activities. The fourth approach-payments for placing lands in conserving uses-has been used at various times in the past, such as the "Soil Bank" program of the late 1950's, and currently

characterizes the Conservation Reserve (CRP) and Wetlands Reserve (WRP) Programs. The compliance approach to conservation originated in the 1985 Food Security Act with the conservation compliance, sodbuster, and swampbuster provisions. This approach essentially adds soil and wetland conservation as additional requirements for receipt of a wide array of farm program payments. The sixth approach-research and data development-is essential to the other five approaches and is undertaken by the Agricultural Research Service (ARS), the Cooperative State Research, Education, and Extension Service (CSREES), the Economic Research Service (ERS), the Forest Service (FS), and the Natural Resources Conservation Service (NRCS).

For the most part, the Federal Government has not employed direct regulation to deal with nonpoint source natural resource and environmental problems associated with agricultural lands. (The conservation compliance, sodbuster, and swampbuster provisions are not regulatory since they apply only to those who participate in farm programs, and farm program participation is voluntary.) However, the Environmental Protection Agency (EPA) does regulate the production and use of pesticides under FIFRA, as amended by the Food Quality Protection Act, and animal waste discharges from large confined livestock operations under the Clean Water Act. An increasing number of States also regulate pesticide use and land-use practices. Voluntary approaches to agricultural resource problems not only avoid the inherent difficulty in regulating nonpoint sources of pollution, but also educate and fund farmers so that they might willingly make improvements in production practices to achieve conservation and environmental goals. In passing the Federal Agriculture Improvement and Reform Act of 1996 (1996 Farm Act), Congress reaffirmed its preference for dealing with agricultural natural resource problems through voluntary approaches.

New USDA Conservation Programs

Environmental Quality Incentives Program (EQIP). EQIP was established by the 1996 Farm Act as a new program to consolidate and better target the functions of the Agricultural Conservation Program (ACP), the Water Quality Incentives Program (WQIP), the Great Plains Conservation Program (GPCP), and the Colorado River Basin Salinity Program (CRBSP). These four terminated programs

are discussed more in the next section. EQIP will be administered by NRCS with the concurrence of the Farm Service Agency (FSA).

The objective of EQIP is to encourage farmers and ranchers to adopt practices that reduce environmental and resource problems. By statute, half of the available funds for EQIP are to be targeted at conservation practices relating to livestock production, and there is general statutory guidance to manage EQIP so as to maximize environmental benefits per dollar expended. During 1996-2002, USDA will provide technical assistance, education, cost-sharing, and incentive payments to producers who enter into 5to 10-year contracts implementing EQIP conservation plans. The program will be available to farmers and ranchers who own or operate land on which crops or livestock are produced, including cropland, pasture, rangeland, and other lands identified by the Secretary.

Producers who implement land management practices (e.g. nutrient management, tillage management, grazing management) can receive technical assistance, education, and incentive payment amounts to be determined by the Secretary. Producers that implement structural practices (e.g. animal waste management facilities, terraces, filterstrips) can receive technical assistance, education, and cost-sharing of up to 75 percent of the projected cost of the practice(s). However, large confined livestock operations generally will be ineligible for cost sharing to construct animal waste management facilities.

An evaluation and selection process is being used to target EQIP funds. First, NRCS solicits priority area proposals from local work groups through the State Conservationist. These proposals are evaluated at the national level, and based on the proposals and other information on conservation needs, EQIP funds are allocated to the States. Once allocations are made, it is the responsibility of the State Conservationist to see that environmental benefits per dollar are maximized. Nearly 600 project area proposals were submitted to the national level in FY 1997.

Some producers outside priority areas may also receive EQIP assistance, especially for low-cost but environmentally effective practices such as nutrient testing. USDA has proposed that up to 35 percent of EQIP funds be available for identified problems outside priority areas.

Program funding for EQIP will be $200 million annually through 2002 except for fiscal year 1996 when funding was $130 million. Congress authorized this $130 million to be paid out through ACP, WQIP,

GPCP, and CRBSP to fulfill EQIP purposes. In general, cost-share and incentive payments paid to a producer under EQIP may not exceed $10,000 for any fiscal year or $50,000 for a multi-year contract. However, the Secretary has the authority to pay a producer more if it is determined to be essential to the purposes of the program.

Wildlife Habitat Incentives Program (WHIP). WHIP was created by the 1996 Farm Act to provide cost-sharing assistance to landowners for developing habitat for upland wildlife, wetland wildlife, threatened and endangered species, fish, and other types of wildlife. The 1996 Farm Act authorized a total of $50 million from CRP funds to conduct the program for fiscal years 1996-2002. NRCS will administer the program.

With the assistance of NRCS, participating landowners will develop plans that include schedules for installing wildlife habitat development practices and requirements for maintaining the habitat for the life of the agreement. Agreements will last a minimum of 10 years from the date the practices are established. Cost-share payments may be used to establish practices needed to meet the objectives of the program, and replace practices that fail for reasons beyond the landowner's control.

Conservation Farm Option (CFO). The 1996 Farm Act established CFO pilot programs for producers of wheat, feed grains, cotton, and rice. NRCS will administer CFO with the concurrence of FSA. Only owners or operators with contract acreage enrolled in the Agricultural Market Transition Program are eligible for participation. Under the pilot programs, producers can receive one consolidated annual USDA conservation payment in lieu of separate payments from CRP, WRP, and EQIP. The producer must implement a conservation farm plan that addresses soil, water, and related resources, water quality, wetlands, and/or wildlife habitat. Participation is voluntary and based upon a 10-year contract between the Commodity Credit Corporation (CCC) and the producer, with a potential 5-year extension. The 1996 Farm Act authorized funding for fiscal 1997 at $7.5 million, increasing to $62.5 million in 2002. A total of $197.5 million of CCC funds is dedicated to this option for FY 1997-2002. However, Congress subsequently limited the program to $2 million for 1997 in the 1997 Agricultural Appropriations Act. USDA is expected to issue program regulations by late summer, 1997.

Farmland Protection Program (FPP). FPP was established by the 1996 Farm Act to purchase

voluntary conservation easements or other interests in lands with prime, unique, or other highly productive soils. NRCS will administer FPP with the concurrence of FSA. To be eligible, land must be subject to a pending offer from a State, tribe, or local government for the purposes of protecting topsoil by limiting nonagricultural uses of the land. The Farm Act authorized up to $35 million of CCC funds to carry out this program.

In 1996, States, Indian tribes, and local governments offered 628 proposed easements covering over 175,000 acres of land in 20 States. The proposals had a total projected easement cost of $330 million. Of this amount USDA was asked to provide $130 million. USDA has evaluated these proposals and has issued cooperative agreements to allocate $14.5 million from the CCC for fiscal year 1996. The program is limited to $2 million in the FY 1997 Appropriations Act.

Flood Risk Reduction Program. The 1996 Farm Act authorized USDA to offer flood risk reduction contracts to producers with frequently flooded contract acreage under the Agricultural Market Transition Act. FSA will administer this program. Individuals can receive up to 95 percent of projected production flexibility contract payments, under the Agricultural Market Transition Act, that the USDA estimates the producer would otherwise have received from the time of the contract though September 30, 2002. In return, producers must agree to the termination of their production flexibility contract, comply with swampbuster and conservation compliance provisions, and forgo future disaster payments, crop insurance payments, conservation program payments, and loans for contract commodities, oilseeds, and extra long staple cotton. Flood risk reduction funding is also provided through the CCC.

Conservation of Private Grazing Land Initiative. The 1996 Farm Act required USDA to conduct, subject to the availability of appropriated funds, a coordinated technical, educational, and related assistance program for owners and managers of non-Federal grazing lands including rangeland, pastureland, grazed forest land, and hay land. NRCS will conduct this Initiative. The Initiative builds on the growing public awareness of the importance of private grazing lands, which comprise nearly 642 million acres, or half the Nation's 1.4 billion acres of private land. Working through local conservation districts, the purpose of the program is to preserve water quality, improve wildlife and fish habitat, help with weed and brush problems, enhance recreational

opportunities, and improve aesthetics. The 1996 Farm Act authorized appropriations of $20 million in FY 1996 (subsequently limited to $10 million), $40 million in FY 1997, and $60 million in FY 1998 and each subsequent year.

USDA Conservation Programs Terminated by the 1996 Farm Act

Agricultural Conservation Program (ACP). Initiated in 1936 and administered by the Farm Service Agency (FSA, formerly Agricultural Stabilization and Conservation Service), ACP provided cost-sharing (up to $3,500 annually or $35,000 under 10-year agreements) and technical assistance to farmers who carried out approved conservation and environmental protection practices on agricultural land and farmsteads. During the past 20 years, outlays generally ran between $175 million and $200 million each year. The number of participants gradually declined from more than 300,000 annually in the mid-1970's to some 85,000 farmers in 1995 (table 6.1.1). Since the 1980s, an increasing amount and proportion of cost-sharing was directed to water quality practices (including those in Water Quality Program activities). In 1995, 27 percent of ACP cost-sharing went for water quality practices, up from 7 percent in 1988 (table 6.1.2). A new practice, Integrated Crop Management (ICM), was made available under ACP in 1990 and was applied on 341,000 acres in 1995. The practice includes pest scouting, nutrient testing, and other improved management practices. Authority for ACP terminated on April 4, 1996, when its functions were subsumed by EQIP, although ACP expenditures from previously obligated funds will continue to service prior long-term agreements.

Water Quality Incentive Projects (WQIP). WQIP was created by the Food, Agriculture, Conservation and Trade Act of 1990, and was administered as a practice under ACP. The goal of WQIP was to reduce agricultural pollutants by subsidizing farm management practices that restore or enhance water resources affected by agricultural nonpoint source pollution. Areas eligible for WQIP included watersheds identified by States as being impaired by nonpoint source pollution under Section 319 of the Clean Water Act; areas identified by State agencies for environmental protection and so designated by the Governor; and areas where sinkholes could convey runoff directly into groundwater. A total of 242 projects were started during FY 1993-95.

Eligible producers entered into 3- to 5-year agreements with USDA to implement approved

management practices on their farm, as part of an overall water quality plan, in return for an incentive payment. The WQIP supported 39 different practices for protecting water quality. In 1995, WQIP assistance was applied on over 800,000 acres at an average incentive payment of nearly $8 per acre. WQIP was consolidated into EQIP by the 1996 Farm Act.

Great Plains Conservation Program (GPCP). GPCP, initiated in 1957 and administered by NRCS, has provided technical and financial assistance in 556 counties in the 10 Great Plains States for conservation treatment on entire operating units. Financial cost-share assistance of up to 75 percent was limited to $3,500 per person per year. Contracts were 3 to 10 years in length. In 1995, over 7,400 farms were active in the program, covering nearly 16 million acres (table 6.1.1). GPCP was terminated on April 4, 1996, when its functions were subsumed by EQIP.

Colorado River Salinity Control Program (CRSCP). Initiated in 1984, CRSCP was jointly administered by USDA and the U.S. Department of the Interior to identify salt source areas in the Colorado River Basin; assist landowners and farm operators in installing practices to reduce salinity in the Colorado River; carry out research, education, and demonstration activities; and monitor and evaluate the activities being performed. Farmers could receive up to 70 percent cost-sharing to install improved irrigation systems designed to increase irrigation efficiency and to reduce the movement of salt into groundwater. Total payments were limited to $100,000 per farm. Once an application was approved, landowners entered into a contract for 3 to 10 years. Besides agreeing to build and install the salinity control project, the landowner also agreed to operate and maintain the project. In 1995, CRSCP had 597 participants receiving an average of $38,000 (table 6.1.1). CRSCP was consolidated into EQIP under the 1996 Farm Act, although expenditures will continue to service prior contracts.

Ongoing USDA Conservation Programs1

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Conservation Technical Assistance (CTA). Since 1936, CTA, administered by NRCS through local Conservation Districts, has provided technical assistance to farmers for planning and implementing soil and water conservation and water quality practices. Farmers adopting practices under USDA conservation programs and other producers who ask

Water quality programs, the Conservation Reserve Program, Conservation Compliance, and wetland programs are discussed in subsequent chapters.