NACD’s Take: The Final 2018 Farm Bill Agreement

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On Monday, Dec. 10, 2018, the House and Senate Agriculture Committees released the text and conference report for the 2018 Farm Bill. NACD staff have been busy analyzing the bill to see how our priorities fared. Passing a bill is only the first step, and we look forward to working with the committee, Congress and USDA to make further improvements as this process moves forward. Please reach out to Director of Government Affairs Coleman Garrison with any questions.

Outlook

With the nutrition disagreements from earlier this year worked out, this is a bicameral and bipartisan agreement and is supported by committee leadership from both chambers and both parties. Congress is eager to pass this legislation before the end of the year and we expect both the House and Senate to vote on the bill this week. Agriculture Secretary Sonny Perdue has offered his support for the agreement indicated that President Trump is likely to sign the bill into law, should it pass Congress.

NACD’s Priorities

Key NACD requests that are contained 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
  • Allow for grazing or natural disasters to serve as mid-contract management on CRP acres
  • Create the opportunity to use the Environmental Quality Incentives Program (EQIP) in the final year of a CRP contract
  • Retain EQIP and the Conservation Stewardship Program (CSP) as separate programs
  • Authorize acequias to be eligible for the Environmental Quality Incentives Program (EQIP)
  • Continue the existing conservation compliance requirements for producers using crop insurance
  • Eliminate the donor program funding from the Regional Conservation Partnership Program (RCPP). RCPP would now have dedicated funding at $300 million annually, an approximately $50 million increase annually
  • Provide robust funding for the Watershed Programs including the Watershed and Flood Prevention Operations Program and the Small Watershed Rehabilitation Program
  • Improve link between crop insurance and conservation by clarifying that good farming practices include conservation activities already approved by NRCS and clarifying cover crop termination guidelines

Conservation Title Funding

While the Senate maintained level funding for the Conservation Title in their version of the Farm Bill, the House proposed to cut $795 million over 10 years from the level that we would expect if the 2014 Farm Bill was simply extended. The final compromise bill maintains level funding for conservation, a key priority for NACD.

The Environmental Quality Incentives Program (EQIP)

The House had proposed merging CSP into EQIP, creating a single working lands program. The proposal was rejected in the final compromise bill. The compromise bill also increases EQIP funding overall, from $1.75 billion in 2019 up to $2.025 billion in 2023. This is an increase in budget authority of $1.5 billion over 10 years compared with the 2014 Farm Bill. The compromise bill also:

  • Authorizes new conservation activity plans including conservation planning assessment, soil health planning, resource conserving crop rotation planning and precision conservation management planning
  • Authorizes soil testing and soil remediation as a practice
  • The bill cuts the livestock set-aside from 60 percent to 50 percent and increases the wildlife set aside from 5 percent to 10 percent annually
  • Does not include many of the “carve outs” or “set asides” that were proposed by the Senate. NACD is concerned that nationally-set “carve outs” make it more difficult for program priorities to be set at the local level.

Conservation Stewardship Program (CSP)

The compromise bill maintains CSP as a separate program. However, it makes some significant changes to CSP’s structure. In the past, CSP was an “acreage-based program”, meaning that Congress told USDA how many acres to enroll in the program, not how much money should be spent on it. Moving forward, CSP will be authorized based on dollars, rather than acres. According to Conference Agreement, this change is intended to give NRCS greater flexibility in administering the program to maximize the federal investment and achieve higher conservation benefits. The compromise bill funds CSP at $700 million in 2019 up to $1 billion by 2023. The compromise bill also:

  • Removes the requirement of $18 average payment per acre
  • Eliminates automatic renewals in the program. Renewals are now focused on new and improved conservation activities and demonstrating continued improvement.
  • Authorizes a few special “initiatives” including a comprehensive conservation plan, cover crops, resource crop rotations, and advanced grazing management. These initiatives are given special payment rates to incentivize more use.
  • Changes application ranking to focus more on the outcomes of practices
  • Directs the Secretary to streamline and coordinate EQIP and CSP and to manage the program to enhance soil health
  • Creates a new “Grasslands Conservation Initiative” within CSP that was not in either the House or Senate versions of the Farm Bill. This initiative is intended to protect grazing lands and improve soil, water and wildlife resources. Only base acres that have been unplanted and in grass for the past 10 years are eligible for enrollment, and all payments will be $18 per acre.

Conservation Reserve Program (CRP)

One of NACD’s priorities was to see increased acreage in CRP while not cutting funding from other programs to pay for it. The compromise bill would slowly increase acreage in the program by 3 million acres to a 27 million acreage cap by the end of the farm bill. This is done in a budget neutral manner by reducing county rental rates and limiting other payments. The compromise bill:

  • Allows grazing to serve as mid-contract management with no cost-sharing payment or reduction in payment rate
  • Allows a natural disaster to substitute for mid-contract management when appropriate
  • Creates the opportunity for farmers to transition directly into EQIP or CSP at end of the CRP contract
  • Caps rental rates for general sign up at 85 percent of county rental rate and rental rates for continuous at 90 percent of county rental rate
  • Requires an acreage floor of 8.6 million acres for Continuous CRP
  • Authorizes the Clean Lakes Estuaries and Rivers Initiative (CLEAR) program, aimed at better improving water quality, at 40 percent of all Continuous CRP Acres
  • Authorizes 50,000-acre pilot program, Soil Health and Income Protection Pilot (SHIP), within CRP to offer short-term CRP contracts
  • Increases opportunities for haying and grazing
  • Caps seed cost at 50 percent of the total cost of the seed mixture
  • Limits cost share payment when combined with all other funding sources to 100 percent of the total cost of installing practices

Regional Conservation Partnership Program (RCPP)

The compromise bill includes a significant change to the funding for RCPP. In the past, the program has drawn funds for EQIP, CSP and ACEP. Moving forward, the program will be funded with dedicated funding at $300 million per year. This is roughly $50 million per year more than the current farm bill. The compromise bill also:

  • Limits a Senate-backed proposal for grant agreements to only 15 total projects per year. NACD strongly opposed the Senate proposal which allowed for 30 percent of all funding to go towards the grant. This would have equaled almost $100 million in grants and the final agreement dramatically limits this new funding mechanism.
  • Reduces the number of funding pools to only two: a state and multi-state pool and a Critical Conservation Area (CCA) pool, which would each receive 50 percent of program funds. Currently, 35 percent of funds go to CCAs, 40 percent to the national pool and 25 percent for the state pool.
  • Allows CRP and PL-566 to be used in projects. Previously, only the authorities of EQIP, CSP and ACEP could be used nationally. PL-556 was only available in Critical Conservation Areas (CCAs).
  • Allows project renewals, a simplified application process and longer projects
  • Authorizes RCPP program contracts rather than signing up producers through the traditional conservation programs. Producers will now have a RCPP contract rather than a EQIP, CSP or ACEP contract.
  • Establishes a State RCPP coordinator in each state
  • Encourages potential project sponsors to consult with local conservation districts and encourages NRCS to include conservation district engagement within its ranking criteria in the compromise bill’s report language.

Agricultural Conservation Easement Program (ACEP)

ACEP is provided a nearly $2 billion increase in funding. The 2014 Farm Bill dramatically dropped funding for this program its final year. This funding increase brings the program back in line with the funding level it received for most of the 2014 Farm Bill.

Forestry Programs

With increased attention from the California wildfires, the Forestry Title of the farm bill emerged as one of the most contentious. In the end, the compromise bill did not make any revolutionary changes to forestry programs. The compromise bill:

  • Renews the insect and disease categorical exclusion (CE) to mitigate wildfires
  • Expands the CE’s purposes to allow for expedited reduction of hazardous fuels
  • Promotes forest management by empowering non-federal partners to remove timber under good neighbor authority (GNA)
  • Expands GNA to include counties and Indian Tribes
  • Codifies current practice of allowing states to keep receipts of timber sales under GNA

Miscellaneous

  • Maintains current mandatory funding for the Watershed Programs. The bill authorizes $50 million per year in mandatory funding for the life of the farm bill and every year thereafter ($250 million over the life of the farm bill).
  • Authorizes a Feral Swine and Eradication and Control Pilot Project and provides $75 million in mandatory funding
  • Allows the Secretary to waive adjusted gross income limits for environmentally sensitive land of special significance
  • Codifies Working Lands for Wildlife Program
  • Authorizes a streamlined certification process for Technical Service Providers (TSPs) with certain qualifications
  • Reserves 10 percent of total conservation funding for source water protection, as identified by State Technical Committees

Questions on the conference farm bill report? Please contact NACD Director of Government Affairs Coleman Garrison.

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