management and maintenance plans, and conduct
monitoring of wetlands under easement. WRP FA funds support the
easement costs paid to the landowner, restoration costs paid for
implementation of restoration design, and implementation costs for
maintenance and repairs on existing easements. FA for easement
acquisition is obligated when the acres to be placed under easement are
enrolled but is not expended until the easement is perfected, a process
that may take years. FA for restoration is obligated when contracts are
developed based on final restoration designs but is not expended until
the installation of practices used to restore the wetlands is complete
and verified by NRCS personnel, which also may occur over several
years. TA funds obligated in a given year are used for workload
generated by the enrollment of new acres and workload generated by
acquisition, restoration, and monitoring of prior year enrollments
which requires the majority of the TA funds obligated in a given year.
FA funding represents the majority of program budget authority.
8. Annual Delivery Cost (FY 2007-FY 2011)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual delivery cost is reported consistent with the President's 2012 Budget and USDA's Strategic Plan:
FY 2007 FY 2008 FY 2009 FY 2010 FY 2011Wetlands Reserve Program Conservation Planning and 4,346 2,363 2,191 2,558 3,807
Technical Consultation
Conservation 21,771 12,719 11,791 13,764 20,482
Implementation
Financial Assistance-- 17,382 11,186 10,370 12,106 18,015
Program Administration
Indirect Costs 16,599 6,923 6,418 7,492 11,148
-------------------------------------------------------------------------------
Sub-total Technical 60,098 33,191 30,770 35,920 53,452
Assistance
-------------------------------------------------------------------------------
Financial Assistance--Cost 187,757 149,758 404,941 594,219 672,647
Share & Monetary
Incentive
===============================================================================
Total Costs 247,855 182,949 435,711 630,139 726,099
FTEs 190 225 191 217 343Notes: These numbers are consistent with the published ``Full Cost by Secretary's Strategic Priorities'' section
of the Explanatory Notes for Fiscal Years 2009 through 2012 President's Budget submissions. In the table
above, Fiscal Years 2007 through 2010 amounts are actual obligations; Fiscal Year 2011 is an estimate from the
Fiscal Year 2012 President's Budget submission.
Financial assistance funding is identified on the line titled, ``Financial Assistance--Cost Share and Monetary
Incentives.'' Funds associated with technical assistance are on the remaining four lines.
9. Eligibility Criteria
--------------------------------------------------------------------------------------------------------------------------------------------------------
Owners of private and tribal lands are eligible to participate in the WRP. WRP offers a perpetual easement, 30 year easement, or 10 year restoration
cost-share agreement available to all private and tribal landowners and a 30 year contract option for tribal landowners only. Land is eligible if it
contains wetlands that have been degraded primarily as a result of agricultural use and have a high likelihood of successful restoration that will
maximize wildlife benefits and wetland functions and values taking cost into consideration. Associated habitats and lands functionally related to the
eligible wetlands may also be enrolled if they will contribute significantly to the wetland functions and values or practical administration of the
enrolled area.
10. Utilization (Participation) Data
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
During the 2008 Farm Bill, WRP has enrolled an average of approximately 215,000 acres on 1,200 projects each year. Since its inception in 1992, WRP has enrolled over 2.3 million acres on
over 11,000 projects. The majority of enrollments, over 77 percent are perpetual easements, 16 percent are 30 year easements and 30 year contracts with tribes, and the remaining six percent
are restoration cost-share agreements. 2010 WRP Number of Agreements and Dollars Obligated data includes:
--------------------------------------------------------------------------------------------------------------------------------------------------------
30 Year Contracts 30 Year Easements Permanent Easements Restoration Cost Total Agreements
-------------------------------------------- Share Agreement ---------------------- Financial Technical
-------------------------------------------- Assistance Assistance
Acres Number Acres Number Acres Number Acres Number Acres Number Obligated Obligated
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total 1,761 4 60,154 425 206,692 954 4,155 31 272,762 1,414 $592,562,106 $28,910,632
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Numbers currently reported in NEST are undergoing an intense quality assurance review. Numbers are subject to change during this process.
11. Duplication or Overlap with Other Programs
There is some potential overlap of the restoration cost-share
agreement enrollment option of WRP with WHIP. Because the restoration
cost-share agreement enrollment option does not have an associated
easement, it provides technical and financial assistance in the form of
a cost-share agreement for the implementation of wetland restoration.
The wetland restoration practices implemented through the WRP
restoration cost-share agreements would potentially be eligible for
cost-share under WHIP. The primary benefit of the WRP restoration cost-
share agreement that sets it apart from WHIP is the length of the
agreement. The WRP agreements require the restoration to be maintained
for a longer period of time--a minimum of 10 years after the date the
last practice is installed and, in contrast, WHIP agreements can be for
one year to a maximum of 10 years. Thus, the WRP restoration cost-share
agreements provide for a longer term protection of the public
investment and realization of the public benefits resulting from the
restored wetlands.
CRP land eligibility criteria is more narrow than WRP. The nature
of the agreements with landowners is also vastly different. Although
there may be some overlap of eligible land with the CRP, WRP does not
offer enrollment options similar to CRP.
12. Waste, Fraud and Abuse
No such instances have to date been identified.
13. Effect of Administrative PAYGO
None.
______
1. Program Name
Farm and Ranch Lands Protection Program (FRPP).
Prepared by USDA's NRCS.
2. Subprograms/Department Initiatives
None.
3. Brief History
FRPP was last reauthorized in 2008 Farm Bill. This legislation
expanded the purpose of the Farm and Ranch Lands Protection Program
from ``protecting topsoil'' to ``protecting agricultural use and
related conservation values of the land.'' The program now allows for
long term agreements with cooperating entities. Such agreements may be
5 years in duration for certified entities and 3 years for eligible
entities that are not certified. The 2008 Farm Bill defines a
``certified entity'' as an eligible entity with a proven record of
acquiring and monitoring conservation easements. Entities may submit
proposals to protect farm and ranch lands throughout the term of the
agreement.
4. Purpose/Goals
FRPP is a voluntary program that helps farmers and ranchers keep
their land in agriculture. The program provides matching funds to
state, Tribal, or local governments and non-governmental organizations
with existing farm and ranch land protection programs to purchase
conservation easements.
5. Success in Meeting Programmatic Purpose/Goals
The following is an example of the benefits of FRPP:
The 180 acre Carpenter Farm and the 142 acre Sparks Farm in Salem
County were protected from development with funding from the State
Agriculture Development Committee (SADC), Garden State Preservation
Trust, and FRPP. The Carpenter Farm has been in agriculture for more
than 300 years. Wheat and soybeans are the primary crops cultivated on
the Sparks Farm. In addition to protecting rich, fertile farmland and
investing in the agricultural economy of the region, preserving these
lands also provides a significant environmental benefit. The resulting
land and waterscape is one of the top areas in the state for waterfowl
diversity and has been designated an Important Bird Area by New Jersey
Audubon.
6. Annual Budget Authority (FY 2002-FY 2011)
------------------------------------------------------------------------
FY Apportionment ($ in millions)
------------------------------------------------------------------------
2002 $50
2003 $100
2004 $112
2005 $112
2006 $74
2007 $74
2008 $97
2009 $121
2010 $150
2011 $175
------------------------------------------------------------------------
7. Annual Outlays (FY 2002-FY 2011)
------------------------------------------------------------------------
FY Outlays ($ in millions)
------------------------------------------------------------------------
2002 --
2003 $15
2004 $54
2005 $63
2006 $59
2007 $91
2008 $73
2009 $74
2010 $102
2011 $97
------------------------------------------------------------------------
FRPP FA funds are obligated the year parcels are enrolled in the
program but not expended until easements are closed, which may take
several years. TA funds obligated in a given year are used for workload
generated by the enrollment of new parcels and workload generated by
parcels enrolled in prior years. The vast majority of TA funding tends
to be expended in the year of obligation. FA funding represents the
majority of program budget authority.
8. Annual Delivery Cost (FY 2007-FY 2011)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual delivery cost is reported consistent with the President's 2012 Budget and USDA's Strategic Plan:
FY 2007 FY 2008 FY 2009 FY 2010 FY 2011Farm and Ranch Lands Protection
Program Conservation Planning and N/A 325 336 336 460
Technical Consultation
Conservation N/A 17 18 18 25
Implementation
Financial Assistance-- 958 3,704 3,828 3,830 5,248
Program Administration
Indirect Costs 2,185 1,615 1,669 1,670 2,289
-------------------------------------------------------------------------------
Sub-total Technical 3,143 5,661 5,851 5,854 8,022
Assistance
-------------------------------------------------------------------------------
Financial Assistance--Cost 69,940 90,520 112,915 144,042 166,978
Share & Monetary
Incentive
===============================================================================
Total Costs 73,083 96,181 118,766 149,896 175,000
FTEs 24 29 34 29 44Notes: These numbers are consistent with the published ``Full Cost by Secretary's Strategic Priorities'' section
of the Explanatory Notes for Fiscal Years 2009 through 2012 President's Budget submissions. In the table
above, Fiscal Years 2007 through 2010 amounts are actual obligations; Fiscal Year 2011 is an estimate from the
Fiscal Year 2012 President's Budget submission.
Financial assistance funding is identified on the line titled, ``Financial Assistance--Cost Share and Monetary
Incentives.'' Funds associated with technical assistance are on the remaining four lines.
9. Eligibility Criteria
Individual landowners must apply to and be accepted by the eligible
state, tribe, or local government or nongovernmental programs to
participate in FRPP. As a Title XII program, these individual
landowners must meet farm bill payment eligibility requirements for
adjusted gross income, wetland conservation, and highly erodible land
conservation. The land to be enrolled in FRPP must meet one of three
criteria to qualify for consideration: (1) have at least 50 percent
prime, unique, or important farmland soil; (2) have historic or
archeological resources; or (3) support the policies of a state or
local farm and ranch lands protection program.
To qualify, farmland must: be part of a pending offer from a state,
tribe, or local farmland protection program; be privately owned; have a
conservation plan for highly erodible land; be large enough to sustain
agricultural production; be accessible to markets for what the land
produces; have adequate infrastructure and agricultural support
services; and have surrounding parcels of land that can support long-
term agricultural production. Depending on funding availability,
proposals must be submitted by the eligible entities to the appropriate
NRCS State Office during the application window.
10. Utilization (Participation) Data
2010 FRPP Number of Parcels and Dollars Obligated data includes:
------------------------------------------------------------------------
Financial
Assistance Technical
Number of Acres 1 Obligated for Assistance
Parcels 1 Easement Obligated
Acquisition
------------------------------------------------------------------------
Total 403 170,412 $144,041,755 $4,425,878
------------------------------------------------------------------------
1 Numbers currently reported in NEST are undergoing an intense quality
assurance review. Numbers are subject to change during this process.
11. Duplication or Overlap with Other Programs
GRP also offers long-term and permanent easements to protect
grazing lands from conversion to other uses. Lands eligible for GRP are
generally eligible for FRPP; however, FRPP is more broadly applicable
to include cropland or other lands that may not be eligible for GRP.
12. Waste, Fraud and Abuse
NRCS has uncovered few instances of entity misuse of landowner
contributions in acquiring easements through FRPP. However, a 2005 OIG
audit found that the entity coerced landowners into returning some of
the proceeds of the sale of the easement to the entity, who had claimed
these as part of their non Federal match. As a result, the entity did
not pay the required 25 percent of the purchase price for the FRPP
easement. In response, NRCS terminated the agreement with the eligible
entity and arranged for parcels to be included in a subsequent
agreement with another eligible entity. Internal controls have been
instituted that require landowners to sign a ``Confirmation of Matching
Funds'' to ensure that cooperating entities do not use landowners'
proceeds from the easement acquisition to cover the entities'
contribution. In addition NRCS State Office staff interview landowners
to be certain that they are not being forced to provide the entity cash
match.
In Wisconsin, the eligible entity misrepresented the source of its
funds by certifying that it had not obtained the money from landowners
when it had. This resulted in NRCS overpaying on these easements. The
Office of General Counsel is currently reviewing legal options. As a
result of this case, changes were made to FRPP policy requiring NRCS
State office staff to visit every FRPP parcel and interview every
landowner, inform them of FRPP regulations, and confirm the estimated
easement value, Federal contribution, entity contribution, landowner
donation, and recommended contribution to stewardship funds before a
cooperative agreement is signed.
13. Effect of Administrative PAYGO
None.
______
1. Program Name
Resource Conservation and Development (RC&D).
Prepared by USDA's NRCS.
2. Subprograms/Department Initiatives
None.
3. Brief History
RC&D was initiated under the Soil Conservation and Domestic
Allotment Act, (16 U.S.C. 590a-590f), the Bankhead-Jones Farm Tenant
Act (16 U.S.C. 1010 and 1011), and the Food and Agriculture Act of
1962, and is authorized under subtitle H, title XV of the Agriculture
and Food Act of 1981, (16 U.S.C. 3451-3461), as amended. Through the
program, RC&D areas establish or improve coordination systems in rural
communities, and build rural community leadership skills to more
effectively use Federal, state, and local programs for the communities'
benefit. The 2002 Farm Bill permanently authorized the program. The
2008 Act further strengthened the relationship between USDA and RC&D
councils. The program began with ten pilot areas and grew to 375 areas
designated by the Secretary of Agriculture.
A RC&D area is a locally defined multi-county area, sponsored and
directed by a RC&D Council that carries out the program encouraging
natural resource conservation and utilization, accelerated economic
development, and/or improvement of social conditions where needed to
foster a sound local economy. The RC&D Council consists of sponsors
from the public and private sector that represent a diverse cross-
section of community interests. Sponsors include county and city
governments, soil and water conservation districts, sub-state
districts, Tribal governments, and other interested private
organizations in the area. The RC&D program is based on grassroots
involvement and decision-making. From public meetings to identify
community concerns, needs, and problems, the RC&D Council develops an
area plan that details the goals, objectives, and action items needed
to address the local communities' priorities and concerns. The RC&D
Council then collects data about identified problems, develops
alternatives, and recommends solutions. Implementation of an action
item may include one step or a full range of steps, such as problem
identification, development of alternatives, plan development, and
funding.
4. Purpose/Goals
The purpose of the RC&D program is to--
(i) Develop and carry out area plans and projects in designated
areas in order to conserve, develop, and improve the use of
land.
(ii) Develop natural resources.
(iii) Improve and enhance the social, economic, and environmental
conditions in primarily rural areas of the United States.
(iv) Encourage and improve the capability of state and local units
of government, Indian Tribes, nonprofit organizations, and
councils.
The mission of the RC&D Program was to make the financial,
administrative, educational, and technical resources of USDA and other
public and private partners available to increase the ability of
communities to meet their regionally identified resource conservation
and economic development needs.
5. Success in Meeting Programmatic Purpose/Goals
The program has been successful in meeting its purpose and goals.
Each year RC&D Councils and their partners, with technical assistance
from NRCS, help to create, retain, and expand businesses and the
formation of cooperatives. RC&D Council projects create and retain
jobs. Each RC&D Council brings in external grant funds for direct
project implementation into their area.
RC&D Councils assist farm or ranch operations with agri-tourism
activities and direct marketing from the field to the consumer via
Community Supported Agriculture groups (CSAs), restaurants, commercial
stores, or public access farmers markets.
Efforts to improve natural resources within RC&D areas result in
the improvement of wildlife habitat, lakes and other water bodies, and
streams. RC&D Councils assist animal agricultural operations with water
quality projects; assist the construction or rehabilitation of flood
control structures; and preserve or protect agricultural land. Over the
last 5-8 years, RC&D Councils have begun implementing renewable energy
projects.
RC&D Councils hold workshops, tours and seminars nationwide on
agriculture, aquaculture, forestry and wildlife; and training sessions
on leadership development, grant writing, business development,
nonprofit management and environmental education. These educational
projects have helped people develop new skills.
6. Annual Budget Authority (FY 2002-FY 2011)
------------------------------------------------------------------------
FY Appropriation ($ in millions)
------------------------------------------------------------------------
2002 $48
2003 $51
2004 $52
2005 $51
2006 $51
2007 $51
2008 $51
2009 $51
2010 $51
2011 1 --
------------------------------------------------------------------------
1 The 2011 Appropriations Act provided no funding for this program.
Based on authority provided through multiple short-term continuing
resolutions, a total of $27 million was available for this program
through April 15, 2011.
7. Annual Outlays (FY 2002-FY 2011)
------------------------------------------------------------------------
FY Outlays ($ in millions)
------------------------------------------------------------------------
2002 $49
2003 $49
2004 $51
2005 $51
2006 $51
2007 $52
2008 $52
2009 $51
2010 $50
2011 $22
------------------------------------------------------------------------
RC&D primarily funded the support of RC&D Coordinators. Given the
nature of this expense, outlays generally occurred in the year of
appropriation and obligation. Prior to FY 2009, RC&D funds were no-year
funds.
8. Annual Delivery Cost (FY 2007-FY 2011)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual delivery cost is reported consistent with the President's 2012 Budget and USDA's Strategic Plan:
FY 2007 FY 2008 FY 2009 FY 2010 FY 2011Resource Conservation and
Development Conservation Planning and 27,693 21,364 21,364 21,364 21,364
Technical Consultation
Conservation 21,495 19,355 19,355 19,355 19,355
Implementation
Financial Assistance-- N/A N/A N/A N/A N/A
Program Administration
Financial Assistance--Cost N/A N/A N/A N/A N/A
Share & Monetary
Incentive
Indirect Costs 1,900 10,011 10,011 10,011 10,011
-------------------------------------------------------------------------------
Total Costs 51,088 50,730 50,730 50,730 50,730
FTEs 453 440 412 403 423Notes: These numbers are consistent with the published ``Full Cost by Secretary's Strategic Priorities'' section
of the Explanatory Notes for Fiscal Years 2009 through 2012 President's Budget submissions. In the table
above, Fiscal Years 2007 through 2010 amounts are actual appropriations; Fiscal Year 2011 is an estimate from
the Fiscal Year 2012 President's Budget submission.
Financial assistance funding is identified on the line titled, ``Financial Assistance--Cost Share and Monetary
Incentives.'' Funds associated with technical assistance are on the remaining four lines.
9. Eligibility Criteria
Eligible entities for the RC&D program are nonprofit entities that
are established by volunteers or representatives of states, local units
of government, Indian tribes, or local nonprofit organizations
specifically to participate in the RC&D program. They apply to the
Secretary of Agriculture to be designated as a USDA RC&D area. The size
and configuration of an area must be based on an assessment of rural
development needs, institutional arrangements, and the natural
resources of the region. Boundaries of an RC&D area are established on
a multi-jurisdictional basis to make the most efficient use of area
plans relating to land conservation, land management, community
development, and environmental enhancement. Commonality of existing
needs and opportunities are important aspects relating to the
geographic boundaries of the area. The Secretary selects designated
areas for assistance on the basis of the elements of the RC&D Council's
area plan.
10. Utilization (Participation) Data
There are 375 RC&D areas serving 2,696 counties in every state, the
Caribbean, and the Pacific Basin. Designated areas continue to serve
over 85 percent of U.S. counties and more than 77 percent of the U.S.
population. There are 39 applicant areas covering 236 additional
counties that have applied for the designation by USDA.
11. Duplication or Overlap with Other Programs
The Federal support for the program was not funded under the FY
2011 Full-Year Continuing Appropriations and agency technical support
for the program is being closed out. RC&D councils may continue to
compete to participate in other programs.
12. Waste, Fraud and Abuse
No such instances have to date been identified.
13. Effect of Administrative PAYGO
None.
______
1. Program Name
Environmental Quality Incentives Program (EQIP).
Prepared by USDA's NRCS.
2. Subprograms/Department Initiatives
Agricultural Water Enhancement Program.
Conservation Innovation Grants (CIG).
Organics.
Air Quality Initiative.
3. Brief History
EQIP was established in the 1996 Farm Bill and was reauthorized in
the 2002 and 2008 Farm Bills. The Chief of NRCS may implement EQIP in
any of the 50 states, the District of Columbia, the Commonwealth of
Puerto Rico, Guam, the Virgin Islands of the United States, American
Samoa, and the Commonwealth of the Northern Mariana Islands.
4. Purpose/Goals
NRCS is charged with carrying out EQIP in a manner that optimizes
environmental benefits and provides:
Flexible technical and financial assistance to farmers and
ranchers that face the most serious threats to soil, water,
air, and related natural resources;
Assistance to farmers and ranchers in complying with
Federal, state, and local environmental regulatory
requirements;
Assistance to farmers and ranchers in making beneficial,
cost-effective changes to cropping systems, grazing management,
manure, nutrient, pest, or irrigation management, land uses, or
other measures needed to conserve and improve soil, water, air,
and related natural resources; and
For the consolidation and simplification of conservation
planning and implementation to reduce the administration burden
on producers.
5. Success in Meeting Programmatic Purpose/Goals
In FY 2010:
NRCS enrolled almost 36,500 agreements on over 13,000,000
acres.
The value of the contracts was over $839 million.
The average agreement size is 357 acres.
On average, NRCS agreed to reimburse participants
approximately $23,000 for each agreement.
6. Annual Budget Authority (FY 2002-FY 2011)
EQIP supports CCPI and CIG. These are not appropriated separately
or tracked separately in the NRCS financial system.
------------------------------------------------------------------------
FY Apportionment ($ in millions)
------------------------------------------------------------------------
2002 $200
2003 $695
2004 $975
2005 $1,000
2006 $995
2007 $996
2008 $1,200
2009 $1,067
2010 $1,180
2011 $1,238
------------------------------------------------------------------------
7. Annual Outlays (FY 2002-FY 2011)
------------------------------------------------------------------------
FY Outlays ($ in millions)
------------------------------------------------------------------------
2002 $185
2003 $626
2004 $859
2005 1 ^$531
2006 $771
2007 $815
2008 $953
2009 $943
2010 $1,059
2011 $1,171
------------------------------------------------------------------------
1 Prior to FY 2005, NRCS advanced funding for the EQIP program to FSA.
In FY 2005 all obligations from FY 2005 and prior and the remaining
funding to pay those obligations came back to NRCS. The negative
outlays meant there was additional cash available to pay for the EQIP
obligations that came back to NRCS.
EQIP FA funds are obligated the year of contract enrollment for the
entire multi-year span of the contract. As the years pass, FA for
contracted practices is not expended until the practices are installed
and inspected for quality control by NRCS personnel. For this reason,
FA funds tend to be expended over multiple years after obligation. TA
funds obligated in a given year are used for workload generated by the
enrollment of new contracts and workload generated by prior year
contract implementation. The vast majority of TA funding tends to be
expended in the year of obligation. FA funding represents the majority
of program budget authority.
8. Annual Delivery Cost (FY 2007-FY 2011)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual delivery cost is reported consistent with the President's 2012 Budget and USDA's Strategic Plan:
FY 2007 FY 2008 FY 2009 FY 2010 FY 2011Enironmental Quality Incentives
Program Conservation Planning and 27,928 17,315 19,132 20,429 22,277
Technical Consultation
Conservation 119,171 89,704 99,117 105,837 115,411
Implementation
Financial Assistance-- 80,152 60,221 66,540 71,051 77,479
Program Administration
Indirect Costs 15,460 101,729 112,404 120,025 130,883
-------------------------------------------------------------------------------
Sub-total Technical 242,711 268,969 297,193 317,342 346,050
Assistance
-------------------------------------------------------------------------------
Financial Assistance--Cost 750,140 924,221 757,389 856,697 833,950
Share & Monetary
Incentive
===============================================================================
Total Costs 992,851 1,193,190 1,054,582 1,174,039 1,180,000
FTEs 2,171 2,313 2,395 2,407 2,872Notes: These numbers are consistent with the published ``Full Cost by Secretary's Strategic Priorities'' section
of the Explanatory Notes for Fiscal Years 2009 through 2012 President's Budget submissions. In the table
above, Fiscal Years 2007 through 2010 amounts are actual obligations; Fiscal Year 2011 is an estimate from the
Fiscal Year 2012 President's Budget submission.
Financial assistance funding is identified on the line titled, ``Financial Assistance--Cost Share and Monetary
Incentives.'' Funds associated with technical assistance are on the remaining four lines.
9. Eligibility Criteria
To participate in EQIP, both the land and the applicant must be
eligible. Eligible land includes cropland, rangeland, pastureland,
private nonindustrial forestland, and other farm or ranch lands. The
land must have an identified natural resource concern that poses a
serious threat to soil, water, air, or related resources by reason of
land use practices, soil type, terrain, climatic conditions,
topography, flooding, saline characteristics, or other natural resource
factors or natural hazard. Publicly owned land is eligible when the
land is under private control for the contract period, and is included
in the participant's operating unit, and must have written
authorization from the government agency to apply conservation
practices. For irrigation-related practices, the land must have a
history of actively irrigating the land unit for 2 out of the last 5
years.
Applicants must be an agricultural producer, have control of the
land for the life of the contract, be in compliance with farm bill
provisions (highly erodible land, wetland conservation, protection of
tenants and sharecroppers), be within appropriate program payment
limitations and adjusted gross income requirements, and develop an EQIP
plan of operations.
Organics--The Organic Initiative is a nationwide special initiative
within EQIP to provide assistance to organic producers as well as
producers in the process of transitioning to organic production.
Air Quality Initiative--The Air Quality Initiative is a nationwide
special initiative within EQIP to provide assistance to farmers and
ranchers to reduce air pollution generated from agricultural operations
in areas designated by the EPA as non-attainment areas for ozone and
particulate matter.
10. Utilization (Participation) Data
EQIP Application/Contract Status data includes:
------------------------------------------------------------------------
Number of Active Financial
FY or Completed Assistance Total Treated
Contracts Obligated Acres
------------------------------------------------------------------------
2005 49,406 $792,091,721 18,080,499
2006 41,190 $784,849,667 21,115,275
2007 41,700 $781,954,270 17,104,234
2008 48,116 $943,407,338 16,944,359
2009 31,960 $731,099,112 12,003,583
2010 36,499 $838,985,212 13,034,363
-----------------------------------------------------
Total........... 248,871 $4,872,387,320 98,282,313
------------------------------------------------------------------------
11. Duplication or Overlap with Other Programs
EQIP is one of the program structures through which CBWP is
delivered. CBWP has more focused priorities by concentrating on water
quality and quantity and only in the Chesapeake Bay watershed.
Although similar to EQIP, WHIP has expanded priorities to support
fish and wildlife.
Although similar to EQIP in implementation, Agricultural Management
Assistance (AMA) is limited to 16 statutorily-designated states that
have low participation in Federal Crop Insurance Programs. There are
some practices that can be installed through AMA but not EQIP
Although similar to EQIP, Agricultural Water Enhancement Program
(AWEP) focuses on ground and surface water conservation and water
quality, and is a component of EQIP.
Both EQIP and CRP address natural resource concerns, the land uses
on which the practices are applied generally are distinct. There could
be minimal overlap where CRP enrolls windbreaks, shelterbelts and
shallow water impoundments for wildlife.
12. Waste, Fraud and Abuse
An audit by the OIG revealed that participant contracts for the
Migratory Bird Habitat Initiative in one Louisiana Parrish received an
increased payment rate for the socially disadvantaged designation
although those participants were not actually in a socially
disadvantaged group. It was identified by OIG that staff inadvertently
selected an incorrect payment schedule. It was recommended to adjust
the agency's business tools so that the socially disadvantaged
designation indicated by the participant would automatically provide
the correct payment rate without staff having to manually select
various payment schedules for each application. For the improper
payments, the agency provided each participant with the option to
either return the overpayment amount or to receive a reduction in
future scheduled payments.
13. Effect of Administrative PAYGO
None.
______
1. Program Name
Conservation Innovation Grants (CIG).
Prepared by USDA's NRCS.
2. Subprograms/Department Initiatives
None.
3. Brief History
First authorized in the 2002 Farm Bill and reauthorized by each
subsequent farm bill, CIG is a voluntary program intended to stimulate
the development and adoption of innovative conservation approaches and
technologies while leveraging Federal investment in environmental
enhancement and protection, in conjunction with agricultural
production. Under CIG, EQIP funds are used to award competitive grants
to non-Federal governmental or non-governmental organizations, Tribes,
or individuals.
CIG enables NRCS to work with other public and private entities to
accelerate technology transfer and adoption of promising technologies
and approaches to address some of the nation's most pressing natural
resource concerns. CIG will benefit agricultural producers by providing
more options for environmental enhancement and compliance with Federal,
state, and local regulations.
4. Purpose/Goals
CIG provides grants on a competitive basis to stimulate the
development and adoption of innovative conservation approaches and
technologies while leveraging Federal investment in environmental
enhancement and protection, in conjunction with agricultural
production.
NRCS expects to incorporate innovative technologies and approaches
which result from CIG into NRCS technical manuals, guides, activities,
and references, and to transfer these innovations to others in the
public sector. CIG projects target innovative on-the-ground
conservation, including pilot projects and field demonstrations.
5. Success in Meeting Programmatic Purpose/Goals
The following provides examples of CIG project results:
(a) In 2005, the Washington State University was awarded a CIG
grant to implement the project titled ``Development and
Integration of a National Feed Management Education Program and
Assessment Tools into a Comprehensive Nutrient Management Plan
(CNMP)'' in Washington. The intend of the project was to
develop a two-tier tool for assessing the impacts of feed
management practices on whole farm nutrient balance for animal
nutritionists and NRCS staff and TSP advisors; develop the
content of a Feed Management chapter for the NRCS Agricultural
Waste Management Field Handbook (AWMFH), and develop and
implement an education program targeting integration of feed
management into a CNMP.
At the end of the project in 2008, the Washington State University
(WSU) developed educational materials that are applicable at
the national level and provided training for NRCS staff,
agricultural professionals, and technical service providers
(TSP's) in feed management concepts and practices that minimize
import of nutrients to the farm. WSU provided training in the
use of computer models and software for strategic ration
balancing, whole farm nutrient balance, and nutrient excretion
estimates based upon feed and animal performance inputs, and
developed a chapter for the NRCS Agricultural Waste Management
Field Handbook (AWMFH) on Feed Management. Education materials
were used to assist with the understanding of the conservation
practice standard (CPS) code 592 Feed Management, feed
management plan development and implementation tools, and a
decision aid tool were developed (Feed Nutrient Management
Economics software--FNMP$).
Workshops have been conducted in the States of Washington,
California, Texas, Maryland, Nebraska, Pennsylvania, and
Wisconsin. Collaborating states with these trainings included:
Idaho, Oregon, Virginia, Indiana, Iowa, and Minnesota. In
addition, the national CNMP training program led by Iowa State
has incorporated our Feed Management project material into
their curriculum. Approximately 70 individuals have become
certified through the American Registry of Professional Animal
Scientists organization to be feed management planners.
While the funding for this project has ended, the interest and
implementation activities are continuing. The project team is
available to work with individual states with adoption of CPS
592 Feed Management. In addition, the American Registry of
Professional Animal Scientists continues to provide the exam
process for certifying that a nutritionist is qualified to
develop a nutrient management plan.
The Feed Management chapter for the AWMFH was completed by
September 2008. In addition, NRCS is converting a decision aid
tool called Feed Management Nutrient Planning Economics (FNMP$)
from Excel to an Access data base format. Efforts to provide
training for nutritionists and TSPs will continue.
(b) The World Wildlife Fund, Inc. (WWF), received a CIG grant in
2005 for a project titled ``Market-Based Program for
Environmental Services on South Florida Ranch Lands.'' The main
goal of the project was to engage ranchers, public agencies,
and public interest groups to design, establish, and install a
market-based incentive program for phosphorous reduction in the
Lake Okeechobee (Northern Everglades) region; monitored and
evaluate the environmental benefits (Phosphorous load
reduction) achieved by the water management alternatives
installed by the livestock producer participants; and design a
scaled-up version of the pilot incentive program for use on a
broader scale and communicated results of the field tests
through field days, journal articles, workshops, and
conferences.
When the project was completed in 2006, eight (8) ranching
operations located within the Northern Everglades--Lake
Okeechobee region in south Florida were contracted by WWF to
developed Water Management Alternatives (WMA's) on formerly
drained wetlands that had been converted to pasturelands in an
effort to retain surface waters and nutrients. Each rancher had
different circumstances for which to implement practices and to
demonstrate surface water retention/water quality benefits.
Sizes of the rancher WMA's ranged from very small in-pasture
systems of 49 acres to two large systems involving 3,748 and
2,500 acres respectively. The average size of the eight WMA
project areas was 1,092 acres.
This CIG project has successfully established a foundation for a
Payment for Environmental Services (PES) program that is
locally accepted among livestock producers, and local, state
and Federal agencies. The eight pilot projects WMA's
demonstrated an average of 3 metric tons of phosphorous
retained on-site from 0.5-2.24 acre-feet of water retained
within their CIG project areas. As a result of this CIG
project, the first effective PES program was generated on a
large regional scale to benefit a globally recognized imperiled
ecosystem, the Everglades, and will do so by maintaining
agriculture as part of the solution. The CIG PES Program
offered a previously unrecognized environmental benefit from
the installation of conservation practices for farm bill
participants located within the Northern Everglades--Lake
Okeechobee region.
The project titled ``Wisconsin's Dairy and Livestock Air Emission/
Odor Project'' from Wisconsin Department of Agriculture, Trade,
and Consumer Protection (ATCP) was funded in 2005 to implement
best management practices to establish the connection between
agricultural ambient air concentrations and odor and evaluate
various best management practices installed on dairy and other
livestock operations to reduce odor, ambient air
concentrations, and overall environmental impacts; and to test
the odor standards developed as part of the administrative rule
to implement Wisconsin's Livestock Siting Law.
Wisconsin Department of Agriculture developed and implemented a
plan to evaluate the odor standards in ATCP 51 LIVESTOCK
FACILITY SITING, Wisconsin Administrative Code through odor
measurements and the relationship with measured ambient air
concentrations on six to eight dairy/livestock farms.
Evaluation installation of a manure digester to produce methane
for production of electricity was completed. An evaluation of
post implementation impacts on ambient air concentrations,
odors, and water quality was conducted. And results were
communicated through the Wisconsin Agricultural Stewardship
Initiative (WASI).
This project provided actual air sampling data associated with the
implementation of practices on dairies in the Midwest U.S. This
data verified that impermeable covers are extremely effective
at controlling odors and permeable covers are considerably
effective at controlling odors. This data also emphasized the
importance of proper design and operation (proper retention
time, operational reliability, and addition of substrate
material) for anaerobic digesters and that storage lagoons
receiving digested manure may require additional management for
odors and ammonia. Solids separation with aeration does appear
to reduce odors (about 25 percent) and hydrogen sulfide, but
may increase ammonia emissions. Overall, the project provided
some much-needed data regarding the effectiveness of certain
odor control practices. Although the data set is somewhat
limited, it does provide some trends and identification of
areas for further study.
(c) In 2005, the Chesapeake Bay Foundation received a CIG grant for
a project titled ``Precision Dairy Feeding to Reduce Nutrient
Pollution in Pennsylvania's Waters and the Chesapeake Bay'' to
demonstrate to dairy producers that precision feeding of dairy
cows could facilitate reductions in the protein (nitrogen) and
phosphorus being fed to dairy animals while maintaining or even
improving milk production and possibly improving animal health.
A total of 66 diverse farms were enrolled in the precision dairy
feeding program and received technical assistance from the
University of Pennsylvania. Forage, feed, and feces samples
were collected quarterly from these farms and analyzed to
adjust their rations to more precisely meet the nutrient needs
of the dairy herds. An additional 33 farms had their forage,
feed, and feces sampled and received technical assistance
through nutritionists and veterinarians who were trained to
precisely balance dairy rations by the University of
Pennsylvania. Dairy producers with their nutritionists
regularly adjusted rations to maintain and improve production
while minimizing manure nutrients.
Based on the finding from these feeding trials, the Pennsylvania
State University Cooperative Extension developed the ``Dairy
Tool'' to help farmers identify the greatest opportunities to
improve profitability on their farms. Feed management is an
essential component of this assessment. In addition, several
publications related to feed management were prepared by the
project participants in August 2008. Further the findings from
the CIG project were presented at various conferences through
display of posters and booths. Also, the Chesapeake Bay
Foundation created and distributed a brochure entitled ``Feed
Efficiency: Improving Dairy Production while Cutting Feed
Costs'' to introduce precision to 13,000 dairy producers who
were not participants in the program. Further several workshops
and training sessions were conducted in Pennsylvania to present
the findings and benefits of precision dairy feeding to dairy
farmers throughout Pennsylvania.
Widespread application of the ``precision dairy feeding''
techniques that were demonstrated and analyzed in this project
could be most valuable to NRCS in achievement of lower
phosphorus and nitrogen loading rates to receiving streams and
water bodies. This could make an especially beneficial
contribution to improved water quality in many watersheds with
high concentrations of dairy animals. Further this feeding
technology could aid development acceptable alternatives in
development of CNMP's. In addition, improvements in animal
health through precision dairy feeding would contribute towards
addressing health issues related to the animal resource.
The findings through this project relating to the evaluation and
promotion of ``precision dairy feeding'' could the s
significant value to NRCS in assisting dairy producers with the
development and implementation of resource management systems
and the achievement of water quality pollutant loading limits.
6. Annual Budget Authority (FY 2002-FY 2011)
CIG is not appropriated as a separate program. CIG is an initiative
within the Environmental Quality Incentives Program and is reported in
the immediately preceding Questionnaire.
7. Annual Outlays (FY 2002-FY 2011)
CIG is a sub-program of EQIP. Budget Authority and Outlays for CIG
are reported as part of EQIP. Since 2004, $125.9 million has been
awarded to CIG grant recipients.
8. Annual Delivery Cost (FY 2007-FY 2011)
CIG is not appropriated separately. It is a subprogram of the EQIP.
The program delivery costs for CIG are included in the total EQIP
delivery cost and are reflected in the EQIP table.
9. Eligibility Criteria
CIG is available to all eligible applicants in the 50 states,
Caribbean Area (Puerto Rico and the Virgin Islands), and the Pacific
Islands Area (Guam, American Samoa, and the Commonwealth of the
Northern Mariana Islands).
10. Utilization (Participation) Data
------------------------------------------------------------------------
FY Number of Applications Number of Grants
------------------------------------------------------------------------
2004 148 40
2005 175 54
2006 199 63
2007 194 50
2008 260 56
2009 391 52
2010 388 58
2011 411 TBD
------------------------------------------------------------------------
11. Duplication or Overlap with Other Programs
There is no duplication or overlapping with USDA conservation
programs. Because the purposes and functions of CIG are unique, CIG
payments do not overlap with other USDA conservation payments.
12. Waste, Fraud and Abuse
No such instances have to date been identified.
13. Effect of Administrative PAYGO
None.
______
1. Program Name
Agricultural Water Enhancement Program (AWEP).
Prepared by USDA's NRCS.
2. Subprograms/Department Initiatives
None.
3. Brief History
AWEP was authorized by the 2008 Farm Bill as a CCC-funded program
within EQIP. The Chief of NRCS may enter into AWEP partnership
agreements with eligible partners who compete through the Request for
Proposals process in any of the 50 states, the District of Columbia,
the Commonwealth of Puerto Rico, Guam, the Virgin Islands of the United
States, American Samoa, and the Commonwealth of the Northern Mariana
Islands.
4. Purpose/Goals
The purpose of the AWEP is to promote ground and surface water
conservation and water quality by helping producers implement
agricultural water enhancement activities. NRCS is charged with
carrying out AWEP in a manner that optimizes environmental benefits and
encourages the following activities with respect to agricultural land:
Development of a water quality or water conservation plan,
including resource condition assessment and modeling;
Water conservation restoration or enhancement projects,
including conversion of dryland farming or to producing
commodities that are less water intensive;
Water quality or quantity restoration or enhancement
projects;
Irrigation system improvement and irrigation efficiency
enhancement;
Activities designed to mitigate the effects of drought; and
Related activities that the Secretary of Agriculture
determines will help achieve water quality or water
conservation benefits on agricultural land.
5. Success in Meeting Programmatic Purpose/Goals
In FY 2010, NRCS obligated approximately $60.8 million in 1,489 new
contracts to implement conservation practices on nearly 271 thousand
acres of agricultural lands. Partners provided approximately $50.5
million in technical and financial assistance. Through AWEP, the agency
approved 28 new partner project areas during FY 2010, and continued to
provide support for 63 projects approved during FY 2009.
Approximately 54 percent of the projects approved in FY 2010 are
located in the designated high-priority water quantity concern areas.
Socially disadvantaged producers received 2.8 percent of all contracts
under the program.
For FY 2011 eight new projects in seven states were approved for a
total of $4.7 million. Producer enrollment currently underway for FY
2011 projects.
6. Annual Budget Authority (FY 2002-FY 2011)
------------------------------------------------------------------------
FY Apportionment ($ in millions)
------------------------------------------------------------------------
2002 $0
2003 $0
2004 $0
2005 $0
2006 $0
2007 $0
2008 $0
2009 $73
2010 $73
2011 $74
------------------------------------------------------------------------
7. Annual Outlays (FY 2002-FY 2011)
------------------------------------------------------------------------
FY Outlays ($ in millions)
------------------------------------------------------------------------
2002 $0
2003 $0
2004 $0
2005 $0
2006 $0
2007 $0
2008 $0
2009 $7
2010 $48
2011 $70
------------------------------------------------------------------------
AWEP FA funds are obligated the year of contract enrollment for the
entire multi-year span of the contract. As the years pass, FA for
contracted practices is not expended until the practices are installed
and inspected for quality control by NRCS personnel. For this reason,
FA funds tend to outlay for multiple years after obligation. TA funds
obligated in a given year are used for workload generated by the
enrollment of new contracts and workload generated by prior year
contract implementation. The vast majority of TA funding tends to
outlay in the year of obligation. FA funding represents the majority of
program budget authority.
8. Annual Delivery Cost (FY 2007-FY 2011)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual delivery cost is reported consistent with the President's 2012 Budget and USDA's Strategic Plan:
FY 2007 FY 2008 FY 2009 FY 2010 FY 2011Agricultural Water Enhancement
Program Conservation Planning and -- -- 1,264 1,257 3,757
Technical Consultation
Conservation -- -- 4,390 4,367 13,052
Implementation
Financial Assistance-- -- -- 3,091 3,075 9,190
Program Administration
Indirect Costs -- -- 2,661 2,648 7,914
-------------------------------------------------------------------------------
Sub-total Technical -- -- 11,406 11,347 33,913
Assistance
-------------------------------------------------------------------------------
Financial Assistance--Cost -- -- 60,397 60,813 40,087
Share & Monetary
Incentive
===============================================================================
Total Costs -- -- 71,803 72,160 74,000
FTEs -- -- 66 65 223Notes: These numbers are consistent with the published ``Full Cost by Secretary's Strategic Priorities'' section
of the Explanatory Notes for Fiscal Years 2009 through 2012 President's Budget submissions. In the table
above, Fiscal Years 2009 and 2010 amounts are actual obligations; Fiscal Year 2011 is an estimate from the
Fiscal Year 2012 President's Budget submission.
Financial assistance funding is identified on the line titled, ``Financial Assistance--Cost Share and Monetary
Incentives.'' Funds associated with technical assistance are on the remaining four lines.
9. Eligibility Criteria
Eligible partners include: Federally recognized Indian Tribes,
states, units of local government, agricultural or silvicultural
associations or other groups of such producers such as an irrigation
association an agricultural land trust, or other nongovernmental
organizations with experience working with agricultural producers.
The Managers' Report to the 2008 Farm Bill provides direction for
the Secretary to give priority to producers in six priority areas: The
Eastern Snake Plain Aquifer region, Puget Sound, the Ogallala Aquifer,
the Sacramento River watershed, Upper Mississippi River Basin, the Red
River of the North Basin, and the Everglades.
10. Utilization (Participation) Data
Approximately 46 percent of valid applications were funded during
FY 2010. Funding the remaining 54 percent of valid applications would
require an additional $70.4 million. For FY 2011, requirements for
continued funding of previous-year projects will significantly impact
the number of new projects awarded and increase the percentage of
unfunded applications. This condition is expected to continue to impact
the number of new applications funded in future years.
AWEP Application/Contract Status data includes:
------------------------------------------------------------------------
Active or Financial
FY Completed Assistance Total Acres
Contracts Obligated
------------------------------------------------------------------------
2009 1,704 $60,385,278 488,380
2010 1,489 $60,813,288 270,667
------------------------------------------------------------------------
11. Duplication or Overlap with Other Programs
The Agricultural Management Assistance (AMA) also focuses on ground
and surface water conservation and water quality. Although similar to
AMA in implementation, AWEP is available nationwide. There are some
practices that can be installed through AMA but not AWEP.
12. Waste, Fraud and Abuse
No such instances have to date been identified.
13. Effect of Administrative PAYGO
None.
______
1. Program Name
Cooperative Conservation Partnership Initiative (CCPI).
Prepared by USDA's Natural Resources Conservation Service.
2. Subprograms/Department Initiatives
None.
3. Brief History
Section 2707 of the 2008 Farm Bill authorized the CCPI as a CCC-
funded program. The Chief of NRCS may enter into CCPI partnership
agreements with eligible partners who compete through the Request for
Proposals process in any of the 50 states, the District of Columbia,
the Commonwealth of Puerto Rico, Guam, the Virgin Islands of the United
States, American Samoa, and the Commonwealth of the Northern Mariana
Islands.
4. Purpose/Goals
The purposes of the CCPI are to:
Address conservation priorities involving agriculture and
nonindustrial private forestland on a local, state, multi-
state, or regional level;
Encourage producers to cooperate in meeting applicable
Federal, state, and local regulatory requirements related to
production involving agriculture and nonindustrial private
forestland;
Encourage producers to cooperate in the installation and
maintenance of conservation practices that affect multiple
agricultural or nonindustrial private forest operations; or
Promote the development and demonstration of innovative
conservation practices and delivery methods, including those
for specialty crop and organic production and precision
agriculture producers.
NRCS may make EQIP, Wildlife Habitat Incentive Program (WHIP), and
Stewardship program resources available to owners and operators of
agricultural and nonindustrial private forestlands who are located in
an approved CCPI project area.
5. Success in Meeting Programmatic Purpose/Goals
In FY 2010, NRCS obligated approximately $42.3 million in 279 new
contracts to implement conservation practices on nearly 1.2 million
acres of agricultural lands. Through CCPI, the agency approved 51 new
partner project areas during FY 2010, and continued to provide support
for 110 projects approved during FY 2009.
For FY 2011 51 new projects were approved for a total of $20
million. Producer enrollment currently underway for FY 2011 projects.
6. Annual Budget Authority (FY 2002-FY 2011)
CCPI is not appropriated as a separate program. CCPI is a provision
for delivering up to six percent of the resources within the WHIP,
EQIP, and Stewardship.
7. Annual Outlays (FY 2002-FY 2011)
CCPI is not appropriated as a separate program. CCPI is an
initiative within WHIP, EQIP, and Stewardship resources.
8. Annual Delivery Cost (FY 2007-FY 2011)
CCPI is not appropriated separately. It is a provision through
which several existing programs may be delivered, including the
Environmental Quality Incentives Program, Conservation Stewardship
Program, and Wildlife Habitat Incentive Program. The program delivery
costs for CCPI are included in the delivery costs for EQIP,
Stewardship, and WHIP and are reflected in the tables for those
programs.
9. Eligibility Criteria
Eligible partners include: Federally recognized Indian Tribes,
states, units of local government, agricultural or silvicultural
associations or other groups of such producers such as an irrigation
association an agricultural land trust, or other nongovernmental
organization with experience working with agricultural producers.
10. Utilization (Participation) Data
Approximately 42 percent of valid applications were funded during
FY 2010. Prior year project were funded to approximately 90 percent of
the original request.
2010 CCPI--EQIP Application/Contract Status data includes:
------------------------------------------------------------------------
Number of Active Financial
and Completed Assistance Total Treated
Contracts Obligated Acres
------------------------------------------------------------------------
Total 1,188 $23,234,738 1,080,901
------------------------------------------------------------------------
2010 CCPI-WHIP Application/Contract Status data includes:
------------------------------------------------------------------------
Number of Active Financial
and Completed Assistance Total Treated
Contracts Obligated Acres
------------------------------------------------------------------------
Total 106 $654,375 12,549
------------------------------------------------------------------------
11. Duplication or Overlap with Other Programs
CCPI is a provision that is delivered through existing programs,
including EQIP, Conservation Stewardship Program, and WHIP. CCPI is a
way for partners to identify target areas where program funds will be
spent.
12. Waste, Fraud and Abuse
No such instances have to date been identified.
13. Effect of Administrative PAYGO
None.
______
1. Program Name
Wildlife Habitat Incentive Program (WHIP).
Prepared by USDA's NRCS.
2. Subprograms/Department Initiatives
None.
3. Brief History
WHIP was first authorized in the 1996 Farm Bill and was
reauthorized in the 2002 and 2008 Farm Bills. The Chief of NRCS may
implement WHIP in any of the 50 states, the District of Columbia, the
Commonwealth of Puerto Rico, Guam, the Virgin Islands of the United
States, American Samoa, and the Commonwealth of the Northern Mariana
Islands.
4. Purpose/Goals
The purpose of WHIP is to help participants develop fish and
wildlife habitat on private agricultural land, nonindustrial private
forestland, and Indian land.
In order to provide direction to the state and local levels for
implementing WHIP and achieving its objective, NRCS has established the
following national priorities:
(i) Promote the restoration of declining or important native fish
and wildlife habitats.
(ii) Protect, restore, develop, or enhance fish and wildlife
habitat to benefit at-risk species.
(iii) Reduce the impacts of invasive species on fish and wildlife
habitats.
(iv) Protect, restore, develop, or enhance declining or important
aquatic wildlife species' habitats.
(v) Protect, restore, develop, or enhance important migration and
other movement corridors for wildlife.
5. Success in Meeting Programmatic Purpose/Goals
In FY 2010
NRCS enrolled over 4,700 agreements on over 1,000,000 acres.
The value of the contracts was almost $63 million.
The average agreement size is 223 acres.
There were 68 contracts valued at over $3.7 million with
American Indian and Alaska Native Lands.
On average, NRCS agreed to reimburse participants
approximately $13,000 for each long-term agreement.
6. Annual Budget Authority (FY 2002-FY 2011)
------------------------------------------------------------------------
FY Apportionment ($ in millions)
------------------------------------------------------------------------
2002 $15
2003 $30
2004 $42
2005 $47
2006 $43
2007 $43
2008 $85
2009 $85
2010 $85
2011 $85
------------------------------------------------------------------------
7. Annual Outlays (FY 2002-FY 2011)
------------------------------------------------------------------------
FY Outlays ($ in millions)
------------------------------------------------------------------------
2002 $2
2003 $9
2004 $14
2005 $21
2006 $27
2007 $31
2008 $44
2009 $53
2010 $58
2011 $63
------------------------------------------------------------------------
Please explain changes between budget authority and outlays:
WHIP FA funds are obligated the year of contract enrollment for the
entire multi-year span of the contract. As the years pass, FA for
contracted practices is not expended until the practices are installed
and inspected for quality control by NRCS personnel. For this reason,
FA funds tend to outlay for multiple years after obligation. TA funds
obligated in a given year are used for workload generated by the
enrollment of new contracts and workload generated by prior year
contract implementation. The vast majority of TA funding tends to
outlay in the year of obligation. FA funding represents the majority of
program budget authority.
8. Annual Delivery Cost (FY 2007-FY 2011)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual delivery cost is reported consistent with the President's 2012 Budget and USDA's Strategic Plan:
FY 2007 FY 2008 FY 2009 FY 2010 FY 2011Wildlife Habitat Incentives
Program Conservation Planning and 1,310 3,554 2,770 2,733 2,769
Technical Consultation
Conservation 3,410 7,563 5,895 5,817 5,893
Implementation
Financial Assistance-- 3,688 9,086 7,083 6,989 7,080
Program Administration
Indirect Costs 1,919 6,220 4,849 4,785 4,846
-------------------------------------------------------------------------------
Sub-total Technical 10,327 26,423 20,597 20,324 20,588
Assistance
-------------------------------------------------------------------------------
Financial Assistance--Cost 32,131 57,080 52,146 62,602 64,412
Share & Monetary
Incentive
===============================================================================
Total Costs 42,458 83,503 72,743 82,926 85,000
FTEs 77 150 128 126 150Notes: These numbers are consistent with the published ``Full Cost by Secretary's Strategic Priorities'' section
of the Explanatory Notes for Fiscal Years 2009 through 2012 President's Budget submissions. In the table
above, Fiscal Years 2007 through 2010 amounts are actual obligations; Fiscal Year 2011 is an estimate from the
Fiscal Year 2012 President's Budget submission.
Financial assistance funding is identified on the line titled, ``Financial Assistance--Cost Share and Monetary
Incentives.'' Funds associated with technical assistance are on the remaining four lines.
9. Eligibility Criteria
To be eligible for WHIP, the land must be:
Private agricultural land including cropland, grassland,
rangeland, pasture, and other land determined by NRCS to be
suitable for fish and wildlife habitat development.
Nonindustrial private forestland including rural land that
has existing tree cover or is suitable for growing trees.
Indian land.
An exception may be made by the Chief in the case of
land allotted by the Bureau of Indian Affairs or Indian
land where there is sufficient assurance of control.
Applicants are subject to adjusted gross income provisions and must
provide NRCS with written evidence of ownership or legal control of the
land.
WHIP plays an important role in implementing a number of NRCS
special initiatives.
Longleaf Pine Initiative. In Alabama, Florida, Georgia,
Louisiana, Mississippi, North Carolina, South Carolina, Texas,
and Virginia, WHIP improved the health and extent of the
longleaf pine forest ecosystem in ways that benefited both the
health of the plant community and wildlife habitat. During FY
2010, NRCS enrolled over 33,000 acres of longleaf pine forest
in almost 400 contracts valued at nearly $4.65 million.
Lesser Prairie Chicken Initiative. WHIP enrolled land in
Colorado, Kansas, New Mexico, Oklahoma, and Texas to keep this
candidate species from being listed as threatened and
endangered under the Endangered Species Act, while also
improving grazing and wildlife habitat. During FY 2010, NRCS
enrolled over 98,000 acres in these states in 138 WHIP
contracts valued at more than $3.8 million.
New England-New York Forestry Initiative. WHIP expanded
stewardship opportunities for forestlands and wildlife in the
New England States of Connecticut, Maine, Massachusetts, New
Hampshire, New York, Rhode Island, and Vermont. During FY 2010,
NRCS enrolled over 48,500 acres in these states in more than
300 WHIP contracts valued at more than $4.6 million.
Sage-Grouse Initiative. In 11 states (California, Colorado,
Idaho, Montana, Nevada, North Dakota, Oregon, South Dakota,
Utah, Washington, and Wyoming) WHIP implemented conservation
practices that will reduce threats to sage-grouse habitat;
these practices are designed both to keep this candidate
species from being listed as threatened and endangered and to
provide grazing land for ranches. During FY 2010, NRCS enrolled
almost 90,000 acres in these states in 37 WHIP contracts valued
at more than $3.8 million.
10. Utilization (Participation) Data
Approximately 56 percent of valid applications were funded during
Fiscal Year 2010. Funding the remaining 44 percent would require an
additional $44 million.
WHIP Application/Contract Status data includes:
------------------------------------------------------------------------
Number of Active Financial
FY and Completed Assistance Treated Acres
Contracts Obligated
------------------------------------------------------------------------
2005 3,333 $33,246,702 454,091
2006 2,717 $31,464,158 324,954
2007 2,107 $31,494,465 357,699
2008 3,495 $57,221,029 646,491
2009 3,706 $51,998,722 812,497
2010 4,731 $62,862,480 1,054,095
------------------------------------------------------------------------
11. Duplication or Overlap with Other Programs
WHIP provides for developing, restoring, and enhancing wildlife
habitats which can also be done under EQIP. EQIP has one national
priority in regard to at-risk species habitat conservation as does
WHIP. However, WHIP has four additional priorities for fish and
wildlife.
EQIP is agriculturally support based while WHIP is fish and
wildlife habitat support based. EQIP requires lands to be in production
agriculture to be eligible. Lands can be in agriculture or have the
potential to be in agriculture to be eligible for WHIP. Public lands
connected with eligible lands are eligible for EQIP but not for WHIP.
CRP enrolls land to create wildlife habitat. All of the lands
eligible for CRP could be enrolled in WHIP if they fall within the WHIP
priority areas but not all lands eligible for WHIP could be enrolled in
CRP.
12. Waste, Fraud and Abuse
An audit by the Office of Inspector General (OIG) revealed that
participant WHIP contracts for the Migratory Bird Habitat Initiative in
one Louisiana Parrish received an increased payment rate for the
socially disadvantaged designation although those participants were not
actually in a socially disadvantaged group. It was identified by OIG
that staff inadvertently selected an incorrect payment schedule. It was
recommended to adjust the agency's business tools so that the socially
disadvantaged designation indicated by the participant would
automatically provide the correct payment rate without staff having to
manually select various payment schedules for each application. For the
improper payments, the agency provided each participant with the option
to either return the overpayment amount or to receive a reduction in
future scheduled payments.
13. Effect of Administrative PAYGO
None.
______
1. Program Name
Agricultural Management Assistance (AMA).
Prepared by USDA's NRCS.
2. Subprograms/Department Initiatives
None.
3. Brief History
AMA was originally authorized under the Agricultural Risk
Protection Act of 2000, Title I, Section 133, Public Law 106-224, on
June 22, 2000. This title was amended by the 2002 Farm Bill and the
2008 Farm Bill.
AMA is available in 16 states where participation in the Federal
Crop Insurance Program is historically low: Connecticut, Delaware,
Hawaii, Maine, Maryland, Massachusetts, Nevada, New Hampshire, New
Jersey, New York, Pennsylvania, Rhode Island, Utah, Vermont, West
Virginia, and Wyoming.
4. Purpose/Goals
AMA provides financial assistance payments to agricultural
producers to voluntarily address issues such as water management, water
quality, and erosion control by incorporating conservation practices
into their farming operations. The Agricultural Marketing Service (AMS)
is responsible for using AMA funding for organic certification
assistance, and the Risk Management Agency (RMA) is responsible for
using AMA funds for mitigation of financial risks through assisting
producers to purchase risk insurance. Funding is authorized at $15
million for FY 2008-2012 and of the funding made available each fiscal
year, not less than 50 percent is to be provided to NRCS, 40 percent to
RMA, and 10 percent to AMS.
5. Success in Meeting Programmatic Purpose/Goals
AMA currently has over 660 contracts in implementation and a
continuing backlog of applications that indicates strong support among
producers for the program. At the end of FY 2010, AMA had a backlog of
767 applications, with an estimated contract value of $5.1 million,
covering over 9,500 acres.
AMA provides many producers a first-time opportunity to address
natural resource concerns on their lands. For instance, many producers
have not been able to participate in EQIP because they do not meet the
eligibility criterion that land must have been irrigated for 2 of the
previous 5 years to receive EQIP funding. A number of these EQIP-
ineligible producers are small-acreage or specialty-crop farming
operations that provide high dollar value products to the general
public. By helping to mitigate the risks associated with these kinds of
agricultural enterprises, AMA helps agriculture remain a valuable
segment of local economies.
6. Annual Budget Authority (FY 2002-FY 2011)
------------------------------------------------------------------------
FY Apportionment ($ in millions)
------------------------------------------------------------------------
2002 $0
2003 $0
2004 $14
2005 $14
2006 $5
2007 $5
2008 $8
2009 $8
2010 $8
2011 $8
------------------------------------------------------------------------
7. Annual Outlays (FY 2002-FY 2011)
------------------------------------------------------------------------
FY Outlays ($ in millions)
------------------------------------------------------------------------
2002 $0
2003 $0
2004 $2
2005 $7
2006 $6
2007 $7
2008 $5
2009 $5
2010 $6
2011 $6
------------------------------------------------------------------------
AMA FA funds are obligated the year of contract enrollment for the
entire multi-year span of the contract. As the years pass, FA for
contracted practices is not expended until the practices are installed
and inspected for quality control by NRCS personnel. For this reason,
FA funds tend to outlay for multiple years after obligation. TA funds
obligated in a given year are used for workload generated by the
enrollment of new contracts and workload generated by prior year
contract implementation. The vast majority of TA funding tends to
outlay in the year of obligation. FA funding represents the majority of
program budget authority.
8. Annual Delivery Cost (FY 2007-FY 2011)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual delivery cost is reported consistent with the President's 2012 Budget and USDA's Strategic Plan:
FY 2007 FY 2008 FY 2009 FY 2010 FY 2011Agricultural Management
Assistance Conservation Planning and 458 147 150 147 212
Technical Consultation
Conservation 2,386 457 465 457 659
Implementation
Financial Assistance-- 940 433 441 433 624
Program Administration
Indirect Costs 775 457 141 165 238
-------------------------------------------------------------------------------
Sub-total Technical 4,559 1,494 1,197 1,202 1,733
Assistance
-------------------------------------------------------------------------------
Financial Assistance--Cost -- 5,756 6,181 6,048 5,767
Share & Monetary
Incentive
===============================================================================
Total Costs 4,559 7,250 7,378 7,250 7,500
FTEs 27 9 9 12 33Notes: These numbers are consistent with the published ``Full Cost by Secretary's Strategic Priorities'' section
of the Explanatory Notes for Fiscal Years 2009 through 2012 President's Budget submissions. In the table
above, Fiscal Years 2007 through 2010 amounts are actual obligations; Fiscal Year 2011 is an estimate from the
Fiscal Year 2012 President's Budget submission.
Financial assistance funding is identified on the line titled, ``Financial Assistance--Cost Share and Monetary
Incentives.'' Funds associated with technical assistance are on the remaining four lines.
9. Eligibility Criteria
Applicants must own or control the land within an identified AMA
state and comply with adjusted gross income limitation provisions.
Eligible land includes cropland, rangeland, grassland, pastureland,
nonindustrial forestland, and other private land that produces crops or
livestock where risk may be mitigated through operation diversification
or change in resource conservation practices.
10. Utilization (Participation) Data
Approximately 36 percent of valid applications were funded during
FY 2010. Funding the additional remaining 64 percent of valid
applications would require an additional $5.1 million. The FY 2010
funded applications covered over 11,000 acres.
AMA Application/Contract Status data includes:
------------------------------------------------------------------------
Number of Active Financial
Fiscal Year and Completed Assistance Treated Acres
Contracts Obligated
------------------------------------------------------------------------
2005 766 $9,578,046 74,255
2006 275 $3,718,549 13,328
2007 0 $0 0
2008 276 $5,756,087 33,202
2009 214 $6,179,956 13,875
2010 426 $6,048,438 11,102
-----------------------------------------------------
Total........... 1,957 $30,942,815 145,762
------------------------------------------------------------------------
11. Duplication or Overlap with Other Programs
The priorities of AMA are the same as for EQIP. There are some
practices that can be implemented under AMA that cannot be under EQIP.
12. Waste, Fraud and Abuse
No such instances have to date been identified.
13. Effect of Administrative PAYGO
None.
AGRICULTURAL PROGRAM AUDIT
(EXAMINATION OF SPECIALTY CROP PROGRAMS)
----------
THURSDAY, JULY 7, 2011
Subcommittee on Nutrition and Horticulture,
House of Representatives,
Committee on Agriculture,
Washington, D.C.
The Subcommittee met, pursuant to call, at 2:52 p.m., in
Room 1300 of the Longworth House Office Building, Hon. Jean
Schmidt [Chairwoman of the Subcommittee] presiding.
Members present: Representatives Schmidt, Southerland,
Crawford, Baca, Pingree, and Costa.
Staff present: Patricia Barr, John Goldberg, Pam Miller,
Mary Nowak, Matt Perin, Debbie Smith, Keith Jones, John Konya,
and Jamie Mitchell.
OPENING STATEMENT OF HON. JEAN SCHMIDT, A REPRESENTATIVE IN
CONGRESS FROM OHIO
The Chairwoman. I would like to thank our witnesses. I am
sorry for the delay, but at least we got the first set of votes
out of the way.
First off, I just want to say thank you to everybody for
your patience, and especially to our witnesses for the USDA's
Agricultural Marketing Service, and to the Animal and Plant
Health Inspection Service, or APHIS, for joining us. I look
forward to your insight and to your testimony. I also want to
thank my good friend, Ranking Member Joe Baca, who got an
exciting gift from a friend of his today. He actually bought
the baseball, but--can I brag for you? Well, Hank Aaron signed
his baseball. Is that like the coolest thing in the world?
Sorry I had to steal your thunder, but I just am really
impressed. So obviously, this is a big day for Mr. Baca. But,
thank you for joining me in this hearing, it is well known that
a certain degree of bipartisanship exists in this Committee. It
is one of the best committees to actually be on because we
fight about regional issues, not about Republican versus
Democratic. I am really glad that he is my friend throughout
this whole process.
As we approach the next farm bill, I look forward to
hearing from the farming community, the producers, the
handlers, everyone from around the country. And as Chairman
Lucas said and has continued to say, that there has to be a
firm understanding of the programs within the framework of the
farm bill, because as he has said, everything is on the table.
So I look forward to hearing from APHIS and AMS with a general
snapshot of the spending of each program that they administer.
I just want to say to Ms. Pegg, I understand you are
leaving, so I won't bother you with any leafy green issues
today. But we will be looking at your testimony and asking
questions. We will study the financial aspects of these
programs and consider whether or not the program's goals are
being met, and whether the programs are financially prudent. We
will join the other Subcommittees in looking for instances of
program overlap, as well as examples of waste, fraud, and
abuse.
An additional benefit to examining programs and their
operation is the education that members will receive. Many of
us do not have firsthand knowledge of how each program is
administered on a daily basis. I appreciate the opportunity to
learn what you all do, and I am excited to hear your testimony.
It is our hope that this process of evaluation and
education will give Members a clear picture of the farm bill as
a whole and see how well programs are being administered before
engaging in policy discussions before the next farm bill.
Today's audit hearing is focused specifically on specialty crop
programs found in Title X of the farm bill, as well as the
administration of Section 32 of the Act of August 24, 1935.
While many programs that affect the specialty crop industry are
found throughout the farm bill, we will do our best to stay
focused on Title X.
USDA's Agricultural Marketing Service and APHIS are the
agencies charged with administering most of the Title X
programs. AMS also administers a series of grant programs,
including the Specialty Crop Block Grant Program, which is
designed to enhance the competitiveness of fruits and
vegetables, tree nuts, dry fruits, horticulture, floriculture,
and nursery crops. These grants are widely used throughout the
states in a variety of ways. I know many in Ohio are
beneficiaries of and like the flexibility that Specialty Crop
Block Grant Program provide.
Creating technical assistance programs throughout the Ohio
Produce Marketing Agreement has been helpful and beneficial.
Last July, a grower from a neighboring district appeared before
our Subcommittee. In his testimony, he stated ``In states like
Ohio, we do not have existing support programs and systems of
technical assistance similar to what other states enjoy. The
Specialty Crop Block Grant Program is one of the few tools we
have to support our growers and better realize our specialty
crop opportunities.'' Further, AMS administers research and
promotion programs, as well as marketing orders and agreements
to help stabilize markets for specific commodities. One
marketing agreement that has received a considerable amount of
attention is the National Leafy Green Marketing Agreement that
AMS is considering, and that is currently open for public
comment. I look forward to learning how AMS is administering
Section 32 funds which have supported agricultural commodities
like fruits, vegetables, and meats, which are not typically
covered by mandatory price supports. AMS has the responsibility
of administering a wide range of programs, including the
National Organic Program, which oversees the labeling of
products as organic.
In addition to AMS testifying, APHIS will detail their
responsibilities in administering the pest and disease
programs, including the National Clean Plant Network, which
propagates pest and disease-free nursery stocks for the
industry. As we approach the next farm bill, it is imperative
that we hear directly from the Department so we can fully
understand from your firsthand experience what is working and
what is not working. Some of the decisions on program
authorizations and funding levels will be difficult, but with
proper evaluation, I am confident that we can put together a
farm bill that meets the goals of food safety and security,
rural prosperity, and nutritional well-being.
Again, I look forward to the panel, and to the witnesses
from the Department and for Ms. Bech and Ms. Pegg for joining
us today.
[The prepared statement of Mrs. Schmidt follows:]
Prepared Statement of Hon. Jean Schmidt, a Representative in Congress
from Ohio
Thank you all for coming to this hearing to review specialty crop
programs to help us prepare for the next farm bill. I thank our
witnesses from USDA's Agricultural Marketing Service and Animal and
Plant Health Inspection Service for joining us today. I look forward to
hearing your insightful testimony.
I also want to thank my friend, Ranking Member Baca, for joining me
in holding this hearing today. It is well known that a certain degree
of comity or bipartisanship exists here on the Agriculture Committee
and I look forward to working with my friend as we go through this farm
bill process.
As we approach the next farm bill, I look forward to hearing from
producers and handlers from around the country. But before we begin
that process, I agree with Chairman Lucas that Members need to have a
firm understanding of the programs within the framework of the farm
bill.
I look forward to hearing from APHIS and AMS with a general
snapshot of the spending of each program that they administer. We will
study the financial aspects of these programs and consider whether or
not the programs' goals are being met and whether the programs are
financially prudent.
We will join the other Subcommittees in looking for instances of
program overlap as well as examples of waste, fraud, and abuse.
An additional benefit to examining programs and their operation is
the education that Members will receive. Many of us, do not have
firsthand knowledge of how each program is administered on a daily
basis. I appreciate the opportunity to learn as much about individual
programs before the farm bill hearings begin.
It is our hope that this process of evaluation and education will
give Members a clear picture of the farm bill as a whole and see how
well programs are being administered before engaging in policy
discussions before the next farm bill.
Today's audit hearing is focused specifically on specialty crop
programs found in Title X of the farm bill as well as the
administration of Section 32 of the Act of August 24,1935. While many
programs that affect the specialty crop industry are found throughout
the farm bill, we will do our best to stay focused on those in Title X.
USDA's Agricultural Marketing Service (AMS) and Animal and Plant
Health Inspection Service are the agencies charged with administering
most of the Title X programs.
AMS also administers a series of grant programs including the
Specialty Crop Block Grant Program which is designed to enhance the
competitiveness of fruits and vegetables, tree nuts, dried fruits,
horticulture, floriculture and nursery crops. These grants are widely
used throughout the states in a variety of ways.
I know many of my Ohio constituents like the flexibility that the
Specialty Crop Block Grant Program provides producers, creating
technical assistance programs through the Ohio Produce Marketing
Agreement. Last July, a grower from near my district appeared before
our Subcommittee. In his testimony, he stated ``In states like Ohio, we
do not have existing support programs and systems of technical
assistance similar to what other states enjoy. The block grant program
is one of the few tools we have to support our growers and better
realize our specialty crop opportunities.''
Further, AMS administers research and promotion programs as well as
marketing orders and agreements to help stabilize markets for specific
commodities. One marketing agreement that has received a considerable
amount of attention is the National Leafy Green Marketing Agreement
that AMS is considering and that is currently open for public comment.
I also look forward to learning how AMS is administering Section 32
funds, which have supported agricultural commodities like fruits,
vegetables, and meats, which are not typically covered by mandatory
price supports.
AMS has the responsibility of administering a wide range of
programs including the National Organic Program which oversees the
labeling of products as organic.
In addition to AMS testifying, APHIS will detail their
responsibilities in administering the Pest and Disease programs
including the National Clean Plant Network which propagates pest and
disease-free nursery stock for the industry.
As we approach the next farm bill, it is imperative that we hear
directly from the Department so we can fully understand from your
first-hand experience what is working and what is not working. Some of
the decisions on program authorizations and funding levels will be
difficult, but with proper evaluation, I am confident that we can put
together a farm bill that meets the goals of food safety and security,
rural prosperity, and nutritional well-being.
Again, I would like to thank the witnesses from the Department, Ms.
Bech and Ms. Pegg, for joining us today. I look forward to your
testimony and today' s discussion.
The Chairwoman. Now I will turn this over to the Ranking
Member, my good friend, Joe Baca.
OPENING STATEMENT OF HON. JOE BACA, A REPRESENTATIVE IN
CONGRESS FROM CALIFORNIA
Mr. Baca. Good afternoon, and thank you, Madam Chairwoman
Schmidt for holding this important hearing to examine programs
that are contained within Title X of the 2008 Farm Bill. I
appreciate your bipartisanship in working with these issues. I
appreciate the little bit of stealing the thunder of Hank Aaron
signing this autographed ball. As you know, he broke Babe
Ruth's record and still holds the record for most home runs
right now. Some of us who play in the Congressional game, hope
we can hit a home run.
The Chairwoman. Can I just add that the Cincinnati Reds
could use some help. Do you think you could come help?
Mr. Baca. Some of us are willing to come out of retirement.
Maybe even to play for the Reds. I do appreciate that. Thank
you very much, Madam Chair.
Let's get back to the original topic here. The 2008 Farm
Bill was historic legislation that included the fundamental
improvements to the USDA nutrition and farm conservation
programs, but perhaps none more important that its recognition
of specialty crops and organic agriculture.
Specialty crops now represent nearly 50 percent of the farm
gate value of the plants based in U.S. agriculture. Organic
fruits and vegetables now account for over 11 percent of all
fruits and vegetable sales in the United States. The
availability of fruits, vegetables, and other specialty crops
are critical to the health of the American consumer, especially
as we look at obesity and other health-related problems that
are impacting us. If we don't deal with that, the additional
taxpayer costs will be roughly around $197 billion. As we look
at alternative fruits and vegetables, we need to focus on
American products. Let me state that again, we need American
products grown by American farmers to better ensure the
economic well-being of our citizens.
The specialty crops and organic sector were recognized in
the 2008 Farm Bill because they looked to the future in areas
like research, conservation, pests and disease management, and
expansion of market opportunities. Congress responded to this
forward thinking with a nearly $3 billion in investment in the
future of specialty crops and organic producers. This
investment is vital to farms across the nation.
My home State of California is blessed as the nation's top
producer of many fruits, tree nuts, and other crops. California
also leads the nation in the amount of certified organic
cropland with over 430,000 acres. As we now know, the 2012 Farm
Bill will be written during a time of unprecedented fiscal
challenges. The question of how to wisely use American's hard-
earned tax dollars will never be far from us. We must not lose
sight of the fact that any farm bill, at its core, is about
good public policy. If we are smart, the 2012 Farm Bill can
save money, improve health and nutrition, and strengthen our
economy.
I am convinced that we are on the right policy track with
the programs that we will be reviewing today. I look forward to
working with my colleagues to ensure that the down payment made
on behalf of specialty crops and organic producers does not go
to waste in 2012. Again, I want to thank the panelists for
their patience in waiting for our votes to conclude. I want to,
again, thank the Chairwoman for holding this hearing.
With that, I yield back the balance of my time.
[The prepared statement of Mr. Baca follows:]
Prepared Statement of Hon. Joe Baca, a Representative in Congress from
California
Good afternoon. Thank you Chairwoman Schmidt for holding this
important hearing to examine programs that are contained within Title X
of the 2008 Farm Bill.
The 2008 Farm Bill was historic legislation that included
fundamental improvements to USDA nutrition and farm conservation
programs.
But perhaps no policy change was more vital than the recognition of
specialty crops and organic agriculture.
Specialty crops now represent nearly 50 percent of the farm gate
value of plant based U.S. agriculture.
Organic fruits and vegetables now account for over 11 percent of
all fruit and vegetable sales in the U.S.
The availability of fruits, vegetables, and other specialty crops
is critical to the health of America's consumers.
And we need American products--grown by American farmers--to better
ensure the economic well-being of our citizens.
The specialty crop and organic sectors were recognized in the 2008
Farm Bill--because they looked to the future in policy areas, like:
Research and conservation;
Pest and disease management; and
Expansion of market opportunities.
Congress responded to this forward thinking with a nearly $3
billion investment in the future of specialty crop and organic
producers.
This investment is vital to farmers across the nation.
My home State of California is blessed as the nation's top producer
of many fruits, tree nuts, and other crops.
California also leads the nation in the amount of certified organic
crop-land--with over 430 thousand acres.
As we all know--the 2012 Farm Bill will be written during a time of
fiscal challenges.
We must not lose sight of the fact that any farm bill--at its
core--is about good public policy.
If we are smart--the 2012 bill can save money, improve health and
nutrition, and strengthen our economy.
I am convinced that we are on the right policy track with the
programs that we will be reviewing today.
I look forward to working with my colleagues to ensure the down
payment made on behalf of specialty crop and organic producers does not
go to waste in 2012.
Again--I want to thank the Chairwoman for holding this hearing--and
thank our witnesses for taking the time to help us better understand
these programs. I yield back.
The Chairwoman. Thank you very much. The chair would
request that other Members submit their opening statements for
the record so the witnesses may begin their testimony in a
timely manner, since we already are an hour delayed.
[The prepared statement of Mr. Southerland follows:]
Prepared Statement of Hon. Steve Southerland II, a Representative in
Congress from Florida
I welcome the opportunity to reauthorize Federal agricultural
policies affecting American agricultural production in the development
of the 2012 Farm Bill. As a significant contributor to U.S. farm
receipts and balance of trade, it is extremely important that the
issues affecting specialty crops play a meaningful role in the farm
bill. Specialty crops, including fruits, vegetables, nuts,
horticultural crops and others, represent over \1/3\ of gross
agricultural cash receipts in the U.S., and hence have a significant
stake in our nation's agricultural policy.
Florida ranks among the top ten states in the nation in
agricultural crop value and second in the specialty crop production
with a wide variety of fruit, vegetable and nursery crops grown through
the state. The farm bill 5 year farm policy measure should continue and
strengthen its emphasis on key areas such as pest and disease,
research, as well as giving states the flexibility needed to better
address environmental challenges and ensuring critical resources are
available to respond to the unique needs of specialty crops in most
budget efficient manner possible.
Historically, many Florida agricultural producers--and specialty
crop growers throughout the country--have chosen to base their economic
decisions on the marketplace and have not relied on Federal farm price
support programs. However, these markets can be very volatile and the
industry faces extreme and somewhat unique pressures including ever
increasing environmental challenges, labor and production costs beyond
that of our competitors, subsidized foreign market competition. In
addition, unprecedented exposure to pests and disease and state-of-the-
art agricultural research needs tailored to the needs of fruit and
vegetable production is also vital.
Florida is listed by the USDA as the number two high risk state
second only to California regarding exotic pest and disease
introductions pressure. According to the Florida Department of
Agriculture, costs to combat pests and diseases affecting Florida
farmers, have easily exceeded $1 billion over the last decade.
Specialty crop farm bill measures such as the such Pest and Disease
Management Program ``Section 10201'', the Specialty Crop Block Grants,
the Specialty Crop Research Initiative, and well as marketing,
nutrition, and other programs provide valuable opportunities for
Florida and U.S. specialty crop industry in American farm policy.
Mindful of the fiscal constraints facing our Federal budget and
increasing national debt, we must be vigilant within this Committee and
working with the U.S. Department of Agriculture to focus valuable
Federal resources in those areas with the most effective impact to
sustain and strengthen specialty crop and agricultural production in
our nation. I look forward to working with my colleagues toward that
end as we consider reauthorization of the 2012 Farm Bill.
The Chairwoman. I am going to begin with introducing our
first panelist, Ms. Rayne Pegg, who is the Administrator,
Agricultural Marketing Service, U.S. Department of Agriculture,
Washington, D.C., and Ms. Rebecca Bech, Deputy Administrator
for the Plant Protection and Quarantine, Animal and Plant
Health Inspection Service, U.S. Department of Agriculture,
Washington, D.C.
Ms. Pegg, we will let you begin.
STATEMENT OF RAYNE PEGG, ADMINISTRATOR,
AGRICULTURAL MARKETING SERVICE, U.S. DEPARTMENT OF AGRICULTURE,
WASHINGTON, D.C.
Ms. Pegg. Thank you very much, Chairwoman Schmidt, Ranking
Member Baca, and Members of the Subcommittee. Thank you for
inviting me to appear before you today to provide a
comprehensive picture of the activities authorized in the
Organic Agriculture Title X of the farm bill, as well as the
activities under Section 32. It is our hope that this
examination of specialty crop, organic, pest and disease
management and Section 32 provisions from the last farm bill
will prove helpful as you begin the next farm bill discussions.
USDA Agricultural Marketing Service and the Animal and
Plant Health Inspection Service are the primary agencies with
the responsibility for implementing Title X. Rebecca Bech from
APHIS is here with me today to answer any APHIS-specific
questions that you might have.
As you mentioned earlier, AMS administers two grant
programs that were reauthorized and amended in the 2008 Farm
Bill. Specialty Crop Block Grant Program provides funding to
states and U.S. territories to enhance the competitiveness of
specialty crops. Specialty crops are defined as fruits and
vegetables, tree nuts, dried fruits, horticulture, and nursery
crops, including floriculture.
The 2008 Farm Bill provided the following funding levels
for the block grants program from CCC funding: $10 million in
2008, $49 million in 2009, $55 million for 2010 through 2012.
In Fiscal Year 2010, approximately $55 million was awarded for
54 grants, which funded a total of 822 different projects. This
year's application deadline is July 13.
The Farmers Market Promotion Program is another AMS grant
program covered under Title X. This works to help improve and
expand domestic Farmers Markets, roadside stands, community-
supported agricultural programs--sorry, agriculture tourism
activities, and other direct producer to consumer market
opportunities. The 2008 Farm Bill extended the Farmers Market
Promotion Program through 2012, and provided a total of $33
million in CCC funding. In 2008, that funding was at $3
million, 2009, $5 million, and in 2010, it was still $5
million, and for 2011 and 2012, we are going up to $10 million
in funding. In 2010, with the $5 million funding, we funded a
total of 81 awards that went to 35 different states. In 2011,
we have notified--we published notice of funding availability
in June of 2011, and the deadline for applying for those funds
was last Friday, July the 1st.
AMS's Market News disseminates detailed information on
marketing conditions for hundreds of agricultural commodities
at major domestic and international wholesale markets,
production areas, and ports of entry. Using direct contacts of
salespersons, suppliers, brokers, buyers, Market News reporters
collect, validate, analyze, and organize unbiased data on
price, volume, quality, and condition, making it available
within hours of collection. In the 2008 Farm Bill, there was
specialty crop market news allocation which authorized $9
million for each fiscal year, starting in 2008 through 2012.
Although funding was not appropriated, AMS continues to carry
out specialty crop Market News activities as the agency
collects information on current supply, demand, and price for
nearly 400 domestic and 700 international fruits, vegetables,
nuts, ornamental and specialty crops.
Title X also directed USDA to collect data on production,
pricing, and marketing of organic agricultural products,
provided $5 million in CCC funds, available until expended. Of
the $5 million, $3.5 million was directed specifically to AMS.
AMS is working to enhance Market News systems to expand
reporting of organic market prices. By the end of 2009, AMS
Market News had expanded the daily reporting of organic
commodities to include a total of 234 items.
Marketing orders and agreements serve as tools to help
fruit and vegetable growers work together to solve marketing
problems that they cannot solve independently. These programs
are designed to help balance the availability of quality
product with the need of adequate returns to producers and
demand of consumers. There are currently 32 active specialty
crop marketing orders and agreements that the agency oversees.
Authorized by Federal legislation, research and promotion
programs, often referred to as check-off programs, are designed
to strengthen the position of the industry in the marketplace,
and to maintain and expand domestic and foreign markets. The
programs are fully funded by the industry. Board members are
nominated by the industry and appointed by the Secretary. AMS
oversees the activities of boards and approves their budgets in
order to ensure compliance with the legislation.
There were two research and promotion provisions in the
2008 Farm Bill. The first made a number of amendments to the
Honey Research Promotion and Consumer Information Act. As a
result of those amendments, a Honey Packers and Importers
Program became effective in 2008. A final research and
promotion provision in the last farm bill allowed for the
development of a program for good agricultural practices and
good handling practices under the Mushroom Promotion Research
and Consumer Information Order, as well as reapportioned the
membership of the Mushroom Council to reflect the shifts in the
industry.
To support organic agriculture, the 2008 Farm Bill
authorized funding for the National Organic Program at $5
million for Fiscal Year 2008, $6.5 million for 2009, $8 million
for 2010, $9.5 million for 2011, and $11 million for 2012. For
the Fiscal Year 2010, Congress appropriated $6.9 million, and
the 2011 budget for the program is $6.91 million. In addition
the National Organic Certification Cost-share Program makes
funds available to states and U.S. territories that are
interested in providing cost-share assistance to organic
producers and handlers certified under the National Organic
Program. The 2008 Farm Bill provided $22 million in CCC funding
for cost-share activities. It also increased the amount of
reimbursement from $500 to $750. Of the $22 million for the
program, $6.5 million remains for the Fiscal Year 2011 and 2012
to be spent.
To support domestic producers, Section 32 of the Act of
August 24, 1935, authorizes the appropriation for each fiscal
year of an amount equal to 30 percent of the gross receipts
from duties collected under Customs laws of the United States
during the preceding calendar year. These funds are
specifically used to encourage domestic consumption of non-
price supported perishable commodities and reestablish farmers'
purchasing power through a variety of activities. These
activities include purchasing commodities, removal of surplus
commodities from the marketplace for distribution to our
Federal nutrition programs, including those programs that
support the National School Lunch Program as well as food
banks, diversion programs that bring production into line with
demand to assist producers, and disaster assistance. AMS
annually purchases approximately $1 billion worth of
commodities for distribution through various nutrition
assistance programs. The 2008 Farm Bill authorized a spending
cap for AMS purchases that has since been modified through
subsequent appropriations.
In addition to the 2002 Farm Bill which established that
there be a minimum of $200 million used for the purchases of
fruits and vegetables, the 2008 Farm Bill established
additional fruit and vegetable purchases for each subsequent
year. The minimum purchase requirement for the 2011 year for
fruits and vegetables is a total of $403 million. To make up
this purchase, entitlement purchases, Department of Defense
purchases, and bonus buys can make up the total requirement for
meeting the minimum fruit and vegetable purchasing requirement
under the farm bill.
AMS and APHIS undertake numerous activities to facilitate
the competitive and efficient marketing of the U.S.
agricultural products, as well as to protect and promote U.S.
agricultural health. I hope that this testimony and subsequent
questions and answers will prove useful to the Subcommittee as
you undertake your work on the next farm bill.
I want to introduce Rebecca Bech, who will add some
additional comments regarding APHIS's administration of Title X
of the farm bill.
STATEMENT OF REBECCA BECH, DEPUTY ADMINISTRATOR FOR PLANT
PROTECTION AND QUARANTINE, ANIMAL AND PLANT HEALTH INSPECTION
SERVICE, U.S. DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C.
Ms. Bech. Well, thank you for inviting me to join
Administrator Pegg today to talk to you about the specialty
crop provisions from the 2008 Farm Bill that APHIS continues to
implement.
The Animal and Plant Health Inspection Service is charged
with protecting American agriculture from foreign pest and
disease introductions, and within APHIS, I head up the Plant
Protection Quarantine Program, which focuses on both plant
pests and diseases that can harm our specialty crops, but also
our forests and natural resources, as well as traditional
crops.
To accomplish that mission, APHIS has developed a robust
agricultural safeguarding system, which consists of a set of
comprehensive interlocking programs that work together to
protect our agricultural resources.
The 2008 Farm Bill created two programs that take these
measures further by targeting specific segments of agriculture
and activities that particularly benefit the specialty crops,
and I would like to thank the Committee for its continued
support for these crucial programs. Both the programs, the
Plant Pest and Disease Management and Disaster Prevention
Program, and the National Clean Plant Network, have proven to
be highly effective and widely supported by stakeholders and
industry. Through the Plant Pest and Disease Management and
Disaster Prevention provision, which we refer to as Section
10201 of the farm bill, APHIS is partnered with numerous
states, tribes, universities, and other community partners to
strengthen and expand the scope of APHIS's pest and disease
prevention activities. Under the program, which is funded
through the Commodity Credit Corporation, APHIS is allocated
$50 million in Fiscal Year 2011, and as of today, we have
funded 317 projects this year with over 100 cooperators. The
agency provided $45 million in Fiscal Year 2010, along with $12
million in Fiscal Year 2009. This program has been hugely
successful and well-supported as we continue to see the
positive impact of the various 2009, 2010, and 2011 projects.
Because of this influx of farm bill funding, we have been
able to work with states and industry to eradicate the plum pox
virus in Pennsylvania, enhance California's ability to detect
dangerous pests entering through mail and freight. We have
eradicated 13 separate Mediterranean fruit fly outbreaks
without the use of emergency funding, and we work with states
across the country to survey for pests so that we can respond
to any pest issues swiftly.
These are just a few of the success stories that we have
seen through this effort, but the net effect of these efforts
and the many partnerships is a demonstrated improvement in
USDA's ability to detect and respond to a plant pest or disease
outbreak. Detecting and responding to a plant pest or disease
in the early stage of an introduction is a significant cost
saving for taxpayers, and can help minimize the potentially
devastating impact on agriculture.
The second farm bill program that helps address plant pest
and diseases is Section 10202, the National Clean Plant
Network. The network is a partnership of APHIS, the
Agricultural Research Service, and the National Institute of
Food and Agriculture. The network works to develop and produce
clean propagative material, so that should a plant pest or
disease strike, clean plant material is available to states,
private nurseries, and the producers. Essentially, it is like
an insurance policy that guarantees that there will be fresh
stock of disease-free plants. The network is currently
comprised of clean plant networks for fruit trees, grapes,
citrus, berries, and hops. It includes 18 supported clean plant
centers and associated programs located in 14 states. We
continue to see broad support within the specialty crop
industry, and also interest from other commodity groups in
becoming part of this program.
I would like to thank you again for the opportunity to
testify today, and we look forward to working with the
Subcommittee as you develop the next farm bill.
Thank you.
[The prepared statement of Ms. Pegg and Ms. Bech follows:]
Joint Prepared Statement of Rayne Pegg, Administrator, Agricultural
Marketing Service; Rebecca Bech, Deputy Administrator for Plant
Protection and Quarantine, Animal and Plant Health Inspection Service,
U.S. Department of Agriculture, Washington, D.C.
Chairwoman Schmidt, Ranking Member Baca, and Members of the
Subcommittee, thank you for inviting me to appear before you today to
provide a comprehensive picture of the activities authorized in the
Horticulture and Organic Agriculture Title of the Food, Conservation,
and Energy Act of 2008 (2008 Farm Bill), as well as the activities
under Section 32 of the Act of August 24, 1935 (Section 32). It is our
hope that this examination of the specialty crop, organic, pest and
disease management, and Section 32 provisions from the last farm bill
will prove helpful as you begin work on the next farm bill.
The Horticulture and Organic Agriculture Title (Title X) of the
2008 Farm Bill represents the first time that a farm bill title was
devoted exclusively to these two sectors. The U.S. Department of
Agriculture's (USDA) Agricultural Marketing Service (AMS) and the
Animal and Plant Health Inspection Service (APHIS) are the primary
agencies with responsibility for implementing Title X. APHIS Deputy
Administrator Bech is here with me today to answer any APHIS-specific
questions that you might have.
The economic vitality of rural America and the U.S. economy at
large depends on a competitive, efficient, and productive agricultural
system. In order to increase prosperity and sustainability in our
nation's agricultural system and rural communities, AMS conducts
oversight activities designed to protect producers from unfair
competition and business practices. AMS assists producers in management
and marketing through the development and oversight of national
standards for the production and handling of agricultural products.
Under the National Organic Program (NOP), the agency also develops and
oversees the standards of products labeled as organic. AMS also
supports producers by providing market trend analysis and business and
marketing tools to cover hundreds of commodities every day and
producing information that impacts billions of dollars in agricultural
products each year.
Grant Programs
The Specialty Crops Competitiveness Act of 2004, as amended by the
2008 Farm Bill, defines specialty crops to include fruits and
vegetables, tree nuts, dried fruits, horticulture and nursery crops,
including floriculture. Using this definition, specialty crops
accounted for about 20 percent of the $283 billion in U.S. farm cash
receipts in 2009. Yet, only about three percent of total crop acres in
the U.S. are devoted to specialty crops.
AMS administers two grant programs that were reauthorized and
amended in the 2008 Farm Bill. The Specialty Crop Block Grant Program
provides funding to states and U.S. territories to enhance the
competiveness of specialty crops. The agency, commission, or department
responsible for agriculture within each of the 50 states, the District
of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the
U.S. Virgin Islands, and the Commonwealth of the Northern Mariana
Islands is eligible to apply for these grant funds from USDA. The
minimum base grant each state or U.S. Territory is eligible to receive
is equal to the higher of $100,000 or \1/3\ of 1 percent of the total
amount of funding made available for that fiscal year (FY).
The 2008 Farm Bill provided the following funding levels for the
Specialty Crop Block Grant Program from the Commodity Credit
Corporation (CCC): $10 million in FY 2008, $49 million in FY 2009, and
$55 million for each Fiscal Year 2010 through 2012. In Fiscal Year (FY)
2010, approximately $55 million was awarded for 54 grants that funded
827 projects, an approximate ten percent increase in the number of
projects funded the previous year. The application deadline for FY 2011
awards is July 13, 2011.
The last farm bill also amended the definition of specialty crop to
include horticulture, and added Guam, American Samoa, the U.S. Virgin
Islands and the Commonwealth of the Northern Mariana Islands to the
list of ``states'' eligible to apply for grants. These changes required
AMS to undertake rulemaking that was completed on March 27, 2009, with
the publication of the final rule in the Federal Register.
The other AMS grant program reauthorized and amended in Title X of
the 2008 Farm Bill is the Farmers Market Promotion Program (FMPP). This
program seeks to improve and expand domestic farmers markets, roadside
stands, community-supported agriculture programs, agri-tourism
activities, and other direct producer-to-consumer market opportunities.
The 2008 Farm Bill extended the FMPP through 2012 and provided $33
million in CCC funds: $3 million in FY 2008, $5 million in each Fiscal
Years 2009 and 2010, and $10 million in each Fiscal Years 2011 and
2012.
The farm bill specified statutorily the categories of farmer-to-
consumer direct marketing activities eligible for funding under the
program. It also required that not less than ten percent of the funds
used to carry out the program in a fiscal year are to be used to
support the use of Electronic Benefits Transfers (EBT) at farmers'
markets. The 2010 awards were announced in October 2010, and totaled
approximately $4.3 million (81 awards in 35 states). A proposed rule
that established eligibility and application requirements, the review
and approval process, and grant administration procedures, was
published in the Federal Register on June 1, 2011. The 2011 Notice of
Funding Availability (approximately $10 million) was published on June
3, 2011, with a deadline of July 1, 2011 for submission of grant
proposals.
Market News
AMS' Market News disseminates detailed information on marketing
conditions for hundreds of agricultural commodities at major domestic
and international wholesale markets, production areas, and ports of
entry. Using direct contacts with salespeople, suppliers, brokers, and
buyers, Market News reporters collect, validate, analyze, and organize
unbiased data on price, volume, quality and condition, making it
available within hours of collection.
In the 2008 Farm Bill, there was a Specialty Crops Market News
allocation which authorized $9 million for each Fiscal Year 2008
through 2012, to remain available until expended. Although recent
appropriations have not specified specialty crops, AMS continues to
carry out specialty crops Market News activities as the agency collects
information on the current supply, demand and prices on nearly 400
domestic and 70 international fruits, vegetables, nuts, ornamental and
specialty crops.
Title X also directed USDA to collect data on the production,
pricing, and marketing of organic agricultural products and provided $5
million in CCC funds, available until expended. Of the $5 million
provided in FY 2008, $3.5 million was directed to AMS. In addition, the
bill required a report to Congress within 180 days of enactment on the
progress made implementing these activities and identifying additional
production and marketing data needs. The report was delivered to
Congress on December 29, 2008. AMS is working to enhance Market News
systems to expand reporting of organic market prices. By the end of
2009, AMS Market News had expanded the daily reporting of organic
commodities to include 234 items. AMS Market News also added an
additional section on the advertised specials on organic products to
the weekly National Fruit and Vegetable Retail Report.
Marketing Orders and Agreements
Marketing orders and agreements serve as tools to help fruit and
vegetable growers work together to solve marketing problems that they
cannot solve individually. These programs are designed to balance the
supply of quality product with the need for adequate returns to
producers and the demands of consumers. There are currently 32 active
specialty crop marketing orders and agreements.
Marketing orders are typically initiated by producers who have an
active role in the development of program provisions. Before any
program is implemented or amended, approval by a \2/3\ or larger
majority by number or volume represented in a referendum is required.
Local committees of farmers and handlers--appointed by the Secretary of
Agriculture--administer the orders.
Marketing orders are binding on all individuals and businesses
classified as ``handlers'' in the geographic area covered by the order.
As defined by most agreements and orders, a handler is anyone who
receives the commodity from producers, grades and packs it, transports,
or places the commodity in commercial channels. However, this
definition is ultimately defined by an individual program. Marketing
orders are distinguished from marketing agreements, in that the
agreements are binding only on handlers who are signatories of the
agreements. Handlers must comply with the grade, size, quality, volume,
and other requirements established under the specific program.
In the 2008 Farm Bill, Congress directed USDA to add clementines to
the list of products in Section 8e of the Agricultural Marketing
Agreement Act of 1937. Section 8e provides that whenever a specified
domestically produced commodity is regulated under a Federal marketing
order, imports of the commodity must meet the same or comparable
product standards as the domestic commodity. However, this provision
has not been implemented as the industry has not pursued establishing a
Federal clementines marketing order.
Also, Title X provided for an expedited marketing order for Hass
avocados relating to grades and standards. The order would become
effective within 15 months of the date that the Department began the
procedures for determining if the order should proceed. To date, AMS
has not received an industry proposal.
Research and Promotion
Research and promotion programs, often referred to as ``check-
offs'', are designed to strengthen the position of the industry in the
marketplace and to maintain and expand domestic and foreign markets.
The programs are all fully funded by industry assessments and are
authorized by Federal legislation. Board or council members are
nominated by the industry and officially appointed by the Secretary of
Agriculture. In order to ensure compliance with the legislation, AMS
oversees the activities of the boards or councils and approves their
budgets.
There were two research and promotion provisions in the 2008 Farm
Bill. The first made a number of amendments to the Honey Research,
Promotion, and Consumer Information Act. It directed AMS to consider a
national research and promotion program for honey packers and
importers. AMS received a proposal for the packers and importers
program, and conducted a referendum on that proposal from April 2-16,
2008. In the referendum, 78 percent of those voting, representing 92
percent of the volume of referendum voters, approved the program. The
program became effective on May 22, 2008, one day after the final rule
was published in the Federal Register. The first board meeting took
place on September 4, 2008. With the approval of this new program, the
collection of assessments under the Honey Research, Promotion and
Consumer Information Order--authorized under the Honey Research,
Promotion and Consumer Information Act--was suspended. A termination
order for that program was published in the Federal Register on April
17, 2009.
Furthermore, USDA was directed to consider establishing a research
and promotion program for domestic honey producers. On July 14, 2009,
AMS published a proposed rule and solicited comments for a domestic
honey producer program. The rule and referendum procedures were
published on April 12, 2010. The referendum was held May 17-June 4,
2010, and resulted in the producers rejecting the domestic research and
promotion program.
Another research and promotion provision in the last farm bill
allowed for the development of a program for Good Agricultural
Practices and Good Handling Practices under the Mushroom Promotion,
Research and Consumer Information Order, as well as reapportioned the
membership of the Mushroom Council to reflect shifts in domestic
mushroom production. AMS published the final rule implementing these
provisions in the Federal Register on October 2, 2009.
Organics
The Organic Foods Production Act (OFPA) of 1990 required USDA to
develop national standards for organically produced agricultural
products and to assure consumers that agricultural products marketed as
``organic'' meet consistent and uniform standards. The National Organic
Program (NOP) is a marketing program administered by AMS.
The 2008 Farm Bill authorized funding for the NOP at $5 million for
FY 2008, $6.5 million for FY 2009, $8 million for FY 2010, $9.5 million
for FY 2011, and $11 million for FY 2012. For FY 2010, Congress
appropriated $6.96 million while the FY 2011 funding for NOP is $6.91
million.
The National Organic Certification Cost-Share Program makes funds
available to states and U.S. territories that are interested in
providing cost-share assistance to organic producers and handlers that
are certified under the NOP. The 2008 Farm Bill provided $22 million in
CCC funds, to remain available until expended, for organic cost-share
activities, and increased the cost-share reimbursement from $500 to
$750 annually. Also, USDA was directed to submit an annual report to
Congress, by March 1 of each year, that describes requests by,
disbursements to, and expenditures for each state during the current
and previous fiscal years, including the number of producers and
handlers served. The program made approximately $4.8 million available
for FY 2010 and approximately $5.2 million is available for FY 2011.
Section 32
Section 32 of the Act of August 24, 1935 authorizes the
appropriation for each fiscal year of an amount equal to 30 percent of
the gross receipts from duties collected under customs laws of the
United States during the previous calendar year. These funds are used
to encourage domestic consumption of non-price supported perishable
commodities and to re-establish farmers' purchasing power through a
variety of activities, including: purchases of commodities and removal
of surplus commodities from the marketplace for distribution to Federal
nutrition assistance programs such as the National School Lunch Program
and diversion programs that bring production in line with demand to
assist producers. AMS annually purchases approximately $1 billion in
commodities for distribution to various nutrition assistance programs.
Section 32 funds are also used to finance the administrative costs
associated with the purchase of commodities and the development of
specifications used for food procurement throughout the Federal
Government.
The 2008 Farm Bill directed USDA to make Section 32 specialty crop
purchases of (in addition to the $200 million required in the 2002 Farm
Bill): $190 million for FY 2008, $193 million for FY 2009, $199 million
for FY 2010, and $203 million for FY 2011, and $206 million for FY 2012
and each fiscal year thereafter. AMS purchased $390.3 million in
specialty crops in FY 2008, $472.8 million in FY 2009, $511 million in
FY 2010, and plans to purchase $403 million in FY 2011.
The 2008 Farm Bill also required USDA to arrange for an independent
study and evaluation of the purchasing processes principally devoted to
perishable agricultural commodities provided in Section 32. The report
was released on May 13, 2010.
Pest and Disease Management
The mission of protecting American agriculture from foreign pests
and disease introduction is among USDA's most critical. To accomplish
that mission, APHIS has developed a robust agricultural safeguarding
system. While APHIS' efforts benefit all of agriculture, its programs
are of particular importance to specialty crops, as foreign pest and
disease introductions could potentially devastate them.
The agricultural safeguarding system that APHIS has developed is a
set of comprehensive, interlocking programs that work together to
protect agriculture. While the border inspection function--which was
transferred to the Department of Homeland Security's Customs and Border
Protection in 2003--is a critical component, it is but one part of the
layered system in place, which has programs that begin well before
products or people reach the border, and continues after their entry.
The system relies on APHIS' strength as a science and risk based
regulatory agency, and the many measures the Agency has developed,
including:
Sound regulatory policies based upon strong science and
thorough risk assessments;
Pre-clearance inspections of commodities in overseas
countries before shipment to the United States;
Extensive pest surveillance activities, both here and
abroad;
Inspection of living plants imported through USDA-operated
plant inspection stations;
Supervision of fumigation and other pest mitigation
treatments when protocols require; and
Robust emergency response activities in the event of
significant pest or disease introductions.
Together, these multi-faceted activities serve as a safety net that
allows all agriculture to succeed.
APHIS has two programs that take these measures further, by
targeting specific segments of agriculture and activities that
particularly benefit specialty crops. Both programs, which were created
in the 2008 Farm Bill, have proven to be highly effective, and widely
supported by stakeholders and industry.
The first, section 10201 of the farm bill, Plant Pest and Disease
Management and Disaster Prevention, is a new program that allows APHIS
to partner with numerous states, Tribes, universities, and other
community partners to strengthen and expand the scope of APHIS' pest
and disease prevention activities.
Under the program, which is funded through the CCC, APHIS allocated
$50 million in FY 2011 to fund 270 projects with over 100 cooperators
that prevent the introduction or spread of plant pests and diseases.
This follows $45 million in FY 2010 and $12 million in FY 2009.
Projects originate as suggestions from hundreds of cooperators
throughout the country. These projects aim to improve the six key goals
of the program:
1. Enhancing plant pest analysis and survey
2. Targeting domestic inspection activities at vulnerable points
3. Enhancing threat identification tools and technology
4. Developing programs to safeguard nursery production
5. Enhancing outreach and education to increase public awareness
and support of plant pest and disease eradication and control
programs
6. Enhancing mitigation capabilities
Projects are evaluated based on how well they align with these
goals, the expected impact of the project, and their technical
approach.
The program provides strong protection to America's agricultural
and environmental resources, and helps nursery and specialty crop
growers flourish. Over the last 2 years, Section 10201 projects have
played a significant role in many USDA successes, such as including the
eradication of plum pox in Pennsylvania, minimizing the effect of a
Mediterranean fruit fly outbreak in Florida, survey work for European
grapevine moth in California, national surveys for honeybee pests, and
methods development work to combat citrus pests.
The net effect of these efforts and the many partnerships is a
demonstrated improvement in USDA's ability to detect and respond to a
plant pest or disease. Detecting and responding to a plant pest or
disease in the early stages of an introduction is a significant cost
savings for taxpayers, and can help minimize the potentially
devastating impact on agriculture.
The second farm bill program that helps address plant pests and
disease is Section 10202, the National Clean Plant Network (NCPN). The
NCPN is a partnership of three USDA Agencies: APHIS, the Agricultural
Research Service and the National Institute of Food and Agriculture. It
aims to develop and produce clean propagative plant material. Should a
plant pest or disease strike, the network could then provide clean
plant material to states for certified clean plant programs and to
private nurseries and producers. Essentially, it is an insurance policy
that guarantees that there will be fresh stock of disease-free plants.
NCPN is comprised of commodity-based networks. Commodities that
have developed a clean plant network under the auspices of the program
are fruit trees, grapes, citrus, berries and hops. These five networks
include 18 supported clean plant centers and associated programs
located in 14 states. There has been broad support within the specialty
crop industry, and other commodities have expressed interest in the
program as well. The NCPN national stakeholder database has about 500
people enrolled who expressed specific interest in the program, which
includes nursery and grower industries, scientists, state regulatory
officials, and educators. The program has been funded with $5 million
in CCC funding each fiscal year from 2009 to 2012, to remain available
until expended.
Miscellaneous
The 2008 Farm Bill provided country of origin labeling requirements
for honey that bears any official certificate of quality, grade mark or
statement, continuous inspection mark or statement, sampling mark or
statement or any combination of the certificates, marks, or statements
of USDA. An interim rule, which became effective October 6, 2009,
established a new regulation addressing country of origin labeling for
packed honey bearing any official USDA mark or statement and added a
new cause for debarment from inspection and certification service for
honey. The final rule was published on January 4, 2011, with an
effective date of February 3, 2011.
It should be noted that USDA did not implement the 2008 Farm Bill's
Food Safety Education Initiatives provision or the Grant Program to
Improve Movement of Specialty Crops as no funding was provided by
Congress.
Conclusion
AMS and APHIS undertake numerous activities to facilitate the
competitive and efficient marketing of U.S. agricultural products, as
well as to protect and promote U.S. agricultural viability. These
efforts support the overall mission of USDA, which is to protect and
promote food, agriculture, natural resources and related issues. I hope
that this testimony and the subsequent questions and answers will prove
useful to the Subcommittee as you undertake your work on the next farm
bill.
The Chairwoman. Thank you so much for your testimony, and I
will remind the Members that just came in, that if you have any
written statements, you have 5 calendar days to bring them to
the Committee, and that we will begin questioning in order of
who came and then by seniority, and so I will begin.
I would like to start with Specialty Crop Block Grants,
probably to Ms. Pegg.
Ms. Pegg, in Fiscal Year 2010, approximately 13 percent of
block grant funding was used for research. How do states or the
USDA ensure that there are not duplicative research projects
funded with both block grants and other research projects?
Ms. Pegg. This is a good question, because not only
regarding research projects but also with the Farmers Market
Promotion Project, we need to keep this in mind when people
make applications. There are two tracks that occur. If a
project applies for a Farmers Market Promotion Grant or another
research grant throughout the Department, when that project
comes in it is shared with the other agencies and divisions to
look at if they are receiving block grant funds, therefore it
may be disqualified. Regarding block grant applications, they
will come in and we will review them, and they will have to
justify if they are receiving other grant funds, what is the
benefit, why do they need this funding, and why do they
specifically need it for this one component?
So they have to create a justification or not receive the
funding at all for that, and that is part of our review
process.
The Chairwoman. Thank you. Can you elaborate on what
activities are considered allowable marketing and promotion
activities, and allowable education activities under the block
grant program?
Ms. Pegg. There are a number of educational activities. It
must be for the benefit of specialty crops defined under the
farm bill, so if it is a marketing program, it must
specifically demonstrate that it is going to promote specialty
crops and not other commodities that are not defined. We want
to ensure that is the case when handing out the dollars,
awarding the dollars to each of the recipients. So it can vary
from a specific commodity being promoted. Education can be, for
instance, in Ohio they have done a number of projects regarding
food safety training for their producers, creating food safety
manuals and practices that are specific for their specialty
crop industry as well as their region.
So those are some examples there that they have focused on.
The Chairwoman. Thank you. When the block grants are made
to states, how much funding is being used by the states for
administration or overhead costs to run the program, and are
states required to disclose this information when they are
applying for the funding?
Ms. Pegg. Yes, there is already a ten percent cap that they
can use for administration costs for each state. They must also
provide--we go in and do site visits of the states as well as
financial audits that they provide to the program, and so they
will supply that to demonstrate that they are meeting that cap.
The Chairwoman. Thank you. Can you talk about the process a
project must undergo to be approved for a grant?
Ms. Pegg. The process initially starts with a state--each
state administers it according to what is best for their
program, whether they have a pool of people that are reviewing
the grants and then grading them and then making the
determination, but the state makes the initial determination.
They send those recommendations to USDA. We review those to
make sure that they are in compliance with the statute, that
they do support specialty crops specifically, and that there is
no other conflicts that may occur regarding other funding that
may be received before giving the final approval for the award
funds to go out to the state.
The Chairwoman. And is the program set up to favor one type
of project over another?
Ms. Pegg. No, not at all.
The Chairwoman. Okay. In Section 32, the DOD Fresh Program
uses Section 32 funds to purchase fresh fruits and vegetables
for child and other nutrition programs. I understand there has
been concern over DOD's administration of this program. Do you
think it is cost effective and efficient for DOD to make these
purchases as opposed to AMS that makes the other Section 32
fruit and vegetable purchases?
Ms. Pegg. This is a question that a number of people have
been discussing. DOD is effective in certain parts of the
United States, and we really look to our FNS, our Food and
Nutrition Service counterpart as well as those Food Service
directors that are dealing directly with DOD to see the
effectiveness. However, we have been discussing with our
counterparts regarding if it is not effective, are there some
other alternatives in which AMS could either administer or the
Food Service directors could administer directly.
So we are looking at other alternatives. We would love to
continue the conversation with the Committee at looking at
other options for schools. We do think that the DOD model is
effective for some schools, but we are also open to looking at
some other alternatives where it may not be as effective.
The Chairwoman. Thank you so much. I will allow Mr. Baca at
this time to question the panel.
Mr. Baca. Thank you, Madam Chair.
Ms. Pegg, we appreciate your insight as we look to
determine the best policies for specialty crops and organic
agriculture in the next farm bill. Since first serving on the
House Agriculture Committee, one of my greatest passions in
Congress has been the work of the Committee to improve and
expand the nutrition programs. Specifically, I am proud of the
progress we have made with the SNAP Program in the 2008 Farm
Bill. Not only did we increase the benefit level, but we also
went a long way to remove the stigma associated with food
stamps by changing the name of the program and switching to
debit cards.
That said, can you update the Subcommittee on AMS's efforts
in working with Food and Nutrition Service to ensure the
farmers markets accept SNAP benefits through debits as a form
of payment? Another question, do you have any specific data on
the number of farmers markets that currently can accept the
SNAP benefits?
Ms. Pegg. Regarding your question, this has been an
important topic and one that both my agency as well as Food and
Nutrition Service have been working on collaboratively to
determine what are the hurdles that people are facing in terms
of getting more SNAP benefits into farmers markets. There are a
couple programs that are working to increase EBT at farmers
markets, the accessibility of EBT at farmers markets. That is
the Farmers Market Promotion Program, of course. That grant
program provides for ten percent of the funds. However, in
2010, we saw 30 percent of the dollars in the Farmers Market
Promotion Program go to support EBT transactions in farmers
markets.
We are also working directly with Food and Nutrition
Service to look at the hurdles. We have developed a handbook to
help farmers markets, individual stalls in order to help them
put in EBT machines, how to administer that effectively, how to
make it cost effective, looking at some of those hurdles and
providing a handbook that gives them some additional tools for
making it simpler, so that these things are more accessible in
more markets.
We have increased the number of EBTs at farmers markets to
1,600, and we really hope to improve that over the years as we
look at some of these issues that they are facing and find new
ways to address them, so that we are creating more access in
more markets throughout the United States.
Mr. Baca. Thank you.
In the 2008 Farm Bill, we established a minimum of ten
percent set aside with FMPP funds to cover electronic benefit
transfer equipment. This allows folks participating in SNAP to
use their benefits at farmers markets. I understand since
adding this set-aside for the program demands for these debit
funds has far exceeded the supply. Are you finding this to be
the case? How many applications have you received that included
EBTs, and how many have been funded?
Ms. Pegg. Well, I don't have the 2011 numbers yet, but when
we saw the $5 million in funding of the Farmers Market
Promotion Program, we saw 30 percent of those funds going to
support EBT in farmers markets. So that is a clear indication
now we are dealing with $10 million in the 2011 year. So we are
hopeful that once we review all of those applications that we
received on July 1, we will actually see an increase in the
number of applicants for those supporting EBT transactions at
farmers markets, CSAs, food hubs, and so forth. And you are
seeing a lot of various entities throughout the nation
recognize the need for providing this to their constituency,
whether it is Detroit's food hub, that they recognize that they
are doing $30,000 a month in sales just for food stamp
recipients every month, that they need to be providing this
service at their food hub. It is one that people are
recognizing the need for, and therefore they are utilizing
Farmers Market Promotion dollars----
Mr. Baca. Let me follow up with another question since you
mentioned that. Beyond FMPP, what else could we in Congress do
to ensure that fruit and vegetable farmers selling directing to
SNAP and WIC customers, can afford to do so. That has been the
problem. Can they afford to? Costs are going up, the debit card
amounts have not. The costs of fruits and vegetables is a lot
higher.
Ms. Pegg. Well, this is one that a lot of nonprofits are
also addressing, whether they are providing the benefit of
double dollars specifically to go for fruit and vegetable
purchases. A lot of nonprofits have been focused on those pilot
programs. I think we have to be creative. It is not only those
programs within AMS, but whether it is Rural Development or
other programs throughout USDA in terms of how to address this
very specific need in creating more access of foods for those
that are underserved.
Mr. Baca. Our schools are now doing a lot of the fresh
fruits and vegetables. That costs a lot. With our school lunch
facilities downsizing and a lack of funding for these efforts,
a lot of needy children who need fresh fruits and vegetables,
aren't receiving them.
Ms. Pegg. Yes, it is a very critical issue that we need to
think about how these different programs can be used to benefit
a lot of these difficult times and difficult struggles that a
lot of local entities are facing right now.
Mr. Baca. Right. I know that my time has run out. Hopefully
in the second round I can ask Ms. Bech some questions.
The Chairwoman. Thank you, and now, Mr. Southerland, you
have 5 minutes.
Mr. Southerland. Thank you, Madam Chair. Ms. Bech, I wanted
to ask--you may not be aware, but I am from Florida and so
obviously in Florida, we have an enormous number of specialty
crops. I just want to ask you some questions regarding the
Specialty Crop Research Initiative, if I could read a brief
statement here. ``Florida, as many other specialty crop regions
of the country, are fighting an extremely dangerous threat due
to citrus greening''--which I am sure you are familiar with--
``represents an immediate threat to the entire $12.2 billion
citrus industry in Florida, California, Alabama, Louisiana, and
Texas. The specialty crop disease has the ability to kill
citrus trees and their fruit within a few short years,
literally placing the future of citrus production in this
nation at risk. Citrus ranks nearly first in the nation among
crop value, among fruit and vegetable specialty crops,
according to the USDA's National Agricultural Statistics
Services. Timely research on citrus greening and its vector,
the Asian citrus psyllid, is absolutely essential to ensuring
the future of citrus production in this country.'' As you know,
Congress authored the Specialty Crop Research Initiative under
the farm bill in an effort to meet the critical needs of the
specialty crop industry by developing and disseminating
science-based tools to address needs of specialty crops,
including pest and disease management, resistance to pest, and
diseases and management strategies in an effort to identify and
address threats from pests. This is the type of research need
for which Congress intended to address through the SCRI, and it
would be difficult to identify a specialty crop of such major
national significance that faces more of a devastating risk to
the future of its existence. Recognizing this dire challenge,
domestic citrus growers have self-funded more than $39 million
in research annually over the past 4 years. Please explain, if
you would, why the USDA has declined to fund over the last 3
years this devastating disease through Specialty Crop Research
Initiative Program, as I have stated, designed by Congress and
intended specifically for the purposes such as these.
Ms. Bech. Well, we certainly share your concern. Citrus
Greening is a very devastating disease. The Specialty Crop
Research Program is administered underneath the National
Institute of Food and Agriculture, which is not my program, and
we can get you some information about the administering of that
particular program.
For APHIS, I would like to say that we have a Citrus Health
Response Program in which part of that funding we set aside for
research, and we have worked very closely with the growers and
the industry down in Florida as well as the rest of the citrus
industry to try to address the concerns about citrus greening.
Mr. Southerland. I think--and that would be helpful. I will
tell you, having been there and been on the ground there, no
country that has ever faced this has ever solved it. It
literally wipes out the citrus industry. This is an enormous
problem, and having met the farmers that are there that are
funding this, and perhaps not getting the assistance that I
think some of the funds were set up to aid is bothersome. So I
would appreciate that. Thank you very much.
Ms. Pegg, I want to ask a quick question. The Specialty
Crop Block Grants provide Florida flexibility to meet the
unique farming challenges of our state, targeting specialty
crops including fruits and vegetables and nursery to support
projects and marketing research innovation, education, pest
disease management, and other things. Florida, as I stated, is
the second largest recipient based on specialty crop
production, receiving $24.3 and $4.9 million annually.
Please comment, just with the time I have remaining, on
this block grant program which gives the states flexibility to
address their unique agricultural needs.
Ms. Pegg. Well, I think you have raised a lot of the points
that are important to this program. It really is one of the
programs that is very beneficial to each state and the growers
in that state and what they are facing. What the projects that
Florida may be focused on, whether it is food safety or finding
new tomato varieties or looking at methyl bromide's
alternatives are really specific to those needs of that
industry versus what Ohio or even California will focus on,
which I think is really the success of this program, is it is
really meeting the unique needs of whatever those producers are
facing. I think that is why it has been such a successful
program and why people really do feel that they are seeing the
benefits of those dollars.
Mr. Southerland. Madam Chair, I see that I am out of time
so I will yield back what time I don't have.
The Chairwoman. Thank you. Why don't we go to Mr. Crawford,
5 minutes, and then we will go to round two on questions.
Mr. Crawford. All right, thank you, Madam Chair.
Last fall, USDA announced that Section 32 funds would be
used to fund $630 million in disaster assistance. Ms. Pegg, can
you cite the authority that the Department used to establish
such a disaster assistance program under Section 32 funds?
Ms. Pegg. You know, it is really important under Section 32
to look at all the clauses which give us the authority for the
different activities that we do. So Clause 1 is encourage
exportation of agricultural products. Clause 2 is encourage
domestic consumption. Clause 3 is reestablish farmer's
purchasing power by making payments in connection with normal
production of agricultural commodities. In addition, the
Secretary also has the authority to direct Section 32 funds to
be used for special disaster assistance programs, and this is
the authority that we used to provide that funding. We provided
a total of $270 million in support for those that were
experiencing the excessive moisture flash flooding disaster in
the Midwest.
It is important to note that this authority has not only
been used in recent years, but you know, in 2007 it was used to
help hog producers with the melamine poisoning. It was also
used in 2006 to help citrus growers with citrus canker in
Florida. So it has been a tool that many Secretaries have used
over the years to help those producers that are struggling.
There is a number of tools under Section 32, not only providing
disaster assistance, but whether that be bonus buys and so
forth.
Mr. Crawford. Okay. I understand the Commodity Credit
Corporation funds were to be used to make up for this shortfall
in Section 32 funds. How much CCC funding has been used to make
commodity purchases that would have normally been bought with
Section 32 funds?
Ms. Pegg. So just to back up a little bit, initially it was
announced that $550 million would be used to provide support.
We didn't use all of that $550 million; only $270 million was
actually used in support. So there is roughly, $160 million
still available to provide, whether it be bonus buy assistance
or disaster assistance under the Section 32 account. So there
are still funds available to meet the needs, should anything
occur in the remainder of the fiscal year.
Mr. Crawford. Okay. I understand CCC has a line of credit
with the Treasury that has to be paid back. Will future Section
32 funds have to be used to reimburse the CCC?
Ms. Pegg. Well, there is the authority to use Section 32
CCC funds if we need to, and there--we can consider if we need
to, to reimburse CCC funds. That has not yet been determined if
that is necessary at this time.
Mr. Crawford. Okay. I yield back. Thank you. Thank you, Ms.
Pegg.
The Chairwoman. I would now like to look at pest and
disease issues, and probably Ms. Bech would be better suited
for this, but feel free to chime in.
What is the main conclusion that can be drawn from the 2009
Annual Pesticide Data Report you just released this spring?
That would be you, Ms. Pegg.
Ms. Pegg. Sorry about that, we were--yes. The Pesticide
Data Report is I think the one you are referring to regarding
the residues, and this is a really important report because it
is really showing us the historical trends in terms of
pesticide use throughout the United States. It looks at
pesticide usage for all the different commodities primarily
consumed in the marketplace.
So what it is indicating is it is indicating that we are
seeing that pesticide use over time is reducing. There is a
changing in trends in terms of pesticide use. Producers are
moving to softer chemicals, as well as overall, our annual
report shows that pesticide residues found on foods tested at
levels below tolerances established by EPA. So you know, as we
are always encouraging people to eat more fruits and vegetables
and to wash them before you do, and I think this age-old rule
still applies.
The Chairwoman. What do you believe the purpose of the 2009
annual report is, and what value was derived from it, do you
believe?
Ms. Pegg. Pardon, what was the second question?
The Chairwoman. What was the value of the program shown in
the report?
Ms. Pegg. Well, there are a lot of purposes for it. I mean,
not only does it help inform EPA in terms of trends that we are
seeing in terms of usage, there is also value in it in that it
is also used in discussions with foreign countries when they
ask about pesticide usage for various commodities to set
maximum residue limits. What we are seeing the trends is that
overall usage is changing, and we are using softer chemicals
and transitioning from some of the older chemicals that were
used in previous years. So you are seeing some developments in
terms of that science and technology, and the products that are
available in the marketplace.
The Chairwoman. When consumers hear about residue, they
might get concerned. I think you have answered the question you
tell them to wash the fruit, but what advice is there for
consumers who are still troubled by the newspaper stories
warning of the consumption of produce based in this report?
Ms. Pegg. Well, once again our annual report shows that
overall pesticide residues found on foods tested are at levels
below the tolerance established by EPA, and it also shows us to
continue eating fruits and vegetables, and wash them before you
do.
The Chairwoman. All right, and then to go back to Section
32 again. Does the Department have the ability to operate the
DOD Fresh Program, or would legislative language be needed for
you to operate it?
Ms. Pegg. We do have the authority to operate that program,
should it be necessary.
The Chairwoman. Okay. In your testimony outlines, the
required Section 32 specialty crop purchases for each fiscal
year, and that AMS plans to purchase $403 million in Fiscal
Year 2011. Can you tell me how much of this you have spent so
far?
Ms. Pegg. Yes. There is the total requirement for fruit and
vegetable purchases of the $403 million that you mentioned, and
so far we have purchased $232 million in fruit and vegetable
purchases. So we will have to meet that minimum before the end
of the fiscal year.
The Chairwoman. Last fall, the USDA announced that Section
32 funds would be used to fund $630 million in disaster
assistance. What authority did the Department use to establish
such a disaster assistance program using Section 32 funds?
Ms. Pegg. The authority that we used is the Secretary also
has the authority to direct Section 32 funds to be used for
special disaster assistance programs is the authority that we
used. And we used a total of $270 million to provide that
assistance to sweet potato, rice, soybean, cotton farmers that
were experiencing crop loss.
The Chairwoman. Has the Department used this authority
before?
Ms. Pegg. Yes, we have used this authority a number of
years. In 2006, we used it for Florida growers dealing with
citrus canker. We have used it for the melamine incident with
pork producers. So we have used it on a number of occasions.
The Chairwoman. Okay. And now since I am about out of time,
first off, Mr. Costa has joined the dais. Do we have unanimous
consent that he can ask questions of the panel? Is there
agreement? Fine. And I think the next 5 minutes goes to the
Ranking Member, Mr. Baca, and then Mr. Southerland and then Mr.
Costa.
Mr. Baca. Thank you, Mrs. Schmidt. With a constant threat
of invasive species like the Asian citrus psyllid, and the
European grapevine moth, pest and disease management is
critical to agriculture in my home State of California. Because
of this, I am very interested in the implementation of Section
10201 of the 2008 Farm Bill. While I am pleased to know that
the pest prevention project in California has received
approximately $12 million in funding for the Fiscal Year 2011,
I am concerned regarding APHIS prohibition from funding the
administration costs associated with these projects. Congress
has now acted on three separate occasions, the Recovery Act,
the Agriculture Appropriation Bill for 2011, and the
Agriculture Appropriation Bill for 2012, to provide technical
correction that allows APHIS to move forward with the
administrative funding needed. Do you have any recommendations
for how these issues can be permanently resolved so that
constant funding for the program may continue?
Ms. Bech. Yes, well we share the concern and first, we
appreciate Congress passing the temporary fixes. We agree that
there needs to be a permanent fix, and we believe that the
permanent fix can be achieved either through the farm bill or
another law. We would look forward to working with you with
language.
Mr. Baca. Okay. Can you please provide the Subcommittee in
writing of the USDA's Office of General Counsel's opinion on
the current prohibition and their recommendation as to how to
best resolve it?
Ms. Bech. Well, we would be happy to work with our Office
of General Counsel to address your request about the opinion,
and I am no lawyer, but I would be happy to talk a little bit
about it.
We know that according to USDA's General Counsel and the
Department of Justice that the statute provided that the
Secretary can use the funds, facilities, and authorities of CCC
to carry out a particular program or activity. However, the
funding cap on administrative expenses of the CCC Charter Act
continues to apply, so we can work with our Office of General
Counsel to address your requests.
[The information referred to is located on p. 225.]
Mr. Baca. Okay, thank you. In 2009, APHIS released a pest
and disease risk assessment update for 50 states. This update
mentioned specific challenges and identified risks and
suggestions that included county level data that would be
helpful in better identifying the risks moving forward. Has the
Department released an updated risk assessment analysis since
October of 2009? If not, can you tell me how APHIS plans to
refine its interpretation of the pest finding and trends, and
how would these changes impact partnership among the Federal,
state, and industry cooperators?
Ms. Bech. Well, we initially characterized the states' risk
by applying certain criteria, and we looked at different things
such as the susceptibility of the state to invasive species,
the number of ports that they have, as well as things like the
impact and the agricultural commodities that are grown in the
state. And while we did that with consulting our National Plant
Board, as well as working with the Specialty Crops Farm Bill
Alliance, you can imagine when we came out with the assessment
that there was some concern about how different states ranked.
But we used that--it is not a formula-based method that we used
to establish the funding of the project, so this is only one
aspect that we used. But because there was some concern, what
we have done is we have authorized the use of funds for some of
the projects working with states to redefine what that
assessment process would look like, and we funded two projects
with that. We are hoping that they will be completed this year.
By the end of the year, we hope to reassess the assessment for
the risk ranking of the states, and we would be able to then
look at how that would be implemented.
So the actual impact on it right now I think it really
shows that we have to work together and that we can employ all
the different interests to come together to administer the
funds. I think it would actually support a stronger team-
building effort.
Mr. Baca. Thank you. I know that my time has run out, are
there any duplicated services that can be consolidated in
trying to implement this?
Ms. Bech. The specific risk----
Mr. Baca. Yes, are there duplicated services that we might
want to consolidate to reduce our costs, and yet still provide
these important services?
Ms. Bech. Well, I think that the risk assessment as well as
the other things that we look at, and the transparency in which
we go about looking at the projects and the funding list have
served us well, and it shows a coordinated effort, especially
because a lot of the projects that we fund cross multiple
states and we look at regional approaches as well. So it is
really looking at it nationally as well as individually.
Mr. Baca. Thank you. I know my time has run out, Madam
Chair.
The Chairwoman. Mr. Southerland?
Mr. Southerland. Thank you, Madam Chair.
Mrs. Bech, I apologize for asking you a question outside of
your purview here, but obviously we will track that down,
because citrus greening is terribly important to all of those,
especially the Florida delegation.
Moving over to APHIS, could you explain to me, as a new
Member, just--and this will be very simple as my only
question--just elaborate how the USDA assesses risk. Help me
understand: I know 4\1/2\ minutes is not a long time, but give
me kind of a kindergartner's understanding of how that--how it
works. How do you go after it?
Ms. Bech. Well, that is a good question, and we can provide
you with some additional information after this hearing about
it.
Mr. Southerland. Okay.
Ms. Bech. But one of the things we have done is we have
really created a very collaborative approach with working with
the states, as well as the industry groups to look at the risk,
and as I mentioned earlier, we had a risk assessment that was
done, looking at the different risks of the states and looking
at the kinds of commodities, the impacts, the kinds of invasive
species that are coming through, such as citrus greening and
the Asian----
Mr. Southerland. So they are the ones that--I apologize for
interrupting, but you are basically put on notice from the
states because they have obviously--something has been
triggered and they see it, so they are doing basically R&D for
you?
Ms. Bech. Well, what the states are doing is we are working
together to survey and to look at the pests that are coming in,
and so we are working as a team to address the threats as they
come in.
Mr. Southerland. Okay.
Ms. Bech. And we have been enhancing the surveys that the
states do, as well as providing traps and lures, things like
that. So it is really a real partnership.
Mr. Southerland. Collaborative effort. Is that--and part of
your assessment, obviously when you have aid that you can send
to the states, I mean, is there--do you always take into
account the economic impact if those diseases or insects would
go unhampered? I mean, as far as being able to prioritize,
okay, because obviously you have a finite resource and you have
so many problems. I mean, do you prioritize based upon the
impact economically, because that is a jobs issues to many
states.
Ms. Bech. Yes. Well, we do look at economics but there are
other factors that weigh in as well, and we try to look at the
impact--like you are a citrus-producing state. Certainly the
problems that you are facing in Florida impact the other
citrus-producing states as well, so we take many things into
consideration and the impact on the commodity itself, yes.
Mr. Southerland. Very good, thank you. And if you could
give me information, maybe provide it to our office, I would
welcome that. I would love to learn more about how you go about
assessing. So thank you.
I yield back.
The Chairwoman. Thank you. Now, Mr. Costa from California.
Mr. Costa. Thank you very much, Madam Chairperson, for
allowing me to participate with the Subcommittee this
afternoon. It is an important issue, and I look forward to
questioning the witnesses.
For my colleague from Florida, what we tend to do is look
at this in terms of risk assessment versus risk management.
Your ability to manage the risk is based upon your ability to
assess the various aspects of risk. Then with state agencies
and local ag commissioners in California, you make a
determination on what resources should be placed on the
management of the risk, based upon the risk assessment that has
taken place.
I would like to ask this question as it relates to APHIS.
As you know, over the 16 year period from 1995 to 2010, as it
relates to our ability to export our products abroad, we have
had 312, World Trade Organization SPS trade concerns that have
been raised. Of these, 212 trade concerns, I understand, remain
unresolved. California, is at the tip of this spear. California
uses over 500,000 phytosanitary export certificates to access
those markets.
My question to you is how APHIS works with all Federal
agencies in trying to deal with this backlog? How does it
assist the USTR on these SPS trade concerns? Ms. Bech, can you
address that quickly, because I have some other questions.
Ms. Bech. Okay. Well, I will try to address what APHIS has
done, but of course, our USTR and others take the lead in----
Mr. Costa. I know, but I want to understand APHIS's role.
Ms. Bech. Yes, so we provide technical support on that, we
do bilateral agreements with the----
Mr. Costa. But how well are you helping USTR deal with
those 212 trade concerns? You haven't been able to come up to
speed on the risk management side to provide those export
certificates.
Ms. Bech. Well, the export certificates are to meet the
trade obligations for the others, and what we do is provide the
assessments. I believe that might be what you are talking
about. However, I would like to clarify that there is no
backlog of export certificates.
Mr. Costa. Right.
Ms. Bech. And we have certainly worked very carefully in
shortening the risk assessment, categorizing it into a tiered
process to look at the priorities to address that----
Mr. Costa. Can you clarify the link between the pest and
the disease challenges, how in working with your partners in
USDA possible trade disruptions and the potential economic
losses that would occur to our agricultural producers are
addressed and hopefully minimized?
Ms. Bech. Well, I think if I can clarify, if I might ask a
clarifying question. Are you asking what we are doing with the
other USDA agencies in addressing the disease impacts on the
economics? Then we are providing, again, the assessments that
go into that economic analysis and working with our Foreign
Agriculture Service to address those issues.
Mr. Costa. Do you have any explanation as to why only \1/3\
of the SPS certificates or trade concerns have been addressed?
Ms. Bech. Well, I could get further information on it.
[The information referred to is located on p. 234.]
Mr. Costa. Let me, move quickly because my time is
expiring. I would like your agency to respond to our folks who
really rely upon you in their ability to get those trade
certificates expedited so that we can access international
markets.
Ms. Bech. Yes, sir.
Mr. Costa. Thank you.
Ms. Pegg, enjoying Washington?
Ms. Pegg. Yes, very much so.
Mr. Costa. Good. She is a former Californian. We used to
interact in the old days.
The Chairwoman and the Ranking Member were asking you on
your agency's various efforts on the USDA school lunch and
breakfast programs. How to expand the commodity purchases. You
talked about the amount of money left in this fiscal year. How
would you, with your previous experience and background,
suggest improvements to get healthy fruits and vegetables, and
better diets into our schools. How would you assess our
efforts, thus far, since the 2008 Farm Bill, both in California
and here in Washington?
Ms. Pegg. Well, I think the 2008 Farm Bill, because it
established those minimums--you know, in previous years, we
have exceeded the minimum amount, whether it was the minimum,
$399 million, we have purchased in the $400 to $500 million
amount. This year, we are seeing a slightly different situation
because we aren't getting a number of bonus buy requests
because people aren't having oversupply in the marketplace. So
that does impact some of the products supplied to schools and
food banks.
I think not only is it the collective work of our
purchases, it is also the food and nutrition standards that
they establish, and then to schools and what they do with that.
I mean, you are seeing a lot of schools that are really
recognizing how they can change their menus to provide more
variety, healthier choices for their students, and that is not
just--it is both including bonus buy, pork buy that we may
deliver to them, as well as complementing that with a local
orange to make a citrus pork dish. I mean, really schools are
being creative to provide more variety in their menus, and I
think we are also developing a lot more programs to assist them
in that, whether it is through more training, different
services to those food service directors, as well as looking at
the menu of items that we purchase directly from our Section 32
account.
Mr. Costa. Madam Chairperson, my time has expired. I
appreciate the answer. Madam Chairperson, knowing how health
conscious you are and how many marathons you run, and having a
good healthy diet, this is an area that is a constant source of
frustration. We see obesity continuing to increase among our
young people. Our efforts with regard to a better healthy
nutrition program in our schools is a step in the right
direction. I am just not sure if this Subcommittee can continue
to examine some new efforts on how we can do a better job. We
grow the healthiest, most abundant food products anywhere in
the world. Our farmers, our dairymen, our ranchers, excel in
doing this. Trying to get those products--those healthy food
products in our school lunch and breakfast programs is
essential to our children
The Chairwoman. We are going to have a hearing on that in
the future, and I invite you to come back, but before we
adjourn, I do have just two more questions, and looking at the
Members here, Mr. Baca may have one, and maybe Mr. Costa so we
may get out here in a quick dash.
But I want to talk a little bit about block grants. State
departments of agriculture have expressed frustration with the
timeliness of the notice of funds available being published by
the Office of Management and Budget, the OMB. Any delay in this
notice creates pressure on state grant processes, which can
discourage grants to non-state operated grant requests. What
needs to happen to expedite this process?
Ms. Pegg. Well, we recognize those concerns. Unfortunately,
because of the delay in the appropriations bill which gave us
the authority to use the funds for administrative functions,
that was the delay in getting out that notice. So there was
part of the reason why we had the concern. It also delayed the
notice for the farmers market promotion and the result of
basically a month turnaround in receiving applications. So that
is one of the issues that we ran into this year. We need to
look at some solutions in coming years to resolve that more
quickly so we can be more timely in our announcements and
getting those dollars out.
The Chairwoman. Thank you. It is our understanding that
states are required to submit state performance reports after
an annual agreement is completed. The reports are supposed to
detail the performance, outcomes, and results of the state
block program projects. What is the status of these reports,
and have states been submitting them in a timely manner, and if
not, do you know why?
Ms. Pegg. I can get you a number of how many reports we
have received. I think one of the important things to know of
this is that because some projects go over a 3 year period, we
have staggering of reports so some reports we are still waiting
for because the project has not yet been completed with the 3
year period that a project may go on for. But I think we are
current, but I will get you a final number of what we currently
have and what is still left to be received. There are currently
121 reports available.
The Chairwoman. Thank you. Mr. Baca, do you have any
questions?
Mr. Baca. I do, just a quick question. Earlier, Ms. Pegg,
you talked about the deadline of July 1st for anyone to submit
their SCBGD grants. It seems that state departments of
agriculture have expressed some frustration with the publishing
timeline for the notice of funds availability. Any delays in
this announcement creates pressure on the states, which can
discourage grant applications. What needs to happen for this
process to be expedited?
Ms. Pegg. Well, just to kind of mention it, what occurred
this year is the appropriations process, because Congress did
not act as quickly as needed. We had initially expected but
finally reached an agreement. We needed language in the
appropriations bill that would allow us for issuing those funds
and using those funds for administrative costs, so that was the
delay until the budget for 2011 was approved. That was the
delay in getting out the notice. So we can talk with you about
some options and some language that could be included in future
pieces of legislation that would assist in getting more timely
notices out.
Mr. Baca. We would love to hear suggestions. Hopefully we
can work on possible improvements.
Ms. Pegg. We would be happy to work with you on that.
Mr. Baca. Just one more question. Several grants supporting
the farmers market project have been approved under the SCBGP,
even though the farm bill provides for farmers market promotion
programs. How are these programs being coordinated? Shouldn't
projects related to farmers markets be considered by the
farmers market promotion program?
Ms. Pegg. Yes, and this very important that we don't have a
duplication or double-dipping when people are applying. So what
occurs is when there is an application for a farmers market
under the block grant program, in reviewing that application we
also send that to those that administer the farmers market
promotion program, the FISNIT Program, if it is a Rural
Development program, to ensure that they are also not receiving
funds under those grant projects. If they are receiving funds,
then they must then demonstrate what is the need for why they
must receive block grant funds. So that is part of our review
process to ensure that there is no double-dipping.
Mr. Baca. Does USDA have a follow-up mechanism for state
oversight to make sure that there is no double-dipping? What
are the consequences for those that are double-dipping?
Ms. Pegg. We do have follow-up in terms of the site visits
that we do to the states, the audits that they are required to
provide. There are no penalty provisions that I am aware of for
the double-dipping, but we would be happy to discuss that with
you.
Mr. Baca. Thank you. Maybe penalties is something to
consider. If there are no penalties, if I can get away with it,
I will get away with it.
Ms. Pegg. Well, we hope that our process does protect from
that ever occurring, and we hope that--yes, hopefully. We hope
that the process is stringent enough where both programs are
catching something, should an entity try to apply for all
funds. And I do see those--when every grant comes to my desk, I
do see the response of every agency, whether they have applied
for MAP or TASC funds, FMPP, Rural Development funds, every
grant application is reviewed upon those and there is a
response specific to that grant application.
Mr. Baca. Okay, thank you. With that, I have exhausted my
time so I yield back.
The Chairwoman. Thank you. Mr. Costa, do you any other
questions? Thank you.
Well, I want to thank the panelists, Ms. Pegg and Ms. Bech,
for being here today, and I wish you luck.
Ms. Pegg. Thank you.
The Chairwoman. This hearing is over. Thank you.
[Whereupon, at 4:08 p.m., the Subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
Supplementary Material Submitted by Rebecca Bech, Deputy Administrator
for Plant Protection and Quarantine, Animal and Plant Health Inspection
Service, U.S. Department of Agriculture
During the July 7, 2011 hearing entitled, Agricultural Program
Audit: Examination of Specialty Crop Programs, requests for information
were made to Rebecca Bech. The following are the information
submissions for the record.
Insert 1
Mr. Baca. Okay. Can you please provide the Subcommittee in
writing of the USDA's Office of General Counsel's opinion on
the current prohibition and their recommendation as to how to
best resolve it?
Ms. Bech. Well, we would be happy to work with our Office of
General Counsel to address your request about the opinion, and
I am no lawyer, but I would be happy to talk a little bit about
it.
We know that according to USDA's General Counsel and the
Department of Justice that the statute provided that the
Secretary can use the funds, facilities, and authorities of CCC
to carry out a particular program or activity. However, the
funding cap on administrative expenses of the CCC Charter Act
continues to apply, so we can work with our Office of General
Counsel to address your requests.
Please see attached memorandum.
December 22, 2008
Memorandum for W. Scott Steele, Director, Office of Budget and Program
Analysis
From:
Marc L. Kesseman,
General Counsel.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Subject:
Opinion re: Use of Commodity Credit Corporation Funds for Salaries and
Expenses
Issue:
This memorandum sets forth the opinion of the Office of the General
Counsel regarding when Commodity Credit Corporation (``CCC'') funds may
be used to pay for the costs of Federal and state agencies with respect
to the implementation of CCC programs.
This opinion has been prepared in response to recent requests for
the apportionment of CCC funds for the Healthy Forests Reserve Program
(``HFRP'') and the Agricultural Management Assistance Program
(``AMAP''). In reviewing these requests, it has become apparent that
clear legal guidance would benefit Department officials confronting the
question of when CCC funds may be expended for the salaries and related
administrative costs associated with the implementation of programs
that Congress has directed to be funded by CCC.
As a result of amendments to section 11 of the Commodity Credit
Corporation Charter Act made by section 161(b)(2) of the Federal
Agricultural Improvement and Reform Act of 1996 (the ``1996
Amendment''), there are significant limitations on the ability of CCC
to use its funds for the payment of costs incurred by state and Federal
agencies in the administration of CCC programs.\1\ Generally, as a
result of the 1996 Amendment, CCC may annually use not more than
$56,102,727 to reimburse Federal and state agencies for costs they
incur in the administration of CCC programs.
---------------------------------------------------------------------------
\1\ The current text of section 11 is attached as Appendix 1.
---------------------------------------------------------------------------
The Farm Security and Rural Investment Act of 2002 (the ``2002
Act'') authorized the use of CCC funds to pay for the salaries and
related expenses incurred in the delivery of a number of specified
programs. In response to a request by the Office of Management and
Budget (``OMB''), the United States Department of Justice (``DOJ'')
opined on the application of section 11 of the CCC Charter Act to
specific conservation programs authorized by the 2002 Act. We conclude
that the analysis of the 2003 DOJ opinion \2\ applies with full force
to the question presented here.
---------------------------------------------------------------------------
\2\ Appendix 2.
---------------------------------------------------------------------------
As noted in the 2003 DOJ opinion, the mere reference to the use of
CCC to carry out a program does not supersede the limitations in
section 11 of the CCC Charter Act. The enactment of the Food,
Conservation, and Energy Act of 2008 (the ``2008 Act'') again raises
the question of the extent to which funds of CCC can be used to pay
salaries and expenses in carrying out programs where the statute
authorizing the program provides that CCC funds or authorities will be
used with respect to such programs. Appendix 3 sets forth a
comprehensive list of the provisions of the 2008 Act that implicate the
use of CCC funds in the conduct of programs.
My office has consulted with OMB before issuance of this opinion
and OMB concurs with our conclusions.
Discussion:
I. 2002 Act
After enactment of the 2002 Act, a question arose with respect to
the propriety of using CCC funds to pay for the technical assistance
costs of the Natural Resources Conservation Service relating to several
CCC-funded conservation programs.
Section 1241(a) of the Food Security Act of 1985 (the ``1985 Act'')
had been amended by the 2002 Act to authorize the Secretary to ``use
the funds, facilities, and authorities of the Commodity Credit
Corporation to carry out'' seven listed conservation programs. As noted
at page 4 of the 2003 DOJ opinion, although these seven programs
provided for the use of CCC funds for program activities, the provision
of technical assistance using CCC funds was limited by section 11 of
the CCC Charter Act:
We believe that section 1241(a) does not confer on the CCC a
source of authority, independent of section 11, for funding
technical assistance to the programs listed in section 1241(a).
Subsequently, Congress amended the 1985 Act to specify that the use
of CCC funds to pay for technical assistance, as defined in section
1201(a)(25) of that Act would not constitute ``an allotment or fund
transfer from the Commodity Credit Corporation for purposes of the
limit on expenditures for technical assistance imposed by section 11 of
the Commodity Credit Corporation Charter Act (15 U.S.C. 714i)'' \3\
with respect to seven programs listed in section 1241(a) of that Act:
---------------------------------------------------------------------------
\3\ Section 1241(c) of the 1985 Act.
---------------------------------------------------------------------------
1. The Conservation Reserve Program;
2. The Wetlands Reserve Program;
3. The Conservation Security Program;
4. The Farmland Protection Program;
5. The Grassland Reserve Program;
6. The Environmental Quality Incentives Program; and
7. The Wildlife Habitat Program.
The 2008 Act added the Conservation Stewardship Program to section
1241(a), and it is therefore treated the same as the seven programs
originally enumerated. As a result of this Congressional action, CCC
funds have been made available to pay salary and related costs in the
administration of these eight programs.
II. 2008 Act
The 2008 Act contains approximately 30 references to programs that
use CCC funds in their implementation (see Appendix 3). While the
majority of the 2008 Act provisions that authorize the use of CCC funds
are not independent of section 11, the following sections of that Act
do provide such independent authority and, therefore, CCC funds may be
used for administrative costs without regard to the limitations in
section 11:
1. Section 1622--Section 1601 provides that the funds, facilities
and authorities of CCC shall be used to carry out Title I of
the 2008 Act and section 1622 further directs the Secretary of
Agriculture to make available $50 million to the Farm Service
Agency to carry out such title.
2. Section 2510--This section amends Title XII of the 1985 Act by
adding a new section 12401 to authorize the establishment of
the Agricultural Water Enhancement Program. Section 1240I(b) of
the 1985 Act specifically provides that an agricultural water
enhancement program shall be established ``as a part of the
environmental quality incentives program [EQIP].'' Because EQIP
is one of the eight programs subject to section 1241(c) of the
1985 Act, CCC funds may be used to pay for technical assistance
expenses.
3. Section 2605--This section amends Title XII of the 1985 Act by
adding a new section 1240Q to authorize the establishment of
the Chesapeake Bay Watershed Program (the ``CBWP''). Section
1240Q(c) of the 1985 Act provides that: ``The Secretary shall
deliver the funds made available to carry out this section
through applicable programs under this subtitle. . . .'' The
reference to ``applicable programs under this subtitle''
includes those eight programs listed above. Because the CBWP is
not an independent program but simply an authorization to use
additional funds of CCC to carry out delineated programs in the
Chesapeake Bay Watershed, to the extent the CCC funds are used
to carry out one of the seven listed conservation programs, CCC
funds may be used to pay for technical assistance expenses.
4. Section 3106--This section amends section 3107 of the 2002 Act
to provide that $84 million of CCC funds shall be used to
administer the McGovern-Dole International Food for Education
and Child Nutrition Program. Section 3107(l)(3) of the 2002 Act
provides that funds made available to carry out the program may
be used to pay related administrative expenses.
5. Section 7410--This section amends section 7405 of the 2002 Act
to provide that $18 million of CCC funds shall be used to carry
out the Beginning Farmer and Rancher Development Program in FY
2009 and $19 million in each of the 2010 through 2012 Fiscal
Years. Section 7405(c)(7) of the 2002 Act provides that not
more than four percent of the funds made available to carry out
this program may be used for administrative expenses.
6. Section 9001(a)--This subsection completely revises Title IX of
the 2002 Act. Included in this revision of Title IX is a new
section 9008, containing the authorization for the Biomass
Research and Development Board and the associated grant
program, which is funded by CCC. The new section 9008(f)(3) of
the 2002 Act specifically authorizes the Secretary to use not
more than four percent of the funds made available to carry out
this program, including the CCC funds, for the administration
of the authorized activities.
III. Other Statutory Provisions
Four additional statutory provisions pre-dating the enactment of
the 2008 Act also warrant reference in this opinion:
1. Section 1469(a)(3) of the National Agricultural Research,
Extension, and Teaching Policy Act of 1977;
2. Section 10417 of the Animal Health Protection Act;
3. Section 442 of the Plant Protection Act; and
4. Section 7405(c) of the 2002 Act.
We have determined previously that these four provisions provide
authority independent of section 11 of the CCC Charter Act to use CCC
funds for salaries and related expenses, and we do not amend that
determination here.
Section 1469(a)(3) of the National Agricultural Research,
Extension, and Teaching Policy Act of 1977 authorizes the Secretary to
retain up to four percent of amounts made available for agricultural
research, extension, and teaching assistance programs under any Act for
the administration of those programs. A similar provision is set forth
in section 7405(c) of the 2002 Act, as amended by section 7410 of the
2008 Act, with respect to the Beginning Farmer and Rancher Development
Program. Section 10417 of the Animal Health Protection Act and section
442 of the Plant Protection Act provide for the transfer of funds
otherwise available to the Secretary, including CCC funds, for use in
eradicating animal and plant pests.
Conclusion
With respect to the HFRP and AMAP, although CCC funds may be used
to pay for salaries and related expenses, the use of CCC funds for
these expenses would be subject to the limitations of section 11 of the
CCC Charter Act.
Based upon the foregoing analysis, and consistent with the 2003 DOJ
opinion, CCC funds may be used to pay for salaries and related expenses
attendant to programs carried out by Federal and state agencies
independent of section 11 only with respect to activities authorized
by:
1. Section 1469(a)(3) of the National Agricultural Research,
Extension, and Teaching Policy Act of 1977;
2. Section 10417 of the Animal Health Protection Act;
3. Section 442 of the Plant Protection Act;
4. Section 1241(a) of the 1985 Act;
5. Section 1240I of the 1985 Act;
6. Section 1240Q of the 1985 Act.
7. Section 3107 of the 2002 Act;
8. Section 7405(c)(7) of the 2002 Act;
9. Section 9008 of the 2002 Act; and
10. Section 1622 of the 2008 Act.
This list is, of course, subject to change by Congress; but cannot
be amended by regulation or other Administrative action.
Legislative Changes
If the relevant policymakers decide to seek a legislative change,
we stand ready to assist with drafting language similar to that adopted
in 2003 by Congress to authorize the use of CCC ``program'' funds for
technical assistance costs associated with the seven listed programs in
section 1241(a) of the 1985 Act. I have attached Appendix 4 as one
example of an amendment that could be enacted to address this matter.
appendix 1
Sec. 11. Cooperation With Other Government Agencies.--The
Corporation may, with the consent of the agency concerned, accept and
utilize, on a compensated or uncompensated basis, the officers,
employees, services, facilities, and information of any agency of the
Federal Government, including any bureau, office, administration, or
other agency of the Department of Agriculture, and of any state, the
District of Columbia, any territory or possession, or any political
subdivision thereof. The Corporation may allot to any bureau, office,
administration, or other agency of the Department of Agriculture or
transfer to such other agencies as it may request to assist it in the
conduct of its business any of the funds available to it for
administrative expenses. The personnel and facilities of the
Corporation may, with the consent of the Corporation, be utilized on a
reimbursable basis by any agency of the Federal Government, including
any bureau, office, administration, or other agency of the Department
of Agriculture, in the performance of any part or all of the functions
of such agency. After September 30, 1996, the total amount of all
allotments and fund transfers from the Corporation under this section
(including allotments and transfers for automated data processing or
information resource management activities) for a fiscal year may not
exceed the total amount of the allotments and transfers made under this
section in Fiscal Year 1995.
appendix 2
January 3, 2003
Memorandum for Philip J. Perry, General Counsel, Office of Management
and Budget
Re: Funding for Technical Assistance for Agricultural Conservation
Programs
You have asked us to examine the sources and limits on funding for
technical assistance provided for agricultural conservation programs
listed in amended section 1241(a) of the Food Security Act of 1985. See
16 U.S.C.A. 3841(a) (West, WESTLAW through Pub. L. 107-313). That
provision instructs the Secretary of Agriculture to ``use the .funds,
facilities, and authorities of the Commodity Credit Corporation
[(`CCC')] to carry out,'' these programs. You have asked us to
determine (1) whether expenditures on technical assistance for these
programs are subject to the annual limit that Congress has placed on
aggregate transfers of CCC funds to other components of the Department
of Agriculture (``USDA'') under section 11 of the Commodity Credit
Corporation Charter Act (``CCC Charter Act''), 15 U.S.C. 714i (2000),
and (2) whether the Secretary of Agriculture may draw upon USDA's
appropriation for Conservation Operations (``CO'') to fund technical
assistance for these programs.
Your Office has concluded that the section 11 cap applies to
technical assistance expenditures for the conservation programs listed
in section 1241(a) and that the Secretary of Agriculture may draw upon
USDA's CO appropriation to fund technical assistance for these
programs.\1\ USDA has concurred in your conclusions on both points.\2\
The Congressional Budget Office, addressing only the first point, has
also concurred.\3\ The General Accounting Office (``GAO''), however,
has reached contrary conclusions: it has determined that the section 11
ceiling does not apply and that the CO appropriation is not
available.'' \4\
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\1\ See Letter for Susan A. Poling, Associate General Counsel,
General Accounting Office, from Philip J. Perry, General Counsel,
Office of Management and Budget (Sept. 16, 2002).
\2\ See Letter for Susan A. Poling, Associate General Counsel,
General Accounting Office, from Nancy S. Bryson, General Counsel, U.S.
Department of Agriculture (Sept. 16, 2002).
\3\ See Letter for Senator Tom Harkin, Chairman, Senate Comm. on
Agriculture, Nutrition and Forestry, from Nancy S. Bryson, General
Counsel, U.S. Department of Agriculture (Sept. 24, 2002) (quoting
electronic message communicating the Congressional Budget Office's
conclusion that the section 11 ceiling remains ``applicable to the
transfers under section 1141(a)'').
\4\ See Letter for Senator Herb Kohl, Chairman, Subcom. on
Agriculture, Rural Development, and Related Agencies, Senate
Appropriation Comm.; Senator Thad Cochran, Ranking Minority Member,
Subcom. on Agriculture, Rural Development, and Related Agencies, Senate
Appropriation Comm.; and Representative Henry Bonilla, Chairman,
Subcom. on Agriculture, Rural Development, FDA & Related Agencies,
House Appropriations Comm. from Anthony H. Gamboa, General Counsel,
U.S. General Accounting Office, Re: Funding for Technical Assistance
for Conservation Programs Enumerated in Section 2701 of the farm bill,
No. B-29124l (Oct. 8, 2002) (available at http://www.gao.gov) (``GAO
Letter'').
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For the reasons set forth below, we conclude that the section 11
cap applies to technical assistance expenditures for the conservation
programs listed in section 1241(a) and that the Secretary of
Agriculture may draw upon USDA's CO appropriation to fund technical
assistance for these programs.
I.
We first address whether the section 11 cap applies to technical
assistance expenditures for the conservation programs listed in section
1241(a).
A.
In legislation enacted earlier this year, Congress substantially
revised section 1241 of the Food Security Act of 1985 concerning the
use of funds transferred from the Commodity Credit Corporation (CCC) to
finance agricultural conservation programs. See Farm Security and Rural
Investment Act of 2002, Pub. L. No. 107-171, 2701, 116 Stat. 134, 278
(``2002 Farm Bill''), codified at 16 U.S.C.A. 3841 (West. WESTLAW
through Pub. L. 107-313). Revised section 1241(a) instructs the
Secretary of Agriculture, during Fiscal Years 2002 through 2007, to
``use the funds, facilities, and authorities of the Commodity Credit
Corporation to carry out [seven specified conservation programs] under
subchapter IV [of title 16, chapter 58] (including technical
assistance).'' 16 U.S.C.A. 3841(a). For three of the seven specified
programs, this authorization to spend CCC funds is not subject to any
specific dollar limitation, although acreage and eligibility
restrictions place some limit on potential spending.\5\ The remaining
four, in contrast, are subject to annual spending limits specified in
section 1241(a).\6\
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\5\ Subsections 1241(a)(1)-(3) instruct the Secretary to use CCC
funds, without any dollar-denominated limit, to carry out the
Conservation Reserve Program (``CRP''), 16 U.S.C.A. 3831-3835a (West,
WESTLAW through Pub. L. 107-313); the Wetlands Reserve Program
(``WRP''), id. 3837-3837e; and the Conservation Security Program
(``CSP''), id. 3838-3838c.
\6\ Subsections 1241(a)(4)-(7) instruct the Secretary to use CCC
funds, up to prescribed annual limits, to carry out the Farmland
Protection Program (``FPP''), 16 U.S.C.A. 3837h-3837j (West, WESTLAW
through Pub. L. 107-313); the Grassland Reserve Program (``GRP''), id.
3838n-3838q; the Environmental Quality Incentives Program (``EQIP''),
id. 3839aa-3839aa-9; and the Wildlife Habitat Incentives Program
(``WHIP''), id. 3839bb-l.
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The 2002 Farm Bill also revised section 1241 to add an express
reference to the section 11 limit on the use of CCC funds to meet
administrative expenses. Revised. section 1241(b) provides that nothing
in the new provisions respecting CCC funding ``affects the limit on
expenditures for technical assistance imposed by section 714i of Title
15 [i.e., section 11 of the CCC Charter Act].'' 16 U.S.C.A. 3841(b)
(West, WESTLAW through Pub. L. 107-313).
The limit on expenditures that is explicitly preserved in this
portion of section 1241(b) restricts USDA uses of CCC funds. The CCC, a
Federal corporation that is located within the USDA and managed by a
Board of Directors under the supervision of the Secretary of
Agriculture, is empowered to obtain funds through borrowing (under a
$30 billion line of credit) as well as through direct appropriations
from Congress.\7\ Section 11 of the CCC Charter Act authorizes the CCC
to allot or transfer ``to any bureau, office, administration or other
agency of the Department of Agriculture . . . any of the funds
available to [the CCC] for administrative expenses.'' 15 U.S.C. 714i,
including funds that the CCC raises through borrowing. In particular,
the section 11 cap provides that:
---------------------------------------------------------------------------
\7\ See 15 U.S.C. 714b(i) (authorizing CCC to borrow to finance its
programs, subject to $30 billion limit on indebtedness). Borrowing from
the United States Treasury under authority of section 714b(i)
represents the principal source of CCC funding. The CCC repays the
loans, thereby restoring its borrowing authority, using programmatic
revenues (such as loan repayments by commodity producers) and annual
appropriations. See e.g., Agriculture, Rural Development, Food and Drug
Administration, and Related Agencies Appropriations Act, 2002, Pub. L.
No. 107-76, 115 Stat. 704, 716-17, 729 (appropriating ``such sums as
may be necessary to reimburse the Commodity Credit Corporation for net
realized losses sustained, but not previously reimbursed'' and specific
amounts for overhead expenses of the commodity export guarantee
program). Direct appropriations for certain CCC programs, made
available through the annual Congressional appropriations process,
provide a secondary source of funding. See generally, U.S. General
Accounting Office, Commodity Credit Corporation: Information on the
Availability, Use, and Management of Funds, Rep. No. GAO/RCED-98-114,
at 1-2 (April 1998) (CCC Funds Report) (describing CCC's use or ''line-
of-credit'' financing and direct appropriations).
After September 30, 1996, the total amount of all allotments
and fund transfers from the Corporation under this section
(including allotments and transfers for automated data
processing or information resource management activities) for a
fiscal year may not exceed the total amount of the allotments
---------------------------------------------------------------------------
and transfers made under this section in Fiscal Year 1995.
Id. According to OMB's figures, section 11 allotments and transfers for
administrative expenses during Fiscal Year 1995 totaled $56 million.
B.
Your Office and GAO have offered competing textual analyses of the
question whether the section 11 cap applies to technical assistance
expenditures for the conservation programs listed in section 1241(a).
You both agree that the section 11 cap applies only to allotments and
fund transfers made by CCC under its section 11 authority. The pivotal
point on which your Office and GAO disagree is whether section 1241(a)
gives CCC a source of authority, independent of section 11, for funding
technical-assistance to these programs. GAO maintains that section
1241(a) provides CCC independent authority; that the technical
assistance that CCC funds for the conservation programs listed in
section 1241(a) is pursuant to this independent authority; and that the
section 11 cap therefore does not come into play. Your office, by
contrast, maintains that section 11 is the sole source of authority for
the CCC to fund technical assistance by USDA entities for farm
conservation programs.
We believe that section 1241(a) does not confer on the CCC a source
of authority, independent of section 11, for funding technical
assistance to the programs listed in section 1241(a). We note in
particular that section 1241(a) states that ``the Secretary shall use
the funds, facilities, and authorities of the [CCC] to carry out''
these programs. Rather than vesting new authority in CCC, section
1241(a) thus states plainly that the Secretary of Agriculture shall use
the CCC's existing ``authorities'' to provide technical assistance to
these programs. Beyond invoking section 1241(a), GAO does not allege
any other authority that CCC has, apart from section 11, for funding
technical assistance to farm programs. Nor are we aware of any such
authority that would operate separately from section 11. We therefore
determine that insofar as the Secretary is using CCC's authorities to
fund such technical assistance, she is relying on CCC's section 11
authority.
Our textual analysis is reinforced by section 1241(b), which
provides that ``[n]othing in [section 1241] affects the limit on
expenditures for technical assistance imposed by [section 11]. '' 16
U.S.C.A. 1241(b). Before the 2002 Farm Bill was enacted, the section
11 cap indisputably applied to technical-assistance funds provided to
at least two of the programs (CRP and WRP) now listed in section
1241(a).\8\ If, as GAO contends, the effect of section 1241(a) were to
remove technical-assistance funding of these two programs from the
section 11 cap, it would be highly peculiar to describe this escape
from the section 11 cap merely as not ``affect[ing] the limit on
expenditures for technical assistance imposed by [section 11].'' It
would be far more natural and straightforward for any reference to the
section 11 cap to state simply that expenditures for technical
assistance under section 1241 are not subject to the section 11 cap.
---------------------------------------------------------------------------
\8\ We are advised by your Office that under the statutory scheme,
including the predecessor version of Section 1241, in effect before the
2002 Farm Bill was enacted, OMB and USDA were of the view that (or at
least acted as if) transfer of CCC funds for technical assistance for
EQIP and WHIP was independently authorized. Whether or not such a view
was permissible under the previous statutory scheme, we do nor believe
that that view should affect our construction of the revised section
1241. It is true that under one canon of construction ``Congress is
presumed to be aware of an administrative . . . interpretation of
statute: and to adopt that interpretation when it re-enacts a statute
without change.'' Lorillard v. Pons, 434 U.S. 575, 580 (1978), but that
canon plainly does not apply where, as here, a statute has been revised
rather than merely re-enacted. Further, we note that one critical
respect in which section 1241 has been revised is the specification
that the Secretary shall use the ``authorities'' of the CCC.
---------------------------------------------------------------------------
By contrast, section 1241(b) is sensibly phrased under our reading
of section 1241(a). With respect to four of the seven programs that it
lists, section 1241(a) sets forth specific amounts, totaling in the
hundreds of millions of dollars each fiscal year, that the Secretary is
to spend. Because section 1241(a) makes clear that the funds expended
may be for purposes ``including the provision of technical
assistance,'' section 1241(a), read in isolation, might suggest that,
irrespective of section 11, any portion of these hundreds of millions
of dollars could be used for technical assistance. Section 1241(b)
instead succinctly makes clear that the section 11 cap continues to
apply.
We therefore conclude that the section 11 cap applies to technical
assistance expenditures for the conservation programs listed in section
1241(a).\9\
---------------------------------------------------------------------------
\9\ GAO argues that the legislative history of the 2002 Farm Bill
supports its reading of section 1241(a). Because we do not believe that
GAO's reading is permitted by the text of section 1241(a), we need not
consider its account of the legislative history. See, e.g., Barnhill v.
Johnson, 503 U.S. 393, 401 (1992).
---------------------------------------------------------------------------
II.
We now consider whether the Secretary of Agriculture may draw upon
USDA's CO appropriation to fund technical assistance for the programs
listed in section 1241(a).
A.
Public Law 107-76 contains the Fiscal Year 2002 appropriation for
the CO account. It provides in relevant part:
``For necessary expenses for carrying out the provisions of the
Act of April 27, 1935 (16 U.S.C. 590a-f), including preparation
of conservation plans and establishment of measures to conserve
soil and water (including farm irrigation and land drainage and
such special measures for soil and water management as may be
necessary to prevent floods and the siltation of reservoirs and
to control agricultural related pollutants); operation of
conservation plant materials centers; classification and
mapping of soil; dissemination of information; acquisition of
lands; water, and interests therein for use in the plant
materials program by donation, exchange, or purchase at a
nominal cost not to exceed $100 pursuant to the Act of August
3, 1956 (7 U.S.C. 428a); purchase and erection or alteration or
improvement of permanent and temporary buildings; and operation
and maintenance of aircraft, $779,000,000, to remain available
until expended (7 U.S.C. 2209b), of which not less than
$8,515,000 is for snow survey and water forecasting, and not
less than $9,849,000 is for operation and establishment of the
plant materials centers, and of which not less than $21,500,000
shall be for the grazing lands conservation initiative. . . .''
115 Stat. at 117. This same authority for the CO appropriation applies
to the continuing appropriations for Fiscal Year 2003. See Pub. L. 107-
229, 101(l), 103, 116 Stat. 1465-66 (providing continuing
appropriations for Fiscal Year 2003); Pub. L. 107-294, 116 Stat. 2062
(extending continuing appropriations through January 11, 2003).
B.
GAO maintains that the CO appropriation identifies the specific
programs that it is available to fund and that it does not include the
programs listed in section 1241(a). It also argues that section
1241(a)'s directive that ``the Secretary shall use the funds,
facilities, and authorities of the [CCC] to carry out the [listed]
programs'' should be read to preclude the Secretary from using other
funds in support of these programs. GAO contends that both a Senate
floor colloquy on the 2002 Farm Bill and the history of funding of the
WRP support its position. See GAO Letter, at 8-11.
Your Office maintains instead that the CO appropriation is
sufficiently broad to authorize funding technical assistance for the
conservation programs listed in section 1241(a). You argue further that
the legislative history of the CO appropriation supports your reading.
See OMB Letter, at 2-4. You find further support in what you
characterize as USDA's ``longstanding regular practice of using the CO
account to fund conservation technical assistance.'' Id. at 4.
We believe that the CO appropriation may be used to fund technical
assistance for the conservation programs listed in section 1241(a). The
CO appropriation provides funds ``for carrying out the provisions of
the Act of April 27, 1935 (16 U.S.C. 590a-f).'' Although the programs
listed in section 1241(a) are not specifically identified in 16 U.S.C.
590a-590f (2000), section 590a(3) ``authorizes the Secretary to
cooperate or enter into agreements with, or to furnish financial or
other aid to, any agency, governmental or otherwise, or any person,
subject to such conditions as he may deem necessary, for the purposes
of this chapter [(chapter 3B)].`` Id. 590a(3) (emphasis added).
Further, the express purposes of chapter 3B include ``(1) preservation
and improvement of soil fertility; (2) promotion of the economic use
and conservation of land; (3) diminution of exploitation and wasteful
and unscientific use of national soil resources; (4) the protection of
rivers and harbors against the results of soil erosion in aid of
maintaining the navigability of waters and water courses and in aid of-
flood control; . . . [and] (6) prevention and abatement of
agricultural-related pollution.'' Id. 590g(a) (``declar[ing] . . .
the purposes of this chapter''). Therefore, insofar, as the Secretary
determines that providing technical assistance for the conservation
programs listed in section 1241(a) would serve any of these purposes,
she may use the CO appropriation to fund such technical assistance.
We do not read section 1241(a)'s directive that ``the Secretary
shall use the funds, facilities, and authorities of the [CCC] to carry
out the [listed] programs'' to foreclose the Secretary from using the
CO appropriation to fund technical assistance for these programs.
Section 1241(a) does not state that the Secretary shall use only the
funds, facilities, and authorities of the CCC to carry out these
programs. In short, we see no statutory bar to the Secretary's using
other funds, in addition to the CCC's, to carry out these programs.
Because we believe that the text of the CO appropriation clearly
authorizes the Secretary to use the CO account to provide technical
assistance for the conservation programs listed in section 1241(a) to
promote any of the purposes of chapter 3B, we need not address the
competing legislative-history arguments that your Office and GAO
present. Likewise, we see no reason to explore the conflicting accounts
of the history of funding of the listed programs: even if GAO is
correct in its assertion that the WRP was not funded out of the CO
appropriation before the predecessor version of section 1241 was
enacted in 1996, that would not bear meaningfully on the question
whether the CO appropriation could have been used to fund WRP.
* * * * *
In sum: The section 11 cap applies to technical assistance
expenditures for the conservation programs listed in section 1241(a).
The Secretary of Agriculture may draw upon USDA's CO appropriation to
fund technical assistance for these programs.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
M. Edward Whelan III,
Principal Deputy Assistant Attorney General.
appendix 3
Title I--Commodity Programs
Sec. 1601. Administration Generally.
Sec. 1622. Implementation.
Title II--Conservation
Sec. 2101. Extension of Conservation Reserve Program.
Sec. 2201. Wetlands Reserve Program.
Sec. 2301. Conservation Stewardship Program.
Sec. 2401. Farmland Protection.
Sec. 2403. Grasslands Reserve Program.
Sec. 2501. Environmental Quality Incentives Programs.
Sec. 2510. Agricultural Water Enhancement Program.
Sec. 2605. Chesapeake Bay Watershed Program.
Sec. 2606. Voluntary Public Access and Habitat Incentive Program.
Sec. 2706. Delivery of Technical Assistance.
Sec. 2801. Agricultural Management Assistance Program.
Sec. 2803. Small Watershed Rehabilitation Program.
Title III--Trade
Sec. 3016. Food for Peace.
Sec. 3101. Export Credit Guarantee Program.\4\
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\4\ While funds to cover the losses incurred under this program
come directly from the Treasury of the United States, expenses related
to the administration of the program are within the provisions of
section 11 of the CCC Charter Act.
---------------------------------------------------------------------------
Sec. 3102. Market Access Program.
Sec. 3104. Cooperator Program.
Sec. 3105. Food for Progress.
Sec. 3106. McGovern-Dole International Food for Education and Child
Nutrition Program.
Sec. 3203. Technical Assistance for Specialty Crops.
Sec. 3204. Emerging Markets.
Sec. 3206. Local and Regional Food Aid Procurement Projects.
Title IV--Nutrition
Sec. 4231. Senior Farmers' Market Nutrition Program.
Sec. 4307. Survey of Food Purchased by School Food Authorities.
Sec. 4406. Re-Authorization of Federal Food Assistance Programs.
Title VI--Rural Development
Sec. 6022. Rural Micro Entrepreneur Assistance Program.
Sec. 6029. Funding of Pending Rural Development Loan and Grant
Applications.
Sec. 6202. Value-Added Agricultural Market Development Program
Grants.
Title VII--Research and Related Matters
Sec. 7206. Organic Agriculture Research and Extension Initiative.
Sec. 7311. Specialty Crop Research Initiative.
Sec. 7410. Beginning Farmer and Rancher Development Program.
Title VIII--
Sec. 8205. Healthy Forest Reserve Program.
Title IX--
Sec. 9001. Biobased Markets Program.
Biorefinery Assistance.
Repowering Assistance.
Bioenergy Program for Advanced Biofuels.
Biodiesel Fuel Education Program.
Rural Energy for America Program.
Biomass Research and Development.
Feedstock Flexibility Program for Bioenergy
Producers.
Biomass Crop Assistance Program.
Title X--
Sec. 10106. Farmers' Market Promotion Program.
Sec. 10109. Specialty Crop Block Grants.
Sec. 10201. Plant Pest and Disease Management and Disaster
Prevention.
Sec. 10202. National Clean Plant Network.
Sec. 10301. National Organic Certification Cost-Share.
Sec. 10302. Organic Production and Market Data Initiatives.
Sec. 10404. Market Loss Assistance for Asparagus Producers.
Title XI--
Sec. 11009. National Sheep Industry Improvement Center.
Title XII--
Sec. 12034. Fisheries Disaster Assistance.\5\
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\5\ This provision mandated a one time transfer of funds to the
Department of Commerce from CCC on May 1, 2008. Accordingly, once
transferred, these funds lost their identity as funds of CCC and are
subject to the provisions otherwise applicable to section 312(a) of the
Magnuson-Stevens Fishery Conservation and Management Act.
Title XIV--
Sec. 14004. Outreach and Technical Assistance for Socially
Disadvantaged Farmers or Ranchers.
Sec. 14012. Determination on Merits of Pigford Claims.
appendix 4
Sec. 11. Cooperation With Other Government Agencies.--
(a) In General.--
(1) Acceptance of services.--Subject to the limitations under
paragraphs (2) and (4), and excluding subsections (b) and (c),
the Corporation, on behalf of an agency of the Department of
Agriculture (Department), may accept and utilize, on a
compensated or uncompensated basis, services, information,
facilities, officers, or employees provided by--
(A) another bureau, office, division, agency, or
mission area of the Department of Agriculture;
(B) another agency of the Federal Government; or
(C) a political unit such as a state, the District of
Columbia, a territory or possession, or a political
subdivision of such political unit.
(2) Prior authorization.--Prior to receiving funding or other
assistance under this subsection, an agency of the Department
shall have statutory authorization to receive services,
information, facilities, officers, or employees covered under
paragraph (1) through the Corporation.
(3) Administrative expenses.--The Corporation may transfer
funds of the Corporation to any unit of Federal Government or
political unit to assist the governmental unit with
administrative expenses incurred in the conduct of its
assistance to the Corporation. The total amount of funds that
may be transferred under this section (including transfers for
automated data processing or information resource management
activities) for a fiscal year may not exceed $57,000,000.
(b) Transfers.--Notwithstanding subsection (a), the Secretary may,
transfer funds of the Corporation in accordance with:
(1) A plant or pest emergency under section 442 of the Plant
Protection Act (7 U.S.C. 7772);
(2) A livestock emergency under section 10417 of the Animal
Health Protection Act (7 U.S.C. 8316);
(3) Section 1469(a)(3) of the National Agricultural Research,
Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3315);
(4) Section 1240I of the Food Security Act of 1985 (16 U.S.C.
3839aa-9);
(5) Section 1240Q of the Food Security Act of 1985 (16 U.S.C.
3839bb-4);
(6) Section 1241(a) of the Food Security Act of 1985 (16
U.S.C. 3841(a));
(7) Section 7405(c)(7) of the Farm Security and Rural
Investment Act of 2002 (Pub. L. 107-171);
(8) Section 9008 of the Farm Security and Rural Investment
Act of 2002 (Pub. L. 107-171); and
(9) Section 1622 of the Food, Conservation, and Energy Act of
2008 (Pub. L. 110-246).
(c) Administrative Expenses.--Funds made available under subsection
(b) may, to the extent authorized in such provisions, be used to pay
expenses incurred in the administration of such activities.
Insert 2
Mr. Costa. Can you clarify the link between the pest and the
disease challenges, how in working with your partners in USDA
possible trade disruptions and the potential economic losses
that would occur to our agricultural producers are addressed
and hopefully minimized?
Ms. Bech. Well, I think if I can clarify, if I might ask a
clarifying question. Are you asking what we are doing with the
other USDA agencies in addressing the disease impacts on the
economics? Then we are providing, again, the assessments that
go into that economic analysis and working with our Foreign
Agriculture Service to address those issues.
Mr. Costa. Do you have any explanation as to why only \1/3\
of the SPS certificates or trade concerns have been addressed?
Ms. Bech. Well, I could get further information on it.
APHIS does work closely with its Federal partners in addressing any
SPS issues that arise. The U.S. Trade Representative publishes an
annual ``Report on Sanitary and Phytosanitary Measures'' that describes
significant barriers to U.S. food and farm exports arising from
measures that foreign governments apply on the grounds that they are
necessary to protect human, animal, or plant life or health from risks
arising from the entry or spread of pests, from plant- or animal-borne
pests or diseases, or from additives, contaminants, toxins, or disease-
causing organisms in foods, beverages, or feedstuffs.
APHIS and our Federal partners will continue to work with
colleagues from across the U.S. Government, as well as interested
stakeholders, to encourage governments around the world to remove their
unwarranted SPS rules to ensure a level playing field abroad for U.S.
ranch and farm products.
______
House Committee on Agriculture Farm Bill Audit Questionnaire
1. Program Name
Specialty Crop Block Grant Program.
2. Subprograms/Department Initiatives
Not applicable.
3. Brief History
The Specialty Crops Competitiveness Act of 2004 (P.L. 108-465; 7
U.S.C. 1621 note) authorized appropriations for Fiscal Years 2005-09 to
provide assistance for specialty crops to all 50 states, the District
of Columbia, and the Commonwealth of Puerto Rico. Specialty crop block
grant funds are meant to enhance the competitiveness of specialty
crops. Specialty crops were defined as fruits and vegetables, tree
nuts, dried fruits, and nursery crops (including floriculture).
From FY 2006 through FY 2008, the program was funded through
appropriations which were made available until expended and awarded in
the year subsequent to the appropriation. The FY 2008 appropriation
made $8.44 million available until expended for Specialty Crop Block
Grants, which were awarded in FY 2009. After all the eligible states
submitted their applications by the established deadline of March 5,
2009, fifty-two U.S. states and territories were awarded SCBGP funds.
The FY 2008 Farm Bill, Sec. 10109, extended the Specialty Crop
Block Grant program (SCBGP-FB) through FY 2012 and provided Commodity
Credit Corporation funding at the following levels: $10 million in FY
2008, $49 million in FY 2009, and $55 million for each of Fiscal Years
2010-2012. These funds are available on an annual basis and must be
obligated in the current year. The Act also amended the definition of
specialty crops by adding horticulture; and added Guam, American Samoa,
the U.S. Virgin Islands, and the Commonwealth of the Northern Mariana
Islands to the list of ``states'' eligible to apply for grants. State
grants for each fiscal year are a minimum of $100,000 or \1/3\ of 1
percent of the total amount of available funding. AMS completed
rulemaking on these farm bill changes with publication of the final
rule in the Federal Register on March 27, 2009. The final rule requires
state departments of agriculture to describe their outreach efforts to
specialty crop producers, including socially disadvantaged and
beginning farmers; and to describe their efforts to conduct a
competitive process to ensure maximum public input and benefit.
4. Purpose/Goals
The purpose of the Specialty Crop Block Grant Program (SCBGP) is
solely to enhance the competitiveness of specialty crops. Specialty
crops are defined as ``fruits, vegetables, tree nuts, dried fruits,
horticulture, and nursery crops (including floriculture).''
5. Success in Meeting Programmatic Purpose/Goals
To date, the grant program has awarded over $110 million to fund
2,500 projects that benefit the specialty crop industry in all 50
states, the District of Columbia, American Samoa, Guam, the
Commonwealth of Puerto Rico, and the Commonwealth of the Northern
Mariana Islands. These projects have particularly enhanced specialty
crop efforts in education, research, marketing and promotion,
production, pest and plant health, and food safety.
6. Annual Budget Authority (FY 2002-FY 2011)
------------------------------------------------------------------------
No-Year Budget Farm Bill Budget
Fiscal Year Authority ($ in Authority ($ in
thousands) thousands)
------------------------------------------------------------------------
2006 $6,930 --
2007 6,930 --
2008 8,400 $10,000
2009 -- 49,000
2010 -- 55,000
2011 -- 55,000
------------------------------------------------------------------------
7. Annual Outlays (FY 2002-FY 2011)
------------------------------------------------------------------------
Appropriated No-Year Farm Bill Annual
Fiscal Year Annual Outlays ($ in Outlays ($ in
thousands) thousands)
------------------------------------------------------------------------
2006 -- --
2007 $5,147 --
2008 8,412 --
2009 7,744 $3,358
2010 44 14,404
2011 YTD 103 19,511
------------------------------------------------------------------------
Funds are expended over the lifetime of the grant, typically around
3 years, as the grantee incurs costs on the projects.
8. Annual Delivery Cost (FY 2002-FY 2011)
SCBG Farm Bill Funds--Delivery Costs ($ in thousands)
------------------------------------------------------------------------
FY 2011
FY 2008 FY 2009 FY 2010 Est.
------------------------------------------------------------------------
Program Oversight -- $328 $637 $667
Staff Years -- 3 4 4
------------------------------------------------------------------------
Program oversight for Specialty Crop Block Grants was not tracked
separately until FY 2009.
9. Eligibility Criteria
The agencies commissions or departments responsible for agriculture
within the 50 states, the District of Columbia, the Commonwealth of
Puerto Rico, Guam, American Samoa, the U.S. Virgin Islands, and the
Commonwealth of the Northern Mariana Islands are eligible to apply for
grant funds directly to the USDA. States may have specific or
additional application requirements such as: funding priorities,
deadlines, applicant eligibility criteria, project duration, funding
restrictions and maximum and minimum grant awards.
10. Utilization (Participation) Data
The Specialty Crop Block Grant Program is authorized to distribute
funds to the 56 eligible entities. In FY 2010, all 50 states, the
District of Columbia, the Commonwealth of Puerto Rico, Guam, and the
U.S. Virgin Islands applied for and received funding for 825 projects
meant to enhance the competitiveness of specialty crops.
11. Duplication or Overlap with Other Programs
The purpose of the Specialty Crop Block Grant Program is to enhance
the competitiveness of specialty crops (fruits, vegetables, tree nuts,
floriculture and horticulture). A grant program that has a similar
purpose is the Specialty Crop Research Initiative, which was
established to solve critical specialty crop industry issues through
research and extension activities.
Each project submitted to the USDA is reviewed to avoid duplication
with other Federal and state grant programs. In the event that a
project has been submitted to other Federal and/or state grant
programs, the Specialty Crop Block Grant Program requires that the
project indicate how Specialty Crop Block Grant Program funding will
supplement and not duplicate or overlap the purpose of the other
funding.
12. Waste, Fraud, and Abuse
No reports or findings of waste, fraud and abuse have occurred or
been published.
13. Effect of Administrative PAYGO
None.
______
1. Program Name
National Organic Program (NOP).
2. Subprogram/Department Initiative
Not applicable.
3. Brief History
The Organic Foods Production Act (OFPA) of 1990 required USDA to
develop national standards for organically produced agricultural
products to assure consumers that agricultural products marketed as
organic meet consistent, uniform standards. Farms and handlers of
organic foods must be certified by a state or private agency that has
been accredited by USDA. All agricultural products sold, labeled, or
represented as organic in the United States must be in compliance with
these regulations. The NOP's objective is to enforce the mandated
requirements.
To comply with statutory requirements, and meet industry demands,
NOP activities consist of the following:
Develop new standards to accommodate requests from the
organic industry;
Enforce compliance and conduct audits to maintain labeling
credibility;
Operate and update website content, to keep certifying
agents and consumers informed with the latest developments;
Respond to public requests for information in a timely
manner;
Provide accreditation of certifying agents;
Oversee the certifying agents, including foreign-based
agents;
Ensure uniform regulatory decisions by the certifying
agents; and
Investigate complaints of organic standard violations
NOP is responsible for ensuring that organically produced products
meet consistent standards. To accomplish that, NOP accredits and
ensures the compliance of 100 domestic and foreign Accredited
Certifying Agents (ACAs). Theses ACAs certify that organic operations
are in compliance with USDA standards (regulations). Proper training is
essential for certifying agents to ensure that regulatory decisions are
uniform regarding the correct application of the standards.
4. Purpose/Goals
The NOP develops, implements, and administers national production,
handling, and labeling standards in accordance with the Organic Foods
Production Act (OFPA) of 1990 and regulations in Title 7, Part 205 of
the Code of Federal Regulations. OFPA gives NOP the authority to
respond to site-specific conditions by integrating cultural,
biological, and mechanical practices that foster cycling of resources,
promote ecological balance, and conserve biodiversity.
5. Selected Examples of Recent Progress
On February 17, 2010, the NOP published the long-awaited
access to pasture rule to clarify feed and living conditions
for livestock production that would qualify their milk and meat
for USDA organic certification. The rule establishes
enforceable pasture practice standards to satisfy consumer
expectations that ruminant livestock animals graze on pasture
during grazing season and are not confined.
In March 2010, the Office of Inspector General (OIG)
published an audit report on the NOP which recommended that the
program further improve administration and strengthens
management controls to ensure more effective enforcement of
program requirements. The report indicated the need to
strengthen oversight of certifying agents and organic
operations to ensure that organic products are consistently and
uniformly meeting NOP standards. The NOP has completed 13 out
of 14 corrective actions identified in the OIG audit.
The NOP developed a quality management system and a Quality
Manual to align the program's accreditation program with
international requirements outlined in ISO 17011. Furthermore,
the program initiated a peer review process to have its
accreditation program assessed by the National Institute of
Standards and Technology for compliance with ISO 17011.
On September 1, 2010, the NOP published the inaugural
edition of the NOP Program Handbook, designed for those who
own, manage, or certify organic operations by providing
guidance about the national organic standards and instructions
that outline best program practices.
In October 2010, the NOP published draft guidance on compost
and vermicompost in organic crop production; wild crop
harvesting; outdoor access for organic poultry; commingling and
contamination prevention in organic production and handling;
and use of chlorine materials in organic production and
handling.
The NOP published a number of rules on the National List of
Allowed and Prohibited Substances including materials
sunsetting in 2012; adding tetracycline and sulfurous acid to
the National List; and other National List substances.
The NOP developed new training seminars on liquid
fertilizers, access to pasture, adverse actions procedures,
labeling, certification, complaint handling, wine labeling, and
enforcement procedures. The NOP provided training in Germany,
Ghana, California, Colorado, Georgia, New York and Wisconsin.
The NOP recently held public meetings of the National
Organic Standards Board in Davis, California and Madison,
Wisconsin.
The NOP established a complaint database to improve the
handling of complaints to ensure they are handled in an
effective and timely manner.
Conducted on-site reviews of recognition agreements
currently in place with the governments of Denmark and Israel.
6. Annual Budget Authority (FY 2002-FY 2011)
------------------------------------------------------------------------
Fiscal Year Budget Authority ($ in thousands)
------------------------------------------------------------------------
2002 $1,640
2003 1,494
2004 1,969
2005 1,975
2006 1,993
2007 2,001
2008 3,127
2009 3,867
2010 6,967
2011 6,919
------------------------------------------------------------------------
7. Annual Outlays (FY 2002-FY 2011)
------------------------------------------------------------------------
Fiscal Year Budget Outlays ($ in thousands)
------------------------------------------------------------------------
2002 $1,384
2003 1,341
2004 1,918
2005 1,990
2006 1,807
2007 1,549
2008 2,871
2009 3,298
2010 5,736
2011 YTD 3,375
------------------------------------------------------------------------
Explanation: The budget authority may be different from outlays due to
timing of payments and the accounting process.
8. Annual Delivery Cost (FY 2002-FY 2011) ($ in thousands)
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2011
FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 Est.
--------------------------------------------------------------------------------------------------------------------------------------------------------
National Organic Program 1,493 1,413 1,983 1,955 1,883 1,897 3,000 3,575 6,244 6,387
Indirect Costs 134 111 156 157 159 160 250 309 517 532
-----------------------------------------------------------------------------------------------------------------------
Total Costs 1,627 1,524 2,139 2,112 2,042 2,057 3,250 3,884 6,761 6,919
-----------------------------------------------------------------------------------------------------------------------
Staff Years 11 13 13 11 13 13 14 19 28 32
--------------------------------------------------------------------------------------------------------------------------------------------------------
Program Indirect costs as reported in the Explanatory Notes.
9. Eligibility Criteria
Not applicable to this program.
10. Utilization (Participation) Data
Certified Organic Operations:
27,000 worldwide
Approximately \2/3\ of USDA certified organic operations are located in the U.S.; \1/3\ are located in other countries
Acreage: reporting of organic acreage is currently not required by regulations. The USDA Economic Research Service estimated that U.S. producers
dedicated approximately 4.8 million acres of farmland--2.7 million acres of cropland and 2.1 million acres of rangeland and pasture--to organic
production systems in 2008.
11. Duplication or Overlap with Other Programs
There is no duplication with other programs. Certifying agents accredited by the National Organic Program certify eligible agricultural processing
and handling activities, both domestically and internationally, upon request.
12. Waste, Fraud and Abuse
NOP's Compliance & Enforcement Division (C&E) is responsible for processing and investigating complaints alleging violations of NOP regulations;
conducting proactive compliance and outreach activities; and enforcing organic production, handling, and labeling standards.
The NOP is increasing enforcement activities here in the United
States and monitoring recognition agreements with foreign countries.
The NOP conducted assessments in Egypt, Israel, Hungary, Denmark, China
and Ghana. AMS auditors have also conducted organic audits in
Argentina, Mexico, Costa Rica, Guatemala, Australia, Italy, Germany,
and Bolivia. Certified organic operations that are found in
noncompliance of the NOP organic standards may have their certification
suspended or revoked. Civil penalties of up to $11,000 per violation
are being used for willful violations of the standards.
13. Effect of Administrative PAYGO
None.
______
1. Program Name
National Organic Certification Cost-Share Program.
2. Subprogram/Department Initiative
National Organic Program/2008 Farm Bill.
3. Brief History
The National Organic Certification Cost Share Program (NOCCSP) is
open to all state agencies in all 50 states, the District of Columbia
and the Commonwealth of Puerto Rico, Guam, American Samoa, the United
States Virgin Islands, and the Commonwealth of the Northern Mariana
Islands.
The NOCCSP is authorized under 7 U.S.C. 6523. The 2002 Farm Bill
provided $5 million for this program. Funding was exhausted before the
2008 Farm Bill made additional funds available. Section 10301 of the
Food, Conservation and Energy Act of 2008 mandated $22 million for the
program from CCC funding available until expended. The Act authorizes
the Department to provide certification cost-share assistance to
producers and handlers of organic agricultural products in
participating states who receive certification or continuation of
certification from a USDA accredited certifying agent. Assistance is
provided through participating states.
4. Purpose/Goals
Funds under this program are made available to all 50 states, all
U.S. Territories, the District of Columbia, and Puerto Rico to assist
producers and handlers of agricultural products in obtaining
certification under the Organic Foods Production Act of 1990. Payments
are limited to 75 percent of an individual producer or handler's
certification costs up to a maximum of $750 annually.
5. Success in Meeting Programmatic Purpose/Goals
In FY 2010, nearly $4.8 million was allocated to states to
partially reimburse producers and handlers for the cost of organic
certification through the National Organic Certification Cost Share
Program. The state agencies are responsible for dispersing the
allocated funds to producers and handlers. We estimate that these funds
can assist over 8,000 certified organic operations. Recent efforts by
the NOP to increase outreach and training have resulted in significant
growth, with at least ten states requesting additional funds to meet
their unexpected demand.
6. Annual Budget Authority (FY 2002-FY 2011)
$5 million authorized by the 2002 Farm Bill
$22 million authorized by the 2008 Farm Bill
------------------------------------------------------------------------
Fiscal Year Budget Authority ($ in thousands)
------------------------------------------------------------------------
2002 $5,000
2003 --
2004 --
2005 --
2006 --
2007 --
2008 $22,000
2009 --
2010 --
2011 --
------------------------------------------------------------------------
7. Annual Outlays (FY 2002-FY 2011)
------------------------------------------------------------------------
Fiscal Year Budget Outlays ($ in thousands)
------------------------------------------------------------------------
2002 --
2003 $1,820
2004 $1,415
2005 $222
2006 $967
2007 $342
2008 --
2009 $3,446
2010 $4,182
2011 YTD $3,412
------------------------------------------------------------------------
Explanation of Variance: To ensure the availability of resources through
2012, a portion of this one-time no-year funding has been made
available each fiscal year.
8. Annual Delivery Cost (FY 2002-FY 2011) ($ in thousands)
------------------------------------------------------------------------
FY 2011
FY 2008 FY 2009 FY 2010 Est.
------------------------------------------------------------------------
Program Oversight -- $149 $136 $223
Staff Years -- 1 1 1
------------------------------------------------------------------------
For FY 2002-2007 program oversight was not tracked separately.
9. Eligibility Criteria
Producers and handlers who have received certification or a renewal
of certification from an accredited certifying agent (ACA) are eligible
to participate.
Certification is the process where a producer or handler is
approved by an Accredited Certifying Agent as being in compliance with
the NOP regulations and is then authorized to sell, label, or represent
products as being ``certified organic''.
10. Utilization (Participation) Data
NOCCSP:
2008: 4,966 participants
2009: 5,436 participants
2010: 6,128 participants
2011 year to date: 1,341 participants
(final figures will not be available until January
2012; \2/3\-\3/4\ of participants usually sign up in the
fourth quarter of the fiscal year)
11. Duplication or Overlap with Other Programs
The U.S. Department of Agriculture (USDA) administers two cost-
share programs to defray the costs of organic certification. The
programs are administered by the USDA Agricultural Marketing Service
(AMS) National Organic Program (NOP).
The AMA Program authorizes cost-share assistance to producers of
organic agricultural products in states that have a historically low
participation rate in the Federal Crop Insurance Program: Connecticut,
Delaware, Hawaii, Maine, Maryland, Massachusetts, Nevada, New
Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Utah,
Vermont, West Virginia, and Wyoming. Conversely, the NOCCSP is open to
state agencies in all 50 the District of Columbia and the Commonwealth
of Puerto Rico, Guam, American Samoa, the United States Virgin Islands,
and the Commonwealth of the Northern Mariana Islands. In addition, the
NOCCSP provides cost-share assistance to both producers and handlers.
The NOCCSP and the AMA are the only Federal programs which provide
financial assistance to defray the cost of organic certification. To
reduce possible overlap between AMA and NOCCSP, producers participating
in the AMA program are not eligible to participate in the producer
portion of the national program.
12. Waste, Fraud and Abuse
No reports or finding of fraud or abuse have occurred or been
published.
13. Effect of Administrative PAYGO
None.
______
1. Program Name
Farmers Market Promotion Program (FMPP).
2. Subprograms/Department Initiatives
Not applicable.
3. Brief History
The Farmers Market Promotion Program was created by the 2002 Farm
Bill (Section 10605) which amended the Farmer-to-Consumer Direct
Marketing Act of 1976 (7 U.S.C. 3005). This program provides non-
construction grants that target improvements and expansion of domestic
farmers' markets, roadside stands, community-supported agriculture
programs, agri-tourism activities, and other direct producer-to-
consumer market opportunities. That Act authorized appropriations for
the program but did not provide funding. From Fiscal Year (FY) 2006 to
2008, appropriations of $1 million were made available each year for
this program. The 2008 Farm Bill further amended the Farmer-to-Consumer
Direct Marketing Act of 1967 and provided funding from Commodity Credit
Corporation (CCC) for Fiscal Years 2008-2012: $3 million in FY 2008, $5
million for each of FYs 2009 and 2010, and $10 million each year of FYs
2011 and 2012.
4. Purpose/Goals
The primary objective of the FMPP program is to help eligible
entities improve and expand domestic farmers markets, roadside stands,
community-supported agricultural programs, agri-tourism activities, and
other direct producer-to-consumer market opportunities. Eligible
entities include agricultural cooperatives, producer networks, producer
associations, local governments, nonprofit organizations, public
benefit corporations, economic development corporations, regional
farmers' market authorities, and tribal governments.
5. Success in Meeting Programmatic Purpose/Goals
In the past 3 years, incoming applications for FMPP grants have
increased with available funding. In Fiscal Year 2011, $10 million is
available for the grant program. Some of the program's accomplishments
include the following:
2010 Accomplishments:
Approximately 28% of the FY 2010 awards offer further
professional development opportunities for farmers to
strengthen their business management skills, including training
in risk management, certification, and good agricultural
practices.
AMS received 509 requests in 2010 from all 50 states and the
District of Columbia. The program awarded a total of 81 grants
to 35 states for a total of $4,099,897.
2009 Accomplishments:
Provided $4.5 million in competitive grants to nonprofit
corporations, regional farmers market authorities, Tribal
governments, local governments, agricultural cooperatives,
economic development corporations to expand direct farmer-to-
consumer sales.
Eighty-six projects from 49 states were selected for funding
out of the 225 proposals received from 37 states throughout the
United States.
2008 Accomplishments:
Awarded $3,445,000 in support to 85 projects across the
country, including $385,375 to 18 projects for establishment/
expansion of EBT capability.
2007 Accomplishments:
Provided support to 23 projects across the country with
$900,000 in funding, including $328,652 to eight projects for
establishment/expansion of EBT capability.
2006 Accomplishments:
Awarded $900,000 in support to 20 projects across the
country, including $202,480 to four projects for establishment/
expansion of EBT capability.
6. Annual Budget Authority (FY 2002-FY 2011)
------------------------------------------------------------------------
Fiscal Year Budget Authority ($ in thousands)
------------------------------------------------------------------------
2006 * $1,000
2007 * $1,000
2008 * $4,000
2009 $5,000
2010 $5,000
2011 $10,000
------------------------------------------------------------------------
Note: * indicates budget authority from annual appropriations. FY 2008
includes both a $1 million annual appropriation and $3 million 2008
Farm Bill funding.
7. Annual Outlays (FY 2002-FY 2011)
------------------------------------------------------------------------
Fiscal Year Budget Outlays ($ in thousands)
------------------------------------------------------------------------
2006 --
2007 $300
2008 $772
2009 $2,549
2010 $3,244
2011 YTD $2,789
------------------------------------------------------------------------
Funds are expended over the lifetime of the grant, typically around 3
years, as the grantee incurs costs of the project.
8. Annual Delivery Cost (FY 2002-FY 2011) ($ in thousands)
----------------------------------------------------------------------------------------------------------------
FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Est.
----------------------------------------------------------------------------------------------------------------
Program Oversight -- -- $175 $437 $682 $776
Staff Years -- -- 1 3 4 4
----------------------------------------------------------------------------------------------------------------
For FY 2006 and 2007 program oversight was not tracked separately.
9. Eligibility Criteria
Eligible entities under FMPP are agricultural cooperatives,
producer networks or associations (added under 2008 Farm Bill); local
governments; nonprofit corporations; economic development corporations;
regional farmers' market authorities; and Tribal governments. All
entities must be owned, operated, and located within one of the 50 U.S.
or the District of Columbia.
10. Utilization (Participation) Data
FMPP has awarded grants for 285 projects. As of June 2011, the
Farmers Market Promotion Program is currently monitoring 157 active
grant awards.
11. Duplication or Overlap with Other Programs
Within USDA, there exists a small pool of grant opportunities that
are used heavily by small farmers and ranchers due to capacity and
other constraints that prevent them from participating in many other
programs. Among these are the (1) Farmers Market Promotion Program,
administered by the Agricultural Marketing Service, (2) the Community
Food Projects program administered by the National Institute of Food
and Agriculture (NIFA, formerly CSREES), and (3) the Risk Management
Education and Outreach Partnerships Program, administered by the Risk
Management Agency.
FMPP applicants are often consumers of other USDA programs that
appear similarly situated, including the Community Food Projects
Competitive Grant Program (CFPCGP), administered by National Institute
of Food and Agriculture. Since 1996, the CFPCGP has promoted self-
sufficiency and food security in low-income communities through
community food projects and training and technical assistance projects
(T&TA). CFPs unite the entire food system, assessing strengths,
establishing linkages, and creating systems that improve self-reliance
over food needs. T&TA helps successful applicants carry out and
evaluate their projects. The CFPCGP is designed to: meet the needs of
low-income people by increasing access to fresher, more nutritious food
supplies; increase the self-reliance of communities in providing for
their own food needs; promote comprehensive responses to local food,
farm, and nutrition issues; meets specific state, local, or
neighborhood food and agricultural needs for infrastructure improvement
and development; plans for long-term solutions; and create innovative
marketing activities that benefit both agricultural producers and low-
income consumers. These one-time grants require a dollar-for-dollar
match in resources.
Another program frequently used by FMPP stakeholders is the
Education and Outreach Partnerships Program housed within the Risk
Management Agency. This program combines the former ``Commodity
Partnerships for Small Agricultural Risk Management Education
Sessions'' and the `Community Outreach and Assistance Partnerships
Program.'' The purpose of this combined cooperative partnership
agreements program is to deliver crop insurance education and risk
management training to U.S. agricultural producers to assist them in
identifying and managing production, marketing, legal, financial and
human risk. The program gives priority to: (1) educating producers of
crops currently not insured under Federal crop insurance, specialty
crops, and underserved commodities, including livestock and forage; and
(2) providing collaborative outreach and assistance programs for
limited resource, socially disadvantaged and other traditionally
underserved farmers and ranchers.
12. Waste, Fraud and Abuse
No reports or findings of waste, fraud or abuse have occurred or
been published.
13. Effects of Administrative PAYGO
None.
______
1. Program Name
Section 32.
2. Subprograms/Department Initiatives
Specialty crop purchase requirements, Fresh Fruit and Vegetable
Program.
3. Brief History
Section 32 of the Act of 1935 (P.L. 74-320), amended through 7
U.S.C. 612(c), allocated the equivalent of 30% of annual customs
receipts to the Secretary of Agriculture. Much of these funds are
subsequently transferred to the Food and Nutrition Service (FNS) and
become part of the budget for USDA's Child Nutrition Programs; with a
smaller transfer to Commerce as directed by the Fish and Wildlife Act
of 1956 (16 U.S.C. 742a).
Funding Availability: The 2008 Farm Bill established an amount to
be retained for Section 32 activities each year beginning in 2009 at
$1.173 billion and increasing gradually to $1.322 billion in 2017 and
thereafter. The subsequent annual appropriations bills have limited the
Section 32 availability to levels lower than authorized in the farm
bill. AMS was also directed to transfer all funds in excess of the
amount identified (after the required transfer to Commerce) to FNS.
Specialty Crop Purchases: The 2002 Farm Bill established a
requirement to purchase at least $200 million in fruits and vegetables,
including at least $50 million in fresh fruits and vegetables. These
purchases were incorporated into entitlement purchases for the National
School Lunch Program. The 2008 Farm Bill established a requirement to
purchase additional fruits, vegetables, and nuts (specialty crops) each
year beginning in 2008 at $190 million and increasing gradually to $206
million in 2012 and thereafter. These additional commodities are
distributed through any of USDA's domestic food assistance programs.
Fresh Fruit and Vegetable Program: The 2008 Farm Bill also required
the use of Section 32 funds for the Fresh Fruit and Vegetable Program.
Under this program, FNS distributes funds to schools to purchase fresh
produce.
4. Purpose/Goals
The purpose is principally to alleviate surplus supplies of
commodities by diverting them from normal channels of trade and
commerce and increasing utilization by low income groups. Most of the
funds retained by AMS to carry out Section 32 are used to purchase non-
price supported commodities to meet entitlement needs of the child
nutrition programs; to purchase additional fruits, vegetables, and nuts
for use in domestic nutrition assistance programs; and to relieve
market surpluses to support agricultural producers. All commodities
purchased under Section 32 are distributed by FNS through USDA's
domestic food assistance programs.
Child Nutrition Entitlement Purchases: AMS purchases non-price
supported commodities to help meet the requirements of USDA child
nutrition programs.
Surplus Commodities: AMS purchases non-price supported commodities
under Section 32 authority based on economic analysis of production
costs and market supply. Demand for this support fluctuates with market
conditions.
Disaster Relief: In the event of Presidentially-declared disasters,
Section 32 funds may be used to provide commodities or replace
entitlement commodities.
5. Success in Meeting Programmatic Purpose/Goals
AMS has successfully met all Section 32 requirements, including
specialty crop purchases mandated by the 2002 and 2008 Farm Bills.
6. Annual Budget Authority (FY 2002-2011) (dollars in thousands)
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2011
FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 Est.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Budget Authority:
Section 32 Total Budget 995,714 1,460,006 1,287,849 1,180,858 1,523,470 1,463,888 1,095,069 963,530 1,098,000 1,065,000
Authority
Specialty Crop Requirements:
2002 Farm Bill Specialty Crop 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000
minimum
2008 Farm Bill Specialty Crop 190,000 193,000 199,000 203,000
minimum
---------------------------------------------------------------------------------------------------------------------
Total Specialty Crop 200,000 200,000 200,000 200,000 200,000 200,000 390,000 393,000 399,000 403,000
requirement
--------------------------------------------------------------------------------------------------------------------------------------------------------
7. Annual Outlays (FY 2002-2011) (dollars in thousands)
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2011
FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 Est.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Outlays:
Specialty Crops 239,874 279,675 304,712 233,557 246,115 232,391 390,292 472,780 511,128 411,600
Other 675,671 999,237 565,847 618,185 1,079,244 467,161 349,399 475,545 575,065 653,400
---------------------------------------------------------------------------------------------------------------------
Section 32 Total Outlays 915,545 1,278,912 870,559 851,742 1,325,359 699,552 739,691 948,325 1,086,193 1,065,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
Section 32 program obligations are outlayed entirely in the current year. Reconciliation upon contract delivery can result in prior year recoveries
which impact total outlays in this account.
8. Annual Delivery Cost (FY 2002-FY 2011) ($ in thousands)
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2011
FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 Est.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual Delivery Cost:
Commodity Purchases Service a 6,906 11,199 10,266 10,848 28,866 31,146 32,595 31,092 22,276 27,110
FTE's 43 45 38 39 45 47 51 49 54 50
--------------------------------------------------------------------------------------------------------------------------------------------------------
a Beginning in FY 2006, costs for WBSCM, a USDA procurement system, are included.
9. Eligibility Criteria
AMS purchases commodities under authority of Section 32 and on
behalf of FNS to meet other entitlement needs. The qualification
requirements requested as part of the application package for a
prospective contractor (commodity vendor) are a reexamination and
revalidation of established qualification requirements as required by
the Federal Acquisition Regulations (FAR) Part 9 and are necessary for
AMS to carry out its procurement mission. A prospective vendor must be
determined to be qualified by the Contracting Officer prior to
submitting offers under an AMS solicitation. There are 142 vendors
selling product to USDA. This includes Small, Small Disadvantaged,
8(a), HUBZone, Service-Disabled Veteran-Owned, and Women-Owned
Businesses.
10. Utilization (Participation) Data
Commodities purchased with Section 32 funding are delivered to
recipients through FNS' domestic assistance programs, including the
National School Lunch Program, the Emergency Food Assistance Program,
the Food Distribution Program on Indian Reservations, the Commodity
Supplemental Food Program, and the Nutrition Services Incentive
Program.
11. Duplication or Overlap with Other Programs
AMS closely coordinates with FNS and FSA to avoid overlap or
duplication.
12. Waste, Fraud, and Abuse
No reports or findings of waste, fraud or abuse have occurred or
been published.
13. Effect of Administrative PAYGO
None.
______
1. Program Name
APHIS Plant Protection and Quarantine Program (PPQ)--Specialty Crop
Pest and Disease Programs (General).
2. Subprograms/Department Initiatives
European Grapevine Moth (EGVM), Light Brown Apple Moth (LBAM),
Fruit Fly Exclusion and Detection Programs (FFED), Phytophthora
ramorum, Citrus Health Response Program (CHRP), Pale Cyst Nematode
(PCN), Golden Nematode (GN), Plum Pox Virus (PPV) and Glassy-winged
Sharpshooter (GWSS). Please Note: All of the programs listed above,
except for EGVM, were funded through the annual appropriations process
or access to emergency funding (Commodity Credit Corporation or Section
32) and not through the farm bill.
3. Brief History
APHIS' Plant Protection and Quarantine (PPQ) has been safeguarding
agriculture and natural resources from the risks associated with the
entry, establishment, or spread of animal and plant pests and noxious
weeds to ensure an abundant, high-quality, and varied food supply for
more than 30 years.
4. Purpose/Goals
APHIS-PPQ safeguards agriculture and natural resources--including
specialty crops--from the risks associated with the entry,
establishment, or spread of animal and plant pests and noxious weeds.
Fulfillment of its safeguarding role ensures an abundant, high-quality,
and varied food supply, strengthens the marketability of U.S.
agriculture in domestic and international commerce, and contributes to
the preservation of the global environment.
5. Success in Meeting Programmatic Purpose/Goals
European Grapevine Moth (EGVM)
APHIS is working closely with affected counties, industry, the
University of California, and other stakeholders to control EGVM which
is a significant pest of grapes and other specialty crops that is
threatening California's $3 billion wine/grape and stone fruit
industry. In 2010 the program was successful in mitigating all grape
export crop losses experienced in 2009 due to EGVM. Populations have
been significantly reduced in 2011 as compared to 2010; however,
several new detections in 2011 have resulted in the addition of new and
expanded quarantine areas.
Light Brown Apple Moth (LBAM)
The LBAM program focuses on the suppression and management of the
moth therefore reducing its impact on agriculture production and trade
of several specialty crops located in California. The program has
successfully maintained millions of dollars worth of specialty crop
exports to Mexico and Canada due to regulatory requirements that assure
our trade partners of pest free commodities.
Fruit Fly Exclusion and Detection Programs (FFED)
The FFED program protects the health and value of American
agricultural resources threatened by the establishment of exotic fruit
fly populations through (1) detection, exclusion, and emergency
response activities in the United States; (2) prevention of the spread
of Mediterranean fruit flies north of Chiapas, Mexico and eventually
the United States; and (3) eradication of the Mexican fruit fly in the
Lower Rio Grande Valley in Texas, Florida, and California. The market
value of exotic fruit fly host commodities protected by FFED activities
totaled about $6.5 billion in the United States in 2007, with
approximately $5.65 billion of that grown in California and $612
million in Florida.
Phytophthora ramorum (Sudden Oak Death)
The goal of the Sudden Oak Death Program is to prevent long-
distance human assisted spread of Phytophthora ramorum in nursery stock
and other commodities and preventing the establishment of Sudden Oak
Death beyond its current range. Program certification of nursery stock
has reduced Phytophthora ramorum in the nursery trade by 97 percent
(140 detections in 2004 to less than four in 2010), thereby
safeguarding the domestic and international trade in nursery stock, as
well protecting the forest products industry.
Citrus Health Response Program (CHRP)
APHIS established the Citrus Health Response Program (CHRP) to
sustain the citrus industry in the United States, to maintain growers'
continued access to export markets, and to safeguard citrus growing
states against a variety of citrus diseases and pests. The CHRP works
closely with regulatory officials in citrus-producing states, industry
stakeholders, university scientists, and other Federal agencies to
provide focus to citrus health research, provide domestic citrus
industries with production guidelines and best practices for fruit and
nursery stock production, and identify/implement appropriate survey,
diagnostic, and mitigation measures to reduce spread of citrus pests/
diseases. The implementation of the CHRP program has allowed APHIS and
stakeholders to facilitate safe movement of host plants, interstate
commerce, and international trade. During the 2007-08 citrus shipping
seasons, 17.6 million bushel cartons of fresh citrus fruit moved to
non-citrus states, while 14.7 million bushel cartons were exported
outside the United States. Citrus pests threaten just over 1 million
commercial acres (137 million trees) with an annual production value
for citrus fruit of $2.88 billion (packinghouse door equivalent--2010
NASS Citrus Fruits Summary) not taking into account backyard citrus
trees that also are affected.
Pale Cyst Nematode (PCN)
The goal of the PCN program is to detect and eradicate cyst
nematodes that cause significant damages along with impact the export
of U.S. potatoes from Idaho. The PCN program protects potato farmers
and farmland in 36 producing states--1 million acres growing 43 billion
pounds worth over $3 billion ($753 million in Idaho) and export markets
of $1 billion in potatoes and related products.
Golden Nematode (GN)
The goal of the GN program is to detect and control the movement
cyst nematodes that cause significant damage and impact the export of
U.S. potatoes from New York. The GN program protects potato farmers and
farmland in 36 producing states--1 million acres growing 43 billion
pounds worth more than $3 billion. APHIS has effectively removed areas
quarantined for GN in areas of New York through a cooperative effort
with growers to perform treatments and restrict the movement of
potentially infested machinery and growing media.
Plum Pox Virus (PPV)
The program's goal is to eradicate PPV which is a damaging disease
of stone fruit. APHIS, in coordination with the state and growers of
Pennsylvania, successfully eradicated PPV from the state in late 2009.
PPV is now located only in New York. APHIS is working with New York
state and growers to survey and place regulatory controls in place that
will stop the spread and lead to eradication. The U.S. stone fruit
industry is valued at an estimated $1.4 billion. PPV is considered one
of the most economically serious virus diseases of stone fruit
worldwide. Many varieties of peach, plum, apricot and nectarine produce
unmarketable fruit or prematurely lose their crop when infected with
PPV. Commercial stone fruit is the primary host of economic importance
but a number of alternate hosts have been reported including ornamental
Prunus and some herbaceous weeds and garden plants.
Glassy-winged Sharpshooter (GWSS)
The highly cooperative GWSS Program has successfully prevented
spread of the pest to valuable wine-growing regions of California, and
the program's rapid response methods have been very successful in
eliminating outlier outbreaks. Due to program control and regulatory
activities preventing further spread, the nearly 800,000 acres of grape
production in California is maintained in spite of the GWSS being
established in 10 of 58 counties. With GWSS present, the vine killing
Pierce's disease threatens California's wine grape, table grape and
raisin grape industries, valued at approximately $3 billion, and with
annual economic impacts of more than $61 billion to California's
economy, and more than $120 billion to the U.S. economy.
6. Annual Budget Authority (FY 2002-FY 2011)
------------------------------------------------------------------------
Commodity Credit
Fiscal Year Appropriated Corporation Section 32
Funds Funds
------------------------------------------------------------------------
(Dollars in thousands)
------------------------------------------------------------------------
2002 $59,631 $45,953
2003 $108,430 $59,531
2004 $121,686 $47,298
2005 $127,704 $122,094
2006 $129,500 $14,433 $400,000
2007 $129,921 $22,827 $100,000
2008 $137,841 $69,539
2009 $140,360 $0
2010 $150,380 $0
2011 $150,078 $16,922
------------------------------------------------------------------------
7. Annual Outlays (FY 2002-FY 2011)
------------------------------------------------------------------------
Fiscal Year Obligations Outlays
------------------------------------------------------------------------
(Dollars in thousands)
------------------------------------------------------------------------
Appropriated Funding
------------------------------------------------------------------------
2002 $64,295 $53,155
2003 $107,276 $88,268
2004 $119,714 $122,906
2005 $134,785 $128,384
2006 $127,731 $108,424
2007 $130,141 $126,561
2008 $141,526 $125,647
2009 $154,423 $141,505
2010 $172,048 $165,761
2011 (est.) $146,221 (est.) $124,288
------------------------------------------------------------------------
Commodity Credit Corporation
------------------------------------------------------------------------
2002 $86,259 $58,082
2003 $48,292 $50,794
2004 $46,023 $32,706
2005 $105,827 $49,647
2006 $17,406 $52,724
2007 $29,403 $21,112
2008 $53,044 $49,657
2009 $5,903 $11,161
2010 $22,207 $30,317
2011 (est.) $5,615 (est.) $5,053
------------------------------------------------------------------------
Section 32
------------------------------------------------------------------------
2006 $376,731 $376,731
2007 $107,105 $105,970
2008 $237 $238
------------------------------------------------------------------------
APHIS has authority to utilize three different sources of funding.
Annual appropriations acts provide appropriations funding as well as
access to Commodity Credit Corporation funding. Section 32 funding
authority, under the Agricultural Marketing Service, was established by
Congress to restore farmers' purchasing power in times of natural
disaster, either through direct payments to farmers or through the
Federal Government's purchase of surplus agricultural commodities.
APHIS used this authority to make payments to commercial citrus
producers who were negatively affected by the spread of citrus canker
that resulted from a series of hurricanes that hit Florida in 2004 and
2005.
Many of the programs included in the Specialty Crop Pests group
have no-year budget authority. In some years, obligations and outlays
may exceed the new budget authority for the year due to carryover
availability. These programs are cooperative efforts with state, local,
and industry partners; APHIS provides funding to these entities through
cooperative agreements to conduct a portion of the program activities.
Program partners usually have one year from the date the agreement was
signed to spend the funds. For this reason (and depending on the timing
of the agreement), outlays of obligated funds may occur in the next
budget year.
8. Annual Delivery Cost (FY 2007-FY 2011)
Annual Delivery Cost by Department Strategic Goals (Rev.)
(On basis of appropriated funds)
(dollars in thousands)
Strategic Goal 4--Ensure that all of America's children have access to safe, nutritious, and balanced meals.
FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012
Program
Program
Items--Di
scretiona
ry
Fruit Fly
Exclusion and
Detection
Indirect 4,778 4,824 4,986 5,034 5,024 4,794
Costs
Program 5,972 6,030 6,232 6,292 6,279 5,992
Operation
al Costs
FTEs 479 553 453 529 443 455
-----------------------------------------------------------------------------------------------
Plum Pox
Indirect 176 175 176 176 176 170
Costs
Program 220 218 220 221 220 212
Operation
al Costs
FTEs 5 5 5 5 5 5
-----------------------------------------------------------------------------------------------
Golden Nematode
Indirect 65 64 65 66 66 66
Costs
Program 81 80 82 83 83 83
Operation
al Costs
FTEs 7 7 7 7 7 7
-----------------------------------------------------------------------------------------------
Citrus Health
Response
Program
Indirect 2,916 2,825 2,831 3,572 3,565 3,572
Costs
Program 3,646 3,531 3,539 4,466 4,457 4,466
Operation
al Costs
FTEs 125 125 125 125 125 125
-----------------------------------------------------------------------------------------------
Glassy-winged
Sharpshooter
Indirect 1,930 1,841 1,836 1,839 1,835 1,622
Costs
Program 2,413 2,301 2,295 2,298 2,294 2,028
Operation
al Costs
FTEs 16 16 16 16 16 16
-----------------------------------------------------------------------------------------------
Phytophthora
ramorum/Sudden
Oak Death
Indirect 245 423 424 428 427 406
Costs
Program 306 529 531 535 534 507
Operation
al Costs
FTEs 19 19 19 19 19 19
-----------------------------------------------------------------------------------------------
Light Brown
Apple Moth
Indirect 0 79 80 81 80 881
Costs
Program 0 99 100 101 101 1,101
Operation
al Costs
FTEs 0 0 5 5 5 5
-----------------------------------------------------------------------------------------------
Pale Cyst
Nematode
Indirect 0 763 664 666 665 497
Costs
Program 0 953 829 833 831 622
Operation
al Costs
FTEs 0 15 15 15 15 15
-----------------------------------------------------------------------------------------------
Critical
Invasive Pest
Response/
Miscellaneous
Pests
Indirect 284 34 167 168 168 168
Costs
Program 355 42 209 210 210 210
Operation
al Costs
FTEs 11 4 8 8 8 8
9. Eligibility Criteria
Not applicable.
10. Utilization (Participation) Data
European Grapevine Moth (EGVM)
APHIS is working closely with affected counties, industry, the
University of California, and other stakeholders to control EGVM which
is a significant pest of grapes and other specialty crops that is
threatening California's $2.7 billion wine/grape and stone fruit
industry. Initial treatment efforts reduced the detections of moths in
affected areas from 66,000 in April 2010 to just 20 moths in August
2010.
Light Brown Apple Moth (LBAM)
The LBAM program works with the state and growers of several
specialty crops located in California. The program has successfully
maintained millions of dollars worth specialty crop exports to Mexico
and Canada due to regulatory requirements that assure our trade
partners of pest free commodities. The LBAM program did not receive
funding from the FY 2011 Farm Bill. This program measures performance
by tracking LBAM spread beyond the generally infested area. In FY 2010,
the program found three isolated populations, compared to five in FY
2009.
Fruit Fly Exclusion and Detection Programs (FFED)
The FFED program protects the health and value of American
agricultural resources through working with Florida, California,
Arizona, and Texas to assure citrus crops are protected from these
pests. In FY 2010, APHIS' long-term performance measure for the number
of exotic fruit flies outbreaks in the United States had a target of
two severe outbreaks per year. A severe outbreak is one that spreads
beyond its initial area. The program experienced three of these
outbreaks in FY 2010, but will have them eradicated by October 2011.
Phytophthora ramorum (Sudden Oak Death)
The goal of sudden oak death program is to prevent long-distance
human assisted spread of Phytophthora ramorum in nurserystock through
working with states that are affected such as California, Washington,
and Oregon along with states who might receive potentially infested
nursery stock. APHIS works with officials in the three states to
establish quarantines and require nursery inspections before host
plants may be shipped interstate. In FY 2010, the program worked with
the nursery industry to reduce the presence of the disease in the
nursery system. It detected 22 infested nurseries in California,
Oregon, and Washington, helping to prevent the spread of the disease.
APHIS is continuing to support the development, communication, and
implementation of best management practices in nurseries to reduce the
risk of P. ramorum introduction and establishment.
Citrus Health Response Program (CHRP)
APHIS works with the entire U.S. citrus industry sustain the citrus
industry in the United States while managing pest and disease threats.
APHIS works with the citrus mutuals, California, Texas, Arizona, and
Florida to ensure safe citrus and maintain foreign trade markets.
During the 2009-2010 shipping season, 12.4 million bushel cartons of
fresh citrus fruit were exported to foreign markets and 17.9 million
bushel cartons were shipped within the United States,
Pale Cyst Nematode (PCN)
The PCN program works with Idaho State and growers in the state to
detect and eradicate cyst nematodes that cause significant damages
along with impact the export of potatoes from Idaho. In FY 2010, the
program achieved a 90 percent reduction in viable PCN populations as a
result of eradication activities.
Golden Nematode (GN)
The GN program works with New York State and growers to detect and
control the movement cyst nematodes that cause significant damages
along with impact the export of U.S. potatoes from New York perform
treatments and restrict the movement of potentially infested machinery
and growing media. Surveys conducted through 2010 allowed from the
release of 43,000 acres from regulation, while continuing to prevent
the spread of the pest.
Plum Pox Virus (PPV)
The PPV program works with New York State and growers to assure
market access for stone fruit is maintained and mitigate the spread to
previously infested areas. In FY 2010, the program addressed outbreaks
in New York and continued monitoring for the disease in Pennsylvania
and Michigan, after declaring eradication in both states in 2009.
Glassy-winged Sharpshooter (GWSS)
The GWSS program works with specialty crop growers and state
officials in California particularly the grape and wine industry to
mitigate the damages and maintain foreign trade markets. This program
has contained GWSS within ten California counties where it is
established and conducted area-wide management programs in major
citrus-producing areas to suppress the pest. These programs were highly
successful at suppressing GWSS populations and maintaining citrus
shipments out of the regulated areas. In FY 2010, six GWSS
interceptions occurred on nursery shipments, with five egg masses, one
nymph, and one adult found among the shipments. This data compares to
23 interceptions in FY 2009 with 25 egg masses. These interceptions and
egg mass finds prevent the GWSS establishment in non-infested areas,
where mitigation efforts would be costly and time-consuming.
11. Duplication or Overlap with Other Programs
In instances when APHIS and another agency find it within their
mission to address a particular pest, APHIS will meet with the other
agency to determine the most effective combination of skills to address
the pest. For instance, APHIS coordinates its Phytophthora ramorum with
the Forest Service as the introduction of the disease into the National
Forest system would be highly disruptive to the Forest Service mission.
12. Waste, Fraud and Abuse
USDA's Office of Inspector General recently published an audit,
USDA Payments for 2005 Citrus Canker Tree Losses, March 2011, which
raised concerns over payments through the Canker Lost Production
Program and Citrus Canker Tree Replacement Program. APHIS is currently
working with OIG to address the concerns raised in the report.
13. Effect of Administrative PAYGO
None.
______
1. Program Name
Farm Bill Section 10201, Plant Pest and Disease Management and
Disaster Prevention.
2. Subprograms/Department Initiatives
Not applicable.
3. Brief History
The Plant Pest and Disease Management and Disaster Prevention
Program was authorized in the 2008 Farm Bill and has been implemented
by APHIS from 2009 through 2011. It is funded annually with Commodity
Credit Corporation (CCC) funding. Funding was set at $12 million in FY
2009, $45 million in FY 2010, and $50 million in FY 2011 and beyond.
4. Purpose/Goals
The purpose of the Pest and Disease Management and Disaster
Prevention Program is for APHIS to partner with states, industry,
universities, and other interested groups to prevent the entry of high-
consequence plant pests, quickly detect those that may enter into the
United States, and enhance our emergency response capabilities. The
program provides strong protection to America's agricultural and
environmental resources, and helps nursery and specialty crop growers
flourish.
Projects are organized around six goal areas: enhancing plant pest
analysis and survey; targeting domestic inspection activities at
vulnerable points in the safeguarding continuum; enhancing and
strengthening threat identification and technology; safeguarding
nursery production; enhancing mitigation capabilities; and conducting
outreach and education about these issues.
5. Success in Meeting Programmatic Purpose/Goals
Over the last 2 years, Section 10201 projects have played a
significant role in many USDA and partner successes to protect American
agriculture and educate the public about the threat of invasive
species. These successes include, among many others, the eradication of
plum pox virus in Pennsylvania and a recent Mediterranean fruit fly
outbreak in Florida, surveys for European grapevine moth in California,
the 2010 national survey of honey bee pests and diseases, the
monitoring of high-risk international and domestic pathways for
invasive species, applied research to combat citrus pests, and the
exploration of the feasibility of an audit-based certification system
to prevent the movement of infested nursery stock.
Selection was based on project alignment with Section 10201 goals,
the expected impact of the project, and the technical approach. In
addition, the reviewers considered how the suggestions would complement
ongoing USDA programs and other Section 10201 projects. APHIS made a
concerted effort to engage external stakeholders, such as the National
Plant Board, Specialty Crops Farm Bill Alliance and USDA's National
Institute of Food and Agriculture, Agricultural Research Service and
U.S. Forest Service, in designing the evaluation criteria for the
suggestions.
6. Annual Budget Authority (FY 2002-FY 2011)
------------------------------------------------------------------------
Budget Authority (dollars in
Fiscal Year thousands)
------------------------------------------------------------------------
2009 $12,000
2010 $45,000
2011 $50,000
------------------------------------------------------------------------
7. Annual Outlays (FY 2002-FY 2011)
------------------------------------------------------------------------
Fiscal Year Obligations Outlays
------------------------------------------------------------------------
(dollars in thousands)
------------------------------------------------------------------------
2009 $11,989 $2,340
2010 $44,881 $11,267
2011 $50,000 (est.) $15,000 (est.)
------------------------------------------------------------------------
Most Section 10201 projects are carried out by APHIS' partners
through cooperative agreements. Most cooperators have one year from the
date the agreement is signed to spend the funds so the funds are not
outlaid in full until the following fiscal year.
8. Annual Delivery Cost (FY 2007-FY 2011)
Annual Delivery Cost by Department Strategic Goals (Rev.)
(On basis of appropriated funds)
(dollars in thousands)
Strategic Goal 4--Ensure that all of America's children have access to safe, nutritious, and balanced meals.
FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012
Program
Program
Items--Ma
ndatory
Farm Bill:
10201--Plant
Pest & Disease
Mgt. & Disaster
Prevention
Indirect N/A N/A 582 1,401 2,425 2,425
Costs
Program N/A N/A 2,947 11,099 12,575 12,575
Operation
al Costs
FTEs N/A N/A 1 37 37 37
9. Eligibility Criteria
A 10201 evaluation team made up of government and non-government, stakeholders, and scientific members evaluate the technical factors of the
individual suggestions using the evaluation criteria described below. If a suggestion does not address a factor, it will be evaluated as ``Low.''
Strengths, weaknesses, deficiencies, and reviewer questions will be documented for each suggestion. At the conclusion of the independent review
period, the entire evaluation team will meet and discuss each technical evaluation factor and agree on a consensus rating for each suggestion.
FY 2011 suggestions have been rated in the following areas:
Criteria 1: Alignment with Section 10201 Goals:
The suggestion should clearly identify the goal area to be addressed and explain how the project will further the goals of the farm bill.
Suggestions should not list more than one of the six goal areas:
1. Enhance plant pest analysis and survey.
2. Target domestic inspection activities at vulnerable points in
the safeguarding continuum.
3. Enhance and strengthen threat identification and technology.
4. Safeguard nursery production.
5. Conduct outreach and education to increase public understanding,
acceptance, and support of plant pest and disease eradication
and control efforts.
6. Enhance mitigation capabilities.
Criteria 2: Impact:
The suggestion should clearly address the potential benefits from
the proposed activities or deliverables. Emphasis should be placed on
projects that will affect high-risk states/areas, address pests of
regulatory significance, and/or benefits specialty crop producers and
minority or underserved communities.
Criteria 3: Technical approach:
The suggestion should discuss the technical approach to be
employed, including a description of methodology and a summary of the
various tasks to be undertaken. The suggestion should also highlight
the cooperators (states, universities, and others) that will be working
together to complete the project and the role each will play.
10. Utilization (Participation) Data
In FY 2009, APHIS provided funding for 63 projects in 21 states.
In FY 2010, APHIS provided funding for more than 270 projects.
In FY 2011, APHIS is providing funding for more than 270 projects
with over 100 cooperators in 50 states. Note: In FY 2011, Section 10201
funding was not available until April, but APHIS is working diligently
to finalize and implement the spending plan. As a result, we anticipate
that participant numbers may change.
11. Duplication or Overlap with Other Programs
APHIS' Pest Detection program is funded through an annual budget
appropriation. It supports APHIS' goal of safeguarding U.S.
agricultural and environmental resources by ensuring that new
introductions of harmful plant pests and diseases are detected as soon
as possible, before they cause significant damage. These efforts engage
the scientific community, government entities, states, tribes,
universities, the public, nonprofit entities, and industry. The
Cooperative Agricultural Pest Survey (CAPS) program is the principle
means of providing funds to all states and other cooperators to survey
for pests that are not known to be in the U.S., as well as some that
are of limited distribution and of regulatory concern. Pest-free
regions are identified that allow the continued export of commodities
from particular areas of the country.
Farm Bill Section 10201 complements the Pest Detection program and
expands upon it by specifically providing funds and technical
assistance to specialty crop growers, organizations representing
specialty crop growers, and state and local agencies working with
specialty crop growers and organizations for the development and
implementation of audit-based certification systems and nursery plant
pest risk management systems, in collaboration with the nursery
industry, research institutions, and other entities to address plant
pests. This Section also provides funds for a threat identification and
mitigation program to determine and address threats to the domestic
production of crops. Risk assessments are being prepared of the
potential threat to the agricultural industry of the United States from
foreign sources, in collaboration with the National Plant Board, and
are implementing action plans for high consequence plant pests and
diseases.
12. Waste, Fraud and Abuse
The program is fairly young as it was created in the 2008 Farm
Bill. Auditing agencies, such as the Office of the Inspector General or
the Government Accountability Office, have not conducted audits to
date. The program is not aware of any instances of waste, fraud, or
abuse.
13. Effect of Administrative PAYGO
None.
______
1. Program Name
Farm Bill Section 10202, National Clean Plant Network (NCPN).
2. Subprograms/Department Initiatives
The National Clean Plant Network is coordinated jointly by three
USDA Agencies: the Animal and Plant Health Inspection Service (APHIS)
(quarantine programs), Agricultural Research Service (research
activities), and National Institute of Food and Agriculture (outreach
initiatives). In March 2009, the three USDA Agencies signed a
Memorandum of Understanding laying the foundation for the NCPN at the
national level and providing direction and guidance for newly forming
NCPN specialty crop networks.
3. Brief History
The National Clean Plant Network was first provided dedicated
funding in the 2008 Farm Bill. The farm bill provides NCPN with $5
million each year (FY 2009-2012) for a total of $20 million over 4
years. The NCPN currently funds 18 clean plant centers in 14 states
focusing on supporting existing state infrastructures. In FY 2010/2011,
five specialty crops were covered including fruit trees, grapes,
citrus, berries, and hops. Several new crops are under consideration
for the program including potatoes, sweet potatoes, olives, garlic,
roses, and other ornamentals.
4. Purpose/Goals
NCPN is a collaborative venture, composed of diagnostic,
therapeutic and horticultural expertise. NCPN's goal is to ensure the
availability of high quality propagated plant material that is free of
plant pests, helping to ensure the global competitiveness of specialty
crop producers. The NCPN promotes pest- and disease-free specialty
crops, the rapid and safe introduction of new varieties from foreign
sources, and hygienic U.S. products for export.
5. Success in Meeting Programmatic Purpose/Goals
Over the past 2 years, the NCPN has built national, regional and
crop-specific NCPN governing bodies composed of governmental,
University, and industry representatives nationwide. Due to this
initiative Clean Plant Centers were revitalized and foundation
plantings of clean nursery stock expanded. The NCPN is currently
supporting Clean Plant Network Centers for five specialty crops in
multiple states including: