[Federal Register Volume 69, Number 153 (Tuesday, August 10, 2004)]
[Notices]
[Pages 48447-48451]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-18185]


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 Notices
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  Federal Register / Vol. 69, No. 153 / Tuesday, August 10, 2004 / 
Notices  

[[Page 48447]]



DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation


Conservation Reserve Program--Long-Term Policy

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Request for comments.

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SUMMARY: The Conservation Reserve Program (CRP) has provided 
significant environmental benefits across the nation, primarily by 
providing wildlife habitat, improving stream quality, and reducing soil 
erosion. The U.S. Department of Agriculture (USDA) is committed to full 
enrollment of CRP up to the authorized level of 39.2 million acres. To 
ensure that the environmental benefits of CRP continue, and because of 
the significant acreage expirations beginning in 2007, the Department 
will offer early re-enrollments and extensions of existing contracts to 
current CRP participants.
    Between September 30, 2007, and 2010, CRP contracts for more than 
28.7 million acres are scheduled to expire. The Farm Security and Rural 
Investment Act of 2002 (2002 Act) authorizes CRP enrollment of up to 
39.2 million acres under rental agreements of 10 to 15 years. The 
expected contract expirations and re-enrollment or replacement of the 
expiring acreage represent a management challenge concerning: (1) CRP 
environmental objectives; (2) USDA staffing needs; and (3) technical 
service provider resources.
    The purpose of this notice is to: (1) Describe the Department's 
commitment to full enrollment of CRP by offering early re-enrollments 
and contract extensions; (2) Obtain public input on management of 
expiring acreage as it relates to program goals and objectives; (3) 
Improve the design and delivery of CRP to most cost effectively provide 
natural resource conservation benefits; (4) Identify areas of concern 
where further research or analysis is required to determine program 
impacts and performance measures; and (5) Assist in the development of 
administrative infrastructure to support potential enrollment of a 
large volume of contracts.

DATES: Comments must be received in writing by December 8, 2004.

ADDRESSES: The Commodity Credit Corporation (CCC) invites interested 
persons to submit comments on this notice. The preferred manner to 
submit comments is via the Internet at: http://www.fsa.usda.gov/pas/. 
However, comments may also be submitted by any of the following 
methods:
     E-Mail: Send comments to: [email protected].
     Mail: Send comments to: Director, Conservation and 
Environmental Programs Division (CEPD), Farm Service Agency (FSA), Room 
4714-S, Stop 0513, 1400 Independence Avenue, SW., Washington, DC 20250-
0513.
     Hand Delivery or Courier: Deliver comments to the above 
address.
    All comments, including names and addresses, provided by 
respondents become a matter of public record. Comments may be inspected 
in the office of the Director, CEPD, FSA, at the above address. Make 
inspection arrangements by calling 202-720-6221.

FOR FURTHER INFORMATION CONTACT: Beverly Preston, Program Manager, 
USDA/CCC/CEPD/STOP 0513, 1400 Independence Avenue SW., Washington, DC 
20250-0513; telephone 202-720-9563; email: [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 CRP was authorized by Title XII of the Food Security Act of 
1985 (1985 Act) to provide farm and ranch owners, operators, and 
tenants a voluntary long-term land retirement program that emphasized 
reducing soil erosion. The 1985 Act authorized enrollment in the CRP of 
40 to 45 million acres. By the end of 1990, a total of 33.9 million 
acres were enrolled in the CRP.
    Initially, the CRP emphasized reducing soil erosion; however, the 
public was beginning to become more sensitive to other environmental 
issues such as condition of streams, lakes, and rivers, and the need to 
preserve game and non-game wildlife species. In the Food, Agriculture, 
Conservation, and Trade Act of 1990 (1990 Act), Congress extended the 
CRP enrollment period through 1995 and broadened the program's focus. 
The program's objectives expanded to include improving water quality, 
turning marginal pasture land into riparian areas, increasing wildlife 
habitat, and other environmental goals.
    During 1991 to 1995 an additional 2.5 million acres were enrolled 
in the CRP, bringing the total enrollment to 36.4 million acres in 
1993. Subsequent appropriations legislation and budget reconciliations 
prohibited further enrollment or reduced the authorized enrollment 
level, effectively capping CRP enrollment at 38 million acres through 
1995.
    Through 1995, land was enrolled during competitive ``general'' 
signup periods normally lasting two to four weeks. Soon after original 
enactment, there was interest to enroll more acreage in the program 
than could be accepted and the Farm Service Agency (CCC) began to 
consider offers on a competitive basis, considering certain 
environmental benefits and cost.
    In September 1996, CCC initiated ``continuous'' signups that focus 
on enrolling acreage in the CRP that utilize certain high-priority 
conservation practices that yield highly desirable environmental 
benefits. Because this land is highly desirable for its environmental 
benefits and would rank comparatively high under a ``general'' 
competitive signup, such acreage may be enrolled under the 
``continuous'' signup process so that all eligible acres could be 
offered and accepted at any time.
    Continuous signup allows management flexibility in implementing 
certain special conservation practices on cropland and certain marginal 
pasture land. These practices are designed to achieve significant 
environmental benefits, giving participants an opportunity to help 
protect and enhance wildlife habitat, improve air quality, reduce soil 
erosion, and protect surface and ground water quality.
    In April 1996, the Federal Agriculture Improvement and Reform Act 
(1996 Act) further amended the 1985 Act and

[[Page 48448]]

confirmed the new CRP focus. The maximum enrollment authority was 36.4 
million acres through 2002. The primary goals under the new CRP were 
reducing soil erosion, enhancing wildlife habitat, and ensuring water 
quality. The new goals brought about a change to how offers were 
selected. CCC began ranking all eligible CRP offers using an 
Environmental Benefits Index (EBI) under an open competition. Prior to 
the open competition, only broad factors were disclosed without a 
detailed, public disclosure of how these broad factors were considered 
in deciding which offers to accept or reject.
    The new, publicly-available EBI was used to evaluate and rank 
offers based on the potential net environmental benefits of enrolling 
the land in the CRP. This ensured that only the most environmentally-
sensitive lands were selected. The criteria used to determine the EBI 
rankings included benefits to wildlife habitat, erosion control, water 
quality, enduring benefits, air quality, and cost. CCC's goal was to 
enroll the most environmentally-fragile lands in a cost-effective 
manner by scoring and ranking offers based on potential environmental 
benefits and estimated contract costs. The first CRP signup under the 
provisions of the 1996 Act was conducted in March 1997, when contracts 
enrolled in the mid-1980's were beginning to expire. Much of the land 
under these contracts was eligible to be reoffered for enrollment. This 
signup yielded the largest single-signup contract acceptance under the 
program, and over 16 million acres were enrolled. Approximately 11.7 
million acres of the total 16 million acres were subject to contracts 
that expired in September 1997.
    In 1997, CCC implemented the Conservation Reserve Enhancement 
Program (CREP), which is a voluntary initiative using State, tribal, 
Federal and non-government funding to help grassroots environmental 
issues related to agriculture. Under CREP agreements, CCC works with 
State governments, tribal, and local interests to create individual 
programs tailored for each State. The objective is to share costs and 
resources to address specific, high priority local environmental 
problems in targeted areas.
    In 2000, Congress authorized the Farmable Wetlands Pilot Program 
(FWP), which was a six-State pilot that provides for enrollment of 
certain wetlands and buffer acreage on a pilot basis into the CRP. 
Certain wetlands, not to exceed 5 acres in size, could be enrolled if 
certain eligibility requirements were met. The pilot was limited to a 
total of no more than 500,000 acres in Iowa, Minnesota, Montana, 
Nebraska, North Dakota and South Dakota.
    Also in 2000, Congress authorized Biomass Pilot Projects. These 
projects allowed producers enrolled in the CRP to harvest certain CRP 
acreage for biomass to be used for energy production.
    The 2002 Act amended the 1985 Act to extend the program to December 
31, 2007, and expand the CRP enrollment authority from 36.4 million 
acres to 39.2 million acres. The 2002 Act amendments also expanded the 
FWP from a six-State pilot program to a nationwide program. In 
addition, authority was provided to allow for managed haying and 
grazing, including harvesting for biomass purposes. The 2002 Act also 
expanded eligibility authority for marginal pastureland to include 
marginal pasture land to be devoted to appropriate vegetation, 
including trees, in or near riparian areas, or devoted to similar water 
quality purposes. This allowed for creation of new wetland and wildlife 
habitat buffer practices.
    Further, the 2002 Act amendments to the 1985 Act require that 
cropland must be planted or considered planted for four of the six 
years preceding enactment, created new eligibility criteria for 
conservation of ground or surface water, permitted entire fields to be 
enrolled through the continuous CRP as buffers when more than 50 
percent of the field is eligible for enrollment and the remainder of 
the field is infeasible to farm, and made land enrolled in CRP 
basically eligible for re-enrollment.

New Continuous Signup Initiatives

    Since the 2002 Act was enacted, CCC began a number of initiatives 
to target important environmental issues, including:
     Wetland Restoration in Flood Plains. In 2003, CCC moved 
enrollment of lands for wetland restoration from the competitive 
general signup to the continuous signup. Restoring wetlands enhances 
water quality, reduces impacts of flooding, enhances wildlife habitat, 
and protects and restores flood plains.
     Hardwood Tree Initiative. In December 2003, CCC created a 
500,000 acre Hardwood Tree Initiative and provided a new practice, 
under the CRP continuous signup, to enroll bottomland hardwood trees in 
the flood plains. This practice was designed to restore floodplains, 
reduce nutrient and sediment loading, enhance wildlife habitat, and 
restore critical ecosystems.
     Isolated Wetland Restoration Initiative. Other initiatives 
under the CRP include a 250,000 acre Wetland Restoration Initiative for 
restoration of wetlands, including playa lakes. The practice, Wetland 
Restoration Non-Flood Plain, is designed to enroll the larger wetland 
complexes and playa lakes not served through the FWP or the current 
Wetland Restoration practice that is limited to acreage within the 100-
year flood plain.
     Northern Bobwhite Quail Habitat Initiative. In addition, a 
new 250,000 acre Northern Bobwhite Quail Initiative provides a new 
practice under the CRP continuous signup that provides habitat buffers 
for upland birds. Over the past 20 years, the Northern Bobwhite Quail 
populations have decreased from 59 million to 20 million birds. The 
practice is designed to provide food and cover for quail, upland birds, 
and other species. The practice may be applied around the field edges 
on eligible cropland provided the cropland is suitably located and 
adaptable to the establishment of wildlife habitat for primarily quail 
and upland birds.

Addressing the Future of CRP

    CCC is also working to change the way it does business in order to 
make it easier for farmers and ranchers to participate in agency 
programs. One of the main tools in this effort is the adoption of new 
information technologies. Software is being developed that will allow 
customers and employees to harness the power of the Internet to manage 
their program benefits and responsibilities. With respect to 
implementation of CRP, CCC is part of a USDA-wide process in which 
standards will be developed in order to eliminate unnecessary 
complexity from a producer's online interaction with CRP. Geographic 
Information Systems (GIS) and other sophisticated technologies are 
being used to make it easier for farmers and ranchers to understand how 
complicated program rules may apply to them and to their land. As an 
initial step, FSA has developed new web-enabled software to process 
offers for general CRP signups. This software is currently for use only 
by FSA employees but represents a critical step in being able to 
deliver programs directly to potential CRP participants who use the 
Internet.
    Investing in new technology and reorganizing business processes is 
consistent with the President's Management Agenda as is development of 
better-defined performance measures.
    In May 2004, USDA's Economic Research Service (ERS) issued a 
legislatively-mandated report, ``CRP's Effect on Local Economies,'' 
which indicates that, in the aggregate, local

[[Page 48449]]

economic impacts have been limited. High CRP enrollment did not have a 
statistically significant adverse effect on population trends in farm 
counties across the U.S. and, while CRP enrollment was associated with 
some job loss in rural counties between 1986 and 1992 (the years 
immediately following the program's introduction); this negative 
relationship did not persist throughout the 1990's. Further, ERS 
research uncovered no statistically significant evidence that CRP 
participation encourages absentee ownership or that high levels of CRP 
participation affected local government services or tax burdens in a 
systematic way.
    At a recent USDA meeting in Fort Collins, Colorado, on the future 
of CRP, discussions illustrated the currents and crosscurrents within 
the CRP program. At the core of these discussions was the central 
issue: ``What is the purpose of CRP?'' The 1985 Act states that the 
purpose of CRP is conservation of water, soil, and wildlife and that 
there must be an equitable balance of these three goals. Despite this 
mandate, however, other, and at times conflicting, goals persist. Some 
consider CRP to be a soil reserve program, akin to the former Soil Bank 
Program of the 1950's and 1960's. Others think of it as a land 
retirement system, a way to give the land a rest to improve future 
productivity of farmland. These conflicting visions of CRP's purpose 
carry through to technical, policy, and programmatic decisions. They 
also affect the degree of satisfaction and support for the program 
because, when expectations do not align with perceived program goals, 
key stakeholders can be disappointed.
    At the Fort Collins meeting, experts in wildlife and conservation 
familiar with the programs authorized by the 2002 Act discussed how to 
better balance wildlife benefits with soil and water enhancement 
through the EBI, the ranking criteria at the heart of this balancing 
act. In addition, numerous researchers called for more attention to be 
focused on monitoring the wildlife benefits of CRP. Case studies 
demonstrated that wildlife benefits accrue as a result of CRP 
practices, but little systematic research takes place. Experts called 
for baseline monitoring to become a part of the program and for both 
long- and short-term monitoring to be funded to both demonstrate the 
accomplishments of the CRP program and to help fine-tune and better 
focus the program to achieve maximum environmental benefits.
    The costs of CRP were also addressed. Economists and 
representatives of farming communities debated whether or not CRP has 
adverse economic impacts on rural communities. Some experts rejected 
the idea, pointing to other compounding factors, such as consolidation 
of farms, overseas competition and trade barriers to explain economic 
stress of rural communities. Proponents of the idea that CRP reduces 
community productivity and undercuts the demand for goods and services 
in small agriculture-dependant communities argued that there is a 
strong correlation between numbers of acres taken out of production and 
loss of rural economic vitality. The experts continued to disagree, 
except that both sides embraced the need for further economic studies 
of this issue.
    Entities other than USDA have a strong interest in the CRP, 
including nonprofit conservation and environmental groups, private 
landowners, State and other Federal agencies. These entities voiced 
strong concern over the need for increased funding and more staffing 
for technical services. Nonprofit organizations were especially 
interested in the potential for supporting CRP in the role of technical 
service providers. Beyond technical services, these entities voiced 
eagerness to be more involved with program development and policy-
making and they applauded the efforts of USDA to reach out to nonprofit 
conservation and environmental groups for ideas, support, funding 
partnerships and technical support for the program.
    The CRP enrollment through June 2004 was 34.8 million acres. 
Contracts for 16 million acres are scheduled to expire, beginning on 
September 30, 2007. An additional 6 million acres in 2008, 4 million 
acres in 2009 and 2 million acres in 2010 are also scheduled to expire.
    CRP contracts expiring in 2007 through 2010 represent (like 
contracts that expired in 1996) a ``milestone'' in program evolution. 
The Administration and Department are committed to utilizing full 
enrollment authority.

Key Issues for Comment

    CCC invites public comment on the following issues:
    1. How should CCC address the large number of expiring CRP 
contracts and their associated acres in a manner that achieves the most 
environmental benefits but is also administratively feasible and cost 
effective? What methods should be pursued that would address the large 
acreage expiring beginning in 2007 (for example, how could CCC stagger 
the contract expirations over several year intervals, and what criteria 
could CCC use to select and extend contracts)?
    The Department is committed to maintaining the environmental 
benefits of CRP by offering early re-enrollments and contract 
extensions. The 1985 Act provides enrollment authority for 39.2 million 
acres through December 31, 2007. Replacing the contracts expiring in 
2007 with new or the same acres will require significant USDA 
expenditures for salaries and expenses. Extending existing contracts 
over time would spread workflow over several years and reduce the cost 
to implement than if large numbers of contracts and acres expired at 
one time.
    2. What factors should be considered in determining the 
acceptability of offers for CRP to provide an equitable balance between 
soil erosion, water quality, and wildlife benefits, and why?
    The 1985 Act requires that, in determining the acceptability of 
offers for CRP, an equitable balance be provided for the conservation 
purposes of soil erosion, water quality, and wildlife benefit. Offers 
and practices are accepted and contracts approved based, in part, on 
equal weighting of water quality, soil erosion, and wildlife 
environmental factors. Other environmental factors are considered in 
ranking offers such as enduring benefits, the likeliness of the 
practice continuing past the contract expiration as though enrolled, 
and emphasis on planting native vegetation historically suited to the 
site. These factors were primarily considered in anticipating measures 
to provide the greatest environmental benefits across the nation. Cost 
was also considered.
    3. How could the Environmental Benefits Index (EBI) be modified?
    CCC has used EBI to rank offers nationally. The EBI for an offer is 
based on points given for five environmental factors plus a cost 
factor. The factors are wildlife, water quality, erosion, enduring 
benefits, air quality, and cost.
    The wildlife factor scores the expected benefits of offers on a 
scale of 0 to 100 points, and has three components: wildlife habitat 
cover, wildlife enhancement, and wildlife priority.
    The water quality factor ranges from 0 to 100 points and has three 
components: location, groundwater quality, and surface water quality.
    The erosion factor ranges from 0 to 100 points and evaluates the 
potential for land to erode as the result of wind or water. Points are 
based on an Erodibility Index (EI) and are awarded for the weighted 
average of the higher value of either the wind or water EI.

[[Page 48450]]

    The enduring benefits factor ranges from 0 to 50 points and 
considers the likelihood of certain practices remaining in place beyond 
the contract period.
    The air quality factor ranges from 0 to 45 points and evaluates the 
air quality improvements gained by reducing cropland airborne dust and 
particulate from wind erosion. In addition, this factor has points for 
the value of CRP land that provides carbon sequestration.
    The cost factor is an evaluation of the cost of environmental 
benefits per dollar expended. This provides farmers and ranchers with 
an incentive to offer cost-effective offers. This factor provides a 
weighted average to assist in considering optimizing environmental 
benefits per dollar for CRP rental payments.
    4. How could the program be better targeted, whether to certain 
practices (e.g., filter strips, riparian buffers), geographically, or 
on some other basis?
    Historically, conservation programs, including CRP, have employed a 
variety of targeting approaches. For example, one of the CRP 
eligibility criteria is for highly erodible land. This targets 
enrollment based on geographic, soil, and topographical 
characteristics. CRP has also used a bidding system to enroll farmers 
and ranchers into the program who are willing to participate at the 
lowest cost, a form of cost targeting. The most complete form of 
targeting used in the CRP has been the use of the EBI, which is 
intended to balance the environmental benefits associated with 
enrolling a parcel of land in the program (items such as water and air 
quality, wildlife habitat, and soil quality among others) against 
costs. Future adjustments to the program could favor other aspects of 
the program, including targeting certain practices, such as use of 
native species, certain areas of the country, such as watersheds 
contributing to hypoxia in the Gulf of Mexico or the Chesapeake Bay, or 
economic status, such as favoring smaller family farms over larger 
operations.
    5. If CCC offered CRP re-enrollment without competition, how could 
it ensure that program goals are achieved in a manner that results in 
the most environmental benefits but is also administratively feasible 
and cost effective? How could CCC determine which contracts and acres 
would be most environmentally valuable to re-enroll into CRP without 
competition through a standard EBI ranking process?
    Over 33 million acres were enrolled in the program from 1986 to 
1990. During the mid-1990's, the early contracts began to expire. Over 
85 percent of the producers offered their land for re-enrollment. The 
offers were ranked based on the EBI and the highest-ranked offers were 
selected. A majority of the expiring contracts were re-enrolled based 
on their relatively high ranking under the EBI. Offering re-enrollment 
without competition could entail, for example, automatically re-
enrolling offers with an EBI score above a certain level, without 
having to compete. This would permit the Agency to spread out work flow 
through the year while protecting the most environmentally sensitive 
land.
    6. In what ways and for what purposes could acreage be set aside to 
assist local areas to meet local priority concerns?
    Under CREP, States identify resources with CRP to address local 
environmental issues of importance to the State and nation. CCC has 
reserved approximately 4 million acres to prioritize and address State 
and local environmental issues under the continuous CRP enrollments, 
including acres eligible under CREP, the FWP, and wetland restoration, 
bottomland, and other initiatives.
    7. Because CCC is concerned about the supply, quality, and cost of 
seed and tree stock, how can the agency manage large CRP enrollments in 
future years to address the need to seed and plant vegetation on newly 
enrolled acres?
    On September 30, 2007, CRP contracts on approximately 16 million 
acres will expire. Enrollment of large amounts of new land or reseeding 
large portions of the 16 million acres of expiring land may tax the 
availability of seed and tree stock.
    8. How can Geographical Information System (GIS) technology be used 
more effectively?
    GIS technology is being used for CRP's general signup to assess and 
capture information for environmental benefits and to assist farmers 
and ranchers understand the impacts of various offer scenarios. GIS is 
also utilized for program data capture and analysis through the 
recording of program practice boundaries. It is anticipated that GIS 
will serve a more comprehensive role in the CRP signup process.
    9. How can local adverse economic impacts, if any, be mitigated?
    Landowners and farm operators have voluntarily enrolled 
approximately 34 million acres of highly erodible and environmentally 
sensitive cropland into CRP. In return for planting qualifying land to 
grasses, trees, and other protective vegetative cover, enrollees 
receive an annual rental payment and reimbursement for roughly half the 
cost of establishing approved ground cover. The program provides a 
stable source of income to participants and produces a wide range of 
environmental benefits but, by retiring farmland, it also reduces 
demand for farm inputs, marketing services, and labor. To limit the 
local economic impact of taking land out of production, no more than 25 
percent of a county's cropland can normally be enrolled in the CRP 
without formal approval to exceed this cap. Nonetheless, critics of the 
program contend that CRP contributes to the loss of farm-related jobs 
and the depopulation of nearby communities that provide agricultural 
and retail services.
    10. What performance measures can be adopted that are most 
meaningful and accurately reflect CRP's benefits, but also can be 
reasonably measured and evaluated?
    Consistent with the President's Management Agenda, a set of 
performance measures is needed to accurately measure and communicate 
the benefits of CRP. CRP outcomes include improved soil, water, 
wildlife habitat, and air quality. Perhaps the greatest obstacle to 
demonstrating the effectiveness of the program is the complexity of the 
environmental systems. The complexities include the lag between the 
adoption of conservation systems and the change in environmental 
quality, the need to enroll sufficient participants in a program to 
achieve a measurable change in environmental conditions, and 
difficulties in explaining how the conservation measures affect the 
system.
    11. How could CRP be designed to most effectively address hypoxic 
conditions in the Gulf of Mexico?
    Hypoxia refers to a process driven by high nutrient loads in which 
water does not have enough dissolved oxygen to support life, 
essentially creating a ``dead zone.'' This dead zone has been an 
increasing problem in the Gulf of Mexico and can lead to progressively 
severe effects on the ecosystem. The area affected averaged 5,400 
square miles between 1996 and 2000, about the size of the State of New 
Jersey.
    A Congressionally-mandated task force led by the National Oceanic 
and Atmospheric Administration and the Environmental Protection Agency 
concluded that changes in agricultural practices in the Mississippi 
River Basin, including increased CRP acreage to achieve certain goals, 
would significantly reduce the nutrient loading thought to be the 
primary cause of hypoxia. CRP could help achieve the goal of halving 
the area of hypoxia through enrollment of wetlands and buffers, which 
would reduce nutrient loading to streams and groundwater.

[[Page 48451]]

Other benefits include habitat for waterfowl, migratory birds and other 
wildlife, flood control, safer drinking water supplies and carbon 
sequestration.

    Signed at Washington, DC, on July 30, 2004.
James R. Little,
Executive Vice President, Commodity Credit Corporation.
[FR Doc. 04-18185 Filed 8-9-04; 8:45 am]
BILLING CODE 3410-05-P