[Federal Register Volume 69, Number 94 (Friday, May 14, 2004)]
[Rules and Regulations]
[Pages 26755-26763]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-10945]



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  Federal Register / Vol. 69, No. 94 / Friday, May 14, 2004 / Rules and 
Regulations  

[[Page 26755]]



DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1410

RIN 0560-AG74


2002 Farm Bill--Conservation Reserve Program--Long-Term Policy

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This final rule adopts as final an interim final rule for the 
Conservation Reserve Program published on May 8, 2003. The interim rule 
set out the existing program regulations in their entirety, including 
revisions conforming to new legislation. Those revisions included, 
among others, a change to the definition of ``conserving use.''

DATES: This rule is effective May 13, 2004.

FOR FURTHER INFORMATION CONTACT: Charles Chadwell, Program Manager, at 
USDA/FSA/CEPD/STOP 0513, 1400 Independence Avenue SW., Washington, DC 
20250-0513; telephone 202-720-7674; e-mail: [email protected]. Persons with disabilities who require 
alternative means for communication (braille, large print, audiotape, 
etc.) should contact the USDA Target Center at 202-720-2600 (voice and 
TDD).

SUPPLEMENTARY INFORMATION:

Background

    The interim rule amended the regulations of the Commodity Credit 
Corporation (CCC) at 7 CFR part 1410 that govern the Conservation 
Reserve Program (CRP). The amendment was published to cost-effectively 
target the CRP to more environmentally sensitive acreage and to comply 
with amendments made by the Farm Security and Rural Investment Act of 
2002 (Pub. L. 107-171) (2002 Act), by:
     Setting forth the terms and conditions of enrolling 
acreage in the CRP;
     Updating program eligibility requirements; and
     Eliminating unnecessary regulations and improving the 
remaining regulations.
    The CRP was authorized by the Food Security Act of 1985 (Pub. L. 
99-198)(1985 Act), which was recently amended by the 2002 Act. The 2002 
Act provided the Secretary of Agriculture (Secretary) the authority to 
maintain up to 39.2 million acres in the CRP. The CRP is intended to 
cost-effectively assist producers in conserving and improving soil, 
water, and wildlife resources by converting highly erodible and other 
environmentally-sensitive acreage to a long-term vegetative cover. CRP 
participants enroll land under contracts for 10 to 15 years in exchange 
for annual rental payments and financial assistance to install certain 
conservation practices and to maintain approved vegetative or tree 
covers.
    Based on 2002 Act amendments, an interim rule was published on May 
8, 2003 (68 FR 24830) which asked for comment on the rule changes and 
other policy issues. The agency will continue to consider policy 
comments as appropriate, and in this notice restricts the discussion, 
for the most part, to whether any further amendment of the program 
regulations is needed at this time.

Summary of Comments

    CCC received 800 comments concerning the interim rule. Entities 
responding included: individuals, State government agencies, State 
conservation organizations, State and national commodity organizations, 
conservation organizations, Federal Government agencies, and a national 
environmental organization. Comments came from Alabama, Arkansas, 
California, Colorado, District of Columbia, Georgia, Iowa, Idaho, 
Illinois, Indiana, Kansas, Kentucky, Louisiana, Maryland, Minnesota, 
Missouri, Mississippi, Montana, North Carolina, North Dakota, Nebraska, 
New Jersey, Ohio, Oregon, Pennsylvania, South Carolina, South Dakota, 
Tennessee, Texas, Utah, Virginia, Washington, and Wisconsin. The 
Midwest, Southeast, and Northern Great Plains were represented on the 
regional level as well.
    There were 135 comments that were not directed to the interim rule 
itself, but to related matters such as payment rates, other eligible 
land provisions, internal guidance and procedures, acreage allocation 
scenarios among the different programs within CRP, and primary nesting 
season jurisdiction. Also, 51 comments were not considered because they 
were unclear on the point they intended to make or were not submitted 
timely. The comments not directed to the interim rule itself and the 
late comments may be considered in future policy development.

General Comments

Overall Support for the Program

    There were 45 comments in support of the interim rule or in support 
of the CRP as a whole. This category accounted for the second largest 
number of comments on the interim rule behind those about managed 
haying and grazing, followed by comments regarding the Environmental 
Benefits Index (EBI), conserving use, and continuous practices. These 
comments ranged from overall programmatic support for CRP to supportive 
comments regarding various aspects of the program and specific sections 
of the rule.
    Most supportive comments stated that the CRP has been one of the 
most significant conservation programs in history by reducing soil 
erosion, improving water quality, and enhancing wildlife habitat for 
many species. One respondent complimented FSA for utilizing the EBI as 
a tool to encourage enrollment of lands which will result in a program 
that provides the greatest amount of environmental benefits per dollar 
expended. Others indicated the development of the EBI has had a 
positive impact on the effectiveness of CRP.
    One comment was received concerning the cost share for installation 
of conservation buffers; however, concern was expressed over the 
confusion from the program's differential incentives for various 
eligible buffer practices. The comment did not recommend a specific 
change. The interim rule was written so as to limit confusion as much 
as possible and provide flexibility to the agency to address new 
situations as they arise. No

[[Page 26756]]

change in the regulations was found to be warranted with respect to 
these comments.

Support for Environmental Benefits of the Program

    Two comments suggested that FSA take advantage of this program in 
order to get the maximum environmental benefit out of the new 
authority, while also doing the most it can to help producers meet the 
many environmental goals expected of them through an incentive-based 
approach. The comments did not make specific recommendations. In any 
event, no rule change would be needed to take these concerns into 
account.

Program Administration

    There were 19 comments concerning the administration of CRP. The 
comments concerned the way the program was being administered and the 
need for the program to be more locally flexible.
    Some respondents recommended an increased role for the Natural 
Resource Conservation Service (NRCS) and the Forest Service, acting 
through State government foresters. These respondents were also 
concerned about whether Technical Service Providers are qualified to 
give advice, the implementation of Technical Service Providers and the 
potential for a conflict of interest with local Technical Service 
Providers. One comment supported the way the CRP was administered, but 
made a non-specific comment that program implementation and efficiency 
could be improved. To the extent that specific comments were made in 
this regard, no rule change was found needed as the rule is flexible 
enough to allow changes as may be warranted. Further, the rule provides 
considerable involvement of FSA State and county committees in making 
determinations, resulting in substantial local influence and control. 
Thus, no changes were made in the final rule as a result of these 
comments.
    The interim rule's provisions clarifying continuous sign-up and its 
role within the CRP program received comments. Another comment felt 
that the program should emphasize conservation treatments for upland 
areas associated with CRP acres and offer more compensation for land 
removed from production to protect water quality. These suggestions are 
possible without a rule change, and no rule change is needed. 
Additional comments specific to administration dealt with Sec.  1410.1 
and are addressed under the heading for comments on that section below.

Opposition to Economic Impacts of the Program

    Comments expressed concern that CRP supports conservation, but 
asserted that it hurts the economy of rural communities. One respondent 
stated that the current CRP, while supporting conservation, is emptying 
rural communities of agriculture-focused economic opportunity and 
people. A cost-benefit analysis examined the environmental, economic, 
and budgetary impacts of enrolling land in CRP. The FSA analysis 
estimated that the new provisions of the CRP will not only continue 
benefitting soil, water, and wildlife resources, but will also produce 
a net benefit to the economy of approximately $131 million per year. In 
addition, there is a clear statutory intent and expectation that the 
CRP will continue to operate and limitations are included in the 
statute to address the concerns expressed by the respondent. Further, a 
study that describes the economic and social effects on rural 
communities resulting from the CRP was required by section 2101(b) of 
the 2002 Act. The USDA's Economic Research Service published the study 
in January, 2004, which indicated that the concerns of the respondents 
are addressed within the limits and requirements within the CRP 
regulations. Thus, the comments did not result in any change in the 
final rule.

Comments on Specific Sections of the Interim Rule

Section 1410.1 Administration

    Seven comments addressed the wildlife objectives of CRP requesting 
clarification of the program's wildlife objectives versus the 
landowner's wildlife objectives. A comment supported what CRP has 
accomplished for wetlands and associated wildlife. The CRP uses the 
wildlife benefit standards from the Field Office Technical Guide (FOTG) 
of NRCS and the program is intended to encourage wildlife benefits. 
Still, the CRP is a voluntary program, and if the landowner has 
objectives that differ from those used by FSA, they may decline to 
participate. Because wildlife objectives are addressed in the NRCS 
FOTG, this comment was not adopted in the final rule.

Section 1410.2 Definitions

    There were 25 comments concerning several technical terms defined 
in the new rule, and their clarity and consistency. Some respondents 
felt that ``marginal pastureland,'' ``local eco-type,'' and ``native'' 
should be defined in the regulations. A majority of the respondents 
felt the intent of the 2002 Act was to make conserving use lands 
eligible for CRP and they did not agree with the CCC definition of that 
term in the interim rule. These comments were considered with other 
conserving use comments submitted under the land eligibility section at 
Sec.  1410.6.
    One respondent suggested that the definition of an agricultural 
commodity as it pertains to a perennial crop be amended to specify that 
a perennial crop must be from the same root structure for two or more 
years. The definition used in the interim rule is consistent with this 
comment; however, because a perennial crop may involve vegetation that 
is not considered an ``agricultural commodity'' within the meaning of 
the program regulations, ``agricultural commodity'' is removed from the 
definition of a perennial crop and an adjustment to that definition has 
been made in this final rule.
    One respondent was concerned that the definition of ``conserving 
use'' for cropland eligibility purposes in the interim rule excluded 
expired CRP contracts with trees planted. Under section 2131(c) of the 
1985 Act, as amended, land that is in a ``conserving use'' can be 
considered to be planted to an ``agricultural commodity.'' This 
definition is consistent with requirements for enrollments based on 
erodibility under section 1231(b)(1), which requires that such land 
have been cropped 4 out of the 6 years preceding the 2002 Act. Under 
the customary CRP practices, cropping history must generally be for the 
kinds of enrollments originally provided for in the 1985 Act. Those 
enrollments were from lands committed to ``agricultural commodities'' 
which, because of a special definition in the 1985 Act, means crops 
that are annually tilled, plus sugar cane. Other enrollments do not 
have these strict ties to ``agricultural commodities,'' although, there 
are still inconsistencies in the statute's references to ``agricultural 
commodities''. For example, of the enrollments not tied to 
``agricultural commodities,'' section 1231(b)(2) is explicitly directed 
at enrollments of marginal pastureland, which clearly do not involve 
land that was annually planted. Also, section 1231(g) provides that 
alfalfa and other multi-years grasses and legumes in a rotation 
practice approved by the Secretary shall be considered to be 
``agricultural commodities.'' As to the question of trees, land planted 
to trees is no longer considered ``cropland,'' which is one of the 
essential criteria of section 1231(b)(1) enrollments where ``conserving 
use'' comes into play. Also,

[[Page 26757]]

such use is not considered to be a ``conserving use'' within the 
meaning of the statute, because trees involve, ultimately, a planting 
undertaken for a commercial purpose.
    A respondent suggested conserving use should include alfalfa, other 
multi-year grasses and legumes and summer fallow during 1996 through 
2001. The respondent indicated that hay land, regardless of the year 
planted, is a conserving use and that requiring hay land to have been 
planted between 1996-2001 will make many lands in the eastern U.S. 
ineligible for CRP. The interim rule provided that, for conserving use 
credit, cropland must have been planted during the year 1996 through 
2001 with alfalfa and planted to other multi-year grasses and legumes 
and summer fallow in a rotation. Such land would only be considered 
fallow if the plantings were in a rotation with agricultural 
commodities. This is made more explicit in this final rule. The rule is 
amended to require that such rotation must be approved by FSA as needed 
to assure the integrity of the program. Nonetheless, the 2002 Act 
requires a cropping history during the period from 1996-2001. Land that 
was planted beyond this period, regardless of whether it was in 
rotation with other crops, cannot be considered. Therefore, no rule 
change was warranted to address this comment.
    A number of comments were received suggesting the conserving use 
definition be expanded to include cropland in CRP with a grass cover, 
under contract which went to full term, and which remains in grass 
cover. Effectively, this land has continued to be maintained as if it 
was still in CRP, and making it eligible is similar to making land 
eligible at the end of the contract period automatically, as the 2002 
Act provides. Therefore, this comment is adopted in the final rule 
under the Sec.  1410.2 definition of conserving use making eligible 
lands under contract that expired during the period 1996 through 2001, 
if the cover continues to be maintained as though under contract. 
Moreover, unlike with trees, it is presumed that a grass cover is 
there, not for commercial purposes, but for compliance with the CRP 
contract, as the land was moved out of the production. Also, under 
traditional definitions, such land would remain as cropland.
    A respondent recommended a definition should be added for 
``marginal pastureland'' due to its importance in terms of eligibility, 
practice requirements, and rental rates. Consistent with new 
legislation, the interim rule expanded eligibility for marginal 
pastureland devoted to a riparian buffer, a new wetland practice, or a 
new wildlife habitat buffer to provide wildlife habitat where tree 
plantings are not practical near water bodies. The agency feels that 
marginal pastureland is adequately defined in context as well as the 
FOTG, and promulgating a definition would reduce flexibility. Thus, CCC 
did not adopt this comment.
    Seven comments addressed lands classified as ``infeasible to 
farm.'' One respondent stated that the interim rule did not clearly 
define ``infeasible to farm'' and how it will be determined. Section 
1410.2 defines ``infeasible to farm'' as an area that is too small or 
isolated to be economically farmed. The local qualifying land 
characteristics as to whether it is infeasible to farm will be 
determined at the county level by FSA. ``Infeasible to farm'' acreage 
is properly determined at the local level where all relevant factors 
can be considered. The agency does not feel that this limitation will 
be arbitrarily applied; thus, this comment was not adopted.
    A respondent recommended that FSA should allow its State offices, 
with the advice of State wildlife agencies, to enroll up to one-half of 
a percent of their cropland in mapped areas of value to critical 
wildlife needs. The respondent feels that this will help achieve 
critical wildlife objectives of the CRP. As suggested by the 
respondent, FSA emphasizes wildlife habitat in the EBI and its practice 
standards for wildlife habitat applicable to the area. Further, a 
unique conservation plan is developed for individual contracts based on 
the site conditions and the NRCS FOTG, which include wildlife needs. 
Therefore, the respondents' suggestions on allocating acreage are 
already addressed by the interim rule and further changes were not 
made.

Section 1410.4 Maximum County Acreage

    Ten comments were received regarding the currently imposed 25-
percent county acreage enrollment limit for the CRP and Wetland Reserve 
Program (WRP). Six of the comments opposed counting continuous lands in 
the 25 percent cap. One respondent indicated that the CRP acreage cap 
should be determined at the watershed scale, not the county level. We 
understand the respondent's rationale; however, the 1985 Act provides 
that CRP acreage enrollment is to be calculated on a county basis. 
Therefore, this and similar comments were not considered further.
    One respondent recommended that limits on participation should be 
included to protect the economic stability of individual counties or 
regions. CCC is committed to addressing conservation issues of the 
nation and providing an opportunity for producers to offer eligible 
lands through a variety of conservation programs consistent with 
statutory authority. Before waiving the cropland limit, CCC, by 
statute, must determine that enrollment of additional land would have 
no adverse economic impact and producers are having difficulty 
complying with their highly erodible land conservation plan. Thus, the 
respondent's concerns are addressed under current regulations, 
consistent with law, and no changes are made in the final rule to 
further limit participation.

Section 1410.5 Eligible Persons

    Two comments concerned the relationship between renters (or 
tenants) and landlords. An individual commented that a renter needs 
immediate notice if a landlord goes to FSA and starts the process of 
sign-up. One respondent recommended that landowners not be required to 
own or have operated the land for the previous 12 months to be eligible 
to enroll in the continuous CRP or Conservation Reserve Enhancement 
Program (CREP).
    FSA encourages landlords and tenants to work closely when enrolling 
land in the CRP. Further, all operators, owners, and tenants who have 
an interest in the acreage being offered are required to sign the CRP 
contract. Also, producers can withdraw an offer anytime before a 
contract is approved. As for the time an applicant must have operated 
the land, the law that authorized the CRP requires landowners and 
tenants to have owned or operated the land for the previous 12 months. 
However, the statute allows CCC to consider, on a case-by-case basis, 
both a landowner or tenant eligible when the land was not acquired for 
the purpose of enrolling it in the CRP. Thus, current regulations are 
sufficient to address the comments, and no rule change was warranted.

Section 1410.6 Eligible Land

    Over 150 comments were received regarding land eligibility. The 
majority of these comments focused on the role of what the agency 
considered to be a ``conserving use'' and the impact of that term on an 
eligibility determination. These comments were addressed with the 
comments regarding Sec.  1410.2 above.
    Twenty comments focused on the interim rule's requirements for 
cropping history. A few comments fully supported the new 4-out-of-6 
year

[[Page 26758]]

cropping history requirements, although most criticized the new rule 
and suggested FSA revert to the original 2-out-of-5 year cropping 
history requirement, However, the 4-out-of-6 year cropping history is a 
statutory requirement. Therefore, these comments were not considered 
further and were not adopted.
    Four comments requested clarification regarding the eligibility of 
permanent crops for CRP programs. The remaining comments criticized 
current regulations for the type of agriculture allowed in the CRP and 
its shortcomings in California. The respondent suggested that CRP 
requirements resulted in land being used to produce grain and row crops 
using conventional tillage when that land may be better suited for 
grazing or forage production. The comments were not clear on what 
change in the regulations would allay their concerns, and they made no 
specific recommendations. Furthermore, from the start, the CRP has 
focused, at least in part, on directing active cropland into conserving 
uses. Rather than encouraging environmentally damaging uses of land as 
suggested by the respondent, the CRP has resulted in many acres of 
marginal land that were being used to produce row crops in the past 
being shifted into a much more ecologically sound practice. Therefore, 
the comments were not further considered and no change in the 
regulations has been made.
    Five comments on re-enrollment were received. Three respondents 
supported the provision required by the 2002 Act, and included in Sec.  
1410.6(a)(3), that there be an option for CRP participants to offer a 
new contract into the program when their contracts expire. Two other 
respondents questioned why tree-planted CRP contracts expiring in 2001 
are not eligible for renewal, based upon the expiration, while similar 
contracts expiring in 2002 and 2003 are being renewed. This is because 
this provision in the regulations follows section 1231(i) of the 2002 
Act, which provided for eligibility for future expirations 
prospectively only. Hence, no change in the regulations was warranted.
    Six comments were received in support of the continuous enrollment 
provisions included in Sec.  1410.6 of the interim rule. A few 
respondents suggested expansion of tha CRP to benefit wildlife by 
enrolling high value practices that restore and protect rare and 
declining species.
    As discussed above, the interim rule expanded CRP eligibility for 
marginal pastureland devoted to a riparian buffer practice, a new 
wetland practice, or a new wildlife habitat buffer practice. Wildlife 
habitat may now be established where tree plantings are not practical 
or appropriate. This change will be valuable in addressing Federal and 
State wildlife issues near streams, rivers, or other water bodies. 
Furthermore, CCC has added continuous sign-up eligibility for practices 
involving wetland restoration and bottomland hardwood trees.
    In riparian areas where the climax vegetation for the site is 
shrub, forb, grass, or a wetland complex, the current rule provided for 
the establishment of conservation practices that are best suited for 
the site. This rule will further permit development of conservation 
practices that provide water-quality benefits such as wetland 
restoration, on marginal pastureland which, at Sec.  1410.6(a)(2)(ii), 
will be limited to enrollments under CREP agreements with State 
governments. This will ensure implementation of conservation practices 
on the most environmentally-desirable lands to improve water quality.
    Some respondents expressed concern about removing cover and 
suggested that farmland previously enrolled in the CRP program and 
planted to approved grasses must be plowed and re-seeded in order to be 
eligible for a future sign-up. Other comments pertaining to this 
section concerned buffer guidelines, and consistency between their 
application by other USDA agencies and programs to native prairies and 
marginal pastureland. One respondent suggested allowing the use of 
continuous sign-up and CREP to meet the producer's buffer requirements 
under State and local mandatory setback laws. Because FSA already 
allows otherwise eligible land to be offered, provided the producer has 
not been specifically designated out-of-compliance with a State and/or 
local setback law, these comments were not considered further and can 
be addressed within existing rules if further action is needed.
    Three comments regarding land eligibility and general sign-up 
touted the need to protect fragile lands and utilize native vegetation 
in order to achieve the highest public benefit and enhance 
biodiversity. The 2002 Act made no changes to the EBI. However, in an 
effort to maximize environmental benefits and implement plantings 
consistent with local ecosystems, CCC has structured the EBI to give 
more weight to contract offers that devote acreage to native plantings. 
CCC recognizes that in certain critical planting areas the use of 
introduced vegetative species may be required to stabilize the soil 
faster, be easier to establish, or provide a more cost-effective 
conservation effort. The agency agrees with the comment; however, 
current rule language is sufficient to accomplish the desired result, 
and no change in the regulations is warranted.

Section 1410.8 Conservation Priority Areas

    A total of 11 comments were received on this section of the rule. 
The majority of the comments suggested that State agencies be provided 
flexibility to revise wildlife and water quality Conservation Priority 
Areas (CPA) between general sign-ups. Because the interim rule does not 
preclude revisions of CPA's between sign-ups, no rule change is needed 
to implement the suggested change.

Section 1410.9 Conversion to Trees

    There were 14 comments pertaining to the planting of CRP acreage to 
trees. Comments were received from State government agencies and 
national conservation organizations. A respondent suggested this 
practice be limited to areas where trees existed historically, because 
planting trees in historically prairie areas created a number of 
problems such as habitat and refuge for predators, ecological traps for 
nesting birds, and nuisance exotic species.
    All 14 respondents were concerned with the effects of converting 
permanent vegetative grass covers under CRP contracts from prior to 
1990 to hardwood trees when the ecosystem did not historically support 
hardwood trees. This rule encourages planting native species suited to 
the environment. Further, the EBI is designed to encourage planting of 
native species. Thus, no rule change is needed to address the concerns 
of the respondent.

Section 1410.11 Farmable Wetlands Program

    There were six comments concerning the Farmable Wetlands Program, 
including eligibility requirements, payment methods, and the methods 
for delineating wetland. Also, there was one comment on the size of 
contiguous wetland acres being accepted into the program regarding the 
basis for enrolling 10 contiguous acres when the owner/operator will 
only be paid for the first 5 acres. The comments did not address 
specific rule provisions that caused these concerns or how they may be 
mitigated. The agency determines wetlands using the FOTG and guidance 
from NRCS, and has no plans to promulgate how wetlands are delineated. 
As for the acreage limitation, it is imposed by the 2002 Act. Thus, 
these comments were not considered further and no change was warranted.

[[Page 26759]]

Section 1410.20 Obligations of Participants

    There were 28 comments received on the obligations of participants, 
a majority of which suggested stricter requirements for keeping noxious 
weeds off CRP lands. Comments on noxious weeds fell into two general 
groups. The first group suggested mandatory control of noxious weeds as 
an essential component of managing CRP lands. The second group 
recommended that weed control be limited to official Federal or State 
recognized noxious weeds, since most so-called weeds provide extremely 
high quality wildlife habitat. As a condition of enrollment, a CRP 
participant must establish and maintain certain covers for the benefit 
of soil erosion, water quality, and wildlife habitat. On an individual 
contract basis, a conservation plan is developed according to the NRCS 
FOTG outlining the requirements to establish and maintain those covers 
including any necessary weed, insect, and pest control measures. As to 
noxious weed matters, State governments enforce noxious weed laws and 
CCC takes appropriate action when notified by State authorities of 
violations. When CCC becomes aware of a contract violation, it pursues 
appropriate remedies, including contract termination. The weed control 
provisions of the program as articulated in the conservation plan 
developed on a contract-by-contract basis according to NRCS FOTG 
standards assure the protection of the cover.
    The remainder of the comments on this section dealt with 
maintenance payments and the use of burning as a maintenance tool. Four 
respondents felt that the landowners were not receiving sufficient 
rental incentives to pay maintenance costs. Of those, one felt that 
rental payments should meet a level-of-effort standard, and that 
landowners who agree to do more maintenance should receive higher 
rental payments. Two individuals were concerned that some participants 
receive rental incentives for maintenance for doing nothing, while two 
others suggested that FSA hold payments until maintenance was 
completed. One suggested that these incentive payments be made only 
when maintenance is needed, and, finally, one suggested that holistic 
grazing be added as eligible for such incentives.
    Maintenance incentive rental payments are paid to ensure proper 
cover of the CRP acreage. What constitutes maintenance and proper 
coverage varies by geography, topography, and other factors. 
Consequently, it is difficult to promulgate these amounts and practices 
at a national level. Thus, what is eligible for maintenance incentive 
payments and the amount to be paid is determined at the local level 
based on local conditions. If practices are not carried out as agreed 
to by the program participant, then payments are not made or are 
required to be refunded when CCC becomes aware through an informant or 
a spot-check that an enforcement action is necessary.
    A comment stressed the importance of including fire protection 
plans and annual controlled burns as a maintenance tool and advocated 
that the landowner and tenant should not be penalized for such 
maintenance related burns.
    The respondent's concerns are addressed by FSA operating procedures 
and are not included in the regulation. CRP participants must have an 
approved conservation plan developed locally and for the unique site 
conditions. Where appropriate, a conservation plan will include a fire 
protection plan, which may include controlled burns as a maintenance 
measure. These plans are prepared according to the NRCS FOTG and may 
incorporate the advice of other experts. Thus, the interim rule already 
addresses the respondent's concerns, and no changes are made in the 
final rule.

Section 1410.22 CRP Conservation Plan

    A total of 15 comments were received concerning conservation plans 
and, more specifically, mid-contract management. Six comments fully 
supported mid-contract management for its role in maintaining and 
maximizing wildlife benefits of the program. A comment recommended that 
the practices to be employed and the timing of application for mid-
contract management should be determined at the State level to account 
for variability in climate and cover development. The interim rule 
requires CRP participants to follow a local technical standard which 
provides the greatest protection of the State's soil, water, and 
wildlife resources, improves and preserves water quality, and enhances 
fish and wildlife habitat. Because the program already incorporates 
local technical standards, as appropriate, it would not serve the 
program well to abandon those and adopt State standards. Therefore, 
this comment was not adopted.
    One respondent suggested that the rule be clarified concerning when 
renewed contracts are considered ``new'' and whether previously 
enrolled acres will now be subject to mid-contract cover management. 
Mid-contract cover management applies to contracts entered into after 
the interim rule's effective date of May 8, 2003, and applies to all 
contracts, including renewal contracts, approved after May 8, 2003. 
Terms of the contracts will, moreover, be specified in the contracts.
    An individual suggested clarification of how cost-share for mid-
contract management practices would be provided, primarily for tree 
thinning. Consistent with the authorizing legislation, CRP participants 
must thin trees under their CRP contract without cost-share and receive 
an annual payment reduction on acreage thinned. Therefore, the comment 
was not considered and no rule change was needed.
    Three comments recommended that all State wildlife agencies be 
engaged to develop criteria for mid-cover management. FSA has consulted 
with the U.S. Fish and Wildlife Service and other agencies on these 
matters. Because the rule already allows consultation other agencies 
with expertise, the rule is sufficient as written.

Section 1410.30 Sign-Up

    There were 23 comments received regarding this section. Some 
respondents suggested expanding the uses of targeted CRP through 
continuous enrollment and CREP to meet more environmental needs. 
Environmentally-desirable land devoted to certain conservation 
practices may be enrolled in CRP at any time under continuous sign-up. 
These practices are usually filter strips, riparian buffers, certain 
wetlands, grass waterways, and other practices the enrollment of which 
provide substantial environmental benefits meeting the conservation 
goals of the program including soil erosion, water quality, and 
wildlife habitat. CCC will annually publish in the Federal Register to 
the extent practicable conservation practices and lands made eligible 
for continuous signup after September 30, 2004.
    A majority of respondents stated that practices installed under the 
continuous sign-up have insufficiently utilized vegetative cover with 
high wildlife values. They recommended that continuous sign-up be 
limited to the use of 40- or 50-point EBI vegetative cover types to 
achieve the highest environmental benefits.
    CCC currently utilizes the FOTG of the NRCS and issues other Agency 
guidance on this subject. Wildlife considerations are a major 
consideration in the practice requirements for most continuous sign-up 
practices. The agency feels that wildlife is being addressed properly 
under the provisions

[[Page 26760]]

of the interim rule and increased emphasis on vegetation for wildlife 
is unnecessary.

Section 1410.31 Acceptability of Offers

    About 60 comments were received regarding the acceptability of 
offers. Comment categories ranged from local eco-type and native 
vegetation consistency, to whole-farm enrollment, to the EBI. The vast 
majority of comments expressed concern that conservation practices 
implementing native vegetation should be more highly considered than 
non-native vegetation, and that the vegetation used in conservation 
practices should be vegetation that is of local eco-type seed. CRP 
policy regulations and the EBI already emphasize planting native 
vegetation. In any event, no rule prohibits the results sought by the 
respondent. Another comment recommended the EBI be included in the 
regulation to protect the EBI against legal challenge. The agency 
understands the respondent's concerns that the acceptability of offers 
be more strictly determined by regulations. The weighing of factors in 
the EBI can change over time and over enrollments based on changing 
conditions, changing needs, and based on the nature of the land 
achieved in previous enrollments. Incorporating the EBI into the rules 
could harden the index in a way that would be harmful to the 
achievement of the goals of the program because of the time that would 
otherwise be needed to change the index. Further, competition in all 
cases is a set formula for enrollments, so as to not allow the agency 
to assign special merit to especially attractive offers. Therefore, 
this comment was not adopted. However, CCC will consider this comment 
further but, should CCC adopt the suggestion, it would be best to do so 
as a separate action from this rulemaking with a full opportunity for 
public comment.

Section 1410.42 Annual Rental Payments

    Over half of the 42 comments received under this section of the 
rule pertained specifically to rental payments. The interim rule 
provides that rental rates are based on relative soil productivity of 
the soil type for dryland cash rental rates for the county. Most 
respondents supported this policy--that CRP rental rates mirror the 
rates for comparable land in the immediate area and be based on the 
agricultural production value of the land. Concerning irrigated lands, 
a comment noted that continuous CRP should allow CCC to pay irrigated 
rates in irrigated landscapes. Further, the comment noted that, 
environmentally, these irrigated areas have highly significant 
concentrated flows with increased soil erosion and degraded water 
quality. As a result of the comment, FSA is evaluating options to 
consider the impact of irrigated rental rates. No rule change is needed 
to make such an allowance.
    A few comments recommended increasing incentive payments under CRP. 
All 42 respondents on this section requested additional incentives for 
CREP and continuous sign-up practices. The respondents felt that 
landowners need adequate funding to maintain and enhance their 
properties to meet CRP conservation plan goals and maximize 
environmental benefits. CCC feels that the payment of competitive, 
market-based rental rates is sufficient enticement for the enrollment 
of land, and the best method for ensuring that payments are distributed 
equitably. Further, the regulations allow for incentives, where 
appropriate, to meet program goals and objectives. Therefore, no rule 
change is needed.
    With regard to contract payments, two comments from a commodity 
organization recommended that if CRP payments are reduced or delayed 
for more than 60 days, the producer should have the option to withdraw 
from the contract without penalty and program crop bases would be 
restored to their prior level. CRP regulations anticipate that contract 
payments will be made in a timely manner. CCC may pay interest if 
claims are overdue for a material portion of time. Contract release is 
too drastic and unwarranted. Accordingly, no change has been made in 
the regulations.

Section 1410.50 Enhancement Programs

    Five comments were received regarding enhancement programs 
suggesting expanding CREP, continuous enrollment, associated practices, 
and incentives. However, the comments were not specific on recommended 
changes. The agency feels that program regulations already encourage 
participation and adequately address CREP and continuous enrollment.

Section 1410.63 Permissive Uses

    There were over 200 comments focused on this section of the rule, 
making it the most commented-upon section. Comment categories included 
managed and emergency haying and grazing, the use of wind turbines, 
maintenance associated with haying and grazing, and the grazing of 
buffer strips. Emergency haying and grazing allows producers to hay or 
graze CRP acreage during disaster-related emergency conditions. Managed 
haying and grazing is intended to have positive effects on the 
management of the cover consistent with CRP's conservation goals. 
Managed haying and grazing is not intended to maximize forage benefits. 
Concerning managed haying and grazing, a majority of comments were 
critical. Many felt that it is unfair for a farmer to receive CRP 
payments while being able to profit from grazing their cattle for free, 
or from selling the harvested hay. However, contrary to what the 
comments suggest, the statute and the regulation require reduction of 
CRP payments based on the acres used for haying and grazing. Thus, no 
change in the regulations was warranted.
    Other respondents were concerned about the effects of haying and 
grazing, stating that the maximum one-in-three year haying and grazing 
frequency may have a negative impact on wildlife. A few respondents 
supported managed haying and grazing, and suggested that it strictly 
comply with the Upland Wildlife Habitat Management standard in the FOTG 
of NRCS.
    The interim rule provisions on managed haying and grazing were 
developed after CCC reviewed scientific recommendations from both 
government and non-government experts on environmental and wildlife 
impacts. Also, in 2001, a panel of grassland ecologists developed a 
number of recommendations for CRP. The panel recommended that haying 
and grazing of CRP land be limited to that which is of ecological 
benefit and in accordance with a management plan suited to the site and 
vegetative cover. Managed haying and grazing is approved locally, and 
the FSA State committee, in consultation with the NRCS State technical 
committee, establishes beginning and ending primary nesting and brood 
rearing dates to ensure wildlife habitat is sufficiently protected. 
Since the interim rule was published, FSA delegated authority to its 
State committees to modify primary nesting season dates as recommended 
by NRCS State technical committees to ensure applicable nesting seasons 
reflect local needs of wildlife. As the regulations provide sufficient 
flexibility for the handling of these issues based on circumstances, no 
change to the regulations is necessary.
    There were 26 comments about emergency haying and grazing. The 
majority of these comments offered specific recommendations how to 
reduce its impact to wildlife habitats. These recommendations included 
acreage caps, timing of harvesting, and

[[Page 26761]]

allowing only grazing. A few respondents suggested that FSA prohibit 
the sale of emergency haying/grazing privileges, while some respondents 
fully supported emergency haying and grazing as it is currently 
implemented. One respondent fully opposed using CRP land for emergency 
haying or grazing.
    The requirements for emergency haying and grazing eligibility were 
enhanced and streamlined this year with the implementation of the 
interim rule. In periods of extreme emergency, the Secretary may make 
certain CRP lands eligible under the rule for emergency haying and 
grazing. Counties also may qualify under a ``D3 Drought--Extreme'' 
category utilizing the U.S. Drought Monitor to streamline the 
application process. The emergency haying and grazing provisions are 
promulgated as required by the statute, incorporating administrative 
flexibility where appropriate. Thus, no changes were made to the 
regulations as a result of these comments.
    Eleven comments addressed maintenance thinning of CRP softwood 
plantations. All eleven felt that poor wildlife habitat quality is 
provided by CRP softwood that is not thinned and, therefore, thinning 
should be allowed with no reduction in annual rental payments. Tree 
thinning ensures the health of trees and is not intended to guarantee 
an income. Further, the law requires a payment reduction to the extent 
income results from CRP softwood. Because CRP contracts already require 
tree thinning, the comment was not adopted.
    Two respondents felt that incidental grazing of grass buffer strips 
should be allowed only when located in green wheat fields or fields 
containing other similar forage. CCC already allows limited grazing of 
certain practices taking into consideration the affects on the 
practice, the environment, and wildlife when grazing is incidental to 
the gleaning of the crop residue in a field after crop harvest. 
Therefore, no changes were made in the final rule as a result.
    Three respondents expressed concerns about detrimental effects on 
grassland birds and other wildlife from wind turbines on CRP lands. CCC 
considers environmental impacts of each site and prepares a site 
specific environmental assessment or environmental impact statement, as 
applicable, before approving the location of wind turbines. If a wind 
turbine will create material wildlife concerns, those concerns will be 
properly considered in determining whether to grant approval. Thus, the 
respondent's concerns are addressed in each instance, and revision of 
the final rule is not necessary.
    Three respondents believe that the 1-in-3 year managed haying and 
grazing rotation was inconsistent with wildlife habitat goals of the 
program. These respondents suggested that the interim rule will have 
severe negative impacts on grassland nesting birds and other wildlife 
within the Northern Great Plains region. They suggested more clearly 
defining the wildlife objectives of the program as a whole. Since these 
impacts and the compliance with wildlife protection requirements can be 
addressed in each contract based on local requirements, specification 
in the regulations of program wildlife objectives is not needed.
    One comment suggested amending the rule to allow managed haying and 
grazing, including the harvest of biomass, without a reduction in 
annual payment in certain areas and allowing more frequent grazing of 
short grass prairie areas established in native short grass vegetation. 
CCC established criteria for frequency of haying or grazing based on 
scientific research to enhance vegetative cover and wildlife habitat 
benefits. The statute requires a reduction of annual rental payments 
commensurate with the economic value of the activity. Current rules are 
consistent with the statutory provision and no change in the 
regulations is warranted.

Other Changes

    This rule amends the interim rule promulgating 7 CFR part 1410 (68 
FR 24830, May 8, 2003) as discussed above with regard to those comments 
adopted. In addition, the interim rule did not address the crop 
insurance requirements in 7 CFR part 1405 as they apply to CRP 
contracts. This rule amends the interim rule to correct that oversight.

Executive Order 12866

    This rule has been determined to be economically significant and 
was reviewed by the Office of Management and Budget (OMB) under 
Executive Order 12866. A Cost/Benefit Analysis was prepared and is 
summarized following the discussion of other applicable laws and 
Executive Orders.

Regulatory Flexibility Act

    It has been determined that the Regulatory Flexibility Act is not 
applicable to this interim rule because the Commodity Credit 
Corporation (CCC) is not required by 5 U.S.C. 553 or any other law to 
publish a notice of proposed rulemaking for the subject matter of this 
rule. CCC is authorized by section 2702 of the 2002 Act to issue a 
final rule.

Environmental Evaluation

    The environmental impacts of this rule have been considered 
consistently with the provisions of the National Environmental Policy 
Act of 1969 (NEPA), 42 U.S.C. 4321 et seq.; the regulations of the 
Council on Environmental Quality (40 CFR parts 1500-1508); and FSA's 
regulations for compliance with NEPA at 7 CFR part 799. Because certain 
programs may significantly have impacts on the human environment, FSA 
completed a final Environmental Impact Statement (EIS) on May 8, 2003, 
which is on file and available to the public in the Administrative 
Record at the address specified in the ADDRESSES section. The EIS is 
also available electronically at: http://www.fsa.usda.gov/dafp/cepd/epb/nepa.htm.

Executive Order 12372

    This program is not subject to the provisions of Executive Order 
12372, which require intergovernmental consultation with State and 
local officials. See the Notice related to 7 CFR part 3015, subpart V, 
published at 48 FR 29115 (June 24, 1983).

Unfunded Mandates

    Title II of the Unfunded Mandate Reform Act of 1995 (UMRA), Pub. L. 
104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions that impose ``Federal Mandates'' 
that may result in expenditures to State, local, or tribal governments, 
in the aggregate, or the private sector, of $100 million or more in any 
one year. This rule contains no Federal mandates as defined by Title II 
of UMRA. Therefore, this rule is not subject to sections 202 and 205 of 
the UMRA.

Federal Domestic Assistance Program

    The title and number of the Federal Domestic Assistance Program, as 
found in the Catalog of Federal Domestic Assistance, to which this rule 
applies, is the Conservation Reserve Program--10.069.

Paperwork Reduction Act

    The 2002 Act specified that the issuance of regulations promulgated 
pursuant to this new authority would be made without regard to chapter 
35 of title 44, U.S. Code (commonly known as the ``Paperwork Reduction 
Act'').

Executive Order 12778

    This final rule has been reviewed under Executive Order 12778. The

[[Page 26762]]

provisions of this rule are not retroactive and preempt State and local 
laws that are inconsistent with this rule. Before any judicial action 
may be brought concerning this rule, appeal rights afforded program 
participants at 7 CFR parts 11, 624, and 780 must be exhausted.

Government Paperwork Elimination Act

    FSA is working to comply with the Government Paperwork Elimination 
Act (GPEA) and the Freedom to E-File Act, which require Government 
agencies in general and FSA in particular to provide the public the 
option of submitting information or transacting business electronically 
to the maximum extent possible. The forms and other information 
collection activities required for participation in CRP are not fully 
implemented for the public to conduct business with FSA electronically.
    Currently, four CRP forms are available electronically through the 
USDA eForms Web site at http://www.sc.egov.usda.gov for downloading and 
regulations are available on the Internet at http://www.fsa.usda.gov/dafp/cepd. Offers may be submitted at FSA county offices, by mail, or 
by FAX. At this time, electronic submission is not available, but full 
implementation of electronic submission is underway.

Summary of Cost-Benefit Assessment (CBA)

Increased Enrollment

    Enrolling an additional 2.8 million acres will provide 
environmental benefits, including establishment of 2.8 million acres of 
wildlife habitat improving recreational benefits through increased 
hunting and wildlife viewing opportunities. Soil erosion will be 
reduced an estimated 27 million tons per year, increasing soil 
productivity, improving surface water quality, and improving air 
quality.
    Total CRP outlays are estimated to increase $1.5 billion during 
fiscal years 2003 through 2012, while commodity program outlays are 
estimated to decline about $1.7 billion over the same period, primarily 
due to a $1.5 billion estimated counter-cyclical payment decline. The 
additional 2.8-million-acre enrollment is estimated to decrease 
combined CRP and commodity program outlays $186 million during the 10-
year period.
    Idling an additional 2.8 million acres under CRP (less than 1 
percent of typically planted acreage) will have minimal impacts on the 
farm sector. Net crop sector income is estimated to increase $307 
million per year (1 percent) during the 2003-2012 crop years due to 
increased market-based net returns ($349 million per year), decreased 
commodity program payments ($186 million per year), and increased net 
CRP payments ($144 million per year) over the 10-year period. Reduced 
plantings will cause estimated crop prices to increase on average $0.02 
per bushel for wheat, $0.02 for corn, $0.01 to $0.02 for other feed 
grains, and $0.06 for soybeans per year.
    Average buyers' loss for domestic users of the major crops is 
estimated to increase $326 million per year when the 2.8 million acres 
are enrolled. Including other estimated average annual economic 
indicator changes over the 2003-2012 time period provides estimated net 
economic benefits of $11 million per year, before any consideration of 
the value to society of the environmental benefits. While comprehensive 
measures of the value of the environmental benefits obtained from 
enrolling environmentally sensitive acreage in CRP do not currently 
exist, the economic value of environmental benefits is expected to be 
substantial.

Eligible Land Impacts

    Basic cropland eligibility options selected (and impacts):
     Consider cropland in summer fallow rotation as conserving 
use. (Adds 29 million acres.)
     Consider cropland devoted to alfalfa or other multi-year 
grasses and legumes as conserving use, but only if planted during 1996-
2001. (Adds 31 million acres and excludes 90 million acres not planted 
during 1996-2001. Also excludes about 1.5 million acres previously 
eligible as land in long-term crop/hay rotations.)
     Consider land formerly enrolled in CRP under contracts 
that expired before 1999 and still in grass as conserving use. (Adds 5 
million acres, and excludes a minimal amount of acreage in trees.)
     Make land used for perennial horticulture eligible, if 
devoted to certain continuous sign-up practices. (Adds about 240,000 
acres.)
    A total of 371 million cropland acres are estimated to meet basic 
crop eligibility requirements, about 8 million more than were eligible 
under previous criteria.
    Significant resource-based eligibility options selected (and 
impacts):
     Include under highly erodible land criteria cropland in 
fields with weighted average Erodibility Index (EI)>=8, rather than 
previous policy that included cropland in fields classified as HEL 
(subject to conservation compliance requirements) and cropland with 
weighted average EI>=8. (Reduces eligible land about 9 million acres.)
     Add about 40 counties to the prairie pothole national CPA. 
(Adds 3 million acres.)
     Increase the allowable State CPA percentage from 10 
percent to 33 percent of cropland acreage per State. (Adds 36 million 
acres.)
    About 270 million acres, or 73 percent, of cropland meeting basic 
eligibility requirements are estimated to meet one or more resource-
based eligibility criteria. Eligible land includes 106 million acres of 
highly erodible cropland, 120 million acres in national conservation 
priority areas, and 87 million acres in State CPA's.

Managed Haying and Grazing Impacts

    Allowing non-emergency managed haying and grazing, conducted in 
accordance with a conservation plan, could potentially affect about 25 
percent of eligible CRP grassland acreage. Haying and grazing will be 
limited to no more than once every 3 years, depending on conservation 
plan guidelines. Thus, around 2 million to 3 million acres could be 
hayed or grazed in any year, improving wildlife habitat benefits on a 
total of about 7 million acres. CRP rental payments could be reduced 
$20 million to $25 million per year.

Rulemaking Exemption

    Section 2702 of the 2002 Act exempts this rulemaking, the interim 
rule that proceeds this affirmation, and the administration of the 
program, from the application of the Paperwork Reduction Act, and the 
Statement of Policy of the Secretary of Agriculture published at 36 FR 
13804 (July 24, 1971). That section of the 2002 Act also provided 
explicitly for allowing an interim rule to be made effective 
immediately without prior notice and comment. As this final rule merely 
affirms the existing interim rule, with slight amendments made for the 
better administration of the CRP non-entitlement program, it would be 
contrary to the public interest to delay the implementation of this 
rule. Accordingly, consistent with the terms of the 2002 Act and the 
public interest, this rule is effective upon publication.

List of Subjects in 7 CFR Part 1410

    Administrative practices and procedures, Agriculture, Conservation 
plan, Contracts, Environmental protection, Natural resources, Soil 
conservation, Water resources, and Wildlife.

0
Accordingly, the interim rule revising 7 CFR part 1410 published at 68 
FR

[[Page 26763]]

24830 on May 8, 2003, is adopted as final with the following changes:

PART 1410--CONSERVATION RESERVE PROGRAM

0
1. The authority citation for part 1410 continues to read as follows:

    Authority: 15 U.S.C. 714b and 714c; 16, U.S.C. 3801-3847.


0
2. Amend Sec.  1410.2(b) by revising the definitions of ``Conserving 
use'' and ``Perennial crop'' to read as follows:


Sec.  1410.2  Definitions.

* * * * *
    (b) * * *
    Conserving use means a use of land with any rotation requirements 
as may be specified by the Deputy Administrator: for alfalfa and other 
multi-year grasses and legumes planted during 1996 through 2001; as 
summer fallow during 1996 through 2001; and in which the land was 
previously enrolled in the program (for which the contract expired 
during the period 1996 through 2001) and where the grass cover required 
by the CRP contract continues to be maintained as though still 
enrolled. Where the land use for a year qualifies as a ``conserving 
use'' under this definition, then, the land for that year shall, for 
purposes of eligibility under Sec.  1410.6(a)(1) be considered to have 
been planted to an ``agricultural commodity.''
* * * * *
    Perennial crop means a crop that is produced from the same root 
structure for two or more years, as determined by CCC.
* * * * *

0
3. Amend Sec.  1410.6 by revising paragraph (a)(2)(ii) introductory 
text to read as follows:


Sec.  1410.6  Eligible land.

    (a) * * *
    (2) * * *
    (ii) Is determined to be suitable for use as a riparian buffer or 
is made eligible in a CREP for similar water quality purposes as 
determined by the Deputy Administrator. A field or portion of a field 
of marginal pasture land may be considered to be suitable for use as a 
riparian buffer only if, as determined CCC, it:
* * * * *

0
4. Amend Sec.  1410.52 by adding paragraph (d) to read as follows:


Sec.  1410.52  Violations.

* * * * *
    (d) Crop insurance purchase requirements in part 1405 of this 
chapter apply to contracts executed in accordance with this part.

0
5. Amend Sec.  1410.63 by revising paragraph (c) introductory text and 
(c)(1)(iii) to read as follows:


Sec.  1410.63  Permissive uses.

* * * * *
    (c) The following activities may be permitted on CRP enrolled land 
insofar as they are consistent with the soil, water, and wildlife 
conservation purposes of the program:
    (1) * * *
    (iii) According to an approved CRP conservation plan in accordance 
with FOTG standards and ensuring that managed haying and grazing 
activities occur outside the official nesting and brood rearing season 
for those plans.
* * * * *

    Signed at Washington, DC, on May 11, 2004.
James R. Little,
Executive Vice President, Commodity Credit Corporation.
[FR Doc. 04-10945 Filed 5-13-04; 8:45 am]
BILLING CODE 3410-05-P