Limit Enrollment in the Department of Agriculture’s Conservation Programs

Background

Under the Conservation Stewardship Program, landowners enter into contracts with the Department of Agriculture (USDA) to undertake various conservation measures—including measures to conserve energy and improve air quality—in exchange for annual payments and technical help. Those contracts last five years and can be extended for another five years. For every acre enrolled in the CSP, a producer receives compensation for carrying out new conservation activities and for improving, maintaining, and managing existing conservation practices. Current law limits new enrollment in the CSP to 10 million acres per year. In 2018, approximately 110 million acres were enrolled, and USDA spent $1.3 billion on the program.

Under the Conservation Reserve Program, landowners enter into contracts to stop farming on specified tracts of land, usually for 10 to 15 years, in exchange for annual payments and cost-sharing grants from USDA to establish conservation practices on that land. One type of tract used in the program is a "conservation buffer"—a narrow strip of land maintained with vegetation to intercept pollutants, reduce erosion, and provide other environmental benefits. Acreage may be added to the reserve program through general enrollment, which is competitive and conducted periodically for larger tracts of land, or through continuous enrollment, which is available during annual sign-up periods announced by USDA, for smaller tracts of land. Current law caps total enrollment in the reserve program at 24 million acres by 2018; in 2018, USDA spent $2 billion on the roughly 23 million acres enrolled.

The Agriculture Act of 2014 (the 2014 farm bill) was the most recent comprehensive legislation addressing farm programs. It authorized the Conservation Stewardship Program and the Conservation Reserve Program through 2018.

Option

Beginning in 2020, the first part of this option would prohibit new enrollment in the stewardship program. Land enrolled now—and therefore hosting new or existing conservation activities—would be eligible to continue in the program until the contract for that land expired (after as long as 10 years if the contract is extended). As a result, starting in 2029—after all of the current contracts expired—there would be no land enrolled in the program.

Beginning in 2020, the second part of this option would prohibit both new enrollment and reenrollment in the general enrollment portion of the reserve program; continuous enrollment would remain in effect.

Effects on the Budget

The budgetary effects of this option are estimated relative to the Congressional Budget Office's baseline projections for the affected programs, which—as required by law—incorporate the assumption that the programs will continue to operate beyond their scheduled expiration date. The options would generate savings with respect to those baseline projections because the programs that are assumed to continue would be eliminated.

By the Congressional Budget Office's estimates, prohibiting new enrollment in the stewardship program would reduce federal spending by about $7 billion through 2028. That prohibition would eliminate the possibility of adding up to 10 million acres per year, at an average annual federal cost of $18 per acre, to the stewardship program.

Ending general enrollment in the reserve program would reduce spending by $3 billion through 2028, CBO estimates. That change would reduce the amount of land enrolled in the reserve program (at an average federal cost of $52 per acre) by almost half—by about 11 million acres in 2028.

Under this option, reductions in federal spending would grow over time because both the stewardship program and the reserve program operate through multi-year contracts. Existing contracts would remain in place until they expired, and as they did the federal government would realize savings. (The option's prohibitions on further enrollment mean that the government would make no payments to new enrollees under the stewardship program or to new enrollees or reenrollees under the general enrollment portion of the reserve program.)

Uncertainty about the budgetary effects of this option stems from uncertainty regarding the average federal costs per acre. Those costs depend on the types of land enrolled in the programs; contracts for different types of land involve different payment rates. Because the projection of the types of land that would be enrolled or reenrolled in the programs under current law is uncertain, those average costs are uncertain.

Other Effects

One argument for prohibiting new enrollment in the stewardship program and thus phasing out the program is that some of the program's provisions limit its effectiveness. For example, paying farmers for conservation practices they have already adopted may not enhance the nation's conservation efforts. Moreover, USDA's criteria for determining payments for conservation practices are not clear, and payments may be higher than necessary to encourage farmers to adopt new conservation measures.

An argument against prohibiting new enrollment in the stewardship program is that, unlike traditional crop-based subsidies, the stewardship program may offer a way to support farmers while also providing environmental benefits. Furthermore, conservation practices often impose significant up-front costs, which can reduce the net economic output of agricultural land, and stewardship program payments help offset those costs.

One argument for scaling back the reserve program is that the land could become available for other uses, some of which might provide greater environmental benefits. For example, reducing enrollment could free more land to produce crops and biomass for renewable energy products.

An argument against scaling back the reserve program is that studies have indicated that the program yields high returns—in the form of enhanced wildlife habitat, improved water quality, and reduced soil erosion—for the money it spends. Furthermore, USDA is enrolling more acres targeting specific environmental and resource concerns, perhaps thereby improving the cost-effectiveness of protecting fragile tracts.