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Image: Natural Resources & Environment

Background

Note: This topic page may contain material that has not yet been updated to reflect the new Farm Act, signed into law on February 7, 2014. ERS has published highlights and some implications of the Act’s new programs and provisions. Sign up for the ERS Farm Bill e-newsletter to receive notices of topic page updates and other new Farm Bill-related materials on the ERS website.

Conservation Spending Seeks To Improve Environmental Performance in Agriculture

Some farming practices can degrade natural resources and the environment. Sediment, nutrient, and pesticide runoff and leaching, for example, can impair water quality. Other practices can preserve and enhance our natural heritage and provide substantial benefits through careful management of agricultural land. Enhancing wildlife habitat on agricultural land--for example, by providing nesting material for migratory birds--can help increase wildlife populations. USDA's conservation programs help agricultural producers improve their environmental performance in many ways, including soil quality, water quality, air quality, wildlife habitat, and greenhouse gas emissions.

A Portfolio of Incentives

The USDA conservation effort relies mainly on voluntary incentive programs to address natural resource issues. These approaches can avoid the inherent difficulties in regulating nonpoint sources of pollution and can minimize economic harm to farmers by offering a range of incentives and assistance programs:

  • Land retirement programs generally remove land from agricultural production for a long period (at least 10 years) or, in some cases, permanently. Retired land can be planted to grass or trees or restored to wetland condition.
  • Working-land programs provide technical and financial assistance to farmers who install or maintain conservation practices on land in production. Common practices include nutrient management, conservation tillage, field-edge filter strips, and fences to exclude livestock from streams.
  • Agricultural land preservation programs purchase rights to certain land uses, such as housing or other development, to maintain land in agricultural use.
  • USDA provides, through Conservation Technical Assistance, ongoing technical assistance to agricultural producers who seek to improve the environmental performance of their farms.

Environmental compliance is a notable exception. Under highly erodible land conservation (provisions other referred to as "Sodbuster" for land not cropped before 1985 and "Conservation Compliance" for land cropped before 1985) farmers who crop highly erodible land must apply an approved soil conservation system or risk losing nearly all agriculture-related farm program benefits, including commodity, conservation, and disaster payments. Under wetland conservation (often referred to as "Swampbuster"), producers must refrain from draining wetlands or face the loss of nearly all agriculture-related program benefits.

Conservation Spending Has Been Rising

Through USDA, the Federal Government invested more than $5.5 billion in voluntary agricultural conservation incentives in fiscal year 2010. Land retirement captured the largest share of conservation spending (46 percent in FY2010), although funding for working-land programs was substantial (35 percent). Most of the remaining expenditures were for Conservation Technical Assistance (14 percent) and agricultural land preservation (5 percent).

 

Funding for major conservation programs, 2009-12
  2009 2010 2011 2012*
Program/type Budget authority ($ Million)
Land retirement programs
  Conservation Reserve Program 1,934 1,884 1,939 1,913
  Emergency Forest Conservation Reserve Program  10 8 6 6
  Voluntary Public Access  0 12 18 7
  Wetland Reserve Program 436 630 611 588
  Subtotal - land retirement 2,380 2,534 2,574 2,514
Workingland programs
  Environmental Quality Incentives Program 1,067 1,174 1,238 1,373
  Agricultural Water Enhancement Program 73 72 74 59
  Conservation Security Program 276 222 204 188
  Conservation Stewardship Program 9 390 601 742
  Wildlife Habitat Incentives Program 85 83 85 47
  Subtotal - Workingland 1,510 1,941 2,202 2,409
Agricultural land preservation
  Farm and Ranch Land Protection Program 121 150 175 145
  Grassland Reserve Program 48 100 79 65
  Subtotal 169 250 254 210
Other Programs
  Healthy Forest Reserve Program 10 8 10 10
  Chesapeake Bay Watershed 23 43 72 50
  Agricultural Management Program 15 15 15 3
  Subtotal - other programs 48 66 97 63
Conservation Technical Assistance 730 762 755 729
All major conservation programs 4,837 5,553 5,882 5,925

Source: ERS analysis of Office of Budget and Program Analysis (OBPA) data.
*OBPA estimate.

Since the mid-1980s, USDA conservation program spending has been on the rise. In 1986, with the beginning of the Conservation Reserve Program (CRP), USDA conservation spending was dramatically increased. For the next 17 years, until 2003, land retirement dominated USDA conservation spending. During this period, about 90 percent of USDA conservation payments made directly to farmers went for land retirement. Beginning in 2003, conservation spending took another leap, largely because of a dramatic increase in funding for working-land conservation programs. Most of the new money went to the Environmental Quality Incentives Program (EQIP) and the Conservation Security Program (CSP; superseded by the Conservation Stewardship Program). Between 2003 and 2010, working-land program funding grew nearly tenfold.

 

Chart data
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With the growth of conservation programs over the past 25 years, conservation spending for fiscal year 2010--expressed in constant dollars--was higher than at any time since 1960. In 1960 at the height of the Soil Bank program (a large land retirement program initiated in 1956), conservation program funding was almost $5.8 billion in 2010 dollars.    

It is not clear that conservation spending will continue to rise in the future. The Food, Conservation, and Energy Act of 2008 reduced the CRP acreage cap to 32 million acres, slowing spending in that program. If the demand for major commodities (e.g., corn, soybeans, and wheat) continues to be strong and market prices for these commodities continue to be well above historic levels, farmers may be unwilling to enroll land in CRP unless annual payments are increased to match the profits from crop production. Under such a scenario, CRP expenditures could jump or the program's acreage could shrink.

Last updated: Wednesday, March 12, 2014

For more information contact: Roger Claassen

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