Conservation Stewardship Program

Program Basics

The Conservation Stewardship Program (CSP) is a comprehensive working lands conservation program designed to protect and improve natural resources and the environment for generations to come. CSP provides technical and financial assistance to farmers and ranchers to actively manage and maintain existing conservation systems and to implement additional conservation activities on land in agricultural production.

CSP targets funding to:

The 2008 Farm Bill authorizes a new nationwide, continuous sign-up for CSP which means farmers and ranchers anywhere in the country will be able to apply for the CSP any year and at any time of the year.  Periodically during the year, USDA’s Natural Resources Conservation Service (NRCS) – the agency that administers CSP – will rank applications and then develop contracts with those farmers and ranchers with the highest rankings until funding for that ranking period is completely allocated.

The new farm bill provides sufficient funding for the program to enroll nearly 13 million acres each year. CSP acreage eligible for enrollment will be allocated to each state based primarily on the amount of agricultural land in that state relative to the national total.

2008 Farm Bill Changes

The original 2002 Conservation Security Program will continue for all farmers and ranchers who enrolled in the program between 2004 and 2008; these producers will continue to receive their payments as scheduled. However, once all of those contracts expire in the coming years, the old CSP program will be over. Beginning in 2009, farmers and ranchers will have the opportunity to enroll in the new Conservation Stewardship Program.

Under the old 2002-enacted program, only a limited number of watersheds in each state were eligible for the program in any given year. Sign-up was limited to a several week long period during just one point in the year. Producers could choose to enroll in one of three tiers of participation, each with their own special, progressively more challenging requirements and each with a different payment limit. At the top two tiers, there was a choice of a 5 or 10 year contract. Moreover, rather than ranking proposals, all producers who achieved certain specified results could be enrolled in the program. As implemented by NRCS, the producer primarily enrolled based on existing conservation activities and achievements, with a limited number of new conservation measures included, but major new conservation practices had to be added through a special contract modification procedure in later years.

All of these features have been eliminated in the new 2008-enacted program. The new CSP is now available on a nationwide, continuous sign-up basis. Priorities will still be set by watershed, but all watersheds will be eligible each and every year. The program has been streamlined by eliminating the tiered structure and going to a universal 5-year contract term and single $40,000 payment limitation. Enrollment is also streamlined by eliminating the need for most later-year contract modifications. Instead, new conservation activities are scheduled and planned for in the original contract.

Many aspects of the new CSP remain the same as the original program, however, including the overall “green payments” philosophy of the program, the dual reward structure for existing and new conservation effort, the focus on comprehensive planning, the emphasis on continual improvement, the higher resource and environmental standards required relative to other federal working lands conservation programs, and the innovative use of resource-specific indices to measure and compensate for environmental benefits and ecosystem services.

Legislative Authority

Section 2301 of the Food, Conservation, and Energy Act (FCEA) of 2008 amends Chapter 2 of Subtitle D of Title XII of the Food Security Act of 1985 to create the new Conservation Stewardship Program, to be codified at 16 U.S.C. Section 3838d.

Key Aspects of the New CSP

Eligible Land– Private agricultural land, including all cropland, pasture, and rangeland and some forested land, is eligible to be enrolled in CSP with the exception of land currently enrolled in the Conservation Reserve, Wetland Reserve, or Grassland Reserve Programs (CRP, WRP, and GRP). In addition, land that has not been cropped for four of the six years prior to 2008 but is then put under crop cultivation is ineligible unless: 1) it was previously enrolled in the CRP; 2) the land was managed under a long-term crop rotation; or 3) is an incidental portion of the land.

Eligible land includes all the acres of an agricultural operation under the effective control of a producer, regardless of whether or not it is contiguous, and regardless of whether it is owned or rented. Farmers and ranchers must enroll all of the acres that they operate.

Eligibility to Apply – NRCS (in consultation with State Technical Committees) will establish between 3 and 5 priority resource concerns for each watershed or region in the country. To qualify for the program farmers and ranchers must:

Based on NRCS requirements under the old CSP, applicants for the new CSP will very likely need to provide a minimum of two years of written records or documentation to support their current conservation system. Applicants will be required to certify in writing the accuracy of their conservation benchmark inventory, and that two years of written records or documentation are available and are being used for the management of their conservation system.

Ranking Criteria — NRCS will periodically rank all proposals it receives and fund proposals, starting from the top-ranked proposals, until all funding is allocated. The ranking system is essentially based on how far farmers and ranchers have already gone, and how much further they are willing to go, to address natural resource concerns. The primary ranking factors are:

1. The extent of the baseline level of conservation on the ground at the time of enrollment.

2. The degree to which the proposed new conservation activities address the priority resources and improve conservation outcomes over baseline levels.

3. The total number of priority resource concerns that are addressed to meet or exceed the stewardship threshold level.

4. The extent to which other natural resource concerns, in addition to those identified as priority resource concerns, are addressed to a level that will improve and conserve them by the end of the contract period.

5. The extent to which the environmental benefits from the contract are provided at the least cost relative to other similarly beneficial contracts.

The fifth criterion — “least cost” — will primarily be used as a “tie breaker” for otherwise equally ranked proposals. The “least cost” ranking provision rewards cost-effective conservation, but does not allow producers to improve their bids by accepting lower payments than would otherwise be available for their conservation activities. This favors low cost sustainable practices over more costly, high-tech solutions and does not allow wealthier farms to “bid down” in order to rank higher than farmers of more modest means.

Payments – CSP payments compensate the producer for improving, maintaining and actively managing conservation activities in place at the time of the application and for adopting new conservation activities during the contract term. Payment amounts will be determined by the following factors:

Farmers who are willing to adopt resource-conserving crop rotations that include cover crops, forages, green manures, catch crops, and the like will be eligible to receive additional supplemental payments. Optional payments are also available for the cost of participation in special CSP on-farm research, demonstration, and pilot testing of alternative conservation activities.

Payments are capped at $40,000 per year. All payments will be attributed to the real persons who are the ultimate beneficiaries, even if payments are made to legal business entities such as partnerships, subchapter C corporations, LLCs, etc.

On a nationwide basis, payments (including the costs of technical assistance) will average about $18 an acre. However, the range of per acre payment amounts will vary greatly, from lower cost rangeland improvement contracts to mid-range pasture contracts to higher cost cropland contracts.

Annual payments will be made after the start of each federal fiscal year on October 1. Payments for maintaining and actively managing existing conservation activities will begin in the fiscal year following enrollment. Payments and payment adjustments for newly implemented activities will be made once implementation of those activities occurs.

Working with EQIP – Farmers who do not rank highly enough to get into CSP the first time they submit an application can resubmit for the very next ranking date and try again. In some cases it may be beneficial to the producer to apply to the other major farm bill working lands conservation program – the Environmental Quality Incentives Program or EQIP – to receive payment for fixing a particular conservation problem which in turn might then better qualify the producer for the CSP. Under the terms of the new farm bill, producers may also apply for EQIP funding to assist in the development of comprehensive conservation plans, which in turn may assist in becoming a high ranking CSP candidate.

Contracts — If an applicant has been accepted through the ranking process, they immediately become eligible for technical assistance to finalize CSP conservation plans and get ready to implement any new conservation activities. All CSP contracts are 5 years, with the option to renew for additional five-year terms so long as the farmer or rancher has complied with the terms of the preceding contract and is willing to adopt additional conservation activities or solve additional resource concerns as part of the new contract. Farmers or ranchers will work with their office of USDA’s Natural Resource Conservation Service (NRCS) to outline their existing conservation activities and the new activities they plan to add to their operation over the course of the contract.

Conservation Plans – Farmers and ranchers have the option of receiving technical and financial assistance for the development of a comprehensive conservation plan. Also, as noted above, comprehensive conservation planning should now also be available for payment under the Environmental Quality Incentives Program, meaning that farmers could develop the plan with EQIP assistance and then the following year use the plan as part of the application for CSP.

Organic Farming – Many organic farmers will benefit enormously from the supplemental payment provision for resource-conserving crop rotations as well as from the emphasis in the ranking criteria on comprehensive resource and environmental farming systems. The new CSP also requires USDA to take specific steps to ensure the program will work for and benefit organic farming and ranching systems. USDA is now required to provide appropriate outreach and technical assistance to organic farmers and ranchers so that they will participate in CSP. USDA is also required to create a transparent process that will allow organic farmers and ranchers to coordinate the organic certification process with their participation in the CSP, including coordination of organic plans and CSP conservation plans.

Funding

The 2008 Farm Bill increased mandatory funding for CSP by a total of $1.3 billion over the next decade. When added to the existing budget carried over from the 2002 Farm Bill, CSP now has a 10-year funding budget of over $12 billion. In addition, the new farm bill evened out some of the existing funding, making more of it available during the 5-year term of the new farm bill than would otherwise have been the case.

Based on the terms of the new program and the funding provided, the Congressional Budget Office estimates that nearly 13 million acres a year can be enrolled. Each year an additional 13 million acres can be added, such that by the end of 2012, when the next farm bill is due to be rewritten, there could be over 50 million acres in CSP and by the end of 10 years, even if Congress does not add more money in the next farm bill, there would be about 120 million acres in the new program.

Conservation Stewardship Program (CSP) Funding

2008

2009

2010

2011

2012

5 year cost

10 yr cost

$381 M

$579 M

$895 M

$1,028 M

$1,152 M

$4,035 M

$12,148 M

Please note: The funding levels in the chart above show the amount of mandatory funding reserved by the 2008 Farm Bill for this program to be provided through USDA’s Commodity Credit Corporation.  However, Congress does at times pass subsequent appropriations legislation that caps the funding level for a particular year for a particular program at less than provided by the farm bill in order to use the resulting savings to fund a different program.  Therefore, despite its “mandatory” status, the funding level for a given year could be less than the farm bill dictates should the Appropriations Committee decide to raid the farm bill to fund other programs under its jurisdiction.

Implementation Basics

USDA will draft rules and regulations that will ultimately govern the program implementation. Those draft rules will then open for public comment. The original USDA schedule for CSP rulemaking called for a proposed rule to be issued in Fall 2008 and an interim final rule by January 2009. However, the outgoing Administration did not issue a proposed rule, leaving it to the new Administration to issue. Given the time crunch involved for the 2009 fiscal year, it is likely that CSP will be issued in 2009 as a Notice of Funding Availability (NOFA) rather than as a rule. The program would then become available to farmers and ranchers in the summer of 2009 under the terms of the NOFA. An interim final rule would then be finalized prior to the 2010 enrollment period. The interim final rule would be open for public comment. With the benefit of those comments, plus the experience of the first year or two operating the new program, NRCS should be in a position to make necessary improvements and finalize the rule.

Key elements of the NOFA may include a list of “enhancement activities” that will be eligible for payment under CSP as either existing activities or as new activities. Also likely to be included are a suite of regular conservation practices that will also be available for payment under CSP. Both enhancements and regular conservation practices will be divided both by the priority resource concern(s) they address and by whether they are available on cropland, pasture, rangeland, or forested acres, or a combination thereof.

Regular conservation practices and structures that are not available directly through CSP, but that may be necessary to a particular farmer or rancher to meet the requirements of the program and the conservation needs of the farm or ranch may be made available to CSP participants via the Environmental Quality Incentives Program (EQIP).

The key to sign-up will be completion of the CSP conservation measurement tool, which will be used to establish the operation’s existing conservation baseline and new practices or enhancements the farmer or rancher proposes to adopt during the contract period. The conservation measurement tool will help determine eligibility, ranking, and payment levels. The farmer or rancher will have assistance from NRCS field staff in filling out the tool.

USDA Contact Information

The USDA webpage for the Conservation Security Program: www.nrcs.usda.gov/programs/csp/

The webpage for the new Conservation Stewardship Program: http://www.nrcs.usda.gov/programs/new_csp/csp.html www.nrcs.usda.gov/programs/

Access your state NRCS office here: www.nrcs.usda.gov/about/organization/regions.html#state

Dwayne Howard, CSP National Program Manager, Dwayne.Howard@wdc.usda.gov, 202-720-3524.