By NACD Director of Government Affairs Coleman Garrison

On Friday, June 8, the Senate Ag Committee released its 2018 Farm Bill (S. 3042), and the legislation passed out of committee on Wednesday, June 13. NACD staff have been busy analyzing the bill to see how our priorities fared. We look forward to working with the committee and Congress to make further improvements as this process moves forward – please reach out to Director of Government Affairs Coleman Garrison with any questions.

Outlook Moving Forward: S. 3042 passed out of committee with only one vote in opposition from Senator Chuck Grassley (R-IA). The Senate began its floor consideration the week of June 25, and the Senate Majority Leader Mitch McConnell, himself a member of the committee, has committed to having the Senate farm bill pass the Senate before the Fourth of July recess. After Senate passage, each chamber would move to a conference committee to reconcile the differences between the two pieces of legislation.

NACD Priorities

Key NACD requests that were included in the bill include:

• Maintain Conservation Title Funding from the 2014 Farm Bill
• Increase the Conservation Reserve Program (CRP) acreage cap without taking funding from working lands programs
• Authorize acequias to be eligible for the Environmental Quality Incentives Program (EQIP)
• Continue the existing conservation compliance requirements for producers using crop insurance
• Retain EQIP and the Conservation Stewardship Program (CSP) as separate programs

Conservation Title Funding

Compared to the Congressional Budget Office (CBO) baseline which was released on April 9, CBO estimates this proposed farm bill will keep level funding over the entire 10-year CBO budget window. This legislation increases direct outlays over the first five years of this farm bill. This is in comparison to the House farm bill which reduced conservation funding by $795 million from the level we would expect if the 2014 Farm Bill was simply extended.

EQIP & CSP Funding

• Does not merge EQIP and CSP and provides separate funding streams for each program
• EQIP is funded at $1.47 billion in FY 19, $1.47 billion in FY 20, $1.54 billion in FY 21, $1.57 billion in FY 22, and $1.59 billion in FY 23.
  • The current EQIP baseline is $1.75 billion per year; this would equal a $626 million decrease over the first five years if this bill were to be signed into law and a $1.481 billion decrease over the 10-year window
• CSP is funded at 8.8 million acres every year of this farm bill
  • The current CSP baseline is 10 million acres, and this cut would represent a $1 billion cut over the 10-year CBO window
• Funds taken from EQIP and CSP were used to increase funding for the Regional Conservation Partnership Program (RCPP) and the Agricultural Conservation Easement Program (ACEP). Further details are below.

EQIP

• Changes the amount of EQIP funds that must go to support livestock operations from 60 percent to 50 percent of all funds and authorizes 10-year contracts for wildlife practices
• Includes numerous “carve-outs” within EQIP including a requirement that 10 percent of all dollars must support wildlife practices, 15 percent must go to beginning farmers and 15 percent must go to socially disadvantaged farmers
• Authorizes numerous “reviews” including a review to ensure USDA is offering the least costly rates to ensure participation, authorizes a review of cost-share standards, and a review of funding allocations to states
• Small changes are made throughout, adding weather volatility to the purposes of the program, adding a small new land eligibility definition, authorizing new types of planning, and changing water conservation language
• Changes the producer definition to include an acequia
• Authorizes soil testing and soil remediation as a practice
• Gives priority to applications that use the most “effective practices” to address natural resource concerns
• Authorizes Soil Health Demonstration Projects that will be funded out of EQIP

Conservation Reserve Program (CRP)

• Increases the CRP cap by 1 million acres to 25 million acres in comparison to the 29 million acres the House farm bill provided
• Caps rental payments at 88.5 percent of the county rental rate while also limiting the incentive payments to only years where commodity prices are higher than the 10-year average
• Authorizes numerous initiatives through the “continuous” portion of CRP with the Clean Lakes Estuaries and Rivers Initiative (CLEAR), the State Acres for Wildlife Enhancement (SAFE), Conservation Reserve Enhancement Program and the Conservation Reserve Easement Program all being newly authorized or codified
  • Initiatives like SAFE were created as a special initiative of USDA and are not technically in statute
  • 40 percent of all continuous acres must be in the CLEAR initiative and SAFE acres must make up 30 percent of all continuous acres
• These initiatives with required set-asides are a vast departure from the House’s CRP model of simplifying CRP and returning to its original operation

Regional Conservation Partnership Program

The most consequential change in the whole conservation title is the change to RCPP. Ranking Member Stabenow (D-MI) introduced an RCPP reform bill last fall which NACD had strong concerns with. Unfortunately, the majority of the proposed “improvements” were included in the Senate farm bill. The most consequential of these is the new grant program which would undermine the current, proven conservation delivery process.

• Reauthorizes and funds the program at $200 million per year in mandatory funding, an increase in mandatory funding of $100 million annually
• Unlike the House farm bill, this legislation keeps the “donor program” aspect of RCPP by continuing to have seven percent of total EQIP, CSP and ACEP funds go to RCPP
• Authorizes RCPP program contracts rather than signing up producers through the traditional conservation programs. Producers will now have a RCPP contract rather than an EQIP, CSP or ACEP contract
• Authorizes a grant program where 30 percent of RCPP funding (over $100 million a year) could go directly to project sponsors to contract directly with producers with broad discretion of the types of activities they could perform
  • The project sponsors could, at their discretion, choose not to contract with producers, and the conservation activities only have to indirectly benefit producers
  • An actual contract would not have to be signed by the producer, a contract would only be signed if found appropriate by the partner
• Changes RCPP to include only two funding pools. The state/multi-state pool would receive 40 percent of program funds and critical conservation areas (CCA) would receive 60 percent of funds. Currently, 35 percent of funds go to CCAs, 40 percent to the national pool and 25 percent for the state pool
• Adds numerous new purposes of the program including flexible and streamlined conservation delivery
• Allows project renewals, a simplified application process, and longer projects
• Establishes a state RCPP coordinator
• Allows for administration expenses, including outreach and project development, of partners to be paid by the Secretary
• Adds CRP and PL-566 to covered programs

Agricultural Conservation Easement Program

• ACEP is provided an additional $1.8 billion in funding. This funding was needed because its funding dropped to half its previous levels in the last year of the previous farm bill to produce savings in the out years.

Watershed Programs

• Has authorization of appropriation of $200 million for PL-566
• Has authorization of appropriation for Dam Rehab of $20 million
• The House farm bill provided $500 million in mandatory funds to go toward both programs
• Establishes a first-time payment limit for Emergency Conservation Program of $500,000 and sets aside 25 percent of funding for replacement of fencing

New “SHIP” Programs

• Authorizes Senator Thune’s (R-SD) Soil Health and Income Protection (SHIP) Program
• The SHIP program allows producers to not plant up to 15 percent of their acres that are the most marginal and receive a payment that is half of the county’s rental rate under CRP
• Contracts would be for 3-5 years and would also include a two percent increase in premium discount for rest of crop

Miscellaneous

• Codifies Working Lands for Wildlife Program
• Defines Technical Service Provider (TSP)
• Authorizes streamlined certification process for TSP with certain qualifications
• Authorizes Secretary to enter into alternative funding arrangements with tribal entities
• Adds FSA to SAM/DUNS exemptions
• Encouragement of source water protection, including collaboration with water utilities and extra incentives for practices that protect sources of drinking water
• Defines and authorizes payments to acequias