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Economic Incentives for Conserving Environmental Services on Agricultural Lands

Permanent Link: http://ufdc.ufl.edu/UFE0022337/00001

Material Information

Title: Economic Incentives for Conserving Environmental Services on Agricultural Lands A Case Study of the Conservation Security Program in the Lower Suwannee Watershed
Physical Description: 1 online resource (110 p.)
Language: english
Creator: Storz, Christina
Publisher: University of Florida
Place of Publication: Gainesville, Fla.
Publication Date: 2008

Subjects

Subjects / Keywords: agriculture, conservation, environmental, farm, incentive, sondeo
Interdisciplinary Ecology -- Dissertations, Academic -- UF
Genre: Interdisciplinary Ecology thesis, M.S.
bibliography   ( marcgt )
theses   ( marcgt )
government publication (state, provincial, terriorial, dependent)   ( marcgt )
born-digital   ( sobekcm )
Electronic Thesis or Dissertation

Notes

Abstract: This research presents an ecological, economic, and legal perspective of economic incentives for conserving environmental services on agricultural lands. Agricultural lands have amazing potential to both significantly degrade and conserve provision of environmental services. Payments for environmental services represent just one policy tool for conserving environmental services, but such programs can be more flexible and efficient on private lands than traditional command-and-control regulation. Although there are a variety of conservation incentive programs available to agricultural landowners, the vast majority fall under the rubric of the Farm Bill Title II Conservation Programs. The Farm Bill was due for reauthorization in 2007 but Congress has yet to pass a new Farm Bill as of this publication. The history of U.S. agricultural policy provides an important backdrop for why conservation programs began to be included in farm bills. The international trade context of conservation incentive programs has important implications for the design and funding of such programs. The Farm Bill must be viewed in light of the Agreement on Agriculture to determine whether conservation incentive programs might help or hinder the U.S. in meeting its international trade obligations. Conservation incentives are considered non-trade distorting subsidies that are not capped by the Agreement on Agriculture. This is significant in terms of funding allocation to Farm Bill subsidy programs. A case study of one Farm Bill Conservation Program, the Conservation Security Program, was conducted in a Florida watershed, the Lower Suwannee River Basin, using an informal interview process. The legislative history, legal authorization, and statutory requirements of the program are explained as important background for the case study in order to explain the program goals and implementation. The sondeo resulted in participant responses regarding their motivation to participate in the Conservation Security Program, participation in other conservation programs, descriptions of conservation practices adopted, explanations of program problems and inefficiencies from the perspective of the participant, and participant recommendations for improving the implementation of the Conservation Security Program. The sondeo results were used to suggest recommendations for improving the implementation of the Conservation Security Program to better achieve its program goal and to optimize environmental benefits achieved.
General Note: In the series University of Florida Digital Collections.
General Note: Includes vita.
Bibliography: Includes bibliographical references.
Source of Description: Description based on online resource; title from PDF title page.
Source of Description: This bibliographic record is available under the Creative Commons CC0 public domain dedication. The University of Florida Libraries, as creator of this bibliographic record, has waived all rights to it worldwide under copyright law, including all related and neighboring rights, to the extent allowed by law.
Statement of Responsibility: by Christina Storz.
Thesis: Thesis (M.S.)--University of Florida, 2008.
Local: Adviser: Hildebrand, Peter E.

Record Information

Source Institution: UFRGP
Rights Management: Applicable rights reserved.
Classification: lcc - LD1780 2008
System ID: UFE0022337:00001

Permanent Link: http://ufdc.ufl.edu/UFE0022337/00001

Material Information

Title: Economic Incentives for Conserving Environmental Services on Agricultural Lands A Case Study of the Conservation Security Program in the Lower Suwannee Watershed
Physical Description: 1 online resource (110 p.)
Language: english
Creator: Storz, Christina
Publisher: University of Florida
Place of Publication: Gainesville, Fla.
Publication Date: 2008

Subjects

Subjects / Keywords: agriculture, conservation, environmental, farm, incentive, sondeo
Interdisciplinary Ecology -- Dissertations, Academic -- UF
Genre: Interdisciplinary Ecology thesis, M.S.
bibliography   ( marcgt )
theses   ( marcgt )
government publication (state, provincial, terriorial, dependent)   ( marcgt )
born-digital   ( sobekcm )
Electronic Thesis or Dissertation

Notes

Abstract: This research presents an ecological, economic, and legal perspective of economic incentives for conserving environmental services on agricultural lands. Agricultural lands have amazing potential to both significantly degrade and conserve provision of environmental services. Payments for environmental services represent just one policy tool for conserving environmental services, but such programs can be more flexible and efficient on private lands than traditional command-and-control regulation. Although there are a variety of conservation incentive programs available to agricultural landowners, the vast majority fall under the rubric of the Farm Bill Title II Conservation Programs. The Farm Bill was due for reauthorization in 2007 but Congress has yet to pass a new Farm Bill as of this publication. The history of U.S. agricultural policy provides an important backdrop for why conservation programs began to be included in farm bills. The international trade context of conservation incentive programs has important implications for the design and funding of such programs. The Farm Bill must be viewed in light of the Agreement on Agriculture to determine whether conservation incentive programs might help or hinder the U.S. in meeting its international trade obligations. Conservation incentives are considered non-trade distorting subsidies that are not capped by the Agreement on Agriculture. This is significant in terms of funding allocation to Farm Bill subsidy programs. A case study of one Farm Bill Conservation Program, the Conservation Security Program, was conducted in a Florida watershed, the Lower Suwannee River Basin, using an informal interview process. The legislative history, legal authorization, and statutory requirements of the program are explained as important background for the case study in order to explain the program goals and implementation. The sondeo resulted in participant responses regarding their motivation to participate in the Conservation Security Program, participation in other conservation programs, descriptions of conservation practices adopted, explanations of program problems and inefficiencies from the perspective of the participant, and participant recommendations for improving the implementation of the Conservation Security Program. The sondeo results were used to suggest recommendations for improving the implementation of the Conservation Security Program to better achieve its program goal and to optimize environmental benefits achieved.
General Note: In the series University of Florida Digital Collections.
General Note: Includes vita.
Bibliography: Includes bibliographical references.
Source of Description: Description based on online resource; title from PDF title page.
Source of Description: This bibliographic record is available under the Creative Commons CC0 public domain dedication. The University of Florida Libraries, as creator of this bibliographic record, has waived all rights to it worldwide under copyright law, including all related and neighboring rights, to the extent allowed by law.
Statement of Responsibility: by Christina Storz.
Thesis: Thesis (M.S.)--University of Florida, 2008.
Local: Adviser: Hildebrand, Peter E.

Record Information

Source Institution: UFRGP
Rights Management: Applicable rights reserved.
Classification: lcc - LD1780 2008
System ID: UFE0022337:00001


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PAGE 1

1 ECONOMIC INCENTIVES FOR CONSERVING ENVIRONMENTAL SERVICES ON AGRICULTURAL LANDS: A CASE STUD Y OF THE CONSERVATION SECURITY PROGRAM IN THE LOWE R SUWANNEE WATERSHED By CHRISTINA DEANNA STORZ A THESIS PRESENTED TO THE GRADUATE SCHOOL OF THE UNIVERSITY OF FLOR IDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE UNIVERSITY OF FLORIDA 2008

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2 2008 Christina Deanna Storz

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3 To my friends and family

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4 ACKNOWLEDGMENTS First I would like to thank m y committee, Peter Hildebra nd, Alyson Flournoy, and Clyde Kiker, for their support and gui dance. I also thank Ken Mora n, Florida State Conservationist Natural Resource Conservation Service [NRCS]; Chris Menhennett, Suwannee County District Conservationist, NRCS; Ron Matthews, Suwa nnee County Soil Conservationist, NRCS; Bob Hochmuth, Multi-county Agricultural Extension Agent, Institute for Food and Agricultural Sciences [IFAS], University of Florida; Melvin Deshazior, Lafa yette County District Conservationist, NRCS; Chris Vann, Lafayette County Agricultural Extension Agent, IFAS; and Ray Dotson, Gilchrist, Dixie, and Levy County Di strict Conservation, NRCS, for all of their assistance and expertise. Add itionally, I thank the participants of the Conservation Security Program that volunteered to take part in my surv ey. Finally, I thank my friends and family for their encouragement and understanding.

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5 TABLE OF CONTENTS page ACKNOWLEDGMENTS...............................................................................................................4 LIST OF TABLES................................................................................................................. ..........8 LIST OF FIGURES.........................................................................................................................9 LIST OF ABBREVIATIONS........................................................................................................ 10 ABSTRACT...................................................................................................................................12 CHAP TER 1 INTRODUCTION..................................................................................................................14 2 ECONOMIC INCENTIVES FOR CONSERVING ENVIRONMENTAL SERVICES ON AGRICULTURAL LANDS ............................................................................................ 16 Environmental Services Defined............................................................................................ 16 Environmental Services on Agricultural Lands ......................................................................18 Overview of Conservation Incenti ves for Environm ental Services....................................... 19 Methods of Designing and Valuing Conservation Incentives ......................................... 19 Forms of Conservation Incentives................................................................................... 21 Comparison of Conservation Incentives to Command and Control Regulation ....................22 Overview of Conservation Incentive Program s Available to Agricultural Landowners........24 Focus on Farm Bill Conservation Programs........................................................................... 26 Conservation Reserve Program.......................................................................................26 Environmental Quality Incentives Program.................................................................... 29 Wildlife Habitat Incentive Program................................................................................ 30 Conservation Security Program.......................................................................................31 Wetlands Reserve Program............................................................................................. 32 Farm and Ranch Protection Program.............................................................................. 33 Future of the Farm Bill Conservation Programs: 2007 Proposal for Title II.......................... 34 3 IMPLICATIONS OF CONSERVATION INCENTIVES IN AN INTERNATIONAL TRADE CONTEXT ............................................................................................................... 41 Introduction................................................................................................................... ..........41 U.S. Agricultural Policy Background..................................................................................... 41 International Agricult ural Policy Background........................................................................ 44 Green Box Subsidies...............................................................................................................47 2002 Farm Bill Inconsistencie s with Trade Oblig ations........................................................ 48 Taking Advantage of the Green Box......................................................................................50

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6 4 CONSERVATION SECURITY PROGRAM........................................................................ 51 Antecedents of the CSP..........................................................................................................51 Early Beginnings....................................................................................................................52 Authorization..........................................................................................................................53 Purpose...................................................................................................................................54 Eligibility.................................................................................................................... ............54 Tier Levels..............................................................................................................................55 An Entitlement Program with a Budget Cap....................................................................... 56 Priority Watersheds a nd Enrollm ent Categories..................................................................... 58 Application Process............................................................................................................ ....59 Sign-Up...................................................................................................................................60 Payments....................................................................................................................... ..........62 5 CASE STUDY OF THE CONSERVATI ON S ECURITY PROGRAM IN THE LOWER SUWANNEE WATERSHED................................................................................. 69 Introduction: Research Problem Objectives, and Questions .................................................69 Research Methodology........................................................................................................... 71 Background Data Collection........................................................................................... 71 Sondeo.............................................................................................................................72 Modified Sondeo.............................................................................................................73 Permission and Respecting Privacy................................................................................. 74 Case Study Background: CSP in Florida................................................................................ 75 2004-2008 Sign-ups.........................................................................................................75 2005 Sign-up process......................................................................................................76 CSP Payments................................................................................................................. 77 Selection of the Watershed for the FY 2005 Sign Up..................................................... 79 Lower Suwannee River Watershed................................................................................. 80 Sondeo Results........................................................................................................................82 Interviews........................................................................................................................82 Description of farmers..................................................................................................... 83 Description of farms........................................................................................................ 83 CSP Advertisement.........................................................................................................84 Motivation to participate................................................................................................. 84 Economic motivations.............................................................................................. 85 Environmental stewardship motivations.................................................................. 86 Practical motivations................................................................................................ 87 Participation in other conservation programs..................................................................87 Conservation practices adopted....................................................................................... 88 Nutrient management............................................................................................... 88 Pest management...................................................................................................... 89 Water conservation................................................................................................... 90 Soil conservation...................................................................................................... 90 Recycling..................................................................................................................90

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7 Program Problems and Inefficiencies..............................................................................90 Farmer Recommendations............................................................................................... 93 Discussion...............................................................................................................................93 6 CONCLUSION: RECOMMENDATIONS FOR IMPROVING CSP ................................. 101 APPENDIX: SAMPLE SURVEY QUESTIONS........................................................................ 105 LIST OF REFERENCES.............................................................................................................106 BIOGRAPHICAL SKETCH.......................................................................................................110

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8 LIST OF TABLES Table page 5-1. Table of 2005 CSP Stewardship Paym entsLower Suwannee River Watershed........... 100 5-2. Top Commodity and Conservation P rogram s in Florida, program years 2003-2005...... 100

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9 LIST OF FIGURES Figure page 2-1. Linkages Between Ecosystem Services and Human Well-Being......................................... 38 2-2. Percentage of Private Land....................................................................................................39 2-3. Comparing payments for environmenta l services (PES) to other conservation approaches..........................................................................................................................39 2-4. Selected wildlife-related practic es and estimated annual CRP benefits ................................ 40 2-5. Selected annual and nonmarket environm ental benefits from CRP...................................... 40 4-1. CSP Watersheds FY-2004..................................................................................................64 4-2. CSP Watersheds FY-2005 ..................................................................................................65 4-3. CSP Watersheds FY-2006..................................................................................................66 4-4. CSP Watersheds FY-2007..................................................................................................67 4-5. Conservation Security Progr am (CSP) Watersheds, FY 2008.............................................. 68 5-1. Florida Selected CSP W atersheds, 2005............................................................................... 95 5-2. Florida Selected CSP W atersheds, 2006............................................................................... 96 5-3. Florida Conservation Security Program (CSP) Watershed, FY 2008................................... 97 5-4. NRCS Administrative Areas & Field Service Centers, F lorida............................................ 98 5-5. Map of Lower Suwannee River W atershed....................................................................... 99

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10 LIST OF ABBREVIATIONS 2002 Farm Bill Farm Security and Rural Investment Act of 2002 AoA Agreement on Agriculture AMS Aggregate Measure of Support BMP Best Management Practice CARES County Alliance for Responsib le Environmental Stewardship CCC Commodity Credit Corporation CRP Conservation Reserve Program CSP Conservation Security Program EBI Environmental Benefits Index eFOTG Electronic Field Office Technical Guide EQIP Environmental Quality Incentives Program ERS Economic Research Service EWG Environmental Working Group FRPP Farm and Ranch Protection Program FSA Farm Service Agency FY Fiscal Year GAO Government Accounting Office IFAS Institute of Food and Agricultural Sciences NRCS Natural Resource Conservation Service PES Payment for environmental service Plan Conservation Stewardship Plan SCS Soil Conservation Service SRWMD Suwannee River Water Management District USDA United Stated Department of Agriculture

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11 WHIP Wildlife Habitat Incentive Program WRP Wetlands Reserve Program

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12 Abstract of Dissertation Pres ented to the Graduate School of the University of Florida in Partial Fulfillment of the Requirements for the Degree of Master of Science ECONOMIC INCENTIVES FOR CONSERVING ENVIRONMENTAL SERVICES ON AGRICULTURAL LANDS: A CASE STUD Y OF THE CONSERVATION SECURITY PROGRAM IN THE LOWE R SUWANNEE WATERSHED By Christina Storz August 2008 Chair: Peter Hildebrand Major: Interdisciplinary Ecology This research presents an ecological, economic, and legal perspective of economic incentives for conserving environmental services on agricultural lands. Ag ricultural lands have amazing potential to both significantly degrad e and conserve provisi on of environmental services. Payments for environmental services represent just one po licy tool for conserving environmental services, but such programs can be more flexible and efficient on private lands than traditional command-and-control regulation Although there are a variety of conservation incentive programs available to ag ricultural landowners, the vast majority fall under the rubric of the Farm Bill Title II Conservation Programs. The Farm Bill was due for reauthorization in 2007 but Congress has yet to pass a new Farm Bill as of this publication. The history of U.S. agricultural policy provides an important backdrop for why conservation programs began to be included in farm bills. The international trade context of conservation incentive programs has important im plications for the design and funding of such programs. The Farm Bill must be viewed in lig ht of the Agreement on Agriculture to determine whether conservation incentive pr ograms might help or hinder the U.S. in meeting its international trade obligations. Conservation incentives are c onsidered non-trade distorting

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13 subsidies that are not capped by th e Agreement on Agriculture. This is significant in terms of funding allocation to Farm Bill subsidy programs. A case study of one Farm Bill Conservation Program, the Conservation Security Program, was conducted in a Florida watershe d, the Lower Suwannee River Basin, using an informal interview process. The legislativ e history, legal authorization, and statutory requirements of the program are explained as im portant background for the case study in order to explain the program goals and implementation. The sondeo resulted in participant responses regarding their motivation to participate in the Conservation Security Program, participation in other conservation programs, descriptions of c onservation practices adopted, explanations of program problems and inefficiencies from the perspective of the participant, and participant recommendations for improving the implementation of the Conservation Security Program. The sondeo results were used to suggest recomme ndations for improving the implementation of the Conservation Security Program to better achieve its program goal and to optimize environmental benefits achieved.

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14 CHAPTER 1 INTRODUCTION Agricultural lands occupy approxim ately one-half of the contiguous United States.1 Thus, the way that farmers use natural resources is critical to environmental conservation. Sociological research reveals that farmers and ra nchers tend to hold stro ngly utilitarian attitudes towards nature and attribute sign ificant resource extraction value to land. They are concerned with the productivity and profitabi lity of nature as well as with the way of life their working lands provide.2 Thus, the questions ariseare owners of agricultural lands stewards of the environment? Should private landowners be comp ensated for conserving natural resources? Some would take a view along the same lines as th e polluter pays principl e that farmers should not be compensated for protecting the environmen t, but regulated and fined for contributing to the destruction of the environment. However, cons idering that agriculture is inevitable in order to provide food security and to conserve the American ideal of the small family farm, some may take the view that compensating farmers for cons ervation is better than the alternative. That alternative is conversion of agricu ltural lands to urbanization. Conservation incentives aim to motivate pres ervation, active management practices, and restoration activities while reducing the demoraliz ing or alienating effects of solely penaltybased systems. Incentives also provide a mech anism for compensating landowners for projects that create public benefits or positive externalities.3 Sociological research has found incentives to be more effective at altering behavior than persuasion, education, or ot her efforts to change 1 John Davidson, The Federal Farm Bill and the Environment 18-SUM Nat. Resources & Envt 3 (2003). 2 Stephanie Stern, Encouraging Conservation on Private Lands: A Behavioral Analysis of Financial Incentives, 48 Ariz. L. Rev. 541, 545-46 (2006). 3 Id. at 550.

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15 attitudes.4 Appreciation of sociological context is important to determine which policy tools (regulation, incentives, market st rategies, or some combination) will be most effective for addressing specific conservation issues. 5 Thus, conservation incentives alone will not always be appropriate for every situation. Chapter 2 of this thesis generally describes the economic and ecological basis of conservation incentives and various incentives available to farmers, focusing especially on the Farm Bill Conservation Programs. Chapter 3 de scribes the domestic and international trade policy context of environmental services pa yment programs and their treatment under the Agreement on Agriculture. Chapter 4 provides the legislative history and legal authorization for the Conservation Security Program, as well as th e statutory requirements for the administration and funding of the program. Chapter 5 explains the objectives, methodology, and results of the Conservation Security Program case study in a Fl orida watershed. Finally, Chapter 6 suggests recommendations for improving the efficiency and success of the Conservation Security Program. 4 Id. at 543. 5 Id. at 546.

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16 CHAPTER 2 ECONOMIC INCENTIVES FOR CONSERVING ENVIRONMENTAL SERVICES ON AGRIC ULTURAL LANDS Environmental Services Defined Environm ental services are de fined as the benefits people obtain from ecosystems.1 (See Figure 2-1). An ecosystem is a dynamic comp lex of plant, animal, and microorganism communities and the nonliving environmen t interacting as a functional unit.2 Environmental services include provisioning services, regula ting services, cultural se rvices, and supporting services. Provisioning services are the products that people obtain from nature.3 Provisioning services include food, fiber, fuel, genetic resources, biochemicals, natural medicines, pharmaceuticals, ornamental resources, and fresh water. Regulating services are the benefits people obtain from the regulation of ecosystem processes. Regulating services include the regulation of air quality, climate, water, erosion, water purification and wast e treatment, disease, pests, pollination, and natural hazards. Cultural services are the nonmaterial benefits people obtain from ecosystems through spiritual enri chment, cognitive development, reflection, recreation, and aesthetic experiences. Cultural services incl ude cultural diversity, spiritual and religious values, knowledge systems, educational values, inspiration, aesthetic values, social relations, sense of place, cultura l heritage values, r ecreation, and ecotourism. Finally, supporting services are the services necessa ry for the production of all othe r ecosystem services. Supporting 1 Millennium Ecosystem Assessment, Ecosystems and Human Well-Being: Synthesis v (Island Press 2005) [hereinafter MEA], available at http://www.maweb.org/documen ts/document.356.aspx.pdf (assessing the state of global environmental services). 2 Id 3 Id. at 40.

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17 services often impact people indirectly or occu r over a very long time and include soil formation, primary production, nutrient cycling, and water cycling.4 The most persuasive argument for protecting environmental services is their extremely high replacement cost.5 The cost of replacing the servic e of water purification alone in the United States would be on the order of many billions of dollars.6 It has been found that costbenefit analyses, preparation of environmenta l impact statements, wetlands mitigation banking, Superfund remediations, and oil spill clean-ups often ignore the provisi on of environmental services. The problem is that there are no significant markets to capit alize on the commercial value of these services.7 Thus, there are no direct price mechanisms to signal scarcity or degradation of envi ronmental services.8 In order to develop an environmental servic es focused policy, Salzman et al pointed out four basic issues that must first be addressed.9 First, the environmental services must be identified. Second, the environmental services must be assessed for their economic benefit. Third, markets need to be developed that can capture the environmenta l services benefits.10 Finally, regulations need to be develo ped to protect environmental services.11 These issues highlight the important roles of ecology in the policy-making process. Ecologists need to work 4 Id 5 James Salzman, Thompson, Barton, & Gretchen Dailey, Protecting Environmental Serv ices: Science, Economics, and Law, 20 Stan. Envtl. L.J. 309, 310 (2001). 6 Id. at 311. 7 Id. at 312. 8 Id 9 Id. at 327. 10 Id. at 327-28. 11 Id. at 328.

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18 to better understand the relations hip between ecosystem function a nd the provision of services in order for policymakers to be able to e ffectively weigh management options. Environmental Services on Agricultural Lands Farm s cover 930 million acres of the United States.12 (See Figure 1-2). Agricultures ability to negatively affect the environment goe s hand in hand with its ability to provide environmental services including water quality, soil quality, air quality, and wildlife habitat. Agriculture is the number one source of surf ace water deterioration in the United States.13 The advantages of protecting water qua lity as an ecosystem service derive from the importance of safe drinking water to the American public a nd the clear linkage betw een watershed protection and drinking water quality.14 Farms are also the number one cause of soil erosion.15 Soil erosion also negatively affects water quality by introduc ing chemical fertiliz ers and pesticides and causing sedimentation of water bodies. In te rms of air pollution, agricultural emissions of carbon dioxide, nitrogen oxides, and methane cont ribute to about one te nth of United States global warming emissions.16 Finally, agricultural production dest roys more habitat in the United States than any other industry.17 Agricultures ability to provide environmental services must also be recognized. A unique and important aspect of agriculture is its multifunctionality.18 In addition to agricultural 12 Stacey Person, Note, International Trade: Pushing United States Agriculture Toward a Greener Future? 17 Geo. Intl Envtl. L. Rev. 307, 308 (2005). 13 Id. at 309. 14 Salzman et al, supra note 5, at 314. 15 Person, supra note 12, at 310. 16 Id. at 311. 17 Id. 18 William Evan, Article, Green Payments: The Next Generation of United States Farm Programs? 10 Drake J. Agric. L. 173, 190 (2005).

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19 commodities, agriculture produces a wide arra y of environmental goods and services ranging from wildlife habitat to water filtration. Ho wever, while agricultural commodities have markets, environmental services do not.19 Thus, farmers have lit tle economic incentive to produce environmental goods and services. Paym ents for environmental services recognize the multifunctionality of agriculture by providing econo mic signals to farmers to produce the level of ecosystem goods and servic es desired by the public.20 Overview of Conservation Incentives for Environmental Services Methods of Designing and Valuing Conservation Incentives The principle of paym ents for environmental services is described by five criteria: [1] A voluntary transaction in which; [2] a well-defined environmental service, or a land use likely to secure that service; [3] is being bought by at least one environmental service buyer; [4] from at least one environmental service provider; [5] if and only if, the environmental service provider secures environmental service pr ovision, i.e., conditionality.21 There are at least four labels to describe the remuneration mechanism, including payments, markets, rewards, and compensation. The term used implies the expectation as to what the mechanism should achieve.22 Markets implies competitive interaction between multiple agents.23 Reward implies a just and equitabl e price for services rendered. Finally, compensation implies recompense for a cost the service supplier has suffered. 24 19 Id. at 190. 20 Id. at 192. 21 Sven Wunder, Are Direct Payments for Environmental Serv ices Spelling Doom for Sustainable Forest Management in the Tropics?, 11 Ecology and Society 23, 24 (2006). 22 Id. at 24-5. 23 Id. at 25. 24 Id

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20 Science plays an important role in laying the foundation for any environmental service payment mechanism. To demonstrate the value of agrobiodiversity, scie nce can assist in (i) assessing the functional ro le of species in thei r cropand non-crop habita ts, (ii) identifying the biotic and abiotic components of agroecosystem structures that s upport the provision of ecological services at the landsca pe level, and, (iii) assessing th e contribution of such ecological functions to human well-being.25 However, the challenge is in translating ecological interdependencies to tangible ecological servi ces that can be valued in monetary terms. Environmental services are public goods that of ten do not have an economic value reflected in the market. First, there are direct or instrumental values of agriculture. 26 Second, there are indirect use or option values of agriculture when ecosystems provide regulating ecosystem services. Finally, there are non-use values, including existence, intrinsic, and bequest value. 27 Since most environmental services ar e non-market goods and services, several methodologies have been developed to estimate their economic value.28 For example, the travel cost method measures peoples wi llingness-to-pay to visit the site. The damage cost avoided, replacement cost, and substitute cost methods me asure the costs of avoiding damages, replacing, or substituting for lost envir onmental services. The continge nt valuation method measures peoples willingness-to-pay for an environmen tal service based on a hypothetical scenario. 29 25 U. Pascual & C. Perrings, Developing incentives and economic mechanisms for in situ biodiversity conservation in agricultural landscapes 121 Agriculture, Ecosystems, and Environment 256, 259 (2007). 26 Id. at 261. 27 Id 28 Herman Daly & Joshua Farley, Ecological Economics: Principles and Applications 409 (Island Press 2004). See also Dennis King and Maritza M azzotta, Ecosystem Valuation, www.ecosystemvaluation.org (explaining how economists value environmental services). 29 Id.

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21 Forms of Conservation Incentives Payments for environmental services are base d on a provider gets principle, as opposed to the polluter pays principle, in that beneficiaries pay the provi der to secure the environmental service and then the provider shares the e nvironmental service with the beneficiaries.30 Payments for environmental services are desi gned to address the dec line in environmental services. The payment is intended to intern alize positive externalities generated by the landowners who maintain the flow of valuable e nvironmental services th at benefit the public. The major obstacle to demonstrating the value of environmental services is scientific uncertainty regarding the linkages between alternative la nd uses and the provision of the targeted environmental service. Necessary conditions have been identifie d for payments for environmental services programs, including a clear level of excludabi lity and rivalry of environmental services by beneficiaries and providers, sufficient demand for environmental services by potential beneficiaries, delineati on and enforcement of property rights surrounding the land use and environmental service, and invest ments in social capital to foster collective action and cohesion between the providers and beneficiaries of environmental services. 31 Direct compensation payments are payments for retiring working lands for conservation.32 Identification of efficient compensation requires an objective measure of the conservation value in both ecological and economic terms. Howeve r, there is asymmetric information between landowners and the compensating government agen cy. This asymmetry of information results when the landowner knows more than the compensation governmental agency about the real opportunity of cost of conservation and the ecological significance of the existing natural 30 Pascual & Perrings, supra note 25, at 262. 31 Id. at 263. 32 Id

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22 assets.33 This asymmetry can create perverse incen tives that reduce the effectiveness of the compensation payments for conservation.34 The payment can create motive for a landowner to increase intensity of produc tion on non-retired lands before seeking compensation or an incentive.35 A third form of compensation for conservation includes auction cont racts, which involve competitive bidding or an auction mechanism.36 Here a landowner must bid for a contract with the government agency to receive compen sation for taking conservation measures.37 Landowners will make bids that will at least cover the opportunity cost of carrying out the conservation activity. Such information about opportunity costs are known better by the individual landowners than the government agency and are likely to be farmer-specific. This method has a cost-revealing advantage that solves the problem of the informational asymmetry of direct conservation payments.38 This results in cost-savings to the compensating government agency and greater conservation benefits. An auc tion is used to reveal the information hidden to the compensating government agency.39 Comparison of Conservation Incentives to Command and Control Regulation There are tw o criteria used to compare payments for environmental services to other conservation toolsthe degree of reliance on economic incentives and the extent to which 33 Id. at 264. 34 Id. at 263. 35 Id 36 Id. at 264. 37 Id. at 265. 38 Id. at 264. 39 Id. at 265.

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23 conservation is targeted directly.40 (See Figure 1-3). Payments for environmental services have a high degree of reliance on economic incentives and target conserva tion directly. Command and control regulation can also target conser vation directly but doe s not rely on economic incentives. However, command and control regulati ons are not as flexible. They are tools for implementing legal instruments that prohibit environmentally damaging uses, expropriate owners, create strictly protected areas, and suppo rt other interventions targeted directly at resource protection. 41 Although desirable because it does not requ ire payment of incentives, command-andcontrol regulation of private lands can be ineffici ent due to problems with enforcement due to the sheer number of private landowne rs, creation of perverse incen tives to avoid the reach of regulations, and enforcement penalties that may create negative attit udes towards conservation.42 Command-and-control regulation is not well-suited for active or adaptive management because it is not flexible enough to be tailored to individual conservation plans.43 Conservation incentives are more efficient than command-and-contro l regulation when information costs are high because conservation incentives are information-forcing.44 The key strengths of incentives are their ability to modify behavior rapidly and their effectiveness with individuals who possess varying environmental values.45 However, conservation incentives share some of the problems 40 Wunder, supra note 21, at 26. 41 Id 42 Stephanie Stern, Encouraging Conservation on Private Lands: A Behavioral Analysis of Financial Incentives, 48 Ariz. L. Rev. 541, 546-47 (2006). But see Daniel Cole & Peter Grossman, When is Command-and-Control Efficient? Institutions, Technology, and the Comparative Efficiency of Alternative Regulatory Regimes for Environmental Protection 1999 Wis. L. Rev. 887, 888 (1999) (arguing that the prevailing view of command-andcontrol regulation as inevitably ine fficient is inaccurate as a matter of economic theory and practice). 43 Stern, supra note 42, at 544. 44 Id. at 551. 45 Id. at 559.

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24 of command-and-control regul ation, including the need for significant monitoring and enforcement, as well as challenges of cost-effectiveness and political capture.46 Direct payment programs provide flexibility to target specific en vironmental problems or ecosystem services and are cost-effective for short-term needs or when future land use, demographic patterns, or ecological science are too uncer tain for long-term protection.47 However, the drawbacks of direct payment programs are th eir high management and monito ring costs and the danger of political capture by sp ecial interest groups.48 Overview of Conservation Incentive Program s Available to Agricultural Landowners There are three sources of incentives for the conservation of environmental services by landowners on private lands, including Endangere d Species Incentives Programs, Market-Based Incentives Programs, and Farm Bill Incentives Programs.49 The Endangered Species Act includes Candidate Conservation Agreements with Assurances, th e Landowner Incentive Program, the Private Stewardship Grants Program, and Safe Harbor Agreements. 50 Candidate Conservation Agreements With Assurances prov ide regulatory assurances in exchange for landowner voluntary efforts to benef it species that are not yet listed but are like ly to be listed in the near future.51 The Landowner Incentive Program provide s cost-share and expert assistance 46 Id. at 556. 47 Id. at 550. 48 Id. at 551-52. 49 Environmental Defense, Center for Conservation Incentives, Resources for Landowne rs [hereinafter ED CCI], http://www.edf.org/page.cfm?tagID=23 (last visited April 6, 2008). 50 ED CCI, Endangered Species Incentives Programs, http://www.edf.org/p age.cfm?tagID=53 (last visited April 6, 2008). 51 ED CCI, Candidate Conservation Agreements With Assurances, http://www.edf.org/page.cfm?tagID=15 (last visited April 6, 2008).

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25 to restore or enhance habitat for at-risk species.52 The Private Stewardship Grants Program provides cost-sharing of up to 90% of the total costs in curred by landowners in addition to expert assistance to manage land to benefit federally listed, proposed, or candidate species, as well as other at-risk wildlife.53 Finally, Safe Harbor Agreements provide regulatory assurances to landowners who manage land to benefit a listed species.54 Market-based programs provide direct payments to landowners for managing their lands in ways that protect or enhance an impor tant environmental resource or service.55 One subject of market-based incentives is carbon sequestration, wh ich involves payments for carbon credits in exchange for landowners storing carbon in soil and forests.56 Conservation banking, also known as mitigation banking, is another illustration of market-based incentive.57 It allows landowners who restore and protect habitat to sell conservation credits to land developers.58 Farm Bill conservation incentive programs include conservation technical assistance programs, such as the Conservation Reserve Pr ogram; environmental improvement programs, such as Environmental Quality Incentives Program and the Wildlife Habitat Incentives Program; stewardship programs, such as the Conservation Security Program; and easement programs, such as the Wetland Reserve Program.59 The next section will focus on Farm Bill Conservation 52 ED CCI, Landowner Incentive Program, http://www.edf.org/p age.cfm?tagID=22 (last visited April 6, 2008). 53 ED CCI, Private Stewardship Grants Program, http://www.edf.org/page.cfm?tagID=26 (last visited April 6, 2008). 54 ED CCI, Safe Harbor Agreements, http://www.edf.org/p age.cfm?tagID=28 (last visited April 6, 2008). 55 ED CCI, Market-Based Programs, http://www.edf.org/page.cfm?tagID=24 (last visited April 6, 2008). 56 ED CCI, Carbon sequestration, http://www.edf.org/page.cfm?tagID=16 (last visited April 6, 2008). 57 ED CCI, Conservation Banking, http://www.edf.org/page.cfm?tagID=5 (last visited April 6, 2008). 58 Id. 59 Natural Resources Conservation Service, NRCS Conservation Programs (USDA)[hereinafter NRCS], http://www.nrcs.usda.gov/programs/ (last visited April 6, 2008). See also ED CCI, Farm Bill Programs, http://www.edf.org/page.cfm?tagID=61 (last visited April 6, 2008).

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26 Programs that provide payments for environmental services, cost-share of conservation practices, payments for a conservation easement, a nd rental payments for land retirement. Focus on Farm Bill Conservation Programs Title II of th e 2002 Farm Bill included a series of conservation programs.60 However, funding for conservation programs is a much sma ller proportion of the 2002 Farm Bill than the funding for commodity programs$20.8 billion ove r six years versus $98.9 billion over six years. The main problems with these programs are the low funding levels, limited oversight and enforcement, and lack of results due to the concen tration of benefits in ar eas that do not have the most environmental damage. The limited fundi ng cannot accommodate all of the farmers who want to participate. Three out of four farmers trying to get benefits fo r changing farm practices or restoring wetlands are turned away, and a bout forty-two percent of the farmers seeking technical and educational guidance on pollution-reducing measures are left unserved.61 Critics of these programs argue that they violate th e polluter pays principl e because the programs bribe farmers not to pollute ra ther than penalizing those who do. Thus, farmers are not forced to account for the environmental costs of food production in their production costs.62 Conservation Reserve Program The Conservation Reserve Program [CRP] is a voluntary land retirement program for environmentally sensitive agri cultural lands established by the Food Security Act of 1985.63 Under this program, the Farm Service Agency [FSA ] contracts with agricultural producers and landowners to retire highly erodible and envi ronmentally sensitive cropland and pasture for a 60 Person, supra note 12, at 316. 61 Id. 62 Id. 63 Patrick Sullivan et al., The Conservation Reserve Program: Economic Implications For Rural America 1, Agricultural Economic Report Number 834 (USDA 2004).

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27 period of 10 to 15 years. Landowners plant l ong-term, resource-conser ving cover to improve the quality of water, control soil er osion, and enhance wildlife habitat.64 The environmental goals of the CRP include protection of topso il from erosion, reducti on of water runoff and sedimentation, protection of groundwater and impr ovement of water quality, and conservation of wildlife habitat. The CRP is the largest conser vation incentive program ever in terms of acres enrolled. 65 The 2002 Farm Bill expanded acreage to 39.2 million acres from 36.4 million acres. Annual program expenditures av erage $1.3 billion per year.66 Payments available under the CRP include rental payments, maintenance/incentive payments, cost-share assistance, and other incentives.67 Rental payments for the retirement of land are based on the relative productivity of the soil and the average cash-rent equivalent. Maintenance/incentive payments provide up to an additional $5 per acre as an incentive to perform maintenance on the cover. Cost-share assistance is provided for establishing the approved cover on eligible land. Cost-share assi stance can be up to 50 percent of the costs in establishing the approved practi ce. Finally, other incentives pr ovide up to 20 percent of the annual rental payment for continuous sign-up practices. 68 The process for selecting partic ipants in the CRP begins with landowners making offers to the FSA to retire cropland or pasturela nd from production for a certain rental price.69 The FSA ranks offers according to the Environmental Benefits Index [EBI]. The EBI was adopted in 64 Farm Service Agency, Fact Sheet: Conservation Rese rve Program 1 (USDA 2003) [hereinafter FSA]. 65 Andrea Cattaneo et al., Balancing the Multiple Objectives of Conservation Programs 40, Economic Research Report Number 19 (USDA 2006). 66 Id 67 FSA, supra note 64, at 2. 68 Id 69 Id

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28 1990 to measure multiple environmental benefits and costs of implementing conservation practices, as well as, to target enrollments.70 The index balances the benefits of reducing the negative environmental impacts of agricultural pr oduction with the costs of retiring land and installing conservation practices. Factors considered by the FSA in this index include the provision of wildlife habitat, wa ter quality, on-farm benefits, e nduring benefits, air quality, and cost. 71 The CRP is credited with measurable envir onmental benefits. If Conservation Reserve Program contracts had ended in 2001, simulatio n models suggest that roughly 51 percent of Conservation Reserve Program land would have returned to crop production, and that spending on outdoor recreation would decrease by as much as $300 million per ye ar in rural areas.72 Wildlife-related benefits attributable to CRP enrollments are estimated at approximately $737 million per year.73 (See Figures 2-4 and 2-5). Wildlif e viewing represen ts 88 percent of estimated wildlife benefits. Over the period 1982 to 1997, soil erosion on all agricultural lands decreased by approximately 40 percent.74 The CRP is attributed with reducing wind erosion by over 13 percent and water erosion by approximately se ven percent. The tota l annual benefits of the CRP on wildlife and soil erosi on are estimated at $38 per acre.75 Only about one-tenth of these benefits accrue to landowner, while a bout 90 percent accrue to a broader region.76 70 Cattaneo et al., supra note 65, at 40. 71 FSA, supra note 64, at 2. 72 Sullivan et al., supra note 63, at i. 73 Id. at 21. 74 Id. at 22. 75 Id. at 24. 76 Id. at 24.

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29 Environmental Quality Incentives Program The Environ mental Quality Incentives Program [EQIP] is a voluntary program that provides financial and technical assistance to farmers to implement conservation practices on working agricultural lands.77 The Natural Resources Conserva tion Service provides assistance to promote agricultural producti on and environmental quality as compatible goals, optimize environmental benefits, and help produ cers meet environmental requirements.78 The environmental objectives of EQIP include redu ction of soil erosion, improvement of water quality, provision of w ildlife benefits, and improvement of air quality.79 The 2002 Farm Bill significantly increased funding sign ificantly for EQIP to $1.6 billion authorized for the period from 2002 to 2007. 80 The objectives of EQIP are achieved through a pr ocess that begins with identification of national priorities. 81 National priorities include reduc ing non-point source pollution, improving air quality, reducing soil erosion and sedimentation, and conserving habitat. NRCS uses these national priorities to allo cate EQIP funds to the States. The St ates then identify priority natural resource concerns within their own state to allo cate funds to a local designated conservationist.82 The locally-designated conservationist adap ts the State program to local conditions.83 Thus, the EQIP program can vary from state-to-state and from county-to-county. The final steps in this 77 Cattaneo et al., supra note 65, at 41. 78 NRCS, 2002 Farm Bill: Environmental Quality Incentives Program Fact Sheet 1(USDA 2004) [hereinafter NRCS EQIP]. 79 Cattaneo et al., supra note 65, at 6. 80 Id 81 NRCS EQIP, supra note 78, at 1. 82 Id. at 1-2. 83 Id. at 2.

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30 process include selecting eligible conservati on practices and developi ng a ranking process to evaluate applications. Since the beginning of EQIP in 1997, NRCS has entered into 111,625 contracts with producers, enrolled 51.5 million acres, and obligated $1.08 billion to assist producers in advancing conserva tion practices on working lands. 84 Wildlife Habitat Incentive Program The W ildlife Habitat Incentive Program [WHIP ] is a voluntary program designed to encourage the creation of high qua lity wildlife habitats that support signifi cant wildlife populations.85 Under this program, NRCS provides technical and financial assistance to landowners. States develop their own WHIP pl ans to serve as a guide for developing ranking criteria. Landowners may file applications to en ter into a cost-share ag reement with NRCS to protect wildlife habitat. Under the cost-share agreement, landowners voluntarily agree to limit future uses of their land for a set period of tim e. The landowner and NRCS develop a wildlife habitat development plan as the basis of the cost -share agreement. The cost-share payments are usually made to participating la ndowners for five to ten years in duration. Since the beginning of WHIP in 1998, almost 15,000 participants have en rolled more than 2.3 million acres. Most efforts focus on the improvement of upland hab itat, but there is recent interest in the improvement of riparian and aquatic areas. 86 84 Id. at 1. 85 NRCS, Farm Bill 2002Wildlife Habitat Incentives Program Fact Sheet 1 (USDA 2004), available at http://www.nrcs.usda.gov/programs /farmbill/2002/pdf/WHIPFct.pdf 86 Id.

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31 Conservation Security Program The Conservation Security Progr am [CSP] is a stewardship program newly enacted in the 2002 Farm Bill.87 The objectives of the CSP are to improve soil quality, water quality, air quality, wildlife ha bitat, and energy.88 The CSP basically estab lishes a system of green payments to farmers for maintaining and enhancing conservation efforts on working agricultural lands.89 A green payment is defined as a payment that efficiently links the production of environmental goods and services with the opportunity to derive an income over and above the cost of produc ing those goods and services.90 CSP is intended to reward farmers who meet the highest standards of conservation and environmental management on their operations.91 CSP establishes three tiers of conservation practices with the level of payment increasing with each tier.92 Tier I payments for contracts of five years may be up to $20,000 per year.93 Tier II payments for cont racts of five to ten years may be up to $35,000 per year. Tier III payments fo r contracts of five to ten years may be up to $45,000 per year. CSP contract payments include an annual stewardship payment, an annual maintenance payment, enhancement payments for exceptional conservation efforts, and a onetime new practice payment for additi onal needed conservation practices.94 The five types of activities for which a CSP participant can receiv e enhancement payments are improvement of a 87 Person, supra note 12, at 319. 88 Cattaneo et al., supra note 65, at 6. 89 Id. at 41. 90 Evan, supra note 18, at 173. 91 NRCS, Farm Bill 2002: Conservation Security Program Fact Sheet 1 (USDA 2005) [hereinafter NRCS CSP]. 92 Person, supra note 12, at 319. 93 NRCS CSP, supra note 91, at 3. 94 Id. at 2.

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32 significant resource of concern be yond the participants contract requirements, improvement in a local priority resource, participation in on-farm conservation research, cooperation in implementing watershed or regional conservation plans, and implementation of assessment and evaluation of conservation security plan activities.95 The NRCS administers the CSP on a watershed basis. In 2005, the total CSP payments approved by watershed were approximately $146 million.96 Total payments are capped at $3.8 billion over ten years.97 Originally, CSP was intended to be an entitlement program, meaning that everyone who qualified was entitled to participate in the program. However, budget constraints have limited the selection of participants based on soil quality and level of environmental effort.98 Wetlands Reserve Program The W etlands Reserve Program [WRP] is a voluntary land retirement program established in 1985 to provide assistance to farmer s to protect, restore, or enhance wetlands.99 The objectives of the WRP are to increase we tland functions and valu es, including wildlife habitat. Landowners can file an application for a conservation easement or a cost-share agreement with the USDA to voluntarily limit the future use of their lands in exchange for financial and technical assistance.100 95 Id. at 2-3. 96 NRCS, FY-2005 Fiscal CSP Payments Approved by Watershed, March 1, 2006 (USDA 2006), http://www.nrcs.usda.gov/Programs/csp/pdf_files/FY_2005_CSP_Payments_A pproved_by_Watershed.pdf (last viewed April 15, 2007). 97 Cattaneo et al., supra note 65, at 41. 98 Id 99 Id 100 NRCS, Farm Bill 2002: Wetlands Reserve Program Fact Sheet 1 (USDA 2007), available at http://www.nrcs.usda.gov/programs/wrp/2007WRPFactSheet.pdf

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33 There are three enrollment options under the WRPpermanent easement, 30-year easement, and restoration cost-share agreement. Under a permanent easement, the USDA pays for a conservation easement in perpetuity and up to 100% of the cost of restoring the wetland. Under a 30-year easement, the USDA pays up to 75% of what would be paid for a permanent easement and up to 75% of the restoration costs. Restoration cost-share agreements are usually for a minimum of ten years and the USDA pays up to 75% of the restoration costs. The WRP has an acreage enrollment cap of approximately 2.3 million acres and an annual enrollment cap of 250,000 acres. 101 In fiscal year 2003, 1.47 million acres were enrolled in the program and $275 million was spent on contracts. Farm and Ranch Protection Program The Farm and Ranch Protection Program [FRPP] was establis hed to prevent the loss of prime agricultural land and important topsoil to nonagricultural uses.102 The primary purpose of the FRPP is to prevent change in agricultural land use.103 This is accomplished by providing matching funds to States, Tribes, and local gover nments or NGOs to acquire an interest in easements that prevents conversion of land to urban uses. Under these easements, landowners retain rights to farm. Entities with an established farm or ranch la nd protection program can accept applications from la ndowners to participate.104 The NRCS then awards funds to qualified entities to purchase perpetual easements. To be eligible for the FRPP, the agricultural land must include prime, unique, or other pr oductive soil or historical or ar cheological resources and be 101 Cattaneo et al., supra note 65, at 41. 102 Id. at 6. 103 Id. at 41. 104 NRCS, Farm Bill 2002: Farm and Ranch Lands Program Fact Sheet 1 (USDA 2004) [hereinafter NRCS FRLP], available at http://www.nrcs.usda.gov/program s/farmbill/2002/pdf/FRPPFct.pdf

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34 covered by a conservation plan for any highly erodible land.105 The 2002 Farm Bill increased funding for FRPP tenfold to $597 mi llion for the period of 2002 to 2007.106 Since the program began in 2003, easement interests have been secured on more than 300,000 acres.107 Future of the Farm Bill Conservatio n Programs: 2007 Proposal for Title II The 2002 Farm Bill was due to be reauthorized in 2007. The USDA devised a proposal for the 2007 Farm Bill Conservation Programs that addresses many of the concerns about the effectiveness of these programs.108 The main criticism of the Farm Bill Conservation Programs is that the demand for participation is greater than the current budget wi ll allow. Thus, the USDAs overall recommendation for reauthorizati on of the Title II Conservation Programs is to increase funding.109 Another major concern regarding the effec tiveness of the Conservation Programs is overlap and redundancy.110 There are several programs with the same or similar goals being implemented by many agencies at the local, stat e, and federal levels. Each program has a different set of requirements and rules government eligibility and participa tion. This overlap and redundancy leads to a complex situation that can be very confusing for farmers interested in conserving environmental resources on their lands. The procedural hurdles and red-tape prevent farmers from seeking help and, thus, ultimat ely, inhibit the Conservation Programs from targeting the most ecologically sensitive lands. Also, these inefficiencies increase administrative 105 Id 106 Cattaneo et al., supra note 65, at 41. 107 NRCS FRLP, supra note 104, at 1. 108 USDA, 2007 Farm Bill ProposalsTitle II: Conservation 2, available at http://www.usda.gov/documents/07title2.pdf 109 Id. 110 Id.

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35 costs, which decrease the amount of money avai lable for conservation incentives and ultimately reduce the programs ability to optimize environmental benefits.111 Title II Conservation Programs are also critic ized for failing to solve complex agricultural landscape problems.112 The USDA found that streamlining, consolidation, and simplification of the Conservation Programs is needed in order to most effectively addres s these problems. The Conservation Programs need to be redesigned to be implemented in a comprehensive fashion in order to maximize environmental benefits instead of implementing the programs in a piecemeal fashion. This can be done by integrating or connecting Conservation Pr ograms with similar objectives. Marketor merit-based funding mechanis ms are also needed in order to ensure that the limited budget for the Conservation Programs is allocated to the highest needs and best uses. Finally, the USDA found that th e Conservation Programs are not fully addressing the needs of beginning and socially disadvantaged farmers.113 The USDA formulated several recommended solu tions to these problem s in its proposal for changes to Title II in 2007. First, the USDA proposed consolida ting the existing EQIP, WHIP, Agriculture Management Assistance Pr ogram, Forest Land Enhance Program, Ground and Surface Water Conservation Program, and Kl amath Basin Program under a newly designed EQIP.114 This consolidation is intended to simplify and streamline activities, reduce redundancies, and produce more cost effectiv e environmental benefits. The USDA also proposed creating a new Regional Water Enha ncement Program to focus on cooperative 111 Id 112 Id 113 Id 114 Id

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36 approaches to enhancing water quantit y and/or quality on a regional scale115 and investing additional resources into the Cons ervation Innovative Grants program.116 These changes to EQIP would invest an additiona l $4.25 billion into the program.117 Second, the USDA proposed modifying the CSP to create a stewardship program that emphasizes incentives for implementing higher levels of conservation practices.118 The USDA also recommended expanding enrollment from the current 15.5 million acres to approximately 96.5 million acres over the next ten years. These changes would require an increased investment of an additional $500 million over the ten year baseline.119 Third, the USDA suggested consolidating exis ting easement programs, such as the WRP and floodplain easements, into one overal l easement program a nd increasing funding.120 This proposal is intended to eliminate overlap and redundancy for those farmers wishing to participate in a conservation easement program. The USDA al so suggested increasing the enrollment cap to 3.5 million acres and increasing the funding cap to $2.125 billion over the next ten years. Increased funding and enrollment will address the pr oblem that demand for participation in these easement programs exceeds supply so that more environmental benefits may be achieved.121 Fourth, the USDA proposed r eauthorization of the CRP.122 The CRP should be focused on lands that provide the most benefits for environm entally sensitive lands so that the effectiveness 115 Id. at 2-3. 116 Id. at 3. 117 Id 118 Id 119 Id 120 Id 121 Id 122 Id

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37 of the program can be maximized. Also, the US DA suggested giving priority to lands used for biomass production for energy to contribute to decreased reliance on fossil fuels.123 Other proposals made by the USDA for the 2007 Farm Bill include designating a portion of each Conservation Program for beginning farm ers, investing $50 million over the next ten years to encourage new private sector e nvironmental markets to supplement existing Conservation Programs, introducing market forces into existing programs to provide greater environmental returns from investments, and, fina lly, repealing the region al equity provision to allow funding to be based on the highest need and best use of conservation funding.124 These proposals are intended to improve existing Conser vation Programs in the 2007 Farm Bill so that they are more ecologically and economically e ffective so that the most sensitive areas are protected and the most environmental services are conserved. Overall, the USDAs proposals would increase funding for Title II Conserva tion Programs by $7.8 billion over ten years.125 123 Id 124 Id 125 USDA, USDAs 2007 Farm Bill Proposals, Release No. 0019.07, available at http://www.usda.gov/wps/portal/!ut/p/_s.7_0_A/7_0 _1OB?contentidonly=true&contentid=2007/01/0019.xml

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38 Figure 2-1. Linkages Between Ecosystem Servi ces and Human Well-Being (Source: Millennium Ecosystem Assessment [MEA], Ecosystems and Human Well-Being: Synthesis vi (Island Press 2005), available at http://www.maweb.org/documents/document.356.aspx.pdf ).

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39 Figure 2-2. Percentage of Private Land (Source: Environmental Defense, Center for Conservation Incentives, Why Private Lands?, http://environmentaldefens e.org/page.cfm ?tagID=442 ). Figure 2-3. Comparing payments for environmental services (PES) to other conservation approaches. (Source: Sven Wunder, Are Direct Payments for Environmental Services Spelling Doom for Sustainable Fore st Management in the Tropics? 11 Ecology and Society 23, 26 (2006)).

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40 Figure 2-4. Selected wildlife-re lated practices and estimated annual CRP benefits (Source: Patrick Sullivan et al., Agricultural Economic Report Number 834, The Conservation Reserve Program: Economic Implications For Rural America 20 (Economic Research Service, United States Department of Agriculture 2004)). Figure 2-5. Selected annual and nonmarket envi ronmental benefits from CRP (Source: Patrick Sullivan et al., Agricultural Economic Report Number 834, The Conservation Reserve Program: Economic Implications For Rural America 24 (Economic Research Service, United States Department of Agriculture 2004)).

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41 CHAPTER 3 IMPLICATIONS OF CONSERVATION INCE NTIVES IN AN INTE RNATIONAL TRADE CONTEXT Introduction This section will explore the domestic and international policy context for payment for environmental service [PES] or green paym ent programs in the United States under the Farm Bill in contrast to agricultural subsidies tie d to production or price. It is important to consider the international trade context for su ch programs because of the economic and legal implications that affect how such program s should be designed and funded. The legal implications of an environmental service payment program must be analyzed at the national level under laws such as the 2002 Farm Bill and at the in ternational level under agreements such as the WTO Agreement on Agriculture. The economic implications of such a program must be explored at each level to ensure that it will not cause market distortions that will interrupt free trade or lead to an unsustainable use of a natu ral resources. Most im portantly, for the purposes of this research, a shift in agricultural policy from commodity-based subs idies to conservation programs may help the U.S. meet its internat ional trade obligations and provide additional sources of funding for PES programs, such as CSP. U.S. Agricultural Policy Background U.S. agricultural policy has a history of en couraging overproduction of crops by relating benefits to production and price.1 U.S. agriculture subsidies generally encourage monocultures by connecting benefits to crop yields on a specified acreage planting base.2 The structure of U.S. agriculture policy also tends to favor certain cr ops by encouraging farmers to invest more and 1 Stacey Person, Note, International Trade: Pushing United States Agriculture Toward a Greener Future? 17 Geo. Intl Envtl. L. Rev. 307, 311 (2005). 2 Id. at 312.

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42 more into the subsidized sectors due to the decreased risk associated with producing those crops.3 The main goals of U.S. agriculture policy have been to support farmers income and to ensure a steady and cheap food supply.4 These goals have been advanced through the use of three forms of measures used to protect farmers from market risksmanaging supplies to bolster price; supporting prices through government purchas es of products that did not clear the market at a government-determi ned floor price;5 and directly supplementing farm income by paying farmers the difference between the market price and the government-set floor price.6 However, the problem is that linking bene fits to production and prices di storts markets and encourages overproduction. The first agricultural policy to break from this tradition was the 1996 Federal Agriculture Improvement and Reform Act (FAIR).7 The intent of FAIR was to phase-out subsidies over a seven-year period and to rela x restrictions on the crops th at could receive subsidies.8 FAIR also decoupled income support from current produ ction and market pri ces through the use of production flexibility contracts, which allowed fa rmers to respond to mark et signals in their planting decisions. Under these contracts, farmer s received the same payment regardless of the difference between the market price and the floor price.9 3 Id. 4 Id. at 313. 5 Id. at 313-14. 6 Id. at 314. 7 Id 8 Id. 9 Id.

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43 Unfortunately, Congress reverted back to the strong agriculture protect ionism of the past with the Farm Security and Rural In vestment Act of 2002 (2002 Farm Bill).10 There are three categories of payments under the 20 02 Farm Bill. Direct payments in the form of the production flexibility contracts from FAIR were retained. However, the bill also created a program of counter-cyclical payments and marketing loan assistance programs that are dependent on current production and prices.11 Fortunately, the 2002 Farm Bill included a series of conservation programs.12 However, funding for conservation programs is a much sma ller proportion of the 2002 Farm Bill than the funding for commodity programs$20.8 billion ove r six years versus $98.9 billion over six years.13 The main problems with these programs are the low funding leve ls, limited oversight and enforcement, and lack of results due to the c oncentration of benefits in areas that do not have the most environmental damage. The limited funding cannot accommodate all of the farmers who want to participate. Thr ee out of four farmers trying to get benefits for changing farm practices or restoring wetlands are turned away, and about fort y-two percent of the farmers seeking technical and educational guidance on po llution-reducing measures are left unserved.14 Critics of these programs argue th at they violate the polluter pays principle because the programs bribe farmers not to pollute ra ther than penalizing those who do. Thus, farmers are not forced to account for the environmental costs of food production in their production costs.15 10 Id. at 315. 11 Id. 12 Id. at 316. 13 Id. 14 Id. 15 Id.

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44 International Agricultural Policy Background The Agreement on Agriculture [AoA] was signed during the Uruguay Round of GATT negotiations.16 The AoA focuses on increasing market access, reducing export subsidies, and reducing domestic support.17 Market access is achieved mostly through tarrification of non-trade barriers (NTBs), which leads to more transparency and predictability.18 Member States agreed to reduce tariffs from a chosen base year period by an average of 36% over five years.19 Member States also agreed to cap and re duce the use of export subsidies over time.20 These reductions in the use of export subsidies are expect ed to improve the allocation of resources in the agriculture sector both at the domestic and international level and to promote more sustainable patterns of production.21 Reduction of subsidized e xports will raise prices on the world market, improving market opportunities fo r more efficient non-subsidizing exporters (generally developing nations).22 The third aspect of the AoA addresses domes tic support, which is most relevant to environmental service payment programs, unde r Articles 6 (Domestic Support Commitments) and 7 (General Disciplines on Domestic Support).23 The goals of reduci ng domestic support are to reduce developed country tr ade conflicts, remove policies that encourage overproduction, 16 Food and Agriculture Organization, Environment, Trade and SARD: Concepts, Issues and Tools 8 [hereinafter FAO, available at http://www.fao.org//docrep/x2775e/x2775e06.htm 17 Person, supra note 1, at 321. 18 FAO, supra note 16, at 10. 19 Id. at 9-10. 20 Id. at 10. 21 Id. at 10-11 22Id. at 11. 23 Id.

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45 provide guidelines on domestic support while leaving leeway for governments to design agriculture policies responsive to specific circ umstances, and to ensure that commitments in market access and export subsidies are not underm ined through domestic support measures. The Aggregate Measure of Support (AMS) quantifies th e domestic policies that distort agriculture production or trade on a Member State basis. Me mber States agreed to reduce their AMS over time.24 The AoA takes a traffic light approach to the categorization of subsidies.25 Amber box subsidies are presumed to be trade distorting because they interfere with the free market by affecting either production or price.26 An example of an amber box subsidy is the countercyclical payment program from the 2002 Farm B ill. The Geneva Framework requires Member States to reduce amber box subsidies by 20% over an implementation period of 1995 to 2000.27 U.S. amber box subsidies are currently capped at $19.1 billion per year.28 Blue box subsidies are direct payments under a production-limiting program.29 This category primarily applies to the European Union and is not subject to reduction commitments. Finally, green box subsidies are publicly-funded government programs that do not increase prices for consumers or provide price support to producers and have no, or mi nimal, trade-distorting effects or effects on production.30 This category includes government payments under environmental programs and 24 Id. 25William Evan, Article, Green Payments: The Next Generation of United States Farm Programs? 10 Drake J. Agric. L. 173, 175 (2005). 26 Person, supra note 1, at 321. 27 Id. at 322. 28 Id. at 324. 29 Id. at 322. 30 Id.

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46 is not subject to reduction commitments. Als o, there is no cap on the total amount of green box subsidies. Annex 2 to the AoA lists types of subsidies that fall into the green box and includes payments under environmental programs. Article 20 of the AoA embodies the commitment of WTO Member States to continue to negotiate reductions in support and protection, while at the same time addressing non-trade concerns (NTCs).31 Recognizing that the long-term objective of substantial progressive reductions in support and protection resulting in funda mental reform is an ongoing process, Members agree that negotiations for con tinuing the process will be initiated one year before the end of the implementati on period, taking into account (C) nontrade concerns, special and differential tr eatment to developing country Members, and the objective to establish a fair and market-oriented agricultural trading system, and the other objectives and con cerns mentioned in the preamble to this Agreement.32 Food security and environmental protection are the only NTCs specifically mentioned in the AoA. Some WTO members have argued that the definition of NTCs s hould be broadened to encompass such multiple functions of agriculture as the preservation of rural landscapes, the economic viability of rural areas and social cohesion.33 The current debate is over the appropriate definition of NTCs and the appropria te policy responses to NTCs. Critics of NTCs, such as the Cairns Group, argue that NTCs are used as post-facto just ification for continuing high levels of trade distorting pr otection of agriculture, that agriculture is not unique in 31 FAO, supra note 16, at 8. 32 World Trade Organization, WTO Analytical Index: Agreement on Agriculture [hereinafter WTO], available at http://www.wto.org/English/res_e/booksp_e/anal ytic_index_e/agriculture_02_e.htm#article20A 33 FAO, supra note 16, at 8

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47 providing multiple functions, and that governments should not be free to pass costs of policy choices onto the rest of the world through trade distorting policies.34 Green Box Subsidies There are four types of green box m easures.35 The first includes general services, which are programs that provide services or benefits to agri culture or the rural community, but that do not involve direct payments to producers or processors and incl ude research, pest and disease control, inspection services, and infrastructural services.36 The second type includes payments for relief from natural disasters. The thir d type includes regional assistance programs for producers in disadvantaged regions. The fourth type, which is most applicable to environmental service payment programs, includes environmental programs. Eligibility for such payments must be determined as part of a clearly-defined government envir onmental or conservation programme and be dependent on the fulfillment of specific conditions under the programme.37 The language of the AoA raises several po tential problems for e nvironmental service payment programs under the green box exceptions.38 First, environmental is not defined in the AoA. This leads to confusion about what is a valid environmental excep tion to Article 6. For example, it is unclear whether green box excepti ons were meant to protect rural agriculture environments or purely natural environments.39 Second, minimal effect is not defined in the AoA. The questions arise of how to ensure that ecosystem payment programs have no more than 34 Id. at 9. 35 Id. at 12. 36Id. 37 Id. 38 Id. at 13. 39 Id. at 14.

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48 a minimal effect on production and trade, whethe r a principle of aggregation should be applied, and how to account for the long-term effects.40 2002 Farm Bill Inconsistencies with Trade Obligations Som e have suggested that the 2002 Farm Bill be repealed41 because it is inconsistent with the AoAs long-range goal to establish a fair and market-oriented agriculture trading system.42 Article 6 of the AoA, which covers domestic support commitments, requir es that there be no trade-distorting domestic subsidies to agricu lture producers in excess of a maximum amount specific to each Member State. Current Tota l Aggregate Measure of Support [Current Total AMS] must be less than the Allowed Total Aggregate Measurement of Support [Allowed Total AMS], which is $19.1 billion for the U.S.43 The Geneva Framework is an agreement among WTO Member States as to the general pr ovisions that the new AoA will entail, including substantial reductions in trade distorting domestic subsidies.44 The U.S. agreed to reduce Allowed Total AMS by 20% during the first year following a final Doha Round agreement. Additionally, Member States stipulated that coun tries must cap amber box subsidies for specific products at their respective average levels.45 The 2002 Farm Bills direct payments are not trade distorting because they are not dependent on current pri ces or production levels.46 However, counter-cyclical payments likely 40 Id. 41 Elizabeth Bulington, Note and Comment, WTO Agreements Mandate That Congress Repeal the Farm Bill of 2002 and Enact an Agriculture Law Embodying Free Market Principles 20 Am. U. Intl L. Rev. 1211, 1212 (2005). 42 Id. at 1222. 43 Id. at 1223. 44 Id. at 1228. 45 Id. at 1229. 46 Id. at 1230.

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49 violate the AoA and are inconsistent with the principles of the Geneva Framework.47 The U.S. Current Total AMS has nearly reached the a llowed limit of $19.1 billion under the 2002 Farm Bill. This total does not take into account market fluctuations that could potentially push subsidies above the ceiling. Thus, the 2002 Fa rm bill has been a major obstruction to WTO Member States reaching consensus in the Doha Round of negotiations. Therefore, many argue that the U.S. should repeal the 2002 Farm B ill and implement a new bill based on free trade principles in accord with the Geneva Framework.48 An example of how the 2002 Farm Bill is disr upting free trade is the U.S.Subsidies on Upland Cotton case.49 Brazil filed a complaint with WTO Dispute Resolution Board (DSB) alleging that U.S. cotton subsidies under the Farm Bill are trade distorting and in violation of WTO agreements. The AoA includes a peace cl ause stating that a WTO Member State may not file a complaint regarding another Me mber States domestic subsidies during the implementation period unless the Member State has spent more on subsidies for a given commodity per year than the State spent on subsidies for that co mmodity during the 1992 marketing year. Brazil argued that the peace clause does not exempt the U.S. because the U.S. spent more on cotton subsidies in recent years than it spent in 1992 and that U.S. cotton subsidies cause serious prejudice to Br azils interests by depressing wo rld markets for upland cotton, which is a violation of the SCM Agreement.50 The U.S. argued that it was immune under the peace clause because its cotton subsidies did not exceed 1992 levels and it did not cause serious prejudice to Brazils interests. The DSB Panel concluded that the US cotton subsidies were not 47 Id. at 1237. 48 Id. at 1244. 49 Id. at 1225. 50 Id. at 1226.

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50 exempt and that they cause significant price suppression and serious prejudice to Brazils interests.51 It is now general consensus that the peace clause has expi red and, therefore, a Member State challenging U.S. s ubsidies would probably not have to show that the U.S. spends more on subsidies for the relevant crop than it did in 1992.52 Taking Advantage of the Green Box The Kind-Boehler t Amendment first introdu ced the idea of green payments to Congress.53 This concept eventually became the C onservation Security Program of the 2002 Farm Bill.54 The program was supported because the payments could be classified under the green box and the U.S. would remain below its amber box subsidy cap. However, the aggregate effect of green box programs can have trade-di storting effects. Developing countries are concerned about developed countri es using sham environmental programs to disguise attempts to circumvent international trade commitments a nd that developed countr ies will miscategorize amber box subsidies as green subsidies to avoid exceeding their amber box cap.55 These concerns appear to be realistic. A recurring domes tic criticism of U.S. pr ograms is that many are not as effective as they could be because they are not limited to targeting solely environmental problem areas, but are instead tied to attempts to control production or primarily provide income support.56 51 Id. at 1227. 52 Id. 53 Person, supra note 1, at 326-27. 54 Id. at 327. 55 Id. at 328-29. 56 Id. at 329.

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51 CHAPTER 4 CONSERVATION SECURITY PROGRAM Antecedents of the CSP About 940 million acres or half of the con tiguous United States land area is owned and managed by farmers and ranchers.1 Thus, the federal government s ability to require and encourage conservation on agricu ltural lands is vital in addressing non-point source pollution. The federal government became involved in agricu ltural conservation as early as 1894, when it recognized the widespread soil erosion problem occurring across the United States.2 At this time, the United States Department of Agriculture [USDA] created the Bureau of Chemistry and Soils to address the soil eros ion program. Over the years, C ongress has changed the name of the soil erosion program, changed its location from the USDA to the Department of the Interior and back again, and expanded its purpose.3 The Soil Conservation Se rvice [SCS], under the USDA, eventually created soil conservation dist ricts in order to implement soil conservation programs more effectively at the local level. Some of the notable programs SCS, now known as the NRCS, was responsible for implementing include the Watershed Protection and Flood Prevention Act of 1954, the Great Plains Conserva tion Program, and the Resource Conservation and Development Program, among others.4 In practice, the flood prevention program was more focused on increasing land production by drai ning land rather than on soil erosion.5 The Great 1 General Accounting Office, Conservation Security Program: Despite Cost Controls, Improved USDA Management Is Needed to Ensure Proper Payments and Reduce Duplication with Other Programs 1, GAO-06-312, Report to the Chairman, Committee on Appropriations, U.S. Senate (April 2006) [hereinafter GAO]. 2 Debra Owen, Comment, Legislative History of Conservation Security Program 9 Great Plains Nat. Resources J. 36, 37 (2004). 3 Id. at 38. 4 Id. at 39-40. 5 Id. at 39.

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52 Plains Conservation Program was su ccessful in terms of number of contracts with land owners to prevent wind erosion problems, but failed to main tain permanent soil erosion efforts after the contracts expired.6 The Resource Conservation and Develo pment Program is an example of a recent shift of focus from soil conservation to economic development by providing federal financial and technical assi stance based on master plans.7 Throughout different administrations, soil conservation programs seem to vary from one extreme of maximizing production of a commodity crop to completely taking land out of production.8 In effect, these policies have frustrated the purposes and goals of soil c onservation. However, the CSP now provides a tangible ongoing incentive for farmers who engage in environmental st ewardship on working lands.9 Early Beginnings The proposed rule to implement CSP c ites two reports reco mmending a conservation incentive program for working lands.10 In 2001, Secretary of Agriculture Ann Veneman released a report titled Food and Agricultural Policy: Taking Stock for the New Century in which she stated the USDAs position on the new farm bill.11 The report proposed a conservation program which included stewardship incentives on working farmland as a response to the nations growing concerns regarding the role of agricultu re in environmental protection.12 6 Id. at 40. 7 Id. 8 Id. at 41. 9 Id. 10 NRCS and Commodity Credit Corporation proposed rule with request for comments, 69 Fed. Reg. 194, 196 (January 2, 2004) (West 2008). 11 Owen, supra note 2, at 41. 12Id. at 42.

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53 Secretary Venemans original vision for CSP wa s to reward those producers meeting the very highest standards of conservation, to create incentives for other producers to meet those standards, and to provide public benefits. In 2001, the USDA also published a report titled 21st Century Agriculture: A Critical Role of Science and Technology which discussed new conservation technologies that coul d provide the basis for the CSP.13 Authorization CSP is authorized by the Food Security Ac t of 1985 (16 U.S.C. 3801 et seq.) as amended by the Farm Security and Rural Investment Act of 2002 [ Farm Bill] (Pub. L. 107-171, May 13, 2002, 116 Stat. 134 (2002)).14 The 2002 Farm Bill authorized an 80 percent increase, $20.8 billion, in funding for conservation programs for fiscal years 2002 through 2007.15 CSP was designed to support[] ongoing conservation stew ardship of agricultur al lands by providing financial and technical assistan ce to promote conservation and th e improvement of soil, water, air, energy, and plant an d animal life on private and agricultural lands.16 CSP is unique in that payments are made on a continuing basis and th e program aims to keep working land in production.17 Another unique quality of CSP is that it rewards producers w ho already meet high standards of conservation and management, in addition to providing incentive to reach higher standards of environmental stewardship.18 13Id. 14Id. at 44. 15 GAO, supra note 1, at 1. 16 Id. at 2. 17 Owen, supra note 2, at 46. The Secretary of Agriculture must allow continued economic uses of enrolled land that maintain the agricultural nature of the land; and are consis tent with the natural resource and conservation objectives of the conservation security program. 16 U.S.C.A. 3838a(b)(4) (West 2008). 18 GAO, supra note 1, at 2.

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54 Purpose The statutory purpose of the CSP is to pr om ote conservation and improvement of the quality of soil, water, air energy, plant and animal life.19 The proposed rule to implement CSP states that the program can help meet the Nations goals for conservation, land productivity, enhanced food security, and stronger economic growth through the promotion of sound conservation principles and advanc ements in science and technology.20 CSP was intended to recognize those farmers and ranchers, the land stewards, who meet the highest standards of conservation and environmental management.21 CSPs motto is to reward the best and motivate the rest.22 The goals of CSP are to sustain the economic well-being of these land stewards and to enhance the production of environm ental services for the benefit of the public. Eligibility Land elig ible to enroll in CSP land must be private agricultural lands23 or Tribal lands in any of the 50 States or U.S. territories.24 Land enrolled in the Conservation Reserve Program, the Wetlands Reserve Program, or the Grassland Reserve Program is not eligible for the CSP.25 19 Farm Security and Rural Investment Act of 2002, 16 U.S.C.A. 3838a(a) (West 2008). 20 NRCS and Commodity Credit Corporation proposed rule with request for comments, 69 F.R. 194, 196 (January 2, 2004). 21 Id. 22 Id 23 Agricultural land is defined to include cropland, rangeland, pastureland, hayland, private non-industrial forest land if it is an incidental part of the agricultural operation, and other land on which food, fiber, and other agricultural products are produced. 7 C.F.R. 1469.3 (West 2008). 24 7 C.F.R. 1469.1 (West 2008). See also 7 C.F.R. 69.5(d) (West 2008) (describing the requirements of eligible land). 25 16 U.S.C.A. 3838a(e)(2)(B)(ii) (West 2008). See also 7 C.F.R. 1469.5(d)(2) (West 2008). However, a producer may simultaneously participate in the CSP and the Conservation Reserve Program or the Wetlands Reserve Program if payments are reduced and the contract is adjusted or the prod ucer removes the land from enrollment in the CSP program. 16 U.S.C.A. 3838a(e)(2)(B)(ii) (West 2008).

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55 Eligible cropland must have been planted for four to six years prior to the date of enactment.26 In order for a producer to be eligible to partic ipate in the program, the producer must develop a conservation security plan and enter in to a conservation security contract.27 Another important applicant eligibility requirement is the requirement that an applicant be in compliance with the highly erodible land and wetland provisions (7 C.F.R. Pa rt 12), a.k.a. Conservation Compliance.28 A producer participating in an existi ng conservation stewardship contract may not submit another applicati on at a subsequent sign-up.29 Tier Levels The statute requires the Secretary of Agricultur e to establish three tier levels for contract payments and to establish eligible conservati on practices (land manage ment, vegetative, and structural).30 Tier I conservation security contracts, which are required to last for 5 years, must include conservation practices that at a minimum, address at l east one significant resource of concern for the enrolled portion of the agricultural operation at a level that meets the appropriate nondegradation standard.31 Tier II contracts must be for a longer time period, between 5 and 10 26 16 U.S.C.A. 3838a(e)(2)(B)(ii) (West 2008). See also 7 C.F.R. 1469.5(d)(3) (West 2008). 27 16 U.S.C.A. 838a(b) (West 2008). See also 7 C.F.R. 1469.21(a) (West 2008). The conservation security plan identifies the designated land and resources to be conserved, describes the tier level and the conservation practices to be implemented, and includes a schedule for implementation, maintenance, or improvement of conservation practices. 16 U.S.C.A. 3838a(c) (West 2008). 28 7 C.F.R. 1469.5(c)(1) (West 2008). Other applicant e ligibility requirements include having control of the land for the period of the contract, sharing in the production risk completing a benchmark inventory, and supplying information needed to determine eligibility. 7 C.F.R. 1469.5(c) (West 2008). 29 7 C.F.R. 1469.5(b) (West 2008). 30 16 U.S.C.A. 3838a(d) (West 2008). See also 16 U.S.C.A. 3838a(d)(4)(listi ng eligible conservation practices, i.e., nutrient management, integrated pest management, water conservation, etc.). 31 16 U.S.C.A 3838a (d)(5)(A) (West 2008) (emphasis added). See also 7 C.F.R.1469.5(e)(1)(i) (West 2008). The regulations specify a minimum level of treatment for nationally significant resource concerns, soil quality and water quality, for each land use. For example, the Tier I and II minimum level of treatment for soil quality for crop land requires that the Soil Conditioning Index be positive. 7 C. F.R. 1469.5(e)(2) (West 20 08). However, the minimum level of treatment for Tier III is much more rigorous. The participant must hav[e ] a fully implemented resource management system that meets the quality criteria for the local NRCS FOTG [Field Office Technical Guide] for all

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56 years, and the conservation practices must, at a minimum, address at least one significant resource of concern for the entire agricultural operation.32 Tier III contracts are also for a period of between 5 and 10 years, but require app lication of a resource management system that meets the appropriate nondegradation standard for all resources of concern of the entire agriculture operation.33 Contracts may be renewed, at the producers option, for a period of 5 to 10 years.34 An Entitlement Program with a Budget Cap CSP was originally inten ded to be an en titlement program, but CSP was subsequently amended to limit its total expenditure s to $3.8 billion over eleven years.35 However, the statute did not prescribe how a broad entitlement program should be implemented with statutory fiscal constraints.36 Based on the land eligibili ty criteria in the statute, the USDA Economic Research Services [ERS] estimated that over 1.8 million farms and ranches may be eligible for CSP.37 Thus, the program cap could be met in the firs t sign-up if all of these potentially eligible applicable resource concerns with some exceptions and must buffer all ripari an corridors to restore, protect, or enhance riparian resources. 7 C.F.R. 1469.5(e)(4) (West 2008). 32 16 U.S.C.A 3838a(d)(5)(B) (West 2008) (emphasis added). See also 7 C.F.R.1469.5(e)(1)(ii) (West 2008). 33 16 U.S.C.A. 3838a(d)(5)(C) (West 2008) (emphasis added). See also 7 C.F.R.1469.5(e)(1)(iii) (West 2008). A resource management system is a system of conservation practices and management relating to land or water use that is designed to prevent resource degradation and permit sustained use of land, water, and other natural resources. 16 U.S.C.A. 3838(11) (West 2008). 34 16 U.S.C.A. 3838a(e)(4) (West 2008). However, Tier I contracts may only be renewed if the produce applies additional conservation practices on land already enrolled or adopts new conservation practices on land that was not previously enrolled. 16 U.S.C.A. 3838a(e)(4)(B) (West 2008). 35 NRCS and Commodity Credit Corporation proposed rule with request for comments, 69 Fed.Reg. 194, 196 (January 2, 2004). 36 Id. The Commodity Credit Corporation [CCC], through th e NRCS, provides financial and technical assistance to CSP participants. The Chief of NRCS is the Vice Pres ident of CCC. 7 C.F.R. 14 69.2 (West 2008). The Chief of NRCS determines the availability of funds and allocates the funds to NRCS State Conservationists for financial and technical assistance to CSP Participants. Id. 37 Id. NRCS also estimated that approxi mately 1.8 million producers nationwide are potentially eligible for CSP. GAO, supra note 187, at 14.

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57 operations enrolled. Due to the budget cap, NRCS estimated that less than 50,000 operations would be able to participate. Enrollment is also limited by the fact that there is a statutory cap of 15 percent of available f unds on technical assistance.38 NRCS proposed an approach to implementing an entitlement program with a budget cap39 that includes five elements, including limited sign-ups, more rigorous el igibility criteria, more rigorous contract requirements, prioritizing funding based on enroll ment categories, and st ructuring payments to maximize environmental benefits.40 In 2006, the Government Accountability Office [GAO] released a report titled Conservation Security Program: Despite Cost Controls, Improved USDA Management is Needed to Ensure Proper Payments and Reduce Duplication with Other Programs that was designed to answer three questions: (1) why CSP cost estimates generally increased; (2) what authority USDA has to control costs a nd what cost control measures exist; and (3) what measures exist to prevent dupl ication between CSP and other USDA conservation programs and what duplication, if any, has occurred.41 The report states that cost estimates have gene rally increased since the CSP was enacted in the 2002 Farm Bill, citing a Congression al Budget Office estimate that the program cost estimate increased from $2 billion in 2002 to $8.9 billion in 2004. GAO explained that this cost increased was due to the lack of information available about program implementation at the time of its 38 The NRCS must provide technical assistance to CSP participants. 16 U.S.C.A. 3838c(g) (West 2008). See also 7 C.F.R. 1469.9 (West 2008) (describing the type of technical assistance the NRCS may provide). 39 NRCS and Commodity Credit Corporation proposed rule with request for comments, 69 Fed.Reg. 194, 196 (January 2, 2004). 40Id. at 197. 41 GAO, supra note 1, at 14.

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58 enactment. GAO recommended that NRCS coul d reduce costs by addressing weaknesses in internal controls and inconsistencies in the wild life habitat assessment criteria that NRCS state offices use, in part, to determine producer e ligibility for the highest CSP payment level.42 However, GAO also recognized that this could reduce the programs conservation benefits. GAO also pointed out that NRCS does not have a comprehensive process for precluding or identifying duplicate payments for the same pr actice from other USDA conservation programs. Priority Watersheds and Enrollment Categories In May 2004, NRCS announced the approach it would use to de termine priority watersheds and enrollment categor ies as part of the eligibilit y requirements for the first signup.43 CSP was capped at $41.4 million for fiscal y ear 2004 by the Consolidated Appropriations Act of 2004, which amended section 1241(a)(3) of the Food Security Act of 1985 (16 U.S.C. 3841(a)(3)). Given the capped spending authority, NRCS wanted to focus CSP benefits in highpriority regions based on watershed. NRCS intended that by rotating sign-up by watershed, every producer would become potentia lly become eligible over the following eight years. NRCS hoped that rotating sign-up base d on watershed would ease the administrative burden for a program estimated to have up to 500,000 eligib le producers when only 3,000 contracts could be funded.44 NRCS recommended ranking watershe ds based on a combination of National Resource Inventory Data and consideration of the history of st ewardship activities.45 NRCS also 42 Id. 43 69 Fed. Reg. 24,560 (May 4, 2004) (West 2008). This approach was also eventually used in the FY 2005 sign-up, as the interim final rule had not been adopted yet. 70 Fed. Reg. 15,277 (March 25, 2005) (West 2008). 44 69 Fed. Reg. 24,560, 24,561 (May 4, 2004) (West 2008). 45 See 7 C.F.R. 1469.6(a)(1) (West 2008) (listing the factors the NRCS will consider in the watershed prioritization and identification process).

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59 recommended prioritizing watersheds on the basis of its improvements, rather than selecting the best or worst watersheds.46 NRCS created enrollment categories47 that consider the applicants current stewardship of the soil condition, tillage intensity, existi ng practices and activities in addition to the statutorily mandated contract requirements.48 All applications meeti ng sign-up criteria would be put in enrollment categories regardless of the available funding and each application would be placed in the highest enrollment category for which it qualifies. F unding would then be distributed within eligible wa tersheds beginning with the high est enrollment category and then funding down the enrollment cate gories until the funding was exha usted. Within enrollment categories, NRCS would use cr iteria to fund the producers with the highest commitment to conservation.49 Application Process The first step of the application process re quires producers to complete a self assessment to determine if they meet basic qualifications of CSP.50 Self-assessment workbooks are 46 69 Fed. Reg. 24,560, 24,562 (May 4, 2004) (West 2008). 47 Enrollment categories are defined as a classification sy stem used to sort out applications for payment using distinct classes for funding defined by resource concerns levels of treatment, and willingness to achieve additional environmental performance. 7 C.F.R. 1469.3 (West 2008). Resource concerns include soil erosion, soil condition, soil deposition, water quality, water quantity, soil deposition, water quality, water quantity, animal habitat, air quality, air condition, plant suitability, plant condition, plant management, and animal habitat and management. Id. Soil quality and water quality are nationally significant resource concerns. 7 C.F.R. 1469.4 (West 2008). 48 69 Fed. Reg. 24,560, 24,563 (May 4, 2004) (West 2008). See 7 C.F.R. 1469.6(b) (West 2008). 49 69 Fed. Reg. 24,560, 24,563 (May 4, 2004) (West 2008). The criteria were developed to target those producers more willing to participate in local conservation programs lower income producers, producers in water quality priority areas for nutrient and pest management, and producers who participate in locally important wildlife/fisheries habitat conservation programs. 7 C.F.R. 1469.6(b)(3) (West 2008). 50 69 Fed. Reg. 34,533 (June 21, 2004) (West 2008). See also 7 C.F.R. 1469.20 (West 2008) (listing the requirements of a CSP contract application).

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60 available at USDA Service Centers or electronically from the NRCS website.51 The self assessment includes a benchmark inventory of the applicants ongoing conservation practices and activities and serves as the basis of the stewardship plan.52 Applicants must also submit documentation of completed stewardship activitie s. NRCS advertises and holds preliminary workshops in which the basic qualifications and application process are explained.53 Sign-Up The first sign-up for the CSP program began in July 2004 in selected watersheds in 22 States.54 (See Figure 4-1). The watersheds were se lected using the process described above and announced by NRCS in an earlier notice.55 In order to be eligible for the fiscal year [FY] 2004 sign-up and subsequent sign-ups, a maj ority of the agricultural operation56 must be located within a selected watershed.57 Enhancements for the FY 2004 sign-up were available for additional conservation treatment above the quality criteria for soil quality, nutrient management, pest management, irrigation wate r management, prescribed grazing, and energy management and for addressing locally identified conservation needs shown on the watershed 51 See e.g., NRCS, Conservation Security Program: Self-Assessment Workbook (USDA 2005), available at http://www.nrcs.usda.gov/programs/csp/pdf_files/CSPfy06self-assessment10_20.pdf 52 69 Fed. Reg. 34,533 (June 21, 2004) (West 2008). See 7 C.F.R. 469.7 (West 2008) (describing the requirements of the benchmark inventory and the conservation stewardship plan). 53 Id. 54 69 Fed. Reg. 34,533 (June 21, 2004) (West 2008). 55 69 Fed. Reg. 24,560 (May 4, 2004) (West 2008). 56 Agricultural operation is defined to include all agricultural land and other lands determined by the Chief [of NRCS], whether contiguous or noncontiguous, under the control of the applicant and constituting a cohesive management unit, that is operated with equipment, labor, accountin g system, and management that is substantially separate from any other. The minimum size of an agricultural operation is a field. 7 C.F.R. 1469.3 (West 2008). 57 69 Fed. Reg. 24,560 (May 4, 2004) (West 2008). See also 7 C.F.R. 469.5(d)(1 )(vi) (West 2008).

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61 specific enhancement lists.58 The FY 2004 sign-up notice provided updated enrollment category criteria based on field testing of the previously published criteria.59 The FY 2004 signup notice also provided stewardshi p practice and activity lists for cropland, pasture, and range.60 The FY 2005 CSP sign-up began in March 2005 in selected watersheds in all 50 States and the Caribbean.61 (See Figure 4-2). NRCS used the same approach for selecting watersheds as was used in the FY 2004 sign-up. This signup changed the annual enhancement component payment to a variable payment rate.62 For the FY 2005 sign-up, N RCS projected that funding would be available for 12,000 to 13,000 contracts w ith approximately 45 percent in Tier I, 45 percent in Tier II, and 10 percent in Tier III.63 Each sign-up notice states enrollment criteria for each land use and lists eligible stewardship practices and activities for each land use.64 58 69 Fed. Reg. 34,533, 34,535 (June 21, 2004) (West 2008). Enhancement payments were limited to $10,000 for Tier I, $17,500 for Tier II, and $22,500 for Tier III annually. An advance enhancement payment, not to exceed $10,000, was also available for contracts with an initia l enhancement payment. This payment shifts the annual enhancement payment to the first year and is deducted from the following year, but does not count towards the enhancement payment limit. Id. 59 For example, in order to meet enro llment category A criteria for cropland, the Soil Conditioning Index must be at least 0.1, the producer must employ at least three stewardship practices and at least three stewardship activities for two or more years, and the producer must agree to m ove to the next tier level or complete two additional stewardship practices or activities. 69 Fed. Reg. 34,533, Attachment 1 (June 21, 2004) (West 2008). 60For example, approved stewardship practices for cropland included composting, field borders, and mulching. 69 Fed. Reg. 34,533, Attachment 1 (June 21, 2004) (Wes t 2008). Approved stewardship activities for cropland included collection of yield data, minimizing the use of irrigation by planting alternative crops with reduced water needs, and using beneficial insects. Id. 61 70 Fed. Reg. 15,277 (March 25, 2005) (West 2008). 62 70 Fed. Reg. 15,277, 15,279 (March 25, 2005) (West 2008). The first year annual enhancement component payment is calculated at 150 percent of the 2005 contract year and then at a rate declining by 20 percent each year thereafter. The declining enhancement component payment is intended to encourage participants to continue to make improvements to their operation. For example, a participant can add additional enhancement activities paid at a flat rate of 100 percent, but the total enhancement payments are capped on an annual basis by tier level. Id. 63 70 Fed. Reg. 15,277, 15,280 (March 25, 2005) (West 2008). Compare 69 Fed. Reg. 24,560, 24,561 (May 4, 2004) (West 2008) (estimating that only 3,000 contracts could be funded for FY 2004). 64 7 C.F.R. 1469.8 (West 2008).

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62 The FY 2006 CSP sign-up began in February 2006 in selected watersheds in all 50 States, Guam, and the Caribbean.65 (See Figure 4-3). This signup was conducted using the process set forth in the 2005 Interim Final Rule.66 Of 110 watersheds recommended by NRCS State Conservationists using the advice of the State Technical Committee, the CSP was offered in 60 watersheds nationwide based on f unding availability. Although 51 wa tersheds were selected for FY 2007, no sign-up was held due to lack of funds.67 (See Figure 4-4). On March 19, 2008, Secretary of Agriculture Ed Schafer announced that the FY 2008 sign-up would begin on April 18, 2008 in 51 watersheds for 64,000 potentially eligible farms.68 (See Figure 4-5). Payments Annual paym ents made to producers under their conservation security contracts include a stewardship component, an existing practice component, a new practice component, and an enhancement component.69 For a Tier I contract, a producer receives an annual per acre stewardship component payment equal to 5 percen t of the applicable base payment, an annual existing or new practice payment component of up to 75 percent of the cost of implementing practices and maintaining c onservation practices, and payments for any enhancements.70 A 65 71 Fed. Reg. 6,250 (February 7, 2006) (West 2008). 66 See 7 C.F.R. 1469.1 et seq. (West 2008). 67 Interview with Kenneth Morgan, Soil Conservationist, Fl orida NRCS, in Gainesville, Florida (Jan. 31, 2008). Any available funds were used to modify existing contracts. Id. 68 USDA, Schafer Announces Conservation Security Program Sign-Up: Sign-Up Begins April 18 in 51 Watersheds Nationwide, USDA Release No. 0084.08 (USDA 2008). 69 16 U.S.C.A. 3838c (West 2008). See also 7 C.F.R. 1469.23 (West 2008) (describing the CSP program payments). The stewardship component is a per acre payment calculated using a base payment that is either the average national per-acre rental rate for a specific land use during the 2001 crop year or another appropriate rate for the 2001 crop year that ensures regional equity. 16 U.S.C.A. 3838c(b)(1)(A). See also 7 C.F.R. 1469.21 (West 2008) (describing conservation st ewardship contract requirements). 70 16 U.S.C.A. 3838c(b)(1)(C) (West 2008). A produce is eligible for an enhanced payment, if the producer: (I) implements or maintains multiple conservation practices that exceed the minimum requirement for the applicable tier of participation ;

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63 producer under a Tier II or Tier III contract receives the same annual payments, except the first payment is equal to 10 and 15 percent, resp ectively, of the applicable base payment.71 Annual payments are not to exceed $20,000 for a Tier I contract, $35,000 for a Tier II contract, and $45,000 for a Tier III contract.72 Another important limitation on CSP payments is the requirement that producers do not receive payments under any other USDA conservation program for the same practices on the same land.73 (II) addresses local conservation priorities in addition to resources of concern for the agricultural operation; (III) participates in an on-farm conservation re search, demonstration, or pilot project; (IV) participates in a watershed or regional resource conservation plan that involves at least 75 percent of producers in a targeted area; or (V) carries out assessment and evaluation activities relating to practices included in a conservation security plan. 16 U.S.C.A. 3838c(b)(1)(C) (iii) (West 2008). See also 7 C.F.R. 1469.22 (describing the requirements for operation and maintenance of conservation practices). 71 16 U.S.C.A. 3838c(b)(1 )(D) and ((E) (West 2008). 72 16 U.S.C.A. 3838c(b)(2)(A) (West 2008). 73 16 U.S.C.A. 3838c(b)(2)(C) (West 2008).

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64 Figure 4-1. CSP Watersheds FY-2004 (Source: NRCS, CSP Watersheds, FY-2004, http://www.nrcs.usda.gov/programs/ csp/2004_CSP_W S/watersheds04.html .)

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65 Figure 4-2. CSP Watersheds FY-2005 (Source: NRCS, CSP Watersheds, FY-2005, http://www.nrcs.usda.gov/pr ogram s/csp/2005_CSP_WS/index.html.)

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66 Figure 4-3. CSP Watersheds FY-2006 (Source: NRCS, CSP Watersheds, FY-2006, http://www.nrcs.usda.gov/pr ogram s/csp/2006_CSP_WS/index.html.)

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67 Figure 4-4. CSP Watersheds FY-2007 (Source: NRCS, CSP Watersheds, FY-2007, http://www.nrcs.usda.gov/programs/csp/2007_CSP_WS.html .)

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68 Figure 4-5. Conservation Security Program (CSP) Watersheds, FY 2008 (Source: NRCS, Conservation Security Progr am (CSP) Watersheds, FY 2008, http://www.nrcs.usda.gov/program s/csp/CSP_2008/2008_CSP_WS.html.)

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69 CHAPTER 5 CASE STUDY OF THE CONSERVATION S ECURITY PROGRAM IN THE LOWER SUWANNEE WATERSHED Introduction: Research Proble m, Objectives, and Questions Private agricultural lands hold trem endous poten tial to both significantly degrade natural resources and to provide important environmental services to the general public. The first generation of environmental law in the U.S. has done much to regulate point source pollution from industry. However, some major environmenta l laws have explicitly exempted agriculture from regulation.1 The agriculture industry has been regulated independently under the Farm Bill Title II Conservation Programs. As opposed to the command and control regulatory approach taken by most major environmental laws, the Farm Bill Conservation Programs are largely voluntary, incentive-based programs. Although the USDA has a long history of resour ce conservation, i.e. soil, the 2002 Farm Bill has been dubbed the greenest farm bill in history.2 This is largely due to the increase in funding for conservation programs and to the creation of a new stewardship program, the Conservation Security Program. This program wa s unique in two aspects: (1) the program aimed to reward farmers for implementing conservation pract ices above and beyond that required of them; and (2) the program enrolls working lands and does not require th at land be retired out of production. Thus, this program recognizes both that farmers can be stewards of the environment 1 For example, the Clean Water Acts definition of point source explicitly excludes agricultural storm water discharges and return flows from irrigated agriculture. 33 U.S.C.A. 1362 (West 2008). Such agricultural discharges are therefore not subject to National Pollutant Discharge Elimina tion System regulation. 33 U.S.C.A. 311(a) (West 2008) (prohibiting the discharge of any pollutant to navigable waters from a point source unless in accordance with a NPDES permit in accordance with CWA 402). 2 Erin Morrow, Agri-Environmentalism: A Farm Bill for 2007 38 Tex. Tech. L. Rev. 345, 369 (2006) (citing Dave Aftandilian, Farm Bill 2002: Corporate Welfare or Farmer's Friend? Conscious Choice, July 2002, available at http:// www.consciouschoice.co m/2002/cc1507/note1507.html .)

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70 and the multifunctionality of agriculture in being able to provide environmental services and agricultural commodities. Given that limited resources prevent regulators from acquiring adequate agricultural lands to retire out of production for conservation, th e fact that the U.S. needs working agricultural lands to provide affordable food secu rity, and the difficultly of regulating non-point source polluti on, the Conservation Security Program seems to be a very promising method for conserving environmental se rvices on private lands. However, CSPs uniqueness means a steep learning curve and growing pains in implementing the program as efficiently as possible and achieving its goals to reward the best and motivate the rest.3 Since CSP is such a new program, little is known about how the program is actually working on the ground and whether it is achieving its goals. If one thing is for sure, it is that Congress grossly underestimated the cost of implementing the program.4 Thus, the NRCS has had to adjust to several budget cuts5 in addition to learning how to implement a highly technical program. Thus, this case study of CSP particip ant experience in one selected watershed is designed to fill this information gap. The objective in conducting a case study of the CSP in a Florida watershed was to understand, describe, and analyze how the pr ogram worked on the ground based on the experiences of the participants themselves and to make recommendations for improving the efficiency of CSP implementation. The methodology used to meet this objective was a modified 3 NRCS and Commodity Credit Corporation proposed rule with request for comments, 69 F.R. 194, 197 (January 2, 2004). 4 General Accounting Office, Conservation Security Program: Despite Cost Controls, Improved USDA Management Is Needed to Ensure Proper Payments and Reduce Duplication with Other Programs 1, GAO-06-312, Report to the Chairman, Committee on Appropriations, U.S. Senate (April 2006) [hereinafter GAO]. 5 Soil and Water Conservation Society & Environmental De fense, Conservation Security Program (CSP) Program Assessment 7 (February 2007), available at http://www.swcs.org/documents/CSP_assessment.pdf

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71 sondeo, which is an informal interview process. The research questions explored by this case study include: (1) What motivates farmers to participate in voluntary conservation program such as CSP? Are these motivations primarily economic or environmental? (2) What improvements to the CSP can be made to maximize environmental benefits based on participant experience and recommendations? a. Is CSP adequately rewarding participants for their past conservation efforts? b. Is CSP creating incentive for participan ts to increase the level of their conservation efforts? (3) What conservation practices are farmers implem enting as part of th eir participation in CSP and why are farmers choosing to implement those practices? (4) What problems and inefficiencies have fa rmers faced in participating in CSP and implementing conservation pr actices on their operations? (5) What improvements could be made to the implementation of CSP based on the experience of the participants in orde r to better achieve the program goals? Research Methodology Background Data Collection In order to begin the case study, much backgr ound information was collected in the fields of law, ecology, and economics. I researched law reviews ex tensively for information on incentive-based conservation programs, the history of the Farm Bill Conservation programs, ideas for conservation of environmental services on private lands, agricultural regulation, and related topics. Additionally, I searched scientific journals for information on environmental services, payments for environmental services programs, ecological economics, and food and resource economics. I searched the Federal Regi ster, the United States Code, and the Code of Federal Regulations extensively to gain an unders tanding of the legal history of the CSP program and how it worked legally and administratively. One valuable source of information was the

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72 2007 Farm Bill Database compiled by the Environmental Working Group [EWG].6 This database provides information on every Farm Bill subsidy program broken down by state, county, and individual over the past decade. Al though this government-collected information is technically public, it cannot be obt ained without a Freedom of Info rmation Act request. Thus, EWG saved me a great deal of time and mone y in making it their goal to provide this information to the public as efficiently as possi ble. Using this database, I searched for all participants of the CSP program in Florida. I found that there were only 55 individual participants receiving CSP payments in one watershed, the Lower Suwannee River Basin, from the FY 2005 sign-up. Thus, I chose the Lower Suwannee River Basin for my case study. Sondeo A sondeo is a rapid team survey approach developed by the Guatemalan Institute of Agricultural Science and Technology. 7 The critical characteristics of a sondeo team are that the team members are well trained in social or te chnical science, have a working understanding of one or more fields and it produ ces a single product resulting from the joint effort of the team.8 The disciplinary specialty of the team members is not as important as having more than one discipline represented.9 In conducting a sondeo, a homogeno us cropping or farming system must be chosen based on the assumption that al l farmers who presently use it have made similar adjustments to a set of restri ctions which they all face and, since they made the same 6 See Environmental Working Group, EWG Farm Bill 2007: Policy Analysis Database [hereinafter EWG], http://farm.ewg.org/sites/farmbill2007/ (last viewed March 29, 2008) (database based on information compiled from the USDA Section 1614 benefits database). 7 Peter Hildebrand, Combining disciplines in rapid appraisal: the sondeo approach 8 Agricultural Administration 423, 425 (1981). 8 Id. at 423-24. 9 Id. at 431.

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73 adjustments, they must all be facing the same set of agrosocioeconomic conditions.10 No quantifiable data or questionnaires are required as the sondeo is an interview conducted in an informal manner so as not to alienate the farmer. The purpose of the multidisciplinary team is to provide many viewpoints simultaneously. The te ams use information generated from these informal interviews to write a report from which they can draw conclusions and make recommendations.11 The report is the primary purpose for undertaking the sondeo.12 In the report, the sondeo team describes the homogene ous technology found across farming systems, such as the principal characteri stics of the farms, crops of in terest, and important differences outside the area. The report also contains a description of the delimited area, including its geographic limits, land tenure and farm size, genera l availability and scarcity of labor, capital flow, important crops, and livestock activity.13 The sondeo team then makes conclusions in the report with special emphasis on the meaning of the sondeo for future work and makes recommendations relevant to government agenci es, the public sector, and the private sector. Modified Sondeo A m odified sondeo methodology was used in orde r for one researcher to conduct this case study. Although the sondeo team only consiste d of one member, the researcher had a background in environmental scie nce, agricultural ecology, ecologi cal economics, and law. The researcher is a joint degree student in a juris doctorate program and an interdisciplinary ecology graduate program. Thus, the re searcher can represent several disciplines and appreciate many viewpoints when conducting interdis ciplinary research. The part icipants in the sondeo are 10 Id. at 426. 11 Id. at 427-29. 12 Id. at 429. 13 Id. at 430.

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74 homogenous in the sense that they all particip ate in the CSP and are located in the Lower Suwannee River Basin, and so are subject to sim ilar natural resource and climate constraints. Thus, the sondeo participants are presumed to face similar agrosocioeconomic conditions. The researcher conducted the interview in an informal manner, usually at the farm site, using a set of questions only as notes to the researcher to help guide the conversation. (See Appendix A). Additionally, since the sonde o team only consisted of one scientis t, the researcher did take notes during the interview to help remember key points of the discussion. The information produced by the sondeo was used to make conclusions about CSP participant experience and program inefficiencies. The sondeo results were also used in conjunction with extensive legal and scientific research to make policy recommenda tions, discussed below, for improving CSP. Permission and Respecting Privacy Although EWGs Farm Bill Database did provide extensive information about participants, including their names, general lo cations, and payments received, it did not provide the participants contact inform ation. While the Freedom of Information Act does require that certain information be made public,14 the Privacy Act exempts some information from disclosure, regulates the conditions of disclosure and requires that agencies promulgate rules governing how such information can be accessed.15 In keeping with the informality of the sondeo, it was decided that it would be best to approach CSP part icipants through their agricultural extension agent or NRCS District C onservationist. It was assumed that farmers, especially those that voluntarily participate in stewardship programs such as CSP, would be well acquainted and comfortable with these agency representatives. Recognizing that the type of 14 5 U.S.C.A. 552 (West 2008). 15 5 U.S.C.A. 552a (West 2008).

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75 financial information to be discussed during th e sondeo about CSP payments is sensitive and private to many farmers, especially in light of recent negative media regarding agricultural subsidies, an approach was taken to respect the farmers privacy as much as possible. Thus, I worked with NRCS District C onservationists in each county located in the Lower Suwannee River Basin to identify farmers who might be willi ng to participate in th e sondeo. The District Conservationists contacted the farmers, genera lly explained the purpose of the research, and provided the researcher names and phone numbers of those willing to participate. The researcher then contacted the farmers to set up a time and place for the interview, which generally lasted between an hour to an hour and a half. Most interviews were conducted at the farm site. Case Study Background: CSP in Florida 2004-2008 Sign-ups The first sign-up for the CSP program began in July 2004 in 18 select ed watersheds in 22 States, but no watersheds were chosen in Florida.16 The FY 2005 CSP sign-up began in March 2005 in selected watersheds in all 50 States and the Caribbean.17 The Lower Suwannee River Basin was selected as one of the 220 priority watersheds. (See Figure 5-1). The FY 2006 CSP sign-up began in February 2006 in 60 selected watersheds in all 50 States, Guam, and the Caribbean.18 A Florida watershed, the Little Manat ee River, was selected as one of the 60 priority watersheds. (See Figure 5-2). However, no applications we re selected to participate in the program because they did not meet the eligibility criteria.19 Although 51 watersheds were selected for FY 2007, including the Lower Choctawh atchee watershed in Florida, no sign-up has 16 69 Fed. Reg. 34,533 (June 21, 2004) (West 2008). 17 70 Fed. Reg. 15,277 (March 25, 2005) (West 2008). 18 71 Fed. Reg. 6,250 (February 7, 2006) (West 2008). 19 Interview with Kenneth Morgan, Soil Conservationist, Fl orida NRCS, in Gainesville, Florida (Jan. 31, 2008).

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76 been held due to lack of funds.20 On March 19, 2008, the Secretary of Agriculture Ed Schafer announced that the FY 2008 sign-up would begi n on April 18, 2008 in 51 watersheds for 64,000 potentially eligible farms.21 One watershed in Florida, the Lo wer Choctawhatchee, was selected. (See Figure 5-3). NRCS estimates that approximately 1,219 farms in Florida will be potentially eligible and that 155,529 acres will be impacted by the 2008 CSP sign-up.22 2005 Sign-up process NRCS made a prelim inary checklist availabl e to potential participants in order for producers to make a preliminary de termination of their eligibility.23 Potentially-eligible producers must then complete a self-assessmen t workbook, which is made available at local NRCS offices, informational meetings,24 and online.25 (See Figure 5-4 for a map of Florida NRCS offices). Completion of the self-assessme nt workbook helps the producer to determine if the producer meets basic eligib ility requirements, document st ewardship work, and prepare a benchmark inventory of implemented conservation treatments.26 The self-assessment must be 20 Id. Mr. Morgan stated, depending on the next farm bill, there may be no sign-up for FY 2007 in Florida or a split sign-up with FY 2008. However, the Florida NRCS websites states that the FY 2007 sign-up for the Lower Choctawatchee watershed is Coming Soon. NRCS, Conservation Security Program (CSP), http://www.fl.nrcs.usda.gov/programs/flcsp.html (last viewed Mar. 5, 2008). 21 USDA, Schafer Announces Conservation Security Program Sign-Up: Sign-Up Begins April 18 in 51 Watersheds Nationwide, USDA Release No. 0084.08 (USDA 2008). 22 Id. 23 NRCS, Conservation Security Program (CSP): Lower Suwannee WatershedFlorida (USDA), available at ftp://ftp-fc.sc.egov.usda.gov/FL/csp/flcspprelim.pdf The checklist consisted of a series of 15 yes or no questions. The checklists encourages producers to complete the Self Assessment Workbook even if the producer answer no to some of the questions. Id. 24 Local outreach sessions were held in January 2005. Florida NRCS, Conservation Security Program 2005 [hereinafter FL NRCS CSP], http://www.fl.nrcs.usda.gov/programs/flcsp05.html (last visited Mar. 5, 2008). 25 Florida NRCS, Conservation Security Program: Application Steps 1 (USD A) [hereinafter FL NRCS APP], available at ftp://ftp-fc.sc.egov.usda.gov/FL/csp/flcspappsteps.pdf 26 FL NRCS CSP, supra note 24.

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77 completed by the producer before an applica tion can be processed during the sign-up period.27 The producer must then bring the self-assessmen t and required records to a local NRCS office.28 The producer must meet with NRCS staff to revi ew the self-assessment and confirm eligibility, identify future conservation work, determine the appropriate tier level an d category, and finalize a Conservation Stewardship Plan [Plan]. Th e Plan is then sent to the NRCS National Headquarters where funding selections are made based on tier level and category until funds are depleted. (See Table 5-1 showing FY 2005 Stewar dship payments by land use and tier level). The local NRCS office then notifies the producer if the Plan has been funded so that the Conservation Stewardship Contract can be signed.29 CSP Payments From 2004 to 2005, the CSP has paid 22,769 participants $205,384,432 across the United States.30 Only $34,478,654 was paid in the program s first year and the remaining $170,905,779 was paid in 2005.31 From 2004 to 2005, the top farm business beneficiary received $172,80432 27 The producer is required to get a USDA Identification Numb er if the producer does not already have one. The producer must also delineate his agricultural operation to determine what land is eligible to be enrolled in CSP. NRCS, Delineating an Agricultural Operation in Conservation Security Program 1 (USDA 2005), available at ftp://ftp-fc.sc.egov.usda.gov/FL/csp/cspdelineation.pdf 28 FL NRCS APP, supra note 25, at 2. 29Id 30 Environmental Working Group, EWG Farm Bill 20 07 Policy Analysis Database, Top Commodity and Conservation Programs in the United States, program years 2003 to 2005 (Environmental Working Group 2008) (hereinafter EWG Farm Bill Database), http://farm.ewg.org/sites/farmbill2007/progdetail1 614.php?fips=00000&progcode=total&page=croptable (last visited Mar. 5, 2008). 31 EWG Farm Bill Database, Total Conservation Security Program be nefits in the United States, 2003-2005 (EWG 2008), http://farm.ewg.org/sites/farmbill2007/progd etail1614.php?fips=00000&progcode=total_csp (last visited Mar. 5, 2008). 32 EWG Farm Bill Database, Total Conservation Security Program benefits in the United States, 2003-2005: Farm Businesses (EWG 2008), http://farm.ewg.org/sites/farmbill2007/top_recips1614. php?fips=00000&progcode=total_csp&yr=mtotal&enttype=e ntity (last visited Mar. 5, 2008).

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78 and the top individual be neficiary received $210,000.33 For payments made between 2003 and 2005, Florida was ranked 35th among all States with 0.3% of the total payments. In 2005, Florida received $533,591 for 55 participants.34 (See Table 5-2 for a comparison of payments for other commodity and conservation programs in Florida) Although there were 55 individual participants from the FY 2005 si gn-up in the Lower River Basin, there are only 36 active conservation stewardship contracts in Fl orida since many individuals receive pass-through payments through farm businesses.35 There were originally 37 contracts, but one participant has passed away since the program began. Only one of the 37 contracts has been promoted to Tier III. Lafayette County received the highest sh are of CSP payments with 31.2%, or $166,472, for 28 participants and Dixie County received the lo west share of CSP payments with 7.5%, or $40,190, for 3 participants.36 In 2005, the top farm business received $30,97937 and the top 33 EWG Farm Bill Database, Total Conservation Security Program be nefits in the United States, 2003-2005: Subsidy Beneficiaries (EWG 2008), http://farm.ewg.org/sites/farmbill2007/top_recips1614. php?fips=00000&progcode=total_csp&yr=mtotal&enttype=i ndv (last visited Mar. 5, 2008). 34 EWG Farm Bill Database, Total Conservation Security Program bene fits in the United States, State Rankings (EWG 2008), http://farm.ewg.org/sites/farmbill2007/progdetail1614. php?fips=00000&progcode=total_csp&page=states&yr=mtot al (last visited Mar. 5, 2008). Compare EWG Farm Bill Database, Florida (EWG 2008), http://farm.ewg.org/sites/farmbill2007/region1614.php?fips=120000 (last visited Oct.11, 2007) (showing Florida received $93.5 million in commodity payments from 2003 to 2005); EWG Farm Bill Database, Top Commodity and Conservation Programs in Florida, program years 2003-2005 (EWG 2008), http://farm.ewg.org/sites/farmbill2007/progdetail1 614.php?fips=12000&progcode=total&page=croptable (last visited Mar. 5, 2008) (showing that CSP was ranked 11th among all commodity and conservation programs in Florida for payments made from 2003 through 2005). 35 Interview with Kenneth Morgan, Soil Conservationist, Florida NRCS, in Gainesville, Florida (Jan. 31, 2008). 36 EWG Farm Bill Database, Total Conservation Security Program benefits in Florida, County Rankings (EWG 2008), http://farm.ewg.org/sites/farmbill2007/progdetail1614. php?fips=12000&progcode=total_csp&page=county&yr=mto tal (last visited Mar. 5, 2008). 37 EWG Farm Bill Database, Total Conservation Security Program be nefits in Florida, Farm Businesses (EWG 2008), http://farm.ewg.org/sites/farmbill2007/top_recips1614. php?fips=12000&progcode=total_csp&yr=mtotal&enttype=e ntity (last visited Mar. 5, 2008).

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79 ranked individual bene ficiary received $34,96238 CSP payments to individuals ranged from $465 to $34,962 in 2005.39 Selection of the Watershed for the FY 2005 Sign Up The Lower Suwannee River Basin was chosen as the selected watershed f or the FY 2005 sign-up because of the history of conservation in the watershed, such as the Suwannee River Partnership, and the high rate of farmer participation in such voluntary conservation programs.40 The Lower Suwannee River watershed was the Fl orida NRCS first choice of watersheds in which to implement CSP out of about six watersheds recommended to the national office in Washington, D.C. The national office ended up approving the Florida offices first choice.41 The Suwannee River Partnership, a public-priva te partnership, was organized in 1999 in response to rising nitrate levels to form a coalition of private la ndowners and government agencies to implement Best Management Practic es [BMPs] that reduce nutrient contamination to rivers, springs, and groundwater.42 The Suwannee River Partnerships mission is to determine the sources of nutrient loads to the Suwannee and Santa Fe river basins, and to work with local land users to mini mize future nutrient loading through voluntary, incentive-based 38 EWG Farm Bill Database, Total Conservation Security Program benefits in Florida, Subsidy Beneficiaries (EWG 2008), http://farm.ewg.org/sites/farmbill2007/top_recips1614. php?fips=12000&progcode=total_csp&yr=mtotal&enttype=i ndv (last visited Mar. 5, 2008). 39 EWG Farm Bill Database, Total Conservation Security Program benefits in Florida, Subsidy Beneficiaries (EWG 2008), http://farm.ewg.org/sites/farmbill2007/top_recips1614. php?fips=12000&progcode=total_csp&yr=mtotal&enttype=i ndv (last visited Mar. 5, 2008). 40 Interview with Kenneth Morgan, Soil Conservationist, Fl orida NRCS, in Gainesville, Florida (Jan. 31, 2008). 41 Id. 42 Suwannee River Water Management District, Suwannee River Partnership [hereinafter SRWMD], http://flsuwanneeriver.civicplus.com/index.asp?nid=57 (last visited March 26, 2008). Information on BMPs is provided at the Florida Department of Agriculture and Consumer Services Division of Ag Water Policy website at http://www.floridaagwaterpolicy.co m/BestManagementPractices.html

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80 programs.43 The Partnership provides information on federal and state agency cost-share programs to private landowners who wish to adopt BMPs.44 Additionally, the Florida Farm Bureau and the Suwannee River Partnership cr eated the County Alliance for Responsible Environmental Stewardship [CA RES] Program to increase envi ronmental awareness of farms through a coalition of agri cultural associations, p ublic agencies and institutions, and farmers. The CARES program institutes a step-by-step ap proach to environmental stewardship [that] will help farmers to implement sound, positive envi ronmental practices and establish and follow environmental management plans while maintaining profitability.45 Lower Suwannee River Watershed The Lower Suwannee River watersh ed is locat ed in parts of eight Florida counties, including Lafayette, Madison, Columbia, Levy, Suwannee, Taylor, Gilchrist, and Dixie.46 (See Figure 5-5). The watershed is estimated to be close to one million acres in land area.47 NRCS described the geology of the watershed to includ e soils that were we ll drained to somewhat poorly drained and karstic hydrogeology with cl osed basins and numerous springs with a high degree of recharge po tential overlain by sandy well-drained soils. 48 The primary land uses include cropland, irrigated cropla nd, and pastureland. In 1995, the Forest Service found that 4.6 43 Suwannee River Partnership, Mission Statement [hereinafter SRP], http://www.suwannee.org/mission.html (last visited March 26, 2008). 44 SRP, Cost Share Programs, http://www.suwannee.org/costshare.html (last visited March 26, 2008). For example, farmers can receive up to 75% cost share assistance und er the federal EQIP (Environmental Quality Incentives Program) and a state SRWMND/FDACS provides cost share in conjunction with USDA cost share programs for nutrient and irrigation BMPs. 45 SRP, County Alliance for Responsible Environmental Stewardship (CARES), http://www.suwannee.org/cares.html (last visited March 26, 2008). 46 FL NRCS CSP, supra note 24. 47 Id 48 Id

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81 million acres in Florida, 32 percent of all forestland in the state, were classified as pine plantations.49 However, forests also share acreage w ith other land uses such as urban areas, wetlands, orchards, pastures and crops.50 In 2002, there were 44,081 farms in Florida to taling over 10 million acres with an average farm size of 236 acres.51 In comparison, the eight counties located in the Lower Suwannee River Basin had 4,087 farms totaling close to 900,000 acres with an average farm size of 236 acres.52 However, in 2005, NRCS estimated the average farm size to be 197 acres.53 NRCS estimated that there are approximately 1,500 farms cove ring 83,000 acres in the cropland areas of the Lower Suwannee River watershed.54 Farms in the watershed received an averag e of $8,543 in government payments in 2002, up 143 percent from 199755, compared to an average of $7,571 in the Lower Suwannee River Basin counties.56 The total value of all agricultural crops sold in Florida in 2002 was over $6 billion dollars.57 49 Douglas Carter & Eric Jokela, Floridas Renewable Forest Resources Edis Publication CIR1433 (University of Florida IFAS Extension 2002), available at http://edis.ifas.ufl.edu.lp.hscl.ufl.edu/pdffiles/FR/FR14300.pdf 50 Id. 51 National Agricultural Statistics Service, 2002 Census of Agriculture: Florida State Profile (USDA 2002) [hereinafter NASS Florida]. 52 NASS, 2002 Census of Agriculture: County Profile (USDA 2002) [hereinafter NASS Counties] (author compiled the profiles for eight Florida counties, including Lafayette, Columbia, Madison, Levy, Suwannee, Taylor, Gilchrist, and Dixie). 53 FL NRCS CSP, supra note 24. 54 Id. 55 NASS Florida, supra note 51. 56 NASS Counties, supra note 52. 57 NASS Florida, supra note 51.

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82 In the Lower Suwannee River Basin counties, the top livestock production activities were broilers and other meat-type chickens and beef cattle.58 The top crop production activity was forage59 with nearly 160,000 acres in pasture.60 Other major crops include corn, peanuts, tobacco, and vegetables.61 In 2002, the average per farm production expenses and net cash income for the Lower Suwannee River Basin were $93,635 and $18,006, respectively. 62 Of the 4087 farms in the Lower Suwannee River Basin counties in 2002, only a little over half of the principal farm operators were primarily occupied by farming.63 Over 80 percent of the principal farm operators were male and 97 percent of all operators wher e white. The average age of a principal farm operate was 57.3 years. Sondeo Results Interviews Nine program participants, representing ei ght CS P contracts, and the NRCS State Conservationist responsible for implementing CSP in the State of Florida were interviewed. All CSP participants who were interviewed were lo cated in the Lower Suwannee River Basin. Four of the participants interviewed were located in La fayette County. Another four participants were located in Suwannee County. One participant was located in Levy County. Unfortunately, the District Conservationist for Bronson NRCS Service Center, wh ich services Levy, Dixie, and 58 Id 59 NASS Counties, supra note 52. 60 FL NRCS CSP, supra note 24. Most of this pastureland is comprised of improved pasture grass species such as Bahia and Bermuda grass. Id. 61 Id 62 NASS Counties, supra note 52. 63 Id

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83 Gilchrist Counties, was unable to help contact as many CSP participants as the other District Conservationists due to his j ob relocation. For FY 2005, CSP payments to sondeo participants ranged from $5,204 to $24,014.64 The average payment was $10,698 and the median payment was $8,495. The farmers said that the largest paym ent was made in the first contract year and the payment was reduced each year thereafter. Description of farmers Of the nine farm ers who were interviewed, six participants were full-time farmers. Of these six, three farmed as part of a family bus iness. The other three full-time farmers were retired professionals, including a retired Department of Treasury special agent, a retired Game Warden, and a retired high school football coach. All were familiar with agriculture from their childhood up-bringing or because they continued farming on a part-time basis while working full-time in their other profession. Each planned to farm as a retirement plan. Another of the part-time farmers, who owns an insurance business, started farming as a retirement plan as well. The other two part-time farmers work as a dairy in spector for the state department of agriculture and as an elected public official. These farmers also grew up on farms. At least one of the farmers interviewed has been recognized at th e local level by the Suwannee CARES program as the Farmer of the Year. This farmer was also ranked third in the nation for the Lloyd Wright Small Black Farmer of the Year in 2005. Description of farms The prim ary production activity of eight farms represented by the sondeo was beef cattle. Six of the farms produced beef cat tle. One farm was a dairy that produced only 64 EWG Farm Bill Database, Top CSP Benefi ciaries in Florida, FY 2003-2005, http://farm.ewg.org/sites/farmbill2007/top_recips1614. php?fips=12000&progcode=total_csp&yr=mtotal&enttype=i ndv (last visited March 28, 2008).

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84 milk. Another farm primarily produced show pigs. Watermelon was produced on two of the farms. Each farm produced either hay or pastur e. The farms ranged in size from just under 100 acres to close to 1,000 acres. Most farmers owned all of their land but a few rented portions of their land from others. Livestoc k operations ranged from about 65 to 600 head. Several farms also had a portion of the land in pine stands. Se lling pine needles to pine straw rakers for use in landscaping seems to be more profitable right now than selling the wood for pulp. CSP Advertisement Sondeo participants were asked how they were inf ormed of CSP. Sondeo participants stated that they first became aware of C SP through NRCS mailings, directly from a NRCS district conservationist or soil conservationist, from the SRWMD, and from the FSA. Most of the sondeo participants had already been invol ved in conservation pr ograms administered by NRCS, such as EQIP, and had a working relationsh ip with the district conservationist. Most learned through this relationship that they could be rewarded for their past participation in voluntary conservation programs by a new program called CSP. One CSP participant, who was the only hog producer in the region, said that he became aware that dairy operators were receiving assistance under EQIP and PL-566 and wanted to see the programs made available to hog producers as well. Supposedly, the NRCS change d the program eligibility rules so to make funding available to hog operations. After participating in EQIP and PL-566, he enrolled in CSP when the program was created. Motivation to participate Sondeo participants were asked why they were motivated to participate in CSP. There were two common general responsesthe exp ected econom ic and environmental benefits.

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85 Sondeo participant responses were classified into three categories of motivation1) economic, 2) environmental stewardship, and 3) practical. Economic motivations. One of the most common responses in this category that was generally shared by all sondeo participants was that making an agricultural operation more sustainable made it more efficient and, thus, more profitable in the long term. One farmer stated that his primary goal was to make his operation sustainable and profitabl e by reducing his inputs as much as possible. The farmers recognized at least two major be nefits to decreasing production inputsfirst, the increas ing costs of fossil fuels (and, th erefore, fertilizers) and water restrictions in recent drought years; and second, th e reduced harmful impact to the environment. However, the farmers assumption is that the co st to implement the conservation practices will be offset by the savings in produc tion inputs and increased efficien cy. This is the basis for many of the farmers decisions on whic h conservation practices to adopt. Another interesting respons e to the motivation question that was common to several farmers was that they chose to participate in CSP in anticipation of future environmental regulation. Although the ag riculture industry has been specifically exempted from some major regulations and generally treate d differently than many other po lluting industries, farmers have noticed a changing regulatory c limate. They recognize that th e agriculture industry has great potential to degrade the natural environment and that stricter, mandatory regulation is looming in the near future. However, many of the participants stated that the cost to adapt to such regulation would put them out of business. Thus, many ha ve acted on this foresi ght by participating in federal, state, and local cost-share programs fo r the past decade or more. These farmers are taking a long-term view of what is best for their business and are taking the opportunity to

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86 transition to higher levels of ma nagement for conservation on thei r farms with the financial and technical assistance of the government. Finally, many farmers said that they were motivated to participate because they would receive payments for practices that they were al ready implementing. The reward aspect of the CSP payment is money that they would not ha ve otherwise receive and it only required recordkeeping to prove that the practice was be ing implemented. Thus, most farmers did not have to change their behavior at all in order to receive CSP payments, as most were in the habit of making thorough records. Many st ated that agriculture is a very unstable and risky business to be in right now with the risi ng cost of production, but no corresponding increase in most market prices. Some farmers went so far as to state that they would go out of business without any kind of government assistance, technical or financial. One farmer st ated that he had previously farmed on rented land in Tennessee. He found that, as a renter, he could not afford to implement conservation practices alone. Ge nerally, the farmers saw CSP as an opportunity to increase their income. Environmental stewardship motivations. Every sondeo participant also stated that one of the motivations for participating in CSP was concern for the environment to varying extents. Many of the farmers lived on the farm, grew up in the area, and had family in the area. The farmers recognized that agricultural runoff could im pair their own drinking water. Also, some stated that farming as an occupation involved an intrinsic love of the land and that implementing conservation practices benefited the land. One fa rmer stated, Take care of the land and the land will take care of you. The farmers generally seemed to be thinking long-term about the environmental impacts of agriculture on the land a nd how best to ensure the long-term viability

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87 of the land. One farmer even mentioned concer n for future generations as a motivation for participating in CSP. Practical motivations. Finally, some farmers gave additional motivations suggesting that participating in CSP was a practical decisi on. Many farmers describe d the requirements of CSP as mostly recordkeeping, which many were al ready doing for their own personal use. Some said that they needed and sought out technical help and direct ion in making their farms more efficient and sustainable. One farmer even said that participating in CSP was the right thing to do. Finally, some farmers recognized that th e program was important to ensuring sustainable food security and protecting small farmers. Participation in other conservation programs Most of the CSP participants interviewed also participated in othe r conservation programs at the federal, state, or local le vel. Six of the farmers participated in EQIP. Most of the farmers also participated in the Suwannee River Part nerships CARES program and implemented Best Management Practices {[BMPs] recommende d by the Suwannee River Water Management District [SRWMD], the Florida Department of Environmental Protection, and the Florida Department of Agriculture and Cons umer Services. Some of the participants also participated in PL-566, which refers to Public Law 83-566, the Watershed Protec tion and Flood Prevention Act. PL-566 is a program in which NRCS coordinates with state and local go vernment agencies to improve soil conservation, prevent floods conserve water, and conserve land.65 PL-566 provides technical and financia l assistance to state and local governments to implement 65 NRCS, Watershed Protection and Flood Prevention, http://www.nrcs.usda.gov/ programs/watershed/ (last visited March 28, 2008).

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88 authorized watershed projects of which th ere are over 1,500, including the Suwannee River Basin.66 Conservation practices adopted Many of the sondeo participants stated th at they were already im plementing most conservation practices required by their CSP contracts before enro llment in the program. Since many of the farmers were enrolled in more than one conservation program, they often could not keep track of which practices they were implem enting for which programs. There also seemed to be a great deal of overlap. The main cons ervation practices the farmers were implementing under CSP fall into the categor ies of nutrient management, pest management, water conservation, soil conservation, and recycling. Surprisingly, none of the farmers stated that they were implementing any wildlife conservation pract ices. Many gave the r eason that the size of the operation was just too small to make it feasible to implement any of the recommended wildlife conservation practices. For example, a few farmers stated that conservation barriers were required to move up from a Tier II to a Ti er III contract. However, the farmers stated that their operations were too small to allow such barrie rs to grow and still be profitable. The main theme underlying all of the conservation practices implemented under CSP is recordkeeping. The farmers each kept detailed records in order to prove that they were meeting their contract requirements. Nutrient management. Many of the sondeo participants st ated that they regularly paid to have their soil tested in order to apply fertilizer at the recommended rate s. Many of the farmers noted the rising cost of fertilizer due to the hi gh price of fossil fuels. The current economic situation is financially motivating farmers to be conservative with ferti lizer applications. One 66 Id.

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89 farmer stated that he rented equipment in order to spread fertilizer using GPS so as to minimize any application overlap. Many farmers also stated that they fertilized in multiple applications based on soil tests so as to maximize crop uptak e of nitrogen and reduce runoff. Additionally, some farmers stated that they rotated their crops with nitrogenfixing legumes such as perennial peanuts or clover. All of the farmers with a livestock operat ion employed extensive nutrient management practices. The dairy operation installed a new feed barn with a concrete floor for the highdensity area in order to collect manure. The manure was collected in a holding pond and spread on forage crops. The hog operation also built a hi gh-density building with a concrete floor to collect manure. However, it is unclear if th e farmers are actually receiving CSP payments for installing these types of structures, which seem to be exempted from the program. These farmers were also enrolled in EQIP and it is likely th at this was responsible for cost-sharing in the installation of th ese structures. Many of the beef cattle operations seemed to be using an intensive rotational grazing technique in order to better spread manure and pr event hot spots. This is done by installing more fencing to divide pastures up into smaller areas (2 to 20 acres) and moving the cattle more frequently across a larger number of pastures. Farmers employing this practice keep extensive records of when and where the cattle were moved to graze. Pest management. The sondeo participants also implemented pest management practices to keep their pesticide applications to a minimum. Most farmers stated that they used very little pesticides and kept thorough records of their pesticide applications. One farmer stated that he used a biological spray called Dimilin that is supposed to be safe for wildlife in order to

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90 control army worms on his hay. He also hung gourds on the farm for Martin s, natural predators, to nest. Another farmer stated that he mo wed his fields in order to control weeds. Water conservation. A few of the sondeo participants who used irrigation systems for their crops stated that they sw itched from high pressure, overhead sprinklers to lower pressure, central pivot systems. One farmer stated that the water pressure of his irrigation system was reduced from 120 to 35 pounds. The central pivot systems were also installed closer to the ground in order to reduc e water evaporation. Soil conservation. Two of the farmers stated that they planted rye between their watermelon rows in order to prev ent wind erosion. A few farmers planted cover crops, such as hay, to prevent soil erosion. One farmer said that he practiced no till on his winter grasses. Recycling. Most of the sondeo partic ipants stated that their CS P contract required them to recycle and record us ed batteries and oil. Program Problems and Inefficiencies Sondeo participants were asked what problem s they encountered while participating in CSP and how the program could be improved from their perspectiv e. The primary problem cited by all sondeo participants was CSPs lack of funding. Funding cuts after the FY 2005 sign-up led the NRCS to change the requirements to m ove up a tier level and, therefore, receive higher payments. Thus, most farmers stated that ther e is no financial incentive to implement any more enhancements to move up a tier level. One farm er stated that the me thod of disbursing CSP payments was misleading. He purchased a tracto r in reliance on his CSP contract payments. However, due to budget cuts, his payments were reduced each year until they were cancelled. Now he can no longer afford his tractor.

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91 Most farmers also found CSP to be inflexib le to innovation in cons ervation practices and unable to adapt to local conditions. For example, a few of the farmers with a Tier II contract stated that they wished to jump to a Tier III contract but were una ble to because of the requirement for conservation buffers, which ar e infeasible on most small operations. One farmer, who had 30 years of experience in wildli fe management as a former game warden, found it difficult to move up to a Tier III level because the wildlife protection requirements were cost prohibitive and impractical on a sm all operation. He stat ed that these practices seemed to be geared towards large farms in the mid-West. He employs some wildlife conservation practices on portions of his farm, such as food plots for deer and turkey, but the land is ineligible to be enrolled in CSP because it is in timber. He explained that the wildlife conservation practices required for Tier III contracts are geared towards a different type of wildlife, such as quail, that require a different type of habitat, i.e. row cr ops. However, row crops are not as profitable for the farmer as beef cattle, pasture, and pine sta nds. Thus, most farmers stated that there is no incentive to adopt more conservation practi ces to move to a higher tier level. All of the farmers stated that many of the conservation practices we re cost-prohibitive and inefficient either because of the size of th e operation, the soil and cl imate conditions of the area, or both. One farmer explained that he had to spend his own money to correct design mistakes made by the NRCS and that the NRCS was not using least cost methods and designs. This farmer approximated that he had spent close to half a million dollars the previous year alone to implement conservation practices on his dairy operation. Thus, the magnitude of the up-front cost to implement some conserva tion practices is very great and, therefore, the most efficient methods and designs should be used. Some farmer s found that the NRCS estimates of the cost of implementation were grossly underestimated.

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92 Some farmers gave specific examples of inefficient conservation practices. One farmer explained that renting costly equipment to spread fertilizer using GPS was inefficient on small operations where the risk of a pplication overlap is very smal l with good recordkeeping. Another farmer explained that his CSP cont ract required that he record the number of batteries that he recycled each year. However, small operations do not necessarily dispose of batteries each year so he often has nothing to record. Based on the language of the contract, he was unsure whether he had failed to fulfill his contract requirement if he did not have any recycled batteries to record. Another problem cited by some farmers wa s CSPs overlap with other conservation programs at the federal, state, and local leve ls. Many farmers were unsure which conservation practices they were implementing for which program and many were receiving payments and cost-share assistance for the same practices. CSP does not allow farmers to receive duplicate payments for the same practices, but if an overl apping payment was made due to an error of the NRCS then the farmer does not have to pay it back. However, exactly this happened to one sondeo participant who went all the way through an administrative appeal process and lost. He felt that the NRCS did this because program fund s had been cut so many times, and he now finds the CSP payments to be unreliable. In general, the farmers stated that th ere is too much bureaucracy, procedure, and paperwork involved in the implementation of CSP. One farmer found CSP to be a very technical program that was difficult to understand, even fo r the NRCS employees that he worked with. However, all of the sondeo particip ants stated that they wished to extend their contracts or move to a higher tier level if there were sufficient f unding available. One farm er specifically stated that he would continue to implement the conser vation practices on his farm even if funds for CSP were cut because it has made his operation so efficient. Despite the problems with CSP in

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93 its early implementation, the farmers seemed to generally recognize that the program was achieving its goals and that it wa s well managed, but that the methods of implementation need to be improved. Farmer Recommendations Many farmers recommended that the admini stration of CSP be more bottom-up. One farmer suggested a similar framework to that of the Farm Service Agency, which uses county committees to oversee the allocat ion of federal money based on lo cal needs. One farmer found that a conservation security prog ram should have an element of food security, which he found to be lacking in CSP. He suggested that animal identification using tags that can be scanned for information about the animals history be incorp orated into the program. He felt that animal identification was important for disease control, human health, and trad e regulations (e.g. some countries regulate the age of beef cattle). He currently takes on th e cost of $2/tag and registering his property but he does not receiv e the premium price for tagged cat tle because the facilities in the region were he can deliver the cattle do not have the technology to scan the tags. Another recommendation made by several farmers is making timber land eligible to be enrolled in the program. Many farmers said that they would be able to implement more wildlife conservation practices if their timber lands were included in the CSP contract. Finally, the farmers recommended that the many conservation programs be streamlined and work together to be more efficient. Discussion There are several important themes that can be extrapolated from the experiences of the sondeo participants with CSP. First, all of th e farmers generally found that sustainability is good for business. The farmers were all adamant that sustainability and adapta bility were required in order to be profitable in the face of increasing in put prices. Many farmers also stated that the

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94 CSP record keeping requirements made them more aware of inefficiencies in their operation and made it easier to identify and correct those ineffi ciencies. Also, the technical assistance of the NRCS made the farmers more aware of diffe rent methods to make their operation more sustainable. The farmers found that participati on in CSP really helped them to reduce their fertilizer, fuel, and water costs during a time of rising fossil fuel costs, which also increases the cost of fertilizer. They were also facing drought in the Suwannee River Basin. Finally, the farmers found that participation in CSP improved the profitability of their business because the conservation practices increas ed the fertility and productivity of their land. The second major theme of CSP participant e xperience that can be garnered from the sondeo participants responses is that farmers can be stewards of th e environment. Many farmers stated that they had environmentally c onscious reasons for participating in the program to begin with. Most of the farmers found that participating in CSP made them more aware of environmentally degrading methods and how to improve them. Although many farmers were primarily motivated to participate for financia l reasons, most were already implementing many of the conservation practices that they received stewardship payments for, and some stated that they would continue to improve the sustainability of th eir operations even without receiving CSP payments. The last major theme is that the CSP partic ipants provide a wealth of experience from which to draw upon to improve inefficiencies in the implementation of the program in achieving its goals of rewarding the best and motivating the rest. All of the farmers have valuable agricultural expertise an d many had professional experience wo rking for government agencies. Together with their experience participating in CSP, they are a valuable resource for identifying and improving inefficiencies in CSP. However, the farmers did recognize that despite the many

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95 areas in need of improvement, CSP is a new program with growing pains and a steep learning curve. Figure 5-1. Florida Selected CSP Watersheds, 2005 (Source: NRCS, CSP Watersheds, FY-2005, http://www.nrcs.usda.gov/programs/images/flcsp05.jpg .)

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96 Figure 5-2. Florida Selected CSP Watersheds, 2006 (Source: NRCS, CSP Watersheds, FY-2006, http://www.nrcs.usda.gov/programs/ csp/2006_CSP_W S/StateMaps/m9081_fl.jpg .)

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97 Figure 5-3. Florida Conservation Security Pr ogram (CSP) Watershed, FY 2008 (Source: NRCS, Conservation Security Progr am (CSP) Watersheds, FY 2008, http://www.nrcs.usda.gov/programs/csp/CSP_2008/2008_state_m aps/rotatedm9936_FL.jpg .)

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98 Figure 5-4. NRCS Administrative Areas & Fiel d Service Centers, Florida (Source: Suwannee County, Florida NRCS, electronic Field Office Technical Guide [eFOTG], http://efotg.nrcs.usda.gov/references/public /FL/nrcs_adm inistrative_areas_service_ce nters.jpg.)

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99 Figure 5-5. Map of Lower Suwannee River Wate rshed (Source: Florida NRCS, Conservation Security Program 2005, http://www.fl.nrcs.usda.gov/programs/flcsp05.html (last visited Mar. 5, 2008).)

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100 Table 5-1. Table of 2005 CSP Stewardship PaymentsLower Suwannee River Watershed (Source: Florida NRCS, Conservation Security Program 2005, http://www.fl.nrcs.usda.gov/programs/flcsp05.html (last visited Mar. 5, 2008).) Land Use/ Tier Level Tier I Tier II Tier III Cropland $0.46/acre$1.85/acre$4.16/acre Irrigated Cropland $1.21/acre$4.95/acre$10.91/acre Rangeland $0.06/acre$0.25/acre$0.56/acre Pastureland $0.28/acre$1.10/acre$2.48/acre Table 5-2. Top Commodity and Conservation Programs in Florida, program years 2003-2005 (Source: EWG Farm Bill Database, Top Co mmodity and Conservation Programs in Florida, program years 2003-2005 (EWG 2008), http://farm.ewg.org/sites/farmbill 2007/progdetail1614.php?fips=12000&progcode= to tal&page=croptable (last visited Mar. 5, 2008).) Rank Program Number of Beneficiaries Program years 20032005 Total Program years 20032005 1 Peanut Subsidies 2,433 $67,005,351 2 Cotton Subsidies 1,600 $44,057,400 3 Conservation Reserve Program 2,040 $8,945,643 4 Environmental Quality Incentive Program (EQIP) 1,167 $8,194,389 5 Dairy Program Subsidies 410 $7,800,498 6 Corn Subsidies 3,989 $7,680,771 7 Wetlands Reserve Program 15 $2,577,638 8 Wheat Subsidies 2,258 $1,523,291 9 Sorghum Subsidies 1,454 $808,154 10 Rice Subsidies 141 $708,817 11 Total Conservation Security Program 55 $533,591 12 Wildlife Habitat Incentives Program (WHIP) 59 $335,011 13 Grasslands Reserve Program 9 $255,575 14 Soybean Subsidies 493 $221,455 15 Oat Subsidies 992 $35,535 16 Barley Subsidies 2 $12

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101 CHAPTER 6 CONCLUSION: RECOMMENDATI ONS FOR IMPROVING CSP There are th ree main recommendations that can be made to improve the efficiency of the CSP based on the sondeo results: (1) increase pr ogram funding; (2) crea te regional oversight committees; and (3) streamline CSP with other conservation programs.1 First, and most importantly, Congress must increase funding for CSP in order for the program to function as an entitlement program as originally intended and to achieve its goal of providing both reward and incentive for farmers to reach the highest levels of conservation on their working lands. Currently, the CSP is working only to provide re ward and is failing to provide incentive for farmers to strive to implement higher levels of conservation practices. There are three ways that increased funding will improve the implementation of the CSP. First, it will allow more CSP contracts in more watersheds across the U.S. Second, it will increase CSP payments so that participating farms can opt to implement more e nhancements and modify their contracts to move to higher tier levels. Finally, Congress should remove the 15 percent cap on technical assistance to increase the number of NRCS employees implementing the CSP and the amount of assistance they are able to provide to farmers. One possi ble source of such funding would be a reallocation of money from trade-distorting commodity-bas ed subsidy programs. Spending less money on such amber box subsidies, which are capped under the WTO AoA, and more on green box programs, such as the CSP, will also help fulfill U.S. international trade obligations. A second major improvement that should be made to improve the implementation of the CSP is to create regional oversi ght committees to implement the program on a more local level, 1 For other reviews of the CSP, see Soil and Water Conservation and Environmental Defense, Conservation Security Program (CSP) Program Assessment, (February 2007), available at http://www.swcs.org/documents/CSP_assessment.pdf and Arha, Kaush et al. (Eds.), Forum: U.S. Agricultural Policy and the 2007 Farm Bill (The Woods Institute for the Environment, Stanford University), available at http://woods.stanford.edu/docs/farmbill/farmbill_book.pdf

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102 instead of top down from the national headquarters. Such committees could be modeled after the FSA county committees, as suggested by one of the sondeo participants, and include NRCS employees, agricultural ex tension agents, representatives of industry groups, representative of public interest groups, and, of c ourse, local farmers. One of the major benefits of using a regional oversight committee to implement the CSP is to draw upon the local agricultural expertise in make more locally pragmatic and flexible decisions in CSP contract and funds allocation. Such committees could be formed on a watershed basis sin ce that is the basis on which the CSP is currently being implemented. Thus, a regional oversight committee would be able to focus on locally priority resources and im prove regionally appropriate quality criteria. Finally, the CSP goals and implementation shou ld be streamlined with other conservation programs in order to reduce bureaucracy, inefficien cy, and confusion. (See Chapter II, Future of the Farm Bill Conservation Programs: 2007 Proposal for Title II). There is a considerable amount of overlap and redundancy in conservation programs with the same or similar goals at the national, state, and local levels. Howeve r, each program has different requirements and eligibility rules, which creates a lot of confusion amongst farmers willing to participate. This overlap and redundancy prevents maximum particip ation. Thus, the programs are not targeting the most environmentally sensitive lands. Administ rative costs must be reduced in order to free up more money for incentives and, therefore, opt imize the environmental benefits produced by conservation programs. More specific policy recommendations could be made through the use of future research into CSP participation across watersheds and fi scal years. A more detailed and expansive sondeo could be conducted across watersheds that represent different ecosystems, climates, and soil types using true interdisciplinary teams of scientists. It is also important to represent a range

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103 of agricultural operations in terms of size a nd production activities in each watershed. Conducting a sondeo over different fiscal years will give a better picture of how each CSP signup has affected participation, conservation pr actices, and overall environmental benefits. Another important aspect of a sondeo could be to interview those farmers who applied to the program and were not selected or those farmers who choose not to participate in such voluntary conservation programs. This could show whethe r CSP eligibility and enrollment criteria are truly capturing the most sensit ive environmental lands and maximizing the environmental benefits achieved by the program. Another area of further research that could be done is to extrapolate the results of this sondeo or a more expansive sondeo as suggested above to design a new conservation incentives program. Many have suggested incorporating many or all of the Farm Bill Conservation Programs into one overall program so that farmer s need only sign one contract and receive one payment. The benefits of this suggestion are th at it has great potential to reduce administrative costs and to reduce confusion and redundancy. Howe ver, the authors research to date has not turned up an actual suggested design or stat utory language for such a program. Another possibility for designing a new conservation incentives program is one in which all private lands, not just agricultural, are eligible. With clos e to one billion acres held privately, of which agriculture is a large proportion, private lands in general hold great potential to conserve environmental services. However, it would be very challenging to de sign eligibility and enrollment criteria for a large variety of land us es with potential conser vation. These exercises are important though to continue creative thinki ng about what the future of environmental regulation in the U.S. should look like. Certainl y, such research will generate new and better ideas about how best to ensure conservation of environmental services.

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104 Conservation incentives are ju st one of many regulatory tool s to conserve environmental services on agricultural lands. The Farm Bill is a revolutionary example of how conservation incentives can be used to incorporate conservati on into the management of working lands. In addition to the weaknesses pinpointed and a ddressed by the USDA in its 2007 proposal and the need to address problems identified in the s ondeo, commentators have noted that conservation incentive programs need to be designed to motivate and maintain long-term behavior curtailment, to continue across the desired temporal span of behavior, and to account for intrinsic motivation to conserve in order to be successful.2 Conservation incentives can be improved to meet these goals by staggering payments to provide for intermittent reinforcement, structuring incentive programs to preserve intrinsic motivat ion and avoid wasting resources, and improving the marketing of incentives.3 The next generation of e nvironmental strategies requires recognition of the comparative merits of regula tion and incentives and car eful consideration of the best approach, or combination of approaches to apply to particul ar conservation issues.4 Conservation easements are flexible policy tool s that can do just that. Thus, conservation incentives such as those found in Title II of the 2002 Farm Bill and forthcoming 2008 Farm Bill provide an invaluable opportunity for farmer s to become stewards of the environment. 2 Stephanie Stern, Encouraging Conservation on Private Lands: A Behavioral Analysis of Financial Incentives, 48 Ariz. L. Rev. 541, 552-54 (2006). 3 Id. at 357. 4 Id at 349.

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105 APPENDIX SAMPLE SURVEY QUESTIONS 1. How did you find out about the Conservation Security Program ? 2. Why were you interested in a program that provided reward and incentive for conservation practices on wo rking agricultural lands? 3. How many acres of your agricultural operation are enrolled in CSP? 4. What production activities or land use do you ty pically engage in on those acres enrolled in CSP? 5. What is your tier placement and enrollment category? 6. Before applying to the CSP, had you alrea dy been engaged in conservation practices on your agricultural lands? 7. If yes, what types of conservation practices did you employ? 8. Do you feel that the CSP payments provide adequate reward your existing conservation practices? Why or why not? 9. What resources were you hoping to conserve by participating in CSP? Do you feel that you have been successful in conserving those resources based on the adequacy of the CSP payments? 10. Are you interested in employing additional c onservation practices to move to a higher tier? 11. Do you also receive payments for enhancements in addition to your stewardship payment? 12. Do you feel that the CSP provides adequate incentive to employ c onservation practices beyond the minimum levels of resource protection? Why or why not? 13. Do you think that CSP should be an entitlement program as Congress originally intended (available to all who qualif y) or should enrollment be capped? Why or why not? 14. What are your main suggestions for im proving the ability of CSP to maximize environmental benefits? 15. What other conservation programs do you participate in?

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106 LIST OF REFERENCES 5 U.S.C.A. 552 et seq. (W est 2008). 7 C.F.R. 1469.1 et seq. (West 2008). 16 U.S.C.A. 3838 et seq. (West 2008). 33 U.S.C.A. 1362 (West 2008). 33 U.S.C.A. 1311(a) (West 2008). 69 Fed. Reg. 194 (January 2, 2004) (West 2008). 69 Fed. Reg. 24,560 (May 4, 2004) (West 2008). 69 Fed. Reg. 34,533 (June 21, 2004) (West 2008). 70 Fed. Reg. 15,277 (March 25, 2005) (West 2008). 71 Fed. Reg. 6,250 (February 7, 2006) (West 2008). Arha, Kaush et al. (Eds.), Forum: U.S. Agricu ltural Policy and the 2007 Farm Bill (The Woods Institute for the Environment, Stanford University), available at http://woods.stanford.edu/ docs/farmbill/farmbill_book.pdf. Bullington, Elizabeth, Note and Comm ent, WTO Agreements Mandate Th at Congress Repeal the Farm Bill of 2002 and Enact an Agriculture Law Embodying Free Market Principles, 20 Am. U. Intl L. Rev. 1211 (2005). Carter, Douglas & Eric Jokela, Floridas Renewable Forest Resources Edis Publication CIR1433 (University of Flor ida IFAS Extension 2002), available at http://edis.ifas.ufl.edu.lp.hs cl.ufl.edu/pdffiles/FR/FR14300.pdf Cattaneo, A ndrea et al., Balancing the Multiple Ob jectives of Conservation Programs, Economic Research Report Number 19 (USDA 2006). Cole, Daniel & Peter Grossman, When is Command-and-Control Efficient? Institutions, Technology, and the Comparative Efficiency of Alternative Regulatory Regimes for Environmental Protection 1999 Wis. L. Rev. 887 (1999). Daly, Herman & Joshua Farley, Ecological Economic s: Principles and App lications (Island Press 2004). Davidson, John, The Federal Farm Bill and the Environment 18-SUM Nat. Resources & Envt 3 (2003).

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107 Environmental Defense, Center for Conservation Incentives, Resources for Landowners, http://www.edf.org/page.cfm?tagID=23 (last visited April 6, 2008). Environm ental Working Group, EWG Farm Bill 2007: Policy Analysis Database, http://farm.ewg.org/sites/farmbill2007/ (last viewed March 29, 2008). Evan, W illiam, Article, Green Payments: The Next Generation of United States Farm Programs?, 10 Drake J. Agric. L. 173 (2005). Farm Service Agency, Fact Sheet: Cons ervation Reserve Program (USDA 2003). Florida Natural Resource Conservation Servi ce, Conservation Security Program 2005 (USDA), http://www.fl.nrcs.usda.gov/programs/flcsp05.html (last visited Mar. 5, 2008). Florida Natural Resource Conservation Service, C onservation Security Program: Application Steps (USDA), available at ftp://ftp-fc.sc.egov.usda.gov/FL/csp/flcspappsteps.pdf Food and Agriculture Organization, Environm ent, Trade and SARD: Concepts, Issues and Tools, available at http://www.fao.org//docrep/x2775e/x2775e06.htm General Accounting Office, Conservation Security Program : Despite Cost Controls, Improved USDA Management Is Needed to Ensure Pr oper Payments and Reduc e Duplication with Other Programs, GAO-06-312, Report to th e Chairman, Committee on Appropriations, U.S. Senate (April 2006). Hildebrand, Peter, Combining disciplines in rapid appraisal: the sondeo approach 8 Agricultural Administration 423 (1981). King, Dennis & Maritza Mazzotta, Ecosystem Valuation, www.ecosystemvaluation.org (la st viewed April 6, 2008). Millennium Ecosystem Assessment, Ecosystems and Human Well-Being: Synthesis v (Island Press 2005), available at http://www.maweb.org/documents/document.356.aspx.pdf National Agricultural St atistics Service, 2002 Census of Agriculture: Florida State Profile (USDA 2002). Morgan, Kenneth, Interview, Soil Conservationist, Florida NRCS, in Gainesville, Flo rida (Jan. 31, 2008). Morrow, Erin, Agri-Environmentalism: A Farm Bill for 2007 38 Tex. Tech. L. Rev. 345 (2006). Natural Resource Conservation Service, 2002 Fa rm Bill: Environmental Quality Incentives Program Fact Sheet (USDA 2004).

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108 Natural Resource Conservation Service, Conservation Security Program (CSP), http://www.fl.nrcs.usda.gov/programs/flcsp.html (last viewed Mar. 5, 2008). Natural Resource Conservation Service, Conservation Security Program (CSP): Lower Suwannee WatershedFlorida (USDA), available at ftp://ftpfc.sc.egov.usda.gov/FL/csp/flcspprelim .pdf Natural Resource Conservation Service, Conservation Security Program: Self-Assessment Workbook (USDA 2005), available at http://www.nrcs.usda.gov/programs/cs p/pdf_files/CSPfy06self-assessm ent10_20.pdf Natural Resource Conservation Service, Delineat ing an Agricultural Operation in Conservation Security Program (USDA 2005), available at ftp://ftpfc.sc.egov.usda.gov/FL/csp/cspdelineation.pdf Natural Res ource Conservation Service, Farm Bill 2002: Farm and Ranch Lands Program Fact Sheet (USDA 2004), available at http://www.nrcs.usda.gov/programs/farmbill/2002/pdf/FRPPFct.pdf Natural Res ource Conservation Service, Farm Bill 2002: Conservation Security Program Fact Sheet (USDA 2005). Natural Resource Conservation Service, Farm Bill 2002: Wetlands Reserve Program Fact Sheet (USDA 2007), available at http://www.nrcs.usda.gov/program s/wrp/2007WRPFactSheet.pdf Natural Resource Conservation Service, Farm Bill 2002Wildlife Habitat Incentives Program Fact Sheet (USDA 2004), available at http://www.nrcs.usda.gov/programs/farmbill/2002/pdf/WHIPFct.pdf Natural Resource Conservation Service, FY-2005 Fiscal CS P Payments Approved by Watershed, March 1, 2006 (USDA 2006), http://www.nrcs.usda.gov/Programs/csp/ pdf_files/FY_2005_CSP_Pa ym ents_Approved_ by_Watershed.pdf (last viewed April 15, 2007). Natural Resources Conservation Service, NRCS Conservation Programs (USDA), http://www.nrcs.usda.gov/programs/ (las t visited April 6, 2008). Owen, Debra, Comment, Legislative History of Conservation Security Program 9 Great Plains Nat. Resources J. 36 (2004). Pascual, U. & C. Perrings, Developing incentives and economic mechanisms for in situ biodiversity conservation in agricultural landscapes 121 Agriculture, Ecosystems, and Environment 256 (2007).

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109 Person, Stacey, Note, International Trade: Pushing United States Agriculture Toward a Greener Future? 17 Geo. Intl Envtl. L. Rev. 307, 308 (2005). Salzman, James, Barton Thompson, & Gretchen Daily, Protecting Environmental Services: Science, Economics, and Law, 20 Stan. Envtl. L.J. 309 (2001). Soil and Water Conservation Society & Environmen tal Defense, Conservation Security Program (CSP) Program Assessm ent (February 2007), available at http://www.swcs.org/documents/CSP_assessment.pdf Stern, Steph anie, Encouraging Conservation on Private Lands: A Behavioral Analysis of Financial Incentives 48 Ariz. L. Rev. 541, 545-46 (2006). Suwannee River Partnership, Mission Statement, http://www.suwannee.org/mission.html (last visited March 26, 2008). Suwannee River W ater Management District, Suwannee River Partnership, http://flsuwanneeriver.civicplus.com /index.asp?nid=57 (last visited March 26, 2008). Sullivan, Patrick et al., The Conservation Rese rve Program: Economic Implications For Rural America 1, Agricultural Economic Report Number 834 (USDA 2004). United States Department of Agriculture, 2007 Farm Bill ProposalsTitle II: Conservation 2, available at http://www.usda.gov/documents/07title2.pdf United States Departm ent of Agriculture, Sc hafer Announces Conservation Security Program Sign-Up: Sign-Up Begins April 18 in 51 Wa tersheds Nationwide, USDA Release No. 0084.08 (USDA 2008). United States Department of Agriculture, USDAs 2007 Farm Bill Proposals, Release No. 0019.07, available at http://www.usda.gov/wps/portal/!ut/p/_s .7_0_A/7_0_1OB?contentidonly=true&contentid =2007/01/0019.xml World Trade Organization, W TO An alytical Index: Agreement on Agriculture [hereinafter WTO], available at http://www.wto.org/English/re s_e/booksp_e/analytic_index_e/ agriculture_02_e.htm #artic le20A Wunder, Sven, Are Direct Payments for Environmental Services Spelling D oom for Sustainable Forest Management in the Tropics? 11 Ecology and Society 23 (2006).

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110 BIOGRAPHICAL SKETCH Christina Deanna Storz was born in Saratoga Springs, New York in 1983. She received her Bachelor of Arts degree in environm ental sc ience from the University of Florida School of Natural Resources and Environment in 2004. In 2004, she began law school at the University of Florida Levin College of Law with emphasis on e nvironmental law. In 2006, she enrolled as the first joint degree student in the College of Law and the School of Natural Resources and Environment. Upon completion of her juris docto rate and master of science degrees, she will practice environmental regulatory law as Assist ant District Counsel for the Army Corps of Engineers in the Jacksonville District office.