10019946 v.l
Draft: For Discussion Purposes Only
1995 Farm Bill
Policies to Integrate
Agriculture and the Environment
Summary
EPA
100/
1994.6
v.l
c.2
U.S. Environmental Protection Agency
September 9, 1994
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Farm Bill Policy Papers
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1. Financial Support and Incentives
2. Farming Systems
3. Land Retirement
4. Marketing
5. Research, Extension, and Education
6. Forestry
Disclaimer
These papers are intended to provide a spectrum of options that can help advance
environmentally and economically sustainable agriculture policies in the 1995 Farm
Bill. These options are provided for discussion purposes only, and they do not
represent official EPA policy or positions.
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FARM POLICY TEAMS
Name
Office
Phone
Fax
FINANCIAL SUPPORT AND INCENTIVES
LEADER
Andy Manale
OPPE
202-260-6365
LAND RETIREMENT
LEADER
Brad Crowder
MEMBERS
Dov Weitman
Robin Dunkins
Steve Ainsworth
Jeanne Melanson
Stacey McVicker
Russ Lafavette
OPPE
OWOW
OAR
OGWDW
OWOW
Reg.7
OWOW
202-260-3528
202-260-7088
919-541-5335
202-260-7796
202-260-6073
913-551-7368
202-260-2492
202-260-2300
MEMBERS
Joe Ferrante
Clay Ogg
Peter Kuch
Ron Bergman
Dave Brussard
Joe Hogue
Rob Esworthy
OPPE
OPPE
OPPE
OW
OPPTS
OPPTS
OPP
202-260-2790
202-260-6351
202-260-6198
202-260-6187
703-308-8104
703-308-8094
703-308-8149
202-260-2300
202-260-2300
202-260-2300
202-260-0732
703-308-8090
703-308-8090
703-308-8189
FARMING SYSTEMS
LEADER
Roberta Parry
Carol Peterson
MEMBERS
Jeanne Melansen
Andy Manale
Dov Weitman
Robin Dunkins
Steve Ainsworth
Dave Brussard
Stacey McVicker
OPPE
OPPTS
OWOW
OPPE
OWOW
OAR
OGWDW
OPPTS
Reg.7
202-260-2876
703-305-6598
202-260-6073
202-260-6365
- 202-260-7088
919-541-5335 '
202-260-7796
703-308-8104
913-551-7368
202-260-2300
703-305-6244
202-260-8000
202-260-2300
202-260-7024
919-541-5489
202-260-0732
703-308-8090
913-551-7863
202-260-2300
202-260-7024
919-541-5489
202-260-0732
202-260-2356
913-551-7863
202-260-6294
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Joe Ferrante
John Simons
RESEARCH AND
LEADER
Harry Wells
Laura Smith
MEMBERS
Joe Ferrante
George Gibson
Amy Leabey
Susan Marcy
Roy Simon
Ron Bergman
John Simons
MARKETING
LEADER
Clay Ogg
MEMBERS
John Kosco
Joe Ferrante
Rob Esworthy
Sherry Sterling
FORESTRY
LEADER
Steve Winnett
Tom Peterson
MEMBERS
John Cannell
Russ Lafayette
OPPE
OGWDW
EXTENSION
OPPTS
OPPTS
OPPE
OW
OW
OGWDW
OW
OGWDW
OPPE
OWOW
OPPE
OPP
OPPTS
OPPE
OPPE
OWOW
OWOW
202-260-2790
202-260-7091
202-260-4472
703-308-3003
202-260-2790
410-573-6840
202-260-6324
202-260-0689
202-260-7777
202-260-6187
202-260-7091
202-260-6351
202-260-6385
202-260-2790
703-308-8149
202-260-2890
202-260-6923
202-260-2277
202-260-7087
202-260-2492
202-260-2300
202-260-0732
202-260-0178
703-308-3259
202-260-2300
410-573-6888
202-260-1036
202-260-1036
202-260-0732
202-260-0732
202-260-0732
202-260-2300
202-260-1977
202-260-2300
703-308-8189
202-260-0951
202-260-6405
202-260-2300
202-260-1977
202-260-6294
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Draft
8/31/94
POLICY OPTIONS FOR FINANCIAL SUPPORT & INCENTIVES
I. BACKGROUND
The 1985 and 1990 Farm Bills made considerable progress in reducing producer
incentives to overuse resources and inputs, such as land, pesticides, and fertilizers. These
legislative initiatives also provided financial incentives to farmers to adopt agricultural
systems that are protective of the environment. This paper outlines options for focusing
and/or redirecting existing financial incentive and support programs, which cost taxpayers
some $10-17 billion per year, to achieve needed environmental and conservation outcomes.
Wheat, feed grains, cotton, and rice are the basic price-supported commodities for which
a producer is paid the difference between the market price and a higher target price that
is set by the Government. Producers of soybeans are supported though a program of non-
recourse loans and producers of sugar beets, sugarcane, peanuts, and tobacco through
import restrictions. Dairy producers are supported through a system of marketing quotas
on fluid milk along with federal purchases of storable surplus dairy products. Together,
these programs maintain a floor for milk prices.
Producers of crops that the U.S. wants to promote for export can benefit from the export
enhancement program which subsidizes the purchase of agricultural products. Growers also
benefit from a subsidized federal crop insurance program, and an ad hoc federal disaster
relief program. The average cost of each of these three programs has been about $3 billion
per year.
Subsidies under the current commodity, baseline, program are determined in the following
way. Farmers who have established base acreage (acres that have grown a program crop)
are eligible for deficiency payments for the number of bushels produced on 85% of base
acreage minus the acres in the acreage reduction program (ARP), land taken out of
production for reasons of controlling supply. When calculating the deficiency payment, yield
per acre is considered fixed. Farmers must grow program crops each year to maintain base.
In return for program payments, program participants are expected to maintain a soil
protection plan under the Cross-Compliance program, if they are farming highly credible
land; not to drain wetlands under the Swampbuster Program; and not to plow up highly
erodible pasture for cropland under the Sodbuster Program.
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II. ALTERNATIVE STAND ALONE OPTIONS
Option 1: Baseline Plus The baseline-plus option is a modification of the existing
Commodity Program that would strengthen the existing stewardship components and result
in greater environmental benefits. It would contain the following provisions: 1) increase the
percentage of base acreage upon which alternative crops can be grown without losing base;
2) continue the current Cross-Compliance program for soil erosion, as well as the
Swampbuster and Sodbuster programs; and 3) require compliance with CZARA or Clean
Water Act management measures where they apply. It also contains one of the following
"add-on" programs: A) introduction of the program of Stewardship Payments (annual
payments for positive environmental activities resulting in measurable benefits) or B)
Management Measure Cost-share (one-time or annual payments that would be made to
farmers to offset the cost of meeting regulatory management measures, cross-compliance
costs, or other mandatory program requirements); or C) Super-Compliance (an expansion
of current cross-compliance programs to cover the use of factor inputs, such as nutrients and
pesticides, through nutrient, pest management, or even irrigation plans).
Additional incentives to remain in the program could be made through creative use of set-
aside requirements. Farmers would be excused from set-aside requirements, or some
portion thereof in exchange for the adoption of stewardship practices or management
measures. Alternatively, set-aside acreage could be targeted to provide maximum
environmental benefits. This provision would allow farmers in the commodity program with
environmentally sensitive land to sell their "production rights" on base acres to farmers in
the commodity program with less sensitive land. In essence, this provision would take
environmentally sensitive base acres out of production in exchange for production on set
aside acreage that is not environmentally sensitive.
Implementation Issues
The stewardship component would be relatively politically palatable to keep producers in
the program and to encourage the adoption of sustainable agricultural systems, rather than
specific practices that address only single objectives. It also has the benefit of being
consistent with the negotiated GATT text regarding agricultural subsidies. A management
measure cost-share would more closely link Farm Income Support to the meeting of EPA
water quality objectives. The program would be more closely targeted towards impaired
watersheds with clear, water quality problems associated with agriculture. However, it would
be a redirection of funds away from income support and hence would not be politically
popular among producers, particularly those not in targeted watersheds. A cost-share
program could effectively reimburse the capital costs of implementing management
measures, but may not perform as well as a stewardship program at reimbursing other costs
(e.g., opportunity costs, and forgone revenue). It can also lead to problems of moral hazard-
-incentives for producers to wait for cost-share before implementing management measures
rather than independently adopting them where necessary at their own expense. A
Supercompliance would more broadly tighten the environmental requirements for income
subsidies, not just for producers in targeted watersheds as under a management measure
cost-share program. However, it would also lead to a diminution in the number of program
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participants. EPA would likely have less influence in the implementation of a
supercompliance program than a targeted program of sharing the costs from the
implementation of CZARA or CWA management measures. The provisions for
environmental uses of set-aside would become moot if GATT mandates the elimination of
the set-aside provision therein removing incentives to participate in the program.
Option 2: Stewardship Payments (Alone). Payment would represent the opportunity cost of
providing the positive externality (e.g., wildlife habitat benefits, soil conservation, wildlife
beneficial crops, winter cover crops, tree planting, and water-quality-related benefits). If
structured properly, the payments could provide farmers with more autonomy than the other
options (and hence encourage greater involvement in issues of environmental protection and
agricultural production). They could thus provide the incentive to look for creative
solutions more in line with principles of ecosystem management than one-time payments to
cover regulatory costs. It can be designed to meet multiple objectives, such as habitat and
qroundwater protection and surface water protection. Payments could also be related to the
implementation of more limited-focus management measures under CWA or CZARA.
Stewardship payments would apply to producers both in and outside the existing Commodity
Program. One component of this option could be payments for energy feedstock
production (biofuels). A Biofuel Reserve Program would deliver production incentives
through a bidding system whereby farmers needing smaller incentives are accepted into a
subsidy program earlier than farmers submitting higher cost proposals.
At least a portion of the cost of a stewardship payment program, particularly for the
adoption of safer pest management practices, could be offset by a chemical pesticide fee,
as well as a similar tax on chemical fertilizers.
Implementation Issues
This option presupposes a new administrative structure for determining what benefits
would be purchased and the price that would be paid. Also, any redistribution of existing
funds away from current recipients would be politically difficult. The biofuels component
could be administratively difficult, but would support the administration's Global Climate
Change Initiative. Any taxing scheme, particularly if the tax is borne by producers, to
provide an alternative source of funding would be resisted by the Congressional committees
that traditional deal with agricultural issues.
Option 3: Revenue Assurance/Insurance Farmers in the current Commodity Programs are
assured a percentage, such as 70% (the revenue target), of the running average of their
previous five year revenue or of per acre returns. Assurance means that the farmers do not
pay for coverage. With an insurance option, they would be required to pay a (subsidized)
premium for coverage. As a condition of either program, they are required to implement
pesticide, nutrient and soil management plans, as under the Supercompliance option. It
would remove disincentives to rotate crops (resulting in certain environmental benefits) and
could lead to a streamlining of deficiency, disaster, and crop insurance programs. To
strengthen this option environmentally, federal crop insurance could be made available to
underwrite farmers' financial risk of undertaking production practices which mitigate
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pollution or risk relative to typical practices. This option assumes that financially sound
sustainable practices have been (or could readily be) defined on a crop specific basis.
Implementation Issues
Revenue assurance would be more expensive for the Government than insurance;
hence, budgetary concerns would need to be resolved. The revenue insurance option raises
the question of actuarial soundness and at what level premiums should be subsidized. Cost
of the program, and hence the political support from producers, depends on what level of
income support it would provide. Also, farmers are generally opposed to "welfare-type"
payments.
III. ALTERNATIVE OPTIONS THAT DO NOT STAND ALONE
Option 4: Export Enhancement Program Targeting. In meeting our obligations under the
GATT, the U.S. will have to reduce export subsidies over the implementation period.
USDA could target these reductions at most environmentally damaging crops (i.e., sugar,
milk, peanuts and cotton). This option could also be stated as: continuation of export
subsidies for crops that have been produced in an environmentally sound manner. Political
and implementation issues (such as monitoring and enforcement) would need to be resolved.
Option 5: Cross-Compliance for the Dairy Program. This option assumes that the Clean
Water Act will be reauthorized with "CZARA type" requirements for management measures
in targeted watersheds. Participants in the Dairy Subsidy Program would receive price
supports only on condition that their operations are in compliance with management
measures for nutrients. The incentive would be lost in years when milk prices exceed the
support price.
Option 6: Underwriting Risk of Pesticide Use/Risk-Reduction options. The Federal
Government underwrites farmers' financial risk of undertaking production practices which
mitigate pollution or risk relative to typical practices. Two suboptions are proposed: one
where the risk would be reduced through underwriting of crop insurance by private insurers
and the other through guaranteed loans for the purchase of necessary equipment. Both
suboptions presuppose existence of sustainable practices that are financially sound. The
eligible production practices would include a) sustainable agriculture practices, b) crop/pest-
specific use of area-wide IPM, and c) crop/pest-specific use of safer pest management
practices, which mitigate pollution or risk relative to typical practices. The program could
be difficult to set and administer initially. Costs at the outset would likely be greater than
later on.
Option 7: "Green Loans" to Fanners to Purchase Technology That Achieves Pollution or Risk
Reduction
This option would make more capital available for loans by direct government loans for the
purchase of promising new, "greener," technologies or would underwrite the risk of loans
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made by private banks for such technologies. Traditional sources of funding, such as banks,
are averse to providing funds for technologies that are not standard farming practice
because of the perceived added risk to the collateral (i.e., the farmer's crop). A new
program that does not have clear or powerful constituency could be politically difficult to
establish given current budget constraints.
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DRAFT - August 16, 1994
FARMING SYSTEMS POLICY OPTIONS
Farming systems are a complete, integrated set of agricultural (plant and animal) production
practices that maintain or enhance farm profits, long-term productivity, and environmental
quality and natural resources. Farming systems often require more intensive management,
more efficient use of inputs, a better utilization of the natural environment and processes,
and increased knowledge due to their site-specific nature. These farming system options
apply to agricultural lands that are kept in production. In addition to the base line, the
options are presented in three main categories: geographic targeting, land management, and
implementation. The sub-options provide alternative policies within each category.
Baseline: Revise and Expand Water Quality Incentives Program. The Water Quality
Incentives Program (WQIP) provides cost-share incentives for farmers to adopt management
practices in specific geographic areas. To strengthen the program, a significant increase in
funding (currently $15 million) could be tied to better environmental targeting using states
and EPA as partners in the process. In addition, WQIP could be separated from the
Agriculture Conservation Program so that the $3,500 annual cap for both management and
structural practices would no longer inhibit integrated environmental solutions.
Geographic Targeting Options To more efficiently use limited funds, farming systems
should be focused on specifically defined geographic areas. Environmentally, the preferred
target may simply be all agricultural lands. However, because of administrative and budget
constraints, the targeted areas will have to be more focused.
Option 1: Agriculture Programs. From an administrative perspective, agricultural lands
enrolled in USDA programs could be easily targeted for incentives. For example, the target
could be all lands in commodity programs, all highly credible lands, or lands coming out of
the Conservation Reserve Program. This type of targeting would not have as great an
impact on environmental problems.
Option 2: Environmental Programs. From a more focused environmental perspective,
agriculture lands that negatively impact the environment could be targeted. Current EPA
programs could be used to target land areas: Wellhead Protection Program, Sole Source
Aquifer Program, PM-10 non-attainment areas, and Coastal Zone Nonpoint Pollution
Control Program. Under the Administration proposal for reauthorization of the Clean
Water Act and Safe Drinking Water Act, additional targeting mechanisms could be
implemented: delineation of watersheds with impaired or threatened water quality, lands
identified in state watershed plans, and lands identified in source water protection plans.
Alternatively, a new environmental targeting mechanism, Environmental Stewardship Zones,
could be implemented. States could identify acres in environmentally-sensitive areas and/or
acres providing major inputs to the human diet, subject to EPA and USDA approval. The
total national number of acres enrolled would be determined by budgetary considerations.
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DRAFT - August 16, 1994
Land Management Options Within the targeted land area, various options can be used to
implement different types of farming systems. Options 1 and 2 would basically look at
whole farm planning.
Option 1: All agricultural management measures. Implement all agricultural management
measures-erosion, nutrients, pests, small and large animal feedlots, irrigation, and grazing-
developed for the Coastal Zone Act Reauthorization Amendments of 1990 guidance.
Option 2: Revised management measures. Implement all measures in Option 1 with the
following changes: strengthen pest measure and add measures for air quality and wildlife
habitat.
Option 3: Selected management measures. Implement management measures based on
pollutant of concern in the geographic area. Only measures which impact pollutants that
are causing violations of air or water quality standards or threatening those standards would
be implemented.
Option 4: Nutrient management measure. Implement only the nutrient management measure
since it may be the most cost-effective measure and have the greatest impact one of the two
most important water quality problems. (Sediment has been addressed through the
Conservation Compliance Program on highly credible land.)
Option 5: Selected Best Management Practices. Implement only selected practices within
management measures that may have the broadest application, for example, crop rotation.
Implementation Options Implementation options are independent of the targeting and
management options. Options 1 and 2 are substitutes for each other. Option 3 stands
alone.
Option 1: Mandatory Recordkeeping and Public Reporting. This option has three main
components: 1) Who reports--the agrichemical user or the agrichemical dealer? 2) What
are they required to report-all pesticides or all pesticides and chemical fertilizers?
Currently only restricted use pesticides have a reporting requirement. 3) Who has access
to the information-restricted to selected Federal and State agencies (as in current
legislation) or available to the public (akin to Toxics Release Inventory)?
Option 2: Expand USDA/NASS Survey. Expand scope of National Agriculture Statistics
Service Survey in the areas of crops covered, states covered, information requested, sample
size increase, etc.).
Option 3: Certification of Plans/Planners. Whole farm planning or any plans required under
specific management measure or for specific pollutants would require some type of
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DRAFT - August 16, 1994
certification program. There are three major sub-options for plan certification: 1) With
technical assistance, farmers develop and self-certify their plans. 2) The Soil Conservation
Service develops and certifies the plans. 3) Plans could be developed by certified
consultants (public and private) and reviewed/certified by the Soil Conservation Service.
The American Society of Agronomy has developed a Certified Crop Advisor Program.
Alternatively, consultants could be certified through a new, federally developed certification
program.
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LAND RETIREMENT POLICY OPTIONS
SUMMARY
Land retirement programs in the 1995 Farm Bill can provide an opportunity to
advance the Administration's objectives with respect to the Federal budget, trade, rural
development, human health, and environmental quality. Farmers and taxpayers share
common goals for protection and improvement of high quality and affordable food,
environmental quality, wildlife habitat, recreation opportunities, human health, sustainable
communities, and rural landscapes. However, achievement of these common goals is
hindered by our failure to manage agricultural resources in an environmentally sustainable
fashion. This failure is related to economic markets that do not capture all benefits and costs
of agricultural production. By integrating agricultural and environmental objectives, we can
create a Farm Bill that furthers the agenda of all stakeholders, within the constraints of the
Federal budget. Moderate agricultural and environmental interests recognize that all groups
will have more leverage in affecting farm legislation if they work together.
The Conservation Reserve Program (CRP), the predominant land retirement program
in 1985 and 1990 farm legislation, did not initially focus on environmental goals. Lands
were selected predominantly based on average credibility of soils within field boundaries.
Land selection criteria were changed in 1990 to recognize opportunities to improve water and
quality, but other benefits - wildlife habitat, supply control, flood abatement, and carbon
sequestration — were achieved with little direction on how to direct resources to lands that
would maximize multiple benefits to the public. Great expense has been incurred for lands
that often yield little or no environmental returns, yet proposals exist to continue payments
on the same lands simply to maintain the inefficient stream of environmental benefits.
Baseline: Extended Conservation Reserve and Wetlands Reserve. An extended CRP
would focus on environmental objectives and include easements of five to 15 years. The
program is envisioned to include 20 to 35 million acres, based on admitting lands that meet
environmental quality selection criteria. An extended Wetlands Reserve Program (WRP)
would select up to one million acres of environmentally sensitive wetlands for permanent
protection, possibly more in future farm bills. A CRP that retires substantially more land
than long-term easements can provide significant environmental benefits if environmental
selection criteria are carefully applied to newly enrolled lands. However, when contracts
expire, either the environmental benefits are negated or the contracts must be renewed to
maintain those benefits. Continuation of the CRP is supported by many landowners, rural
communities, and others because it would provide a stream of income without removing
agricultural land permanently from production. The disadvantage is the added expense to
taxpayers for repurchase of environmental benefits every five to fifteen years.
Option 1: Long-term Easements. A focused, long-term land retirement program is
proposed for up to 10 million acres for conserving land uses. The program could be
expanded in future farm bills, supported by the experience gained during implementation of
the 1995 farm bill. Crop producers would maintain conserving land uses on environmentally
sensitive lands that would be continued for 30 years or longer. Easements would focus only
on those lands that are needed in conserving uses for purposes of protecting the environment.
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Lands would serve environmental objectives for protecting water quality, endangered and
threatened wildlife, ecosystems and biodiversity, and air quality. Focus areas would include
riparian lands (two to four million acres), ground water protection areas (one to three million
acres), threatened wetlands (one to three million acres), and wildlife (one to four million
acres). Lands and land uses that provide multiple objectives would be given top priority for
selection, and would focus on the worst land for farming and/or the best land for
environmental protection. By directing land retirement resources to critically sensitive lands,
other farm programs (for example, for soil erosion control, nutrient and pest management,
animal waste management) that more efficiently address environmental quality problems
would have greater resources available if land retirement is reduced to the minimum
necessary to achieve environmental objectives. Greater environmental objectives can be
achieved that provide public benefits with less land and at less cost than under the CRP.
Also, the conserving land use receives long-term protection and landowners are paid once for
that conserving use, versus the continuing payments required under a CRP-type program
extension.
Option 2: Conservation Reserve Renewals and Long-term Easements. The CRP can
be renewed in a manner that provides for continued retirement of some lands already
enrolled in the program while also providing focused long-term easements for
environmentally sensitive lands, or a so-called "50-50" option. For each acre renewed for
another ten years under existing CRP leases, there would be a fixed percentage of land that
would be set aside in a long-term easement for environmental purposes. The additional
acreage could come from existing CRP lands or from newly recruited lands. This option
would provide landowners with an opportunity to continue receiving payments for enrollment
of a substantial portion of existing CRP lands, while assuring at least one-half or some other
fraction of enrolled lands meet environmental protection criteria and are protected under
long-term easements. The Wetlands Reserve Program would continue to be available for
landowners to retire lands under permanent easements, and a new environmental easement
program would be available for enrolling the rest of the long-term easement lands.
Long-term easements would retire lands for environmental purposes when those lands
cannot be used for agricultural production and still protect critical natural resources and
environmental quality. Some riparian zones, ground water recharge areas, and endangered,
threatened, and canditate species' habitats need permanent or long-term (greater than 30
years) protection. Taxpayers will support protection of these areas if they only pay once for
the value of the land.
Shorter-term easements provide more protection than conventional farming practices
for certain resources, such as wildlife habitat, soil, air, and water. If the CRP is extended,
resources should be directed to lands that can provide environmental benefits for the general
public as well as landowners, and to those lands that accomplish multiple objectives.
To minimize the payments necessary for long-term easements and to support farm
incomes, land uses such as limited haying and grazing or timber production should be
considered, consistent with the environmental values being protected. Where cropping
practices can attain environmental objectives, they should be used in lieu of land retirement.
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Draft: September 7, 1994
MARKETING OPTIONS
Farm programs include a number of marketing programs which could be modified
to provide incentives for improved environmental performance by producers. An advantage
of making such modifications is low budget exposure and an opportunity to involve
consumers in supporting environmental programs.
Option 1: Milk Stewardship
The dairy price support program provides mechanisms which could include incentives
for proper management of manures. Several options could be considered. One proposal
focuses on offering farmers a premium (e.g. 2 percent higher price) for milk certified as
produced in an environmentally friendly way. The higher price would be administered
similarly to the Grade A milk price differential. The higher price would be implemented
at the processor level, but through market mechanisms, it would be passed on to consumers.
(The certified milk would not necessarily be labeled in the retail market). If the premium
were a 2 percent price differential, it would result in half a billion dollars per year available
to producers to fund waste treatment systems. Otherwise, dairy presents one of the greatest
economic and environmental challenges for implementing proposed CWA management
measures for agriculture.
Option 2: Labeling Options-Organic or Organic/Low Pesticide or IPM
The 1990 farm bill provides a certification program which could label fresh produce
in the above ways. USDA staff working on this effort is responsive to EPA interest in
providing a choice regarding pesticides and food. If given approval to pursue this option,
a small team would first determine what additional labeling would facilitate greater
consumer choice regarding pesticides and then determine whether any additional committee
language is needed to provide the desired consumer choice. Food safety may ultimately
become a matter of choice as consumers weigh pesticide risks versus spoilage and cosmetic
quality.
Option 3: Labeling Options-Environmental Report Card
Out of a sense of environmental benevolence or concern, consumers might voluntarily
pay more for milk or other products labeled as produced in an environmentally friendly
manner. USDA, in consultation with EPA and industry, would provide direction for an
industry run Report Card program.
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Option 4: Cross-Compliance for Marketing Orders Subject to the Agricultural Marketing
Act
The option would stipulate that for a marketing order to be granted to producers in
a region they must agree to adopt IPM or other more environmentally sound system of
agricultural production. Participants in each marketing order would be charged with
providing a set of minimally acceptable IPM practices and charged with assuring that these
IPM practices be followed in producing some portion (e.g. 75 percent) of the marketing
orders' output. Denying marketing orders is a heavy hammer and threat of doing so would
get the attention of producers. Although producers might be persuaded to use IPM and
related practices which, in some cases, greatly reduce pesticide use, identifying a minimally
acceptable set of IPM practices for so many crops represents a challenge.
Option 5: Federal Purchase Preference for IPM Produced Foods
The Secretary of Agriculture review review and implement ways in which USDA
programs can be used to provide markets for foods produced with reduced risk pesticides
and IPM techniques. Three areas of either direct control or influence in the Farm Bill are
explored: 1) The Food Stamp Program, 2) The Women, Infants and Children (WIC)
Nutrition Program and 3) The School Lunch Program. In addition, USDA in concert with
EPA shall coordinate with the General Services Administration and the Department of
Defense to establish a phase-in to give Federal purchasing preference to foods produced
under approved IPM methods.
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Draft 5-A
8/15/94
RESEARCH, EXTENSION AND EDUCATION POLICY OPTIONS
1. Joint EPA-USDA prioritization of USDA ARS and CSRS research to focus
on human health and environmental risk.
Summary: This proposal recommends a process whereby specific applied research
priorities are jointly agreed to and set to resolve production problems with an emphasis on
air and water non-attainment areas. Three broad areas of concern are reductions of
pesticide use, improved management of nutrients and air quality.
2. New initiative to determine total environmental costs of off-site
agricultural pollution.
Summary: EPA believes that unless the "total costs" of production are understood and
accounted for the nation will be on a continuous pattern of fixing environmental problems
often at great expense. This is an attempt to understand total costs so management and
political decisions can be made with full understanding and disclosure of the impacts of
various production practices. In many ways this is a model pollution prevention tool. If
we understand the future long term costs of aquifer pollution, for example, we have the
opportunity to manage the aquifer resource more carefully. This principle applies equally
to all of our non-renewable resources.
3. Commit to encouraging private sector products, systems and services and
technologies that contribute to low [environmental] impact agricultural
production.
Summary: Incentives can be provided to "level the playing field" in a number of ways
including:
o Create market mechanisms to increase product/service demand. Eg. Link
products/services to BMP recommendations.
o Establish a research and implementation revolving fund for qualifying alternative
technologies, products and services.
o Assist in creating cooperative scouting services for small producers and for minor
crops.
4. Establish a coordinator for alternative farming systems under the Assistant
Secretary for Research and Education at USDA. Require the office to
identify pollution prevention goals and to develop and promote innovative
environmentally acceptable farm production technologies in concert with
EPA.
Summary: The primary thrust of USDA research education and demonstration is with
production agriculture and major commodity crops and products. Alternative fanning
systems and sustainable agriculture are addressed by sectors of CSRS and ES. Water
quality issues are a significant concern of the SCS. The small movement toward alternative
(non industrial farm) systems must be given institutional parity within the Department to
enable these producers to compete in the marketplace and to address environmental
concerns including:
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o Soil biology, tilth and retention
o Threatened and endangered species
o Air and water quality
o Human health and risk from exposure to pesticides.
o Threats from pesticides and nitrates to ground water that support critical surface
water ecosystems.
5. New initiative on residue monitoring, food consumption surveys, and
incident poisoning monitoring.
Summary: While much data presently exists, there is a need for a high level coordinated
system of evaluation and review to establish research priorities in the areas of food safety,
human health and nutrition.
6. Provide funding for state agricultural chemical use reduction programs to
help achieve the Administration's 75% land management goal. Coordinate
the award process with EPA and its 10 regional offices. Fund annually at
$5 million per region.
Background/Summary: The goal to have 75% of domestic crop land under plans for pest
and nutrient management needs financial support and coordination.
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DRAFT September 9,1994
Sustainable Private Nonindustrial Forestry
1995 Farm Bill
I. Consolidate Forestry Practices (BMP's) Issues Under a Streamlined,
Coordinated and Highly-Targeted SIP;
• Target to forests with riparian zones and key watersheds, high value-added fiber
production, significant impairments.
• Use the watershed approach as an organizing principle for targeting and planning.
• Increase acres using harvest planning and BMP implementation.
• Integrate with the President's Plan for Climate Change.
• Integrate with other tree planting programs through joint planning mechanisms (see
land set aside programs below).
• Improve emphasis on water quality, particularly nonpoint source pollution prevention.
• Create programs for watershed restoration.
• Improve emphasis on wildlife habitat, particularly habitat loss prevention.
• Develop stewardship plans using a watershed approach.
• Develop better mechanisms for collaborative multi-property plans, such as trading.
II. Consolidate Land Set Aside and Tree Planting Programs Into a
Single, Coordinated, Highly-Targeted Program;
• Replace the current "alphabet soup" of set aside programs with single program that
integrates forestry and agriculture into two major categories: long-term and short-term
programs.
• Make tree planting a major component of land set aside programs, with appropriate
planting incentives and harvesting safeguards.
• Target to riparian zones, key watersheds, and threatened high value-added forests.
• Integrate with SIP through joint planning and cross-program incentives.
• Coordinate the design and implementation of these set aside programs with other Farm
Bill agriculture incentives programs.
• Create disincentives for conversion of targeted forest lands to nonforest uses,
particularly w here conversion to cropland is an issue.
SUMMARY
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