U.S. Policy Options û The Farm Bill

Reducing net U.S. GHG emissions through changes in agricultural practices and land uses will require new agricultural policies. It is useful to classify such policies as those that could be adopted as part of the conservation title of the Farm Bill and those that go beyond the Farm Bill.

The Farm Bill. At present, there are a large number of narrowly focused conservation programs. Responsibility for implementing these programs is divided between the Natural Resources Conservation Service (NRCS) and the Farm Services Agency (FSA), both agencies of the U.S. Department of Agriculture (USDA). The large number of programs and the disparities in eligibility requirements are major barriers to farmer participation. Major conservation programs and the environmental benefits they now encourage are shown below:


1- Implemented by the FSA 2 -Implemented by the NRCS CRP: Conservation Reserve Program; CREP: Conservation Reserve Enhancement Program; WHIP: Wildlife Habitat Incentive Program; FPP: Farmland Protection Program; EQIP: Environmental Quality Incentive Program; SWP: Small Watershed Program; CC: Conservation Compliance; CTA: Conservation Technical Assistance.

Participation in environmental programs such as the CRP, WRP, and EQIP has been voluntary. These programs provide payments to farmers for taking environmentally friendly actions. The Conservation Compliance program required farmers who opted to receive government subsidies to control erosion and protect wetlands. In recent years, however, the trend has been to make fewer demands on farmers, and eligibility for crop insurance payments has been delinked from wetland (Swampbuster) and erosion control (Sodbuster) provisions.

Effectiveness of present programs in addressing environmental goals is also hampered by the restricted geographic spread (see Figure 3), limited sizes and types of farm operations participating, and limited funding. Thus conservation programs could be more effective if they were more fully funded, simplified, broadened, and harmonized.

Figure 3

Source: Center for Agricultural and Rural Development, Iowa State University, 2001.
Note: Ratio shown is the percent of total commodity payments received by a state divided by the state’s share of total U.S. value of agricultural production.

New Approaches. Reform of farm programs is under consideration for a variety of reasons, including international trade rules that constrain production subsidies. Guaranteed commodity prices and crop insurance subsidies encourage more acreage under cultivation than would occur without the programs. Reforming these subsidies might be one of the most cost-effective means of reducing net GHG emissions from agriculture and providing other soil, water quality, and wildlife habitat benefits.

A number of proposed new conservation programs are intended to provide payments for a wide range of conservation practices and environmental services, including soil, water quality, wildlife habitat, and GHG benefits across a wider variety of land use and management categories. These programs would offer higher payments as more conservation practices are adopted or services provided.

Important program design considerations include:

• Whether all who use a practice or only new adopters can participate;
• Potential loss of environmental benefits – e.g., buffer strips reverting to cropland; and
• Benefits being offset by other changes – e.g., conservation tillage offset by additional lands brought into production, or increased pesticide use that may accompany no-till.

S ome have formally expressed concern that “good actors” (i.e., those who adopted practices before program implementation) should not be excluded from program benefits. Including all who use an eligible practice addresses this concern, avoids problems of early adopters of desired practices reverting to detrimental ones in order to become eligible to participate, and would be easier to implement as it eliminates the need to differentiate between current adopters and farmers who adopt because of the program.

Research has shown that targeting programs to induce adoption of conservation tillage could cut program costs by more than 50 percent depending on the scale of the program. Approximately 36 percent of U.S. cropland was under some form of conservation tillage last year, and the effect of policies that encourage adoption of conservation tillage should be measured relative to this baseline adoption rate. Furthermore, the environmental benefits of many practices vary widely depending on soils, topology, climate, and location. Consequently, linking program criteria to the level of environmental benefits could help maximize environmental gains.

Programs that encourage environmentally friendly practices may be easier to implement if they do not require measurement, verification, or monitoring of specific environmental benefits. However, a policy that does include measuring, monitoring, and verification might generate more real environmental benefits, encourage innovation in measurement methods, and facilitate GHG emissions trading. Short of measuring specific GHG reductions, regional, practice-based benchmarks or baselines can be used. The approach of offering an incentive for adopting a practice could be coupled with additional incentives if measurement, monitoring, and verification are undertaken.

Pilot Programs. A pilot program would be a relatively low-cost way to demonstrate the feasibility of encouraging a large proportion of farmers to adopt climate-friendly practices. Pilot projects in a range of geographic areas, cropping and animal husbandry systems, and farm sizes could be selected to provide critical information on how many, and what types of, farmers will adopt practices at various subsidy levels, and whether demonstration sites, technical assistance, or other outreach efforts are effective. Pilot programs could also serve to test methods for measurement, monitoring, and verification.

NEXT: Beyond the Farm Bill

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