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Environmental Protection Agency
Office of Inspector General
Department of Agriculture
Office of Inspector General
Evaluation Report:
Saving the Chesapeake Bay Watershed
Requires Better Coordination of
Environmental and Agricultural Resources
EPA OIG Report No. 2007-P-00004
USDAOIG Report No, 50601 -10-Hq
November 20, 2006

About This Joint Report
The Offices of Inspector General for the U.S. Environmental Protection Agency and the
U.S. Department of Agriculture jointly conducted this evaluation. The Chesapeake Bay
Program is a partnership of Federal, State, and local governments, as well as non-profits
and academia. We conducted this review jointly to identify areas of mutual concern
and opportunities to enhance the Federal partnership as they relate to environmental and
agricultural issues for the Chesapeake Bay Program.
ARS	Agricultural Research Service
CBPO	Chesapeake Bay Program Office
CEAP	Conservation Effects Assessment Project
CRP	Conservation Reserve Program
CREP	Conservation Reserve Enhancement Program
CSREES	Cooperative State Research, Education, and Extension Service
EPA	U.S. Environmental Protection Agency
EQIP	Environmental Quality Incentives Program
FS	Forest Service
FSA	Farm Service Agency
GAO	Government Accountability Office
NFC A	Non-Funded Cooperative Agreement
NFS	National Forest System
NRCS	Natural Resources Conservation Service
OIG	Office of Inspector General
USDA	U.S. Department of Agriculture
Cover photo: A Virginia pond serves as a reservoir to stock cattle's alternative water source
(EPA OIG photo).

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Environmental Protection Agency	Department of Agriculture
Office of Inspector General	Office of Inspector General
November 20, 2006
SUBJECT: Saving the Chesapeake Bay Watershed Requires Better Coordination
of Environmental and Agricultural Resources
EPA OIG Report No. 2007-P-00004
USD A OIG Report No. 50601-10-Hq
TO:	Donald S. Welsh	MarkRey
Regional Administrator	Under Secretary
Region 3	Natural Resources and Environment
U.S. Environmental Protection Agency	U.S. Department of Agriculture
This is our report on the subject evaluation conducted by the Offices of Inspector General (OIG)
of the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Agriculture
(USDA). This report contains findings that describe issues the EPA and USDA OIGs have
identified and corrective actions recommended by both OIGs. This report represents the opinion
of the OIGs and does not necessarily represent the final EPA or USDA positions. Final
determinations on matters in this report will be made by Agency managers in accordance with
established resolution procedures.
This evaluation was conducted to respond to the concern of U.S. Senator Barbara A. Mikulski
from Maryland, that the goals to clean up the Chesapeake Bay may not be achieved. This
evaluation is part of a series of evaluations that the EPA OIG is conducting to determine whether
best management practices and other controls are adequate to achieve the Chesapeake Bay's
long-term water quality goals. The EPA OIG requested the USDA OIG to partner in this
particular evaluation because of its expertise in agricultural issues and programs.
Action Required
We held an exit conference with EPA on July 17, 2006, and EPA provided its written response
on October 23, 2006. EPA concurred with our findings and recommendations, and its full
response is in Appendix E. Based on EPA's response, we made changes to the report as
appropriate. In accordance with EPA Manual 2750, EPA is required to provide a written
response to this report on the status of recommendations within 90 calendar days. This is to

include a corrective action plan for agreed upon actions, including milestone dates. In addition
to providing us with a paper copy of your response, EPA is requested to email an electronic
version to fuller.linda@epa.gov. We have no objections to further release of this report to the
public. The report will be available at http://www.epa.gov/oig. If you or any of your staff have
any questions related to EPA issues, please contact Bill Roderick, Acting Inspector General, at
(202) 566-0847; Dan Engelberg, Product Line Director, at (202) 566-0830; or Linda Fuller,
Assignment Manager, at (617) 918-1485.
We held an exit conference with USDA on July 6, 2006, and USDA provided its written
response on October 12, 2006. USDA also concurred with our findings and recommendations,
and its full response is in Appendix F. The USDA response contained sufficient justification to
reach management decisions on Recommendations 5, 6, and 7. We ask USDA to please follow
Departmental and your internal agency procedures in forwarding final-action correspondence to
the Director, Planning and Accountability Division, Office of the Chief Financial Officer.
Excerpts from the USDA response and the Office of Inspector General's (OIG) position will be
presented in a separate memorandum to USDA.
Based on the response, management decision has not been reached for Recommendation 4. The
information needed to reach management decision is set forth in the OIG Position section after
the recommendation. In accordance with Departmental Regulation 1720-1, please furnish a
reply within 60 days describing the corrective actions taken or planned and the timeframes for
implementation for those recommendations for which a management decision has not yet been
reached. Please note that the regulation requires a management decision be reached for all
recommendations within a maximum of 6 months from the date of report issuance. Final action
on the management decisions should be completed within 1 year of the date of the management
decisions to preclude being listed in the Department's annual Performance and Accountability
This report will also be available to the public at http://www.usda.gov/oig/rptsaudits.htm.
For questions related to USDA, please contact Robert W. Young, Assistant Inspector General for
Audit, at (202) 720-6945, or Ernest M. Hayashi, Director, Farm and Foreign Agricultural
Division, at (202) 720-2887.
We appreciate the courtesies and cooperation extended to us by EPA and USDA during this
Acting Inspector General
Office of Inspector General
U.S. Environmental Protection Agency
Phyllis K. Fong /s/
Inspector General
Office of Inspector General
U.S. Department of Agriculture

cc: Congress
Senator Barbara A. Mikulski
Benjamin Grumbles, Assistant Administrator, Office of Water
Jon Scholl, Counselor to the Administrator for Agricultural Policy
Rebecca Hanmer, Chesapeake Bay Program Office
Lorraine Fleury, Audit Coordinator, Region 3
Michael Mason, Office of Water
Gale A. Buchanan, Under Secretary for Research, Education and Economics
Floyd Gaibler, Acting Under Secretary for Farm and Foreign Agricultural Services

Executive Summary
Saving the Chesapeake Bay Watershed
Requires Better Coordination of
Environmental and Agricultural Resources
EPAOIG Report No. 2007-P-00004
USDA OIG Report No. 50601 -10-Hq
November 20, 2006
Purpose of Review
We conducted this review
at the request of U.S.
Senator Barbara A.
Mikulski of Maryland.
Our overall objective was
to identify principal
barriers to achieving
nutrient reduction goals in
the Chesapeake Bay. This
report, the first of several
planned, is on agriculture
issues. It was prepared
through a partnership
between the U.S.
Environmental Protection
Agency (EPA) and U.S.
Department of Agriculture
(USDA) Offices of
Inspector General. The
report concentrated on
agricultural best
management practices
used to address nonpoint
nutrient and sediment
loading to the Chesapeake
Bay watershed.
What We Found
Despite significant efforts to improve water quality in the Chesapeake Bay watershed,
excess nutrients and sediment continue to impair the Bay's water quality. Improving
water quality conditions in the Bay is necessary to support living resources throughout
the ecosystem, which in turn supports commercial and recreational uses, such as
fishing/shellfishing. At the current rate of progress, the watershed will remain impaired
for decades. State-level partners have committed the agricultural community to making
the largest nutrient reductions, but numerous practices abound and are generally
performed on a voluntary basis. Few of the agricultural practices in the tributary
strategies have been implemented because the agricultural community considers many
of these practices as either being unprofitable or requiring significant changes in
farming techniques. Although the State-level partners have provided substantial funding
to implement these practices, one of the key State partners acknowledged substantial
additional funding is still needed. At the Federal level, applications for USDA's
technical and financial assistance programs went unfunded, making it difficult to expand
incentives for Bay area agricultural producers.
EPA must improve its coordination and collaboration with its Bay partners and the
agricultural community to better reduce nutrients and sediment entering the Chesapeake
Bay watershed. However, members of the agricultural community have been reluctant
to participate with EPA because of EPA's regulatory enforcement role. USDA, a Bay
partner at the Federal level, could significantly assist EPA in implementing the needed
conservation practices within the agricultural community. Given its many conservation
programs, extensive field organization, and long experience working with the
agricultural community, USDA's commitment and collaboration would significantly
contribute to the EPA Chesapeake Bay Program Office's plan for long-term
improvement to the Bay's water quality. However, USDA has not coordinated a
Department-wide strategy or policy to address its commitment as a Bay partner.
What We Recommend
We recommend that EPA execute a new Memorandum of Agreement with USDA that specifically identifies tasks and
timeframes for meeting mutually shared goals in the cleanup of the Bay. Further, the two agencies should agree to a
method to track progress. Also, EPA, USDA, and the States, with assistance from land grant universities and
agricultural organizations, should revisit State tributary strategies to ensure that an effective and cost-efficient
combination of conservation practices are adopted and implemented. USDA should assign a senior level official to
coordinate with EPA's Chesapeake Bay Program and review the feasibility of targeting USDA funds geographically.
Although these steps will not by themselves solve the Bay's problems, they will significantly assist the Bay partners in
cleaning up the Bay. EPA and USDA generally concurred with our findings and recommendations.
For further Information, contact:	To review the full report online, click on:
•	The U.S. Environmental Protection Agency	• www.epa.gov/oig/reportV2007/
Office of Inspector General at (202) 566-2391; or 20061120-2007-P-00004.pdf; or
•	The U.S. Department of Agriculture, Office of	• www.usda.gov/oig/rptsaudlts.htm
Inspector General, at FOIASTAFF@olg.usda.gov

Saving the Chesapeake Bay Watershed Requires Better Coordination
of Environmental and Agricultural Resources
Table of C
1	Introduction		1
Purpose		1
Background		1
Scope and Methodology		9
Structure of Report		9
2	Chesapeake Bay Watershed Will Not Be Restored by 2010 at Current Level of Effort		11
Establishing Water Quality Standards and an Equitable Allocation
to Reduce Nutrients and Sediment First Priority		11
Despite Early Progress, Restoration Could Be Decades Away 		13
Agricultural Community Key to Achieving Goals		15
Substantial Financial Commitment Needed to Implement Strategies		16
Better Partnership Needed		19
3	EPA Needs to Improve Its Coordination and Collaboration with the
Agricultural Communily		20
Agricultural Practices in Tributary Strategies Not Widely
Implemented by Agricultural Community		20
EPA Needs to Engage the Agricultural Community to
Commit to Implementing Tributary Strategies		23
Effective EPA-USDA Partnership Could Help Advance Alternative Practices		27
4	USDA Needs to Improve Coordination to Restore Chesapeake Bay		30
Role of USDA		30
Providing Leadership		31
Bringing USDA's Resources to Bear		32
Evaluating USDA's Performance		38
5	Conclusions and Recommendations		43
Conclusions		43
Recommendations		44
EPA and USDA Responses and OIGs' Comments		45
A Agricultural Best Management Practices for Chesapeake Bay Watershed		46
B Details on Scope and Methodology		48
C Agricultural Best Management Practices'Progress and Challenges		50
D Alternative Agricultural Management Practices		54
E EPA Response to OIG Draft Report		57
F USDA Response to OIG Draft Report		58

Chapter 1
In 2000, the Chesapeake Bay partners agreed to improve water quality in the Bay and its
tributaries to the level necessary to support aquatic life and be removed from the U.S.
Environmental Protection Agency's (EPA's) impaired waters list by 2010. Bay
stakeholders have questioned whether the needed nutrient reduction goals will be met,
prompting interest from U.S. Senator Barbara A. Mikulski of Maryland. The Senator
requested the EPA Office of Inspector General (OIG) to evaluate the progress being made
by the Chesapeake Bay Program. The EPA OIG is evaluating progress in controlling both
nonpoint and point source pollution. Control of nonpoint source pollution is being
evaluated in three phases: agriculture, land use, and air deposition. For this report, EPA
OIG partnered with the U.S. Department of Agriculture (USDA) OIG to evaluate best
management practices proposed by Bay partners to control agricultural pollution. The EPA
OIG has also examined the effectiveness of EPA grant funds in targeting Chesapeake Bay
For this evaluation, EPA OIG and USDA OIG sought to answer the following questions:
1.	How are Bay stakeholders choosing and applying agricultural best management
practices or conservation practices to address nonpoint nutrient and sediment
loading to the Chesapeake Bay watershed?
2.	What alternative approaches to reducing nutrient loadings have been proposed for
the Chesapeake Bay and similar communities?
3.	What challenges must be overcome to effectively implement the current and
alternative best management practices in the Bay watershed?
4.	What is the feasibility of implementing the short- and long-term management
practices needed to reduce nutrient and sediment loading to the Chesapeake Bay?
Bay Watershed Ecology and Geography
The Chesapeake Bay is North America's largest and most biologically diverse estuary,
home to more than 16 million people and 3,600 species of plants, fish, and animals. For
more than 300 years, the Bay and its tributaries have sustained the region's economy. The
Bay watershed is also an important recreational and educational resource.

The Bay watershed is comprised of
approximately 23 percent agricultural
land (crops, livestock, and pasture), 9 percent
developed land, 58 percent forest cover, and
10 percent mixed open land. In this area,
agriculture is characterized by smaller farms
and a wider range of products than elsewhere
in the United States (farms in the Bay
watershed are approximately 180 acres while
the U.S. average is 500 acres). However,
poultry and hog operations in the
Mid-Atlantic region tend to have more
birds/animals per acre than farms elsewhere
in the country.
Bay Pollution Sources and Impacts
Figure 1: Map of Chesapeake Bay Watershed
(Source: Chesapeake Bay Foundation)
Nutrient and sediment overload have been identified as the primary causes of water quality
degradation and loss of aquatic life.
•	Nutrients such as nitrogen and phosphorus aid in the growth of plants and, in
water, can fuel large algae blooms that block sunlight and, as the algae die and
decompose, deplete the oxygen in the water. Without sunlight, underwater bay
grasses cannot grow and blue crabs and fish cannot live, depriving larger fish of
food sources. Nutrients come from many sources, such as lawn fertilizer, sewage
treatment plants, septic systems, cropland, livestock, and the air.
•	Sediment refers to the loose particles of clay, silt, and sand that are suspended in a
body of water and eventually settle to the bottom. Sediment reaches waterways
primarily from stream and shoreline erosion, forests, and urban and agricultural
lands. Sediment also prevents sunlight from reaching aquatic plants, and carries
excess nutrients to water bodies.
Figures 2a to 2c show the relative contributions of nutrients (specifically, nitrogen and
phosphorus) and sediment from various sectors:
A watershed refers to a geographic area in which water drains to a common outlet. The
Chesapeake Bay watershed includes not only the Bay and its tributaries, but also the
surrounding land. The Chesapeake Bay
watershed covers 64,000 square miles and
includes parts of six States - Delaware,
Maryland, New York, Pennsylvania, Virginia,
and West Virginia - and all of the District of
Columbia (see Figure 1).

Figure 2a: Sources of Nitrogen to Bay (2004)
Figure 2b: Sources of Phosphorus to Bay (2004)
Atmospheric Deposition to
Imospheric Deposition to
Mixed Open	Forest	Water
Figure 2c: Sources of Sediment to Bay (2004)
Mixed Open
Source (all three charts): Chesapeake Bay Program
While the precise percentages have been questioned by stakeholders, the agricultural
community is the largest contributor of nutrients and sediment to the Bay. Of the
Chesapeake Bay modeled nutrient and sediment loads from agricultural sources, the
signatory States of Maryland, Virginia, and Pennsylvania contribute approximately
87 percent of nitrogen and phosphorus and 89 percent of sediment; the headwater States of
Delaware, New York, and West Virginia contribute the remainder. Although agriculture
employs only about 4 percent of the labor force in the Mid-Atlantic region, sub-watersheds
in southern New York, northern and southeastern Pennsylvania, western Maryland, and
western Virginia rank in the top 10 percent of U.S. watersheds for manure nitrogen runoff
and leaching, manure nitrogen loadings from concentrated animal feeding operations, and
soil loss from erosion. Further, watersheds in southeast Pennsylvania and the southern

Virginia coast rank in the top 10 percent of U.S. watersheds for nitrogen loadings from
commercial fertilizer application. These high levels of runoff and loadings are due to a
combination of factors, including rainfall, soil characteristics, and on-farm management
practices including manure application.1
Stakeholders in Chesapeake Bay Restoration
The Chesapeake Bay Program is a regional partnership of State and Federal agencies,
academic institutions, and non-government organizations formed in 1983 to lead and direct
restoration of the Chesapeake Bay. It supports the goals of the Chesapeake Bay
Agreements (1983, 1987, and 2000) signed by the States of Maryland, Pennsylvania, and
Virginia (referred to as the "signatory States"); the District of Columbia; the Chesapeake
Bay Commission (a tri-state legislative advisory body); and EPA. The Program is
comprised of numerous committees and sub-committees responsible for technical and
administrative actions. They work under the umbrella of the Chesapeake Executive
Council, which consists of the governors of the signatory States; the Mayor of the District
of Columbia; the Chair of the Chesapeake Bay Commission;2 and the EPA Administrator,
who represents the Federal Government on the council.
As the representative of the Federal Government, EPA and its Chesapeake Bay
Program Office (CBPO) coordinate partner activity and implementation of
strategies to meet the restoration goals of the Chesapeake Bay. The EPA/CBPO,
headquartered in Annapolis, Maryland, is part of EPA's Region 3. Since 1991, the
EPA/CBPO budget has remained stable at approximately $20 million annually. In
Fiscal Year 2006, the funds were distributed as follows:
•	$8 million to States in implementation grants,
•	$2 to $3 million in water shed-wide monitoring and modeling efforts,
•	$6 million for special projects/staffing, and
•	$3.5 to $4.0 million for administrative support.
EPA's mission is to protect human health and safeguard the natural environment -
air, water, and land. EPA was established to consolidate a variety of Federal
research, monitoring, standard-setting, and enforcement activities to ensure
environmental protection. The EPA Administrator provides overall supervision of
the Agency and is responsible directly to the President of the United States. The
EPA Administrator is supported by nine Assistant Administrators overseeing
1	Chesapeake Bay Futures, Choices for the 21st Century, Chapter 7, page 86, prepared by Chesapeake Bay's
Scientific and Technical Advisory Committee.
2	The Chesapeake Bay Commission was formed in 1980 and serves the General Assemblies of Maryland,
Pennsylvania, and Virginia, guiding them in cooperatively managing the Chesapeake Bay. Each State has a
seven-member delegation consisting of five State legislators, the governor or their designee, and a citizen

administrative, financial, enforcement/compliance, and specific environmental
programs related to air, water, and land. In addition, the Counselor to the
Administrator for Agricultural Policy advises the EPA Administrator on agricultural
issues and serves as a liaison to the agricultural community, including agricultural
organizations and agencies.
EPA's organizational structure includes a national headquarters and 10 regional
offices, each of which is responsible for several States (and territories as
appropriate). Each regional office is responsible within its States for the execution
of the Agency's environmental programs. EPA delegates responsibility for issuing
permits and for monitoring and enforcing compliance to States and tribes, and
provides direct support through grants to State environmental programs. EPA also
relies on partnerships with public and private entities to solve environmental
problems not generally addressed by laws and regulations. Partnership efforts
require reaching out to various stakeholder groups, such as the agricultural
community. For example, to assist in such communication, EPA Region 3 has an
agricultural liaison.
EPA's 2003-2008 Strategic Plan includes goals related to the Chesapeake Bay
Watershed, with targets for nutrient and sediment reduction and increased growth of
submerged aquatic vegetation. However, the plan notes that improving Bay water
quality is a partnership effort and that more specific goals guiding Bay restoration
are delineated in the Chesapeake 2000 Agreement. See next section, "Chesapeake
Bay Cleanup Approach," for additional information on Bay restoration goals.
Among the many Federal agencies that provide expertise and resources to the
Chesapeake Bay restoration effort is USDA. The Secretary and Deputy Secretary
of Agriculture lead USDA in achieving its mission to provide leadership on food,
agriculture, natural resources, and related issues based on sound public policy, the
best available science, and efficient management. To accomplish this mission,
USDA activities are performed under 7 mission areas with 17 agencies as shown in
Table 1 that follows.

Table 1: USDA Missions
USDA Mission Area
USDA Agency
Farm and Foreign Agricultural Services
Foreign Agricultural Service (FAS)
Farm Service Agency (FSA)
Risk Management Agency (RMA)
Food, Nutrition and Consumer Services
Food and Nutrition Service (FNS)
Food Safety
Food Safety and Inspection Service (FSIS)
Marketing and Regulatory Programs
Agricultural Marketing Service (AMS)
Animal and Plant Health Inspection Service
Grain Inspection, Packers and Stockyards
Administration (GIPSA)
Natural Resources and Environment
Forest Service (FS)
Natural Resources Conservation Service (NRCS)
Research, Education and Economics
Agricultural Research Service (ARS)
Cooperative State Research, Education and
Extension Service (CSREES)
Economic Research Service (ERS)
National Agricultural Statistics Service (NASS)
Rural Development
Rural Business-Cooperative Services (RBCS)
Rural Housing Service (RHS)
Rural Utilities Service (RUS)
Source: USDA
Each mission area is under the direction of an under secretary. However, leadership
and authorities are limited to their unique mission areas.
The organizational structure of USDA's agencies is diverse. Some agencies operate
with one nationwide office (e.g., CSREES), some agencies operate with national
and regional or area offices (e.g., ARS), and other agencies operate with national,
State and local offices (e.g., NRCS and FSA). Agencies within the Natural
Resources and Environment mission area (NRCS and FS) are characterized by
decentralized management, delegating significant responsibilities and management
decisions to the State and local offices. Agencies within the Farm and Foreign
Agricultural Services mission area (e.g., FSA) retain policy making and other
managerial decision making processes closer to the agency's headquarters. In
agricultural communities, USDA has positioned "USDA service centers" which
provide a single location where customers can access the services provided by FSA,
NRCS, and Rural Development. Like EPA, USDA agencies also rely heavily on
partnerships with both State and other governmental entities and non-governmental
organizations to accomplish their mission. NRCS' approximately 2,900 field
offices are often co-located with State and local conservation offices in an effort to
better serve the customer. Customers accessing services provided by NRCS'
11,251 permanent Federal field employees may work with a combination of

Federal, local, or State employees - and not perceive any distinction. FSA's 2,350
service centers are staffed with a combination of 4,287 permanent Federal
employees and 9,008 permanent non-Federal FSA employees.
The two USD A agencies providing the largest amount of conservation funds in the
Chesapeake Bay area are NRCS and FSA. NRCS allocates its funds to each NRCS
State office based on a number of factors, including natural resource concern,
resource base, performance incentive, and State-specific concerns. Once funds are
allocated to the State NRCS offices, the State Conservationist, with the advice of
the State Technical Committee (representatives of various stakeholders), in turn
allocates the funds across the State. NRCS expects the State Conservationist to
allocate funds to achieve the greatest environmental impact. Consequently, in the
Chesapeake Bay States, the majority of funds may be allocated to land within the
Chesapeake Bay watershed. In contrast, FSA funding for conservation practices is
through nationwide competition. However, FSA recognized the Chesapeake Bay
watershed as a conservation priority area and has effectively increased funding to
the watershed by making all land within the Chesapeake Bay eligible for
enrollment. FSA further augments its contribution to the watershed through its
Conservation Reserve Enhancement Program (CREP) partnerships with State
governments, which are used to focus funds on local environmental issues. Each of
the six Chesapeake Bay States has a CREP agreement with FSA.
Through its technical services, research, outreach, and cost-share programs, USD A
can significantly affect producers' agricultural practices. The goal of USDA's
conservation programs is to support agricultural productivity while helping to
sustain environmental quality by encouraging practices to reduce soil erosion,
enhance water supplies, improve water quality, increase wildlife habitat, and reduce
damages caused by floods and other natural disasters. These conservation programs
are offered on a voluntary, incentive-based approach. USD A (as a department or
through its agencies) has agreements with the Chesapeake Executive Council
expressing USDA's commitment, as a partner organization, to manage the
watershed as a cohesive ecosystem and to achieve the goals of the Chesapeake 2000
Agreement. Details on the major USDA agencies and programs that support
Chesapeake Bay restoration efforts can be found in Chapter 4.
USDA has created a strategic plan to implement its vision. The framework of this
plan depends on these key activities: expanding markets for agricultural products
and supporting international economic development; further developing alternative
markets for agricultural products and activities; providing financing needed to help
expand job opportunities and improve housing, utilities, and infrastructure in rural
America; enhancing food safety by taking steps to reduce the prevalence of
foodborne hazards from farm to table; improving nutrition and health by providing
food assistance and nutrition education and promotion; and managing and
protecting America's public and private lands working cooperatively with other
levels of government and the private sector. A copy of the USDA strategic plan can
be found at: http://www.usda.gov/ocfo/usdasp/usdasp.htm

Chesapeake Bay Cleanup Approach
In 2000, with an agreement known as the Chesapeake 2000 Agreement, the Chesapeake
Bay Program partners recommitted to their overall mission of Bay restoration and
established new goals. The agreement provided for the goal of improving water quality in
the Bay and its tributaries so that these waters may be removed from EPA's impaired
waters list by 2010 when Section 303(d) of the Clean Water Act would require the
calculation and allocation of a total daily maximum load among the States. At this time,
the non-signatory Bay watershed States of New York, Delaware, and West Virginia also
agreed to nutrient and sediment goals.
All the States within the Bay watershed either have or are expected to prepare tributary
strategies. These strategies are river-specific cleanup plans that include specific best
management practices to be employed to reduce the amount of nutrients and sediment
flowing into the Bay. These strategies are designed to work on a watershed-by-watershed
basis to reduce pollution from point and nonpoint sources.
EPA/CBPO uses the term "best management practices" to describe practices used by all
sectors to reduce nonpoint source pollution. While State tributary strategies delineate
practices for all sectors, agricultural best management practices include conservation
tillage, nutrient management, buffer strips, and other activities that reduce soil loss, prevent
runoff, and provide for the proper application rates of nutrients to cropland. In USD A, the
analogous term is "conservation practices." For the purposes of this report, these terms are
interchangeable. Following are some examples of agricultural best management practices.
Appendix A shows each of the 26 agricultural best management practices for which
Maryland, Virginia, and Pennsylvania have set implementation goals. As explained in our
Scope and Methodology section, we limited our review of practices to the signatory States.
Table 2: Selected Agricultural Best Management Practices for Chesapeake Bay Watershed
Cover Crops
Non-harvested crops (e.g., rye, wheat, barley) are planted to maintain
vegetative cover on cropland, holding nutrients at the root zone.
Trapped nitrogen can be released and used by the crops.
Riparian Forest Buffers
Linear wooded areas are located along rivers, streams, and shorelines.
Buffers filter nutrients, sediment, and other pollutants from runoff and
remove nutrients from groundwater.
Nutrient Management
Plan Implementation
Plans recommend appropriate rates of nutrient application, timing of
applications, and placement of nutrients to result in economically
optimum crop yields while managing the level of nutrient loss.
Off-stream Watering
with Fencing
Limits livestock access to streams with fencing and by providing an
alternative drinking water source.
Source: Chesapeake Bay Program

Scope and Methodology
We conducted our evaluation from May 2005 through February 2006 in accordance with
Government Auditing Standards, issued by the Comptroller General of the United States.
This evaluation was conducted jointly by the EPA OIG and USDA OIG. We reviewed the
progress the Chesapeake Bay Program partners had been making in reducing nutrients from
1985 to 2004, and the activities the Bay partners had taken in meeting the agricultural
nutrient reduction goals resulting from the Chesapeake 2000 Agreement until the end of
We interviewed EPA and USDA staff representing various Federal programs, State staff
involved in developing and implementing State tributary strategies, agricultural producers,
and experts from academia and other fields involved in Chesapeake Bay restoration. We
reviewed the Chesapeake 2000 Agreement, State tributary strategies, data from the
Chesapeake Bay Program Watershed Model, and other related documents. We did not
audit the reliability of the data included in these reports.
Appendix B provides further details on our scope and methodology, including prior
evaluations of this program.
Structure of Report
Regarding the four questions in our "Purpose" section, we found the following regarding
Question 1: Agricultural producers have chosen conservation practices that have been
deemed cost effective, eligible for USDA cost share funding, and/or required by
Federal/State regulations.
Question 2: A number of alternative approaches were identified, but there is no one
approach or practice that can address the area's nutrient imbalance. EPA/CBPO is
working with USDA's Agricultural Research Service on developing new approaches.
Question 3: While each practice has its own challenge, generally, many of the
conservation practices included in the State Tributary Strategies were not cost effective
for the producer or suitable to the region.
Question 4: Current management practices will fail to achieve Chesapeake Bay goals
due to Bay partners' insufficient financial support and coordination.

These issues are discussed in further detail in the subsequent chapters of this report. These
subsequent chapters are broken up as follows:
Chapter 2: The overall progress of Bay partners in achieving nutrient/sediment goals.
Chapter 3: EPA's efforts to coordinate with the agricultural community.
Chapter 4: USDA's role as a Bay partner.
Due to the overlapping nature of the issues discussed in those three chapters, we are
providing an overall conclusion and all of our recommendations in Chapter 5.

Chapter 2
Chesapeake Bay Watershed Will Not Be Restored by 2010
at Current Level of Effort
Despite significant efforts to improve water quality in the Chesapeake Bay watershed,
excess nutrients and sediment continue to impair the Bay's water quality. At the current
rate of progress, the watershed will remain impaired for decades, exceeding the 2010
cleanup deadline. Improving water quality conditions in the Bay is necessary to support
living resources throughout the ecosystem, which in turn supports commercial and
recreational uses, such as fishing/shellfishing. Establishing water quality standards and
determining an equitable method to distribute the load reductions among partners were
initially priorities. Now, more than half-way to the 2010 deadline for attaining their goals,
States are just beginning to prepare implementation plans, and are finding that available
resources are unlikely to support substantial financing needed to implement all the
practices included in their strategies. Federal programs can contribute resources, but the
current level of funding cannot be expected to fill the gaps. In their tributary strategies,
States committed the agricultural community to making the largest nutrient reductions.
However, no one method is used to achieve reductions, numerous practices abound, and
implementation of these practices is carried out by thousands of land owners primarily on a
voluntary basis. As the lead Federal agency responsible for coordinating project efforts,
EPA/CBPO needs to strengthen its partnership not only with the agricultural community,
but also with its Federal and State partners to utilize that extensive field organization. By
doing so, EPA/CBPO will be able to obtain greater commitment from all sectors.
Establishing Water Quality Standards and an Equitable Allocation
to Reduce Nutrients and Sediment First Priority
The Bay partners set the nutrient and sediment reduction goals based on the need to
improve water quality so that the Bay and its tributaries could be removed from the
impaired waters list by 2010. Accordingly, the Bay partners' first priority was to develop
and agree to an equitable allocation for reductions by each partner and set water quality
standards. EPA's 2003 Strategy for Water Quality Standards and Criteria provides that
"water quality standards and criteria are the regulatory and scientific foundation of
programs established under the Clean Water Act to protect the Nation's waters." However,
completing the standards, tributary strategies, and implementation plans took the partners
more than half-way through their 10-year timeframe. While these activities are a major
accomplishment for the Bay partners, the implementation phase will likely take decades
before the ultimate goal of a clean Bay is achieved.

With the signing of the Chesapeake 2000 Agreement, the Bay partners agreed to:
•	By 2001, define the water quality conditions necessary to protect aquatic living
resources and then assign load reductions for nitrogen and phosphorus to each
major tributary;
•	By 2001, using a process parallel to that established for nutrients, determine the
sediment load reductions necessary to achieve the water quality conditions that
protect aquatic living resources, and assign load reductions for sediment to each
major tributary;
•	By 2003, the jurisdictions with tidal waters will use their best efforts to adopt new
or revised water quality standards consistent with the defined water quality
On March 21, 2003, and April 15, 2003, the Chesapeake Bay Program Principals' Staff
Committee and representatives of the headwater States adopted the nutrient and sediment
cap load allocations and submerged aquatic vegetation restoration goals for the Chesapeake
Bay. EPA/CBPO defined the water quality conditions in its April 2003 Ambient Water
Quality Criteria for Dissolved Oxygen, Water Clarity, and Chlorophyll a for the
Chesapeake Bay and Its Tidal Tributaries. This document provided EPA/CBPO's
recommendations to the Chesapeake Bay States for use in establishing their water quality
standards. In October 2003, EPA/CBPO issued Technical Support Document for
Identification of Chesapeake Bay Designated Uses and Attainability to assist the States in
development and adoption of refined water quality standards.
The State partners with tidal waters agreed to revise their water quality standards and
submitted revisions to EPA for approval as shown in Table 3:
Table 3: EPA Approval of Water Quality Standards
Date Standards
Submitted to EPA
Date Approved
by EPA
District of Columbia
06/2005 *

01/2006 *
^Virginia did not include chlorophyll a in the tidal James until its 2006 submission
Source: Chesapeake Bay Program
Through a six-State memorandum of understanding, the headwater and signatory States
adopted cap load allocations for nitrogen, phosphorus, and sediment that not only were
expected to be achieved, but also to be maintained even in the face of increasing
development in the watershed. The Bay partners need to ensure that increasing
development is well planned. Development increases impervious surface cover and
destroys open space, which reduces the capacity of the watershed to store and use nutrients
and sediment.

In making their allocation decisions, the partners factored in both equity and feasibility of
achieving reductions. This systematic process conducted during 2003 established
Bay-wide 2010 loading goals of 183 million pounds of nitrogen, 12.8 million pounds of
phosphorus, and 4.15 million tons sediment per year. These levels were the amounts the
Bay could accept while meeting water quality goals. Subsequently, allocations of nitrogen,
phosphorus, and sediment loading were assigned to each State and each tributary basin
within each State. Leaders of each State agreed to reduce nutrients and sediment to its
target load allocation. Table 4 shows the 2004 loading to the Bay by State (including
Washington, DC) and the 2010 loading allocated to each partner jurisdiction.
Table 4: Reductions Needed from 2004 Loading to 2010 Allocation Goals




(million pounds/year
(million pounds/year)

(million tons/year)



Washington, DC
New York
West Virginia
Bay-Wide 1
'Totals may not add up exactly due to rounding.
2 Includes 8 million pounds of nitrogen from air deposition; EPA has committed to reducing this load through its air
program controls. The total nitrogen load allocated to the State jurisdictions is 175 million pounds (with a reduction of
79 million pounds needed).
Source: Chesapeake Bay Program
Based on Table 4, Bay partners must reduce approximately 87 million pounds of nitrogen,
6.2 million pounds of phosphorus, and almost 0.8 million tons of sediment from entering
the Bay each year from 2004 levels. However, these cuts are so great that the
implementation levels needed to meet their cap load will not be possible with current
programs and resources.
The CBPO and its partners accomplished much in establishing a scientifically sound basis
for reducing nutrients to the Bay during the 5 years following the signing of the 2000
Agreement. CBPO's Associate Director for Science stated that in 2000, when the 2010
commitment was made, the partners did not know the full scope of the restoration
challenge. He further noted that when the processes were largely completed and initial
estimates of cost and effort were made, "local governments found the magnitude of the
effort to meet Chesapeake Bay water quality standards sobering."
Despite Early Progress, Restoration Could Be Decades Away
By the year 2000, Bay partners had achieved approximately 80 percent of the nutrient goal
set forth in the 1987 Chesapeake 2000 Agreement. Though that goal had not been met, the
2000 Agreement set new, more ambitious goals. However, attaining these new goals is
unlikely by the Agreement's deadline of 2010 because the current rates of reduction fall

short of the amount needed. In fact, it could take decades to reach target loads and even
longer to reach ecological restoration goals.
The Chesapeake Bay Program estimated that between 1985 and 2004, modeled loads of
nitrogen, phosphorus, and sediment to the Bay have been reduced as detailed in Table 5:
Table 5: Bay-Wide Progress from 1985 to 2004
Estimated Reductions*
Percent of Goal Reached
67 million pounds
8 million pounds
1 million tons
* Accounts for increased loads due to population growth
Source: Chesapeake Bay Program
These reductions are attributed to improved nutrient removal technology by wastewater
treatments plants, State bans on phosphates in detergents, and the various best management
practices implemented to control nonpoint source pollution. The above progress represents
net reductions throughout the watershed based on loads from all sectors. Therefore, overall
reductions have been made in the face of population growth.
Based on the modeled loading rates, the Bay partners will not meet their 2010 goals for
reducing those loads. For example, based on EPA/CBPO estimates of nitrogen reductions
between 1985 and 2004, loads decreased at a rate of 3.4 million pounds annually.
However, meeting the Bay loading goals by the 2010 deadline would require a reduction
rate of 16 million pounds of nitrogen each year from 2004 to 2010. Achieving the
remaining reductions may be even more challenging because the easier problems have been
addressed. Therefore, it is not likely the Bay partners will reduce nitrogen by 2010 to the
extent necessary; it may be decades before this level of reduction can be reached. Based on
EPA/CBPO's modeled nutrient and sediment loading to the Bay between 1985 and 2004,
we calculated annualized rates of reductions (additional units reduced per year) to
determine an estimate of a timeframe to meet the 2010 cap loads. Details for annualized
modeled load reductions for nitrogen, phosphorus, and sediment are in Table 6.
Table 6: 1985-2004 Annualized Reduction Rates for Meeting Goals to Reduce Loads

(million pounds)
(million pounds)
(million tons)
Annualized reduction rate
(additional units reduced per year)
Time to reach 2010 loading cap
at annualized rate
28 years
15 years
15 years
Source: OIG analysis of Chesapeake Bay Program data
Meeting loading goals alone does not mean the Bay's water quality and aquatic resources
will be immediately restored to desired conditions. Even if modeled load goals are met,
Chesapeake Bay Program staff note that it could take another 10 years for pollution control
practices to result in Bay water quality improvement. Further, since actual loads vary

greatly based on a given year's rainfall, modeled load reductions may not be apparent in
the short term. Therefore, while it may be decades before reduction targets are reached,
ecological restoration will take even longer.
Agricultural Community Key to Achieving Goals
Agricultural operations are by far the largest source of nutrient and sediment loads to the
Bay, representing over 40 percent of the nutrient load and 60 percent of the land-based
sediment load. In developing their tributary strategies, State partners committed the
agricultural community to reducing approximately 60 percent of the total nutrient loading
and 90 percent of the sediment loading through the application of best management
practices on cropland and animal operations, according to EPA/CBPO. This represents
reductions of approximately 54 million pounds of nitrogen, 3.3 million pounds of
phosphorus, and 0.67 million tons of sediment from 2004 levels by 2010.
Aside from being a major source of nutrients and sediment to the Bay, another reason for
placing an ambitious goal on the agricultural community is that implementation of
agricultural practices has been determined to be cost effective. The Chesapeake Bay
Commission evaluated a number of best management practices for the agriculture and
urban sectors and selected six practices it deemed "most cost-effective and widely
applicable." (The information about practice costs and efficiencies was assembled by the
CBPO.) One practice identified was wastewater treatment plant upgrades (the subject of a
subsequent OIG review) while the other five were agricultural practices:
•	Diet and feed adjustments
•	Traditional nutrient management
•	Enhanced nutrient management
•	Conservation tillage
•	Cover crops
If these five practices were implemented to the maximum extent possible, the Chesapeake
Bay Commission estimated that Bay stakeholders could achieve nitrogen, phosphorus, and
sediment reductions of 44, 30, and 100 percent, respectively, at an estimated cost of
$630 million per year. This cost is far lower with greater benefits in comparison to other
sectors and practices.
Figure 3a shows each sector's relative responsibility for achieving the Bay-wide nitrogen
reduction goal (i.e., percent of the Bay-wide nitrogen reduction goal that each sector is
expected to assume). Figure 3b shows the estimated relative cost associated with
implementation in each sector.

Figure 3a: Nitrogen Reduction
Per Tributary Strategies
Figure 3b: Annualized Cost
Per Tributary Strategies
Point source
Point source
Urban runoff
Urban runoff
Source: Chesapeake Bay Program
The figures show that while States expect implementation of agricultural practices in the
tributary strategies to make up 64 percent of reductions from all sectors, the estimated cost
to achieve this goal is only 13 percent of the total cost, indicating the cost benefit of
implementing the agricultural practices.
Substantial Financial Commitment Needed to Implement Strategies
Despite the general cost-effectiveness of agricultural best management practices, the cost
of implementing them to the level necessary to achieve nutrient and sediment goals is
significant. Implementing tributary strategies will require a substantial financial
commitment from the States, which have recently started to identify and generate funding
sources. Federal funding can help States, but needs to be better coordinated with tributary
strategy goals (see Chapters 3 and 4). However, Federal funding at current levels cannot be
expected to fill all the gaps.
In their tributary strategies, States estimated capital costs for implementing agricultural
practices at over $2 billion. See Table 7 for cost estimates by State (Maryland's tributary
strategy was not clear on how its total agricultural costs were calculated).
Table 7: State Agricultural Cost Estimates
Estimated Cost (millions)
West Virginia
Sources: States' Tributary Strategies

Figures for New York and Delaware are not available because these States have not yet
completed their tributary strategies. Maryland determined that it will only be able to fund
$280 million of its agricultural costs, leaving a shortfall of $371 million, or 57 percent.
Shortfall estimates for the other States were not available.
EPA/CBPO expected the State partners to develop implementation plans identifying how
the best management practices in the tributary strategies were to be funded and
implemented, along with any funding gaps. More than half-way to the 2010-year goal,
only Maryland and West Virginia had issued draft implementation plans.
Despite the lack of plans or comprehensive funding strategies, Maryland, Pennsylvania,
and Virginia have instituted or proposed various funding mechanisms to support Bay
commitments. However, the new revenues must also support other needed investments,
such as upgrading wastewater treatment facilities. For example, in 2004, Maryland
established the Chesapeake and Atlantic Coastal Bays Restoration Fund supported by a
$2.50 monthly fee on sewer bills and an annual $30 fee on septic system owners. The
sewer fees will be used to upgrade wastewater treatment plants while the septic fees will
provide $3 to $4 million annually for planting approximately 100,000 acres of cover crops
to prevent nutrient runoff. Cover crops, such as rye, wheat, or barley, maintain a vegetative
cover holding nutrients to the root. Nonetheless, these additional funds do not come close
to funding cover crop planting. According to Maryland's tributary strategy coordinator, at
least 300,000 acres must be planted before Maryland can see an impact in water quality.
Maryland's tributary strategy goal for cover crops is 600,000 acres.
While the Federal Government provides funding for agricultural programs it cannot fill the
gap. The amount of Federal funding is limited and some Federal programs limit benefits.
For example, in the case of cover crops, USDA limits funding of this activity up to a
maximum of 3 years to encourage agriculture producers to test its applicability to their
long-term goals. To be effective, cover crops need to be planted on a continuous basis.
EPA provides substantially less funding for agricultural practices than USDA, and does so
generally just for demonstration projects.
While USDA provides substantial funding and technical assistance to farm and forest
landowners as well as conservation organizations in the Chesapeake Bay watershed, the
Department does not specifically target its funding to meeting the Chesapeake Bay goals
(see Chapter 4). Other Federal program funding is not as significant, must be shared
between urban and agricultural sector projects, and is usually for demonstration projects.
These programs include: the Chesapeake Bay Small Watershed Grants and Targeted
Watersheds Grants Programs administered by the National Fish and Wildlife Foundation in
cooperation with EPA/CBPO, and the Nonpoint Source Management Grants Program
(Clean Water Action Section 319) administered by EPA Region 3.
Funding for the Small Watershed Grants comes primarily from EPA with additional
funding from USDA's Forest Service and Natural Resources Conservation Service, the
National Oceanic and Atmospheric Administration, the Chesapeake Bay Trust, and the
Keith Campbell Foundation for the Environment. In 2005, 88 projects from both urban and

agricultural sectors were selected to receive $3.06 million from the Small Watershed
Grants program. The Chesapeake Bay Targeted Watersheds Grant Program was
introduced in 2005 with a budget of $7.9 million and a subsequent budget of $6 million in
2006.	The 2005 grant funds were awarded in 2006 as follows: $4.3 million for crop and
manure management, $1.5 million for market-based incentive projects, and $1.3 million for
urban/suburban stormwater management projects. The 2006 funds will be awarded in
EPA's Region 3, in which most of the Chesapeake Bay watershed is located, administers
the Section 319 program that provides grants to control nonpoint source pollution. Again,
these grants are directed at a variety of sectors, not just agriculture or the Chesapeake Bay
watershed specifically.
Participation in this
program is voluntary.
Some typical agricultural
activities funded under
these grants include:
salaries for technical
assistants, construction of
animal waste storage
structures, and stream bank
Table 8 shows how much funding the signatory States of Maryland, Pennsylvania, and
Virginia distributed to agricultural projects from 2003 to 2005. This funding was awarded
for Statewide activities, not just within the Chesapeake Bay watershed. The amount of
funding differs by each State and year. From 2003 to 2005, Virginia generally awarded
50 percent of the Section 319 funds to agricultural projects, Maryland a third or less, and
Pennsylvania a high of 17 percent in 2003.
Table 8: EPA Section 319 Funding for Agricultural Projects
Total 319 Funds Awarded
to Signatory States
Total Dollars to
Agricultural Projects
Percent to
Agricultural Projects
Sources: Maryland, Virginia, and Pennsylvania Nonpoint Source Programs
For the same period of time, USDA provided over $250 million to Maryland, Virginia, and
Pennsylvania for Statewide activities through its cost-share programs.
EPA's Section 319 Nonpoint Source Management Program is also limited to funding
demonstration projects. The grants essentially function as seed money; they do not support
ongoing practices. With some exceptions, USDA cost-share programs support practices
for a longer period of time. EPA issued guidelines in 2003 to facilitate the integration
An animal waste storage tank (EPA OIG photo),

between Section 319 program goals and USDA conservation programs. The guidelines
noted that the 2002 Farm Bill has provided more conservation funding for agricultural
producers than any previous Farm Bill.
As the lead Federal Agency, EPA/CBPO needs to coordinate the limited Federal funds,
which often have different or competing missions and objectives, to ensure that they are
used more effectively to accomplish the Bay goals. The EPA/CBPO is currently in the
process of doing this. On January 10, 2005, the Chesapeake Bay Executive Council issued
Directive 04-2, Meeting the Nutrient and Sediment Reduction Goals - Next Steps, with the
purpose to address next steps that will advance Tributary Strategy implementation and
identify measures to implement actions that can be taken quickly. The steps include:
•	Determining Funding Priorities
•	Engaging the Department of Agriculture
•	Finding Opportunities in the Farm Bill
•	Establishing a Watershed Funding Network
•	Improving Coordination of Federal Agencies
•	Managing Urban Stormwater
•	Implementing and Enforcing Air and Water Laws
The Chesapeake Bay Program recently established a mechanism - the Chesapeake Bay
Watershed Assistance Network - to improve coordination among available Federal and
State funding sources. The mandate has been written and contacts established, and the
2006 work plan is to develop information from the major Federal sources about how to
improve access to their funding programs for tributary strategy implementation. A report
is being developed for presentation to the Fall 2006 Federal Principals' meeting of the
17 agencies that signed Directive 04-2.
Better Partnership Needed
EPA recognizes that USDA is an influential partner in the agricultural community because
of its extensive field organization and experience with the community and its many
conservation programs. At the Federal level, EPA and USDA are key to accomplishing the
environmental goals of the Chesapeake Bay watershed. However, in the past, their
relationship has been one of two independent entities, often constrained by their mandated
goals and directions, rather than partners with a common objective. Chapter 3 discusses
how EPA can better coordinate Bay activities with USDA and other organizations, and
Chapter 4 discusses how USDA can become a more visible and active presence in
encouraging conservation practices in the Bay watershed. While this report focuses on
activities of these two major Federal partners, EPA also needs to strengthen its relationship
with other partners within the agricultural community, such as land grant universities, State
agricultural agencies, and professional agricultural organizations. These other
organizations need to complement the efforts by EPA and USDA. Overall conclusions and
recommendations are in Chapter 5.

Chapter 3
EPA Needs to Improve Its Coordination and Collaboration
with the Agricultural Community
EPA must improve its coordination and collaboration with the agricultural community to
assist the Bay partners in realizing the nutrient and sediment reductions needed to clean up
the Chesapeake Bay watershed. State partners developed tributary strategies relying
heavily on the agricultural community to reduce nutrients and sediments. However, few of
the agricultural practices included in the strategies have been reported as implemented
because they are either unprofitable or require significant change in farming techniques.
The Clean Water Act states that EPA shall provide support to carry out the Chesapeake
2000 Agreement. To meet the aggressive schedule of the Chesapeake 2000 Agreement,
EPA will need to coordinate and collaborate with its other Federal partners as well as the
State agencies, universities, and non-governmental organizations to work with the
approximately 87,000 farms in the Bay watershed to adopt, on a long-term basis, the
various practices in the tributary strategies. USD A, one of EPA's Federal partners, could
significantly assist in obtaining greater participation by the agricultural community.
However, these Federal partners have been constrained by their mandated missions and
have not significantly worked together to mesh their goals for the overall benefit of the Bay
watershed. Furthermore, EPA will need to rely and build upon the extensive field
operations and experience these other partners, including USD A, already have with the
agricultural community. Without leveraging these resources, experience, and access
available to these partners, EPA will miss the opportunity to achieve its overall goals.
Agricultural Practices in Tributary Strategies
Not Widely Implemented by Agricultural Community
As of 2004, only 3 of the 26 agricultural best management practices for which State
implementation goals were set were close to being met or had exceeded their 2010 targets.
It is up to individual producers to implement the practices and, with few exceptions,
producer implementation is voluntary. Producers face multiple challenges in implementing
best management practices (see Appendix C for progress and challenges). If the producer
does not believe a practice will be beneficial or technically feasible, the practice is less
likely to be adopted. Likewise, practices that are supported by Federal and State cost share
programs and perceived as profitable are more widely implemented. Without producer
acceptance of practices, nutrient reductions will be limited, thus preventing Bay cleanup.
In developing their tributary strategies, States chose a mix of best management practices
from a menu of practices that could either be measured by the Chesapeake Bay watershed
model or were in the process of peer review. States do not receive credit in the model for
implementation of practices that have not been fully defined or peer reviewed. Signatory
States developed implementation goals in their strategies for 26 of the practices that are

either credited in the model or still under peer review, though not all States committed to
goals for each best management practice.
As of 2004, though goals for 3 practices were nearly met or exceeded, 46 percent of the
practices included in the strategies (12 of the 26) were reported as not being implemented
at all. Table 9 shows the progress in best management practice implementation as of 2004.
Table 9: Reported Best Management Practice Implementation Progress - 2004
Percent of Goal
Number of
Proportion of
26 Practices*
1 % - 25%
26% - 50%
Over 100%
*Percentages do not add up to 100 due to rounding
Source: OIG analysis of Chesapeake Bay Program data
The figures in Table 9 represent only the percentage of goal achieved in units implemented
(e.g., acres), not pounds of nutrients or sediment reduced. Actual reductions vary by soil
characteristics and other best management practices applied on the same land.
EPA/CBPO staff stated all but 1 of the 12 practices identified as not being implemented are
being applied to some degree in the Bay watershed, as a pilot-project or at small scales.
They believe current tracking cannot identify smaller-scale projects in a 64,000-square-
mile watershed. Without further evidence, we cannot change the above results. However,
being able to adequately track the project's progress is a critical program activity. This is
an activity that the EPA/CBPO, States, and USDA may wish to collaborate on as part of
our recommended task force.
Based on our review of various studies of producers' preferences with regard to adopting
conservation practices, we determined that the likelihood of producers implementing best
management practices is based on whether the practices are:
•	Profitable
•	Environmentally effective
•	Required by Federal or State regulations
•	Financed at least in part by government or other cost-share programs
•	Easy to implement
The three practices with the most success in being implemented (conservation tillage, off-
stream watering with fencing and rotational grazing, and nutrient management plans) meet
the producer criteria of profitability, being required by regulation, and/or having financial
support available. Conservation tillage saves a producer costs in time and equipment by

requiring as little as one trip across a field for planting. Nutrient management plans and
off-stream watering with fencing can be eligible for USDA cost-share programs. Nutrient
management plans may also be required by law depending on the State.
A significant percentage of the best management practices still have a zero rate of
implementation because producers do not recognize many of the practices as being cost-
effective, technically feasible, or in their long-term interests. For example, alternative
crops such as switch grass used for carbon sequestration currently have no market, so it
would not make sense for a producer to raise such a crop. Similarly, to plant cover crops, a
producer must incur seed, herbicide, and labor costs, but cannot harvest or sell the crops.
Planting commodity cover crops, also known as small grain enhancement, could help
address the financial barrier to implementation in that these types of cover crops may be
harvested and sold. According to EPA/CBPO's Associate Director for Science, this
practice is under research and is advocated in Maryland. Of the Bay partners, only
Maryland has set a goal for commodity cover crops in its tributary strategy, but no
implementation is reported as of 2004. The Maryland Department of Agriculture has
introduced a new commodity cover crop program to its 2006-2007 cost share program.
As stated earlier in this report, State or Federal funds are available in some areas to assist
producers with cover crop planting costs. However, feasibility also plays a role in adoption
of practices. For cover crops, efficiency depends highly on the timing of planting; nitrogen
uptake and trapping diminishes rapidly if crops are planted too late in the Fall. Producers
have difficulty getting cover crops planted early enough to be efficient due to weather and
time of harvest, and because optimal planting time coincides with a farmer's busiest time of
year. State tributary strategy goals (i.e., cap loads) rely on early planting of cover crops on
76 percent of available acres.
Other practices included in the strategies - such as continuous no-till, precision agriculture,
dairy precision feeding, and ammonia emissions reduction - are new and complex in
nature, require investment in new equipment, or involve change in farming technique.
A January 2001 USDA study, Adoption of Agricultural Production Practices: Lessons
Learnedfrom the U.S. Department of Agriculture Area Studies Project, reported that
experienced farmers are less likely to implement newer, technologically complex practices
because either they believe they have sufficient knowledge to manage crop nutrients and/or
they are reluctant to switch practices they have used for years. Many in the agricultural
population are nearing retirement age, and the next generation may not continue to farm the
land.3 The high land value in the Chesapeake Bay watershed area means that developers
may offer producers an attractive sum of money for their land, further hindering adoption
of practices that require long-term investment. Therefore, it is important that the Bay
partners identify how they will provide the technical or financial assistance necessary to
encourage practices that result in economic benefits to producers as well as environmental
3 USDA's analysis of national figures on farm succession indicated "mixed signals." While 37.7 percent of all farms
reported multiple farm operators, an indication of succession potential, most of these other operators were most likely
spouses. USDA estimated that probably only 9.1 percent of farms nationally had evidence of a succession plan.

EPA Needs to Engage the Agricultural Community to Commit to
Implementing Tributary Strategies
The Chesapeake Bay partners are relying on the agricultural community to make the largest
share of reductions. Yet there is little evidence that the agricultural community is
committed to carrying out many of the practices included in the tributary strategies to the
level needed to significantly reduce nutrients. There are approximately 87,000 farms
covering about 23 percent of the watershed. In operating their farms, agricultural
producers rely on a variety of experts for technical advice, including veterinarians, feed
suppliers, land grant university professionals, State agricultural office staff, cooperative
extension agents, and USDA conservation staff. Therefore, if the Bay goals are to be met,
EPA needs to mobilize the assistance of these experts and parties in obtaining greater
commitment by the agricultural community in implementing the practices called for in the
tributary strategies. Specifically, EPA needs to strengthen its partnership with USDA,
including obtaining the attention of senior level USDA management and working with
them to consider significant program or policy changes in USDA activities. EPA also
needs to strengthen its working relationship with the other Bay partners.
While not the only partner, USDA is a critical partner within the agricultural community.
USDA agencies such as the Natural Resources Conservation Service (NRCS), Farm
Service Agency, and Forest Service have earned the trust of the agricultural community
over the decades by providing significant technical and financial assistance to producers.
EPA has recognized the critical role USDA can play in the restoration effort and USDA has
participated in the Bay program at the staff level. While EPA has been successful in
obtaining USDA technical staff assistance, obtaining high-level USDA interest has not
been as forthcoming (see also Chapter 4). This is a concern because to get the amount of
nutrient reductions from the agricultural community within the aggressive time frame of
the strategies may require USDA consideration of innovative practices or policy changes.
For example, the Chesapeake Bay Watershed Blue Ribbon Finance Panel4 reported that
USDA-authorized cost-share levels are not being used to their maximum levels, are not
allowed to be geographically targeted, and do not include all commodities or conservation
practices. Examining these policy issues requires involvement of senior level management.
USDA entered into a Memorandum of Agreement with the Chesapeake Executive Council
on January 25, 1994, that provided for an Agricultural Steering Committee and high level
management participation. The EPA/CBPO Director said the USDA Secretary did not
designate a senior level policy maker to the Steering Committee and the Agricultural
Steering Committee was not established. However, the EPA/CBPO staff stated that USDA
does provide technical expertise to the Nutrient Subcommittee, Modeling Subcommittee,
Land Growth and Stewardship Subcommittee, Tributary Strategy Workgroup, Forestry
Workgroup, Scientific and Technical Advisory Committee, Regional Manure and Litter
Use Task Force, and others.
4 The Chesapeake Bay Watershed Blue Ribbon Finance Panel was established by the Chesapeake Executive Council to
identify funding sources sufficient to implement basin-wide cleanup plans.

On October 31, 2002, the Chesapeake Executive Council (made up of the governors of
Maryland, Pennsylvania, and Virginia; the Mayor of Washington, DC; the EPA
Administrator; and the Chesapeake Bay Commission Chair) issued a Resolution to
Enhance the Role of the United States Department of Agriculture in the Chesapeake Bay
Partnership. The resolution "urged" USD A to "make the Chesapeake Bay watershed a
priority objective by heightening coordination efforts with other Federal departments and
agencies." It was not until June 2005 that the USDA/NRCS East Regional Assistant Chief
began attending meetings of the Chesapeake Executive Council's Principals Staff
Committee (State and Federal agency representatives serving as policy advisors to the
Executive Council).
Some additional actions to improve the EPA and USD A partnership were highlighted by
EPA/CBPO. The NRCS Chief, representing the USDA Deputy Under Secretary, attended
the Federal Principals Meeting in October 2005. This meeting resulted in the issuance of
the Resolution to Enhance Federal Cooperative Conservation in the Chesapeake Bay
Program, which was signed by the USDA Deputy Under Secretary. Also, the USDA
Deputy Under Secretary signed the Chesapeake Bay's manure strategy and met with State
governors in November 2005. In late July 2006, the EPA/CBPO's Associate Director for
Science expanded its contact with USDA/NRCS' State Conservationists beyond Maryland,
to Virginia and Pennsylvania. But these initial contacts with the USDA/NRCS State
Conservationists in the Bay watershed need to be followed up with attendance at the State
technical committee meetings, which are open to all interested stakeholders and provide
advisory feedback to the State Conservationists. We believe that these are good steps in
EPA/CBPO's understanding of how local priorities are established, especially in areas of
the watershed that are further away from the Chesapeake Bay.
We commend EPA's and USDA's recent efforts in improving their partnership. But these
actions are working within the current program structure. In our opinion, to meet the
significant reductions needed from the agricultural community, EPA and USDA should
reexamine their priorities and consider policy changes. Such significant changes will need
to be negotiated by high-level managers from both agencies. We believe the two agencies
could start this process by developing mutual goals and measures that could benefit the
Bay's water quality and the agricultural producers.
We identified some common elements to an effective partnership as follows:
•	Common goals and objectives
•	Partners'recognition of benefit
•	Mutual ownership of the goal and outcome
•	Clearly stated terms and defined roles
•	Trust and credibility
•	Understanding each other's perspective
•	Ability to monitor, evaluate, and measure performance of the outcome of the
partnership efforts

We found that the EPA and USDA partnership lacks these common elements. Section
117(b)(2)(B)(iii) of the Clean Water Act states that EPA/CBPO shall provide support to the
Chesapeake Bay Executive Council "in cooperation with appropriate Federal, State, and
local authorities, assisting the signatories to the Chesapeake 2000 Agreement in developing
and implementing specific action plans to carry out the responsibilities of the signatories to
the Chesapeake 2000 Agreement." As the lead Federal agency for the Chesapeake Bay
project, EPA needs to take the initiative to address these partnership weaknesses. EPA and
its partners spent a lot of time defining water quality and negotiating and determining an
equitable allocation to reduce nutrients and sediment to the Bay. Now these partners need
to develop mutual goals and measures for the implementation phase. Key partners need to
have their roles clearly defined. The agricultural community as a whole needs to know and
accept its role in the cleanup of the Chesapeake Bay. USDA, State agricultural agencies,
land grant universities, and professional organizations can assist in this endeavor.
Mutual goals
A key component of an effective partnership is having mutual goals and measures. Also,
each partner should be able to recognize the benefit of the partnership. EPA is focused on
improving water quality on a watershed basis. The agricultural community is concerned
with soil erosion, water quality protection, and maintaining a viable agricultural presence in
the region. USDA/NRCS stated that it works through an established partnership to help
private landowners meet their conservation goals. These goals are compatible. However,
as previously stated, some of the practices included in the tributary strategies identified as a
means to improve the water quality of the Bay may not be viewed as economically
beneficial by a producer. If EPA and its partners hope to gain greater participation from
the agricultural community, they need to:
(1)	identify and promote practices that may be more readily accepted; and/or
(2)	assist producers in minimizing their financial burden in implementing practices
that may significantly reduce nutrient pollution but may not be cost-effective.
EPA does not enjoy the trust of the agricultural community and will need to establish
relationships with the various agricultural organizations to promote the Bay's cleanup
goals. Though most of the practices in the tributary strategy would be implemented on a
voluntary basis, the agricultural community is concerned that EPA as a regulatory agency
may use this information to take enforcement actions. USDA/NRCS stated that it does not
want to jeopardize the trust it has developed over the decades with private landowners and
the agricultural community by a closer alignment with EPA because of the latter's greater
focus on the regulatory approach in addressing corrective actions. It stressed its
responsibility as enacted by Congress to maintain the confidentiality of farmers' and
ranchers' conservation plans and related resource information. It indicated that farmers
would be unwilling to take voluntary steps to improve their operation if they felt that
information could be used for future regulatory enforcement for purposes of the Clean Air

Act or the Clean Water Act. One step in gaining trust is for EPA to better understand
USDA's mission and priority setting-process, and consider how it can incorporate USDA's
goals of assisting landowners and producers into the Bay's cleanup goals. EPA will also
need to explain its perspective to the agricultural community; it cannot assume that its
goals are self-evident.
Ability to monitor; evaluate, measure performance
Providing an accurate picture of the progress the agricultural community is making in
controlling nutrient pollution is a project on which EPA/CBPO and USDA should
collaborate. The agricultural community believes it has done much to reduce nutrient
pollution and questions its nutrient contribution as calculated by EPA/CBPO. Additionally,
EPA/CBPO indicated that more practices are being implemented than are tracked and
reported. We believe that both EPA/CBPO and USDA share the same mutual goals of
restoring the Chesapeake Bay and, therefore, share comparable performance measures and
outcomes. However, because measurement of nutrient and sediment runoff is not an easy
task, these two Federal partners need to pool their resources and expertise to develop
models that are mutually compatible yet address each of their program's mandated goals
and performance measures. Working together to develop compatible but distinct
measurement tracking systems could overcome the often competing agenda that has
characterized their past working relationship.
EPA/CBPO developed a sophisticated quantitative best management practices tracking and
crediting system. EPA/CBPO relies on the watershed model as the primary means to
develop and track best management practice implementation and nutrient reduction goals
and progress. Program staff in USDA indicated they questioned EPA/CBPO watershed
model. In 2004, the Bay Program's Scientific and Technical Advisory Committee
identified weaknesses in best management practice efficiency assumptions and
implementation estimates. For example, the current phase of the watershed model gives
full nutrient reduction credit for nutrient management plans written without assurance that
the plans are implemented. EPA/CBPO staff reported that they are addressing these
weaknesses in its next version - Phase 5 of the model - and will continue improvements in
the future as new information becomes available. They stated that the Phase 5 watershed
model, currently being calibrated, accounts for all manure and chemical fertilizer nutrient
inputs - making mostly irrelevant plans written versus plan implemented. In our opinion,
EPA/CBPO could further develop trust by the agricultural community if it coordinated its
modeling efforts with USDA.
The EPA and USDA partnership could benefit greatly from establishing clearly stated
terms and defined roles in meeting the goals of cleaning up the Chesapeake Bay.
EPA/CBPO's Director indicated that they were considering proposing that USDA sign a
Memorandum of Agreement. If USDA agrees to do this, this document should be very
explicit, describing activities and timeframes expected from both parties. For example,

EPA/CBPO stated that it would like to see technical assistance provided for enhanced
nutrient management.
Another tool that EPA/CBPO could use in enhancing its partnership with USDA is EPA's
own National Strategy for Agriculture issued in April 2006. The Strategy's
implementation goals include:
•	EPA will identify the impact of EPA's rules, policies, etc., on agriculture as part of
its routine practice.
•	EPA will work with the agricultural sector through collaboration, innovative and
voluntary programs, financial incentives, and traditional regulatory approaches.
•	EPA will develop an effective communication strategy and marketing network to
better communicate with agriculture, assist with technology transfer, and show
environmental results.
•	EPA will identify existing environmental measures and, where needed, modify
them or develop new ones to demonstrate environmental improvements that can be
achieved through new practices or technologies. Additionally, EPA should identify
and assess environmental improvements related to agriculture and, where
appropriate, use performance measures similar to or in harmony with those used by
We believe that these are all good practices that EPA/CBPO needs to incorporate in
strengthening its working relationship with all of its Bay partners, yet at the same time
acknowledging the mandated mission of each agency, if it is to further the overall effort of
cleaning up the Chesapeake Bay.
While USDA can make a major contribution to the Bay's cleanup, EPA/CBPO should not
rely on USDA alone to assist in garnering the agricultural community's commitment.
Many of the practices require long-term commitment or a change in current farming
operations. It is up to the individual producer to decide which practices to implement.
EPA/CBPO does have a relationship with the local land grant universities which provide
technical assistance to producers and should continue this relationship. EPA/CBPO should
also cultivate ongoing relationships with professional agricultural organizations to better
understand the business side of agricultural operations in order to move toward goals of
both improved water quality and a productive and sustainable agricultural sector in the
Effective EPA-USDA Partnership Could Help Advance Alternative
An effective EPA and USDA partnership could help further research, dissemination of
information, and adoption of promising alternative practices.
There is an imbalance of agricultural nutrients in the Chesapeake Bay watershed. That is,
the total nutrient inputs, including manure, chemical fertilizer, and atmospheric deposition,

exceed crop uptake. In the regions of
the Chesapeake Bay watershed with
intensive animal agriculture, more
manure is generated than can be
applied as fertilizer to meet crop needs,
and the excess nutrients enter the Bay
and its tributaries. State tributary
strategies outline best management
practices to manage this excess.
However, given the rate of nutrient
reduction progress to date, the
substantial reductions still to be
achieved, and the challenges
associated with the current practices
outlined in the strategies, sharply
reducing nutrient and sediment loads to the Bay will require technological advances and
systemic changes.
Though a regional strategy and research agreement have been initiated to coordinate and
research innovative approaches to managing excess nutrients, EPA and USDA must take
actions to ensure that effective approaches reach and are accepted by their intended
EPA is attempting to address the nutrient imbalance at a regional level with a manure
management strategy, signed by the Chesapeake Executive Council and USDA in
November 2005. The 2005 strategy identified opportunities for better managing manure
nutrients in the Bay watershed, such as reducing surplus nutrients by adjusting animal diets
and building markets and technologies for alternative uses of manure and poultry Utter.
The strategy calls on the participation of EPA and Chesapeake Bay Program Committee
members, State agricultural and water quality agencies, and USDA agencies to provide
education and outreach, technical assistance, and/or financial resources.
Also, EPA/CBPO has signed an agreement with USDA to better coordinate research
efforts. EPA/CBPO, USDA's Agricultural Research Service, and the Mid-Atlantic Water
Quality Program of the Land Grant Universities signed a 5-year, Non-Funded Cooperati ve
Agreement on October 5, 2005, to strengthen the cooperation among its signatories to reach
the Chesapeake 2000 commitments and work together to reach goals of mutual interest in
research, outreach, and education. However, the participants did not include specific
projects or milestones in the agreement showing how the commitments would be achieved.
Though the results of the strategy and agreement remain to be seen, the academic
community, private industry, and USDA's Agricultural Research Service have developed a
variety of alternative products and approaches to deal with the abundance of manure, such
as anaerobic digestion, a process that generates energy from manure (see Appendix D). As
mentioned earlier, practices that are technologically advanced are not easily accepted by
producers. Key stakeholders have recognized the need for demonstration projects to not
Dry manure compost ready to be used as a soil additive
(EPA OIG photo)

only identify and develop viable new conservation practices but to serve as a starting point
to evaluate their economic feasibility and then promote their launching.
Overall conclusions and recommendations are in Chapter 5.

Chapter 4
USDA Needs to Improve Coordination to Restore
Chesapeake Bay
While USDA has long been a Federal partner in the Chesapeake Bay Program, it has not
significantly influenced the formulation and implementation of policy to address the
environmental problems faced by the Program. Even though USDA agencies have been
encouraging science-based conservation practices in the region for years, they have not
significantly adapted their strategies to meet the specific needs of the Chesapeake Bay. In
other words, USDA has approached the Bay's unique environmental problems as if they
were similar to the problems of any other region. This "business as usual" model will not
suffice to see Chesapeake Bay removed from the impaired waters list by 2010. If this goal
is to be accomplished, USDA working with the EPA must better communicate and
coordinate its conservation efforts to better address the Chesapeake Bay's unique needs.
Role of USDA
Because many of the environmental problems faced by the Chesapeake Bay are related to
farming practices, their solutions involve the implementation of environmentally
progressive agricultural policies and models. The adoption of these policies and models
requires the consent of individual producers and landowners - many of whom may not see
an immediate incentive to cooperate. Thus, the ultimate success of the Chesapeake Bay
Program depends upon encouraging landowners to adopt farming and natural resources
conservation practices consonant with the Bay's long-term environmental health.
Of all the agencies in the Federal Government, USDA may be best positioned to persuade
farming producers to adopt progressive agricultural practices and to help communities and
private landowners conserve natural resources. The Chesapeake Bay's 41 million acres of
land consist of 24 million acres of forests and 12 million acres of farms - nearly 80 percent
of this land is privately owned. The Forest Service is the largest Federal land manager in
the Bay watershed with 1.2 million acres of National Forest System land. Moreover,
USDA has an extensive field office organization with about 200 field service offices
manned by staff providing technical and financial assistance to producers and landowners.
During the 10-year period prior to fiscal year 2005, three USDA agencies provided
significant funding to encourage landowners and communities to voluntarily adopt and
install conservation practices in the Chesapeake Bay area: $305 million from the Natural
Resources Conservation Service (NRCS); $287 million from the Farm Service Agency
(FSA); and $61 million from the Forest Service (FS). Annual Departmental spending, in
total dollars unadjusted for inflation, for conservation practices in the States involved in the
Chesapeake Bay watershed has increased from $27 million in fiscal year 1995 to
$142 million in fiscal year 2004. Since the signatory States have projected they will not be

able to meet the costs for implementing environmentally sound agricultural policies by
2010, it is essential that Federal funds spent in this watershed contribute to the goals of the
Chesapeake Bay Program.
Providing Leadership
USD A has not implemented a coordinated Departmentwide approach to addressing the
Bay's unique environmental needs. Although USDA agencies have devoted significant
funds to projects that will improve water quality in Chesapeake Bay, they have continued
previously existing conservation programs.
USDA has signed two agreements directly with the Chesapeake Executive Council.
In January 1994, the USDA Assistant Secretary for Natural Resources and Environment
signed a memorandum of agreement between USDA and the Chesapeake Executive
Council.5 This agreement committed USDA conservation agencies to work with State,
local, and other Federal agencies to develop and implement the concept of total resource
management planning on agricultural lands. This agreement also committed USDA's
science agencies to efficiently coordinate watershed-based research, and funding for that
research, among Federal, State, and private entities. Six months later, in July 1994,
USDA's Deputy Secretary, along with the EPA Administrator, the Secretary of the Interior,
and others, committed the Federal Government's executive agencies to work with the
Chesapeake Executive Council to improve water quality in the Chesapeake Bay
watershed.6 These agreements express USDA's commitment, as a partner agency, to
manage the watershed as a cohesive ecosystem and to achieve the goals of the Chesapeake
2000 Agreement. But these agreements do not commit USDA to any specific action. As a
result, USDA has continued, for the most part, to implement programs in the Chesapeake
Bay watershed that, presumably, it would have implemented similarly without entering into
these agreements at all.
Without discounting the conservation efforts of USDA agencies, USDA, at the
Departmental level, has done little to coordinate actions needed to directly fulfill these
agreements. USDA did create a Water Quality Working Group - comprised of agency
representatives from the conservation, science, and budget agencies - to exchange
information between USDA agencies on water quality issues across the United States.
While the Chesapeake Bay is part of the group's activities, this group has a national
function and thus the Bay would only be a small part of its deliberations.
As a partner in the Chesapeake Bay Program, USDA is also indirectly a party to other
agreements and directives signed by the Executive Council. Though some of these
agreements call for actions that fall within USDA's purview, there has not been a
coordinated Department-wide strategy or policy on addressing this commitment. These
agreements include the Chesapeake 2000 Agreement, signed in June 2000 by the
Chesapeake Bay Program partners, which guides the restoration efforts throughout the Bay
5	Memorandum of Agreement between the United States Department of Agriculture and the Chesapeake Bay Executive
6	Agreement of Federal Agencies on Ecosystem Management in the Chesapeake Bay.

watershed. Built on the foundation of Bay agreements signed in 1983 and 1987,
Chesapeake 2000 is the most comprehensive and far-reaching agreement in the Bay
Program's history.
In 2005, after a recommendation by the Blue Ribbon Finance Panel to the Chesapeake
Executive Council, USD A appointed a deputy under secretary as a high-level official to the
Chesapeake Executive Council's Principals' Staff Committee. This position was
immediately delegated to the NRCS Regional Chief, with the Maryland NRCS State
Conservationist as the alternate representative. The NRCS Regional Chief is a high-level
official within NRCS but has limited official authority beyond NRCS and the Natural
Resources and Environment mission area. Delegating this duty in this way effectively
meant that the position no longer possessed high-level influence through the Department
and could not provide the Department-wide leadership needed to address the Bay's
environmental problems. Although the NRCS Regional Chief may be appropriately
positioned to be the USD A high-level official appointed to the Chesapeake Executive
Council's Principals' Staff Committee, this position lacks the authority that comes with
Departmental standing. This authority is crucial to providing coordination for all USDA
agencies, as other agencies in other mission areas will look only to the Department for
guidance. A senior FSA manager, an agency under a different mission area, reported that
his agency could not follow direction from NRCS or any another agency from a different
mission area.
While other USDA activities may have gone undocumented, it is clear that the Department
has not provided the coordination necessary to fulfill the spirit of its agreements with the
Chesapeake Executive Council. In such circumstances, the relevant agencies have
continued to conduct "business as usual." Remedying this situation will involve appointing
a high-level, Departmental official to participate in the Chesapeake Executive Council and
to coordinate, direct, and oversee the activities of the USDA agencies working in the
watershed. Among that official's initial tasks will be taking steps to help bring USDA's
conservation resources to effectively complement the ongoing restoration of the
Chesapeake Bay watershed as a regional problem, and improving the relevant agencies'
ability to report useful performance data.
Bringing USDA's Resources to Bear
USDA agencies contribute to the Chesapeake Bay Program's conservation efforts in two
broad categories - producer/landowner assistance and research funding. FS also
contributes through direct natural resource management of public lands and through
partnership building with communities and watershed groups. NRCS, FSA, and FS all
provide financial assistance to encourage producers/landowners to become better stewards
of the land. The Agricultural Research Service (ARS), Cooperative State Research,
Education, and Extension Service (CSREES), and FS provide research, or funding for
research, promoting the best available agricultural science and enhancing urban and rural
forest ecosystems and their management.

Financial Assistance for Producers
Although NRCS, FSA, and FS expend significant resources in the Chesapeake Bay
watershed, all three agencies, to varying degrees, tend to follow nationwide
program goals that are not necessarily well adapted to the regional needs of the Bay.
The diverse array of USD A programs (e.g., Environmental Quality Incentives
Program, Farmland Preservation, etc.) could clearly accomplish more for the Bay if
guidelines for their implementation were adjusted to maximize water quality and
ecological benefits. The Chesapeake Bay Program was created presupposing that
the Bay's environmental problems can best be addressed regionally and
geographically; however, because USDA's agencies are Federal and are therefore
designed to operate nationally (and to treat all States equally), they tend to resist the
kind of regional planning the Chesapeake Bay Program represents. Nevertheless,
we believe that the lessons learned in the Chesapeake Bay would be applicable in
this and other major watersheds and estuaries, such as the Mississippi River delta
and the Great Lakes regions.
NRCS' relationship to the Chesapeake Bay Program exemplifies this
problem. As the largest USD A conservation agency in the watershed,
NRCS helps producers identify which science-based conservation practices
are needed to maintain and improve their natural resources, and then assists
them financially in implementing those practices. NRCS does not, however,
permit the establishment of geographic priorities in its allocation
methodologies; instead, it tends to emphasize conservation from the
perspective of the individual producer on a discrete piece of land.
EPA's Chesapeake Bay Program addresses similar problems, but
approaches those problems from the perspective of an entire watershed.
Early in the program's history, natural resources agencies and local
stakeholders devised "tributary strategies" to reduce the amount of nutrients
and sediment flowing from producers' land into tributary rivers and then
into the Bay; these strategies constitute a long-term plan that will provide
the most effective and efficient means of repairing the environmental
damage to the Chesapeake Bay.
While USD A managers participated in the creation of these tributary
strategies, USD A agencies are not necessarily committed to implementing
them. Officials at NRCS regard that agency's role as continuing to meet
agricultural producers' needs with its available conservation practices, i.e.,
to do what is best for the individual producer based on that producer's
discrete piece of land. Although the causes for the environmental problems
facing the Bay are regional in scope, NRCS officials do not have enough
flexibility to implement the Chesapeake Bay Program's tributary strategies

because of their agency's prohibition against funding particular geographic
Consequently, NRCS has not augmented its conservation program funding
in the Bay's watershed. Nationwide, NRCS conservation programs have
been turning away producers due to a lack of funding. In fiscal year 2005,
NRCS did not fund about 2,000 Environmental Quality Incentives Program
(EQIP) applications and 1,500 other conservation program applications in
the six States comprising the Chesapeake Bay watershed. Each of these
unfunded applications is a missed opportunity to help restore the
Chesapeake Bay's water quality.
NRCS has also been turning away many applications for technical
assistance. Technical assistance is the vehicle NRCS uses to provide a
substantive level of technical expertise, background, and support for
Federal, tribal, State, and local conservation programs. This technical base
enables other NRCS programs by facilitating conservation planning,
interagency coordination, technical consultations, and collaboration with
agricultural decision makers. We found that NRCS conservation district
employees often did not have the time to record requests they knew could
not be funded. As a result, although technical assistance is vital, we were
unable to identify the exact number of requests for technical assistance in
the Chesapeake Bay States that went unfunded.
To meet the needs of unfunded conservation programs in the Chesapeake
Bay region, NRCS would need to target or redirect funds to the States in the
Bay's watershed. However, NRCS officials repeatedly and consistently told
us that they cannot allocate funds for a particular region's geographic needs.
Although there is no legislative requirement preventing NRCS from
targeting funds in this way, simply because NRCS could target funds
geographically does not mean NRCS should do so. Barring the possibility
of a budget increase, NRCS would have to shift funds away from other
States to those in the Chesapeake Bay watershed. NRCS officials have
explained that shifting funds from one area to another entails major
economic and political ramifications. Moreover, they stated that if they
allowed geographic considerations to enter into their allocation process, they
would be inundated with requests for special consideration from many
regions. While we found NRCS' program allocation methodologies
reasonable, we question how NRCS can remain an effective Chesapeake
Bay Program partner if it cannot fund States to support the program's
tributary strategies and it will not allocate funds to support the unique
geographical needs of the Chesapeake Bay watershed.
We conclude that how NRCS allocates its funds is a difficult issue, and one
that should be resolved by high-level cooperation between USDA officials.
In some instances, USDA does recognize the Chesapeake Bay's special

needs and has specifically targeted funding to address those needs. In 2005
NRCS made $20 million in EQIP funds available for the Conservation
Innovation Grants, and has specifically targeted $5 million toward proposals
demonstrating the use of innovative technologies or approaches, or both, to
address one or more of the natural resource concerns within the Chesapeake
Bay watershed. Additionally, we note that NRCS has directed some funding
to provide liaison staff co-located with the EPA Chesapeake Bay Program.
Whatever the difficulties involved, given the Federal Government's decision
to identify Chesapeake Bay as a priority for environmental cleanup, some
corresponding priority for funding must also be arrived at.
Unlike NRCS, FSA has recognized the unique needs of the Chesapeake Bay
watershed and has tailored its programs to meet those needs. FSA's
contribution to water quality in the Chesapeake Bay watershed is largely
through its Conservation Reserve Program (CRP). CRP is a voluntary
program for agricultural landowners and includes the Conservation Reserve
Enhancement Program (CREP). In exchange for annual rental payments
and cost-share assistance, landowners agree to establish long-term, resource-
conserving cover crops on eligible farmland. Permanent cover crops
significantly reduce sedimentation and generally do not require fertilizer,
making CRP compatible with the Chesapeake Bay Program's goals.
FSA created and recognized the Chesapeake Bay watershed as a
conservation priority area and devoted additional resources to it. As a
result, the acreage in the Chesapeake Bay watershed devoted to FSA's CRP
has grown from 189,000 acres to 366,000 acres. FSA CRP rental payments
and cost-share assistance have also increased proportionately over a 10-year
period. In sum, FSA has grown its CRP in the watershed by 177,000 acres,
at an approximate 10-year cost of $287 million, of which $122 million was
for CREP rental and incentive payments in the Chesapeake Bay watershed.
Much of FSA's CRP growth has been through CREP. CREP is a
partnership between USDA's Commodity Credit Corporation and State
governments to fund riparian buffers, grass filter strips, wildlife habitat, and
to restore wetland and other conservation practices on environmentally
sensitive land. CREP came into existence in 1997 in large part due to the
adoption of the Bay buffer goals in 1996 with Maryland as the first State in
the program. All six Chesapeake Bay States (New York, Pennsylvania,
Delaware, Maryland, West Virginia, and Virginia) are USDA partners in
this program. The two primary objectives of CREP are to coordinate
Federal and non-Federal resources to address specific conservation
objectives of a State and the nation in a cost-effective manner, and to

improve water quality, erosion control, and wildlife habitat related to
agricultural use in specific geographic areas.
There are four important ways in which CREP differs from CRP. First,
CREP is targeted to specific geographic areas. It is designed to focus
conservation practices on addressing specific environmental concerns.
Second, CREP is a joint undertaking among States, the Federal Government,
and other stakeholders who have an interest in addressing particular
environmental issues. Third, it is results oriented, and requires States to
establish measurable objectives and conduct annual monitoring to measure
progress toward implementing those objectives. Fourth, it is flexible, within
existing legal constraints, and can be adapted to meet local conditions on the
The role of the Forest Service (FS) differs significantly from both NRCS
and FSA since FS programs do not focus primarily on farmers and
agricultural producers or on the delivery of incentives for landowners. The
FS provides assistance to State forestry agencies and nongovernmental
organizations, which in turn provide services directly to farmers and forest
landowners. The FS also works through various partnerships to serve urban
communities. The agency's contributions to Bay restoration involve natural
resource management including private forest land, forest research, and
public land management.
Because of the vital role of trees and forests in sustaining high water quality,
the FS addresses the dual objectives of conserving and managing existing
forests as well as using trees and forests as solutions to water quality
problems associated with agricultural and urban lands. Many farmers are
also forestland owners or tree farmers. As a result, FS works with States to
expand forests in agricultural areas - particularly as buffers in riparian
areas - since these buffers can substantially reduce the rate of nutrient and
sediment flow from farmland while also providing habitat for wildlife.
Since the early 1990s, FS has maintained a small staff stationed at the
EPA/CBPO; this staff has served in a leadership and coordination role for
forestry. The Chesapeake Bay Watershed Forestry Program was established
through this office to provide leadership specifically on Bay agreements as
they relate to forestry, to coordinate forestry programs on a regional basis,
and to develop strategies in collaboration with the EPA for using forestry to
address water quality issues. This staff has contributed to policy initiatives
by the Chesapeake Executive Council (FS supported the Riparian Forest
Buffer Directives of 1994, 1996, and 2003; the Chesapeake 2000
Agreement, and the Cooperative Conservation Resolution), has coordinated
the Chesapeake Bay Program's Forestry Workgroup for 15 years, and

significantly advanced riparian buffer restoration, forest conservation, and
the use of urban forestry for stormwater and air quality. The program also
provides grant funding and technical assistance.
Although not directly responsive to the Bay restoration, the National Forests
also conduct erosion control, management, and restoration projects that
indirectly improve water quality in Bay tributaries. The Forest Service
Research Program has implemented a limited number of reviews in direct
response to Bay restoration issues.
The FS' primary contribution to water quality in the Chesapeake Bay
watershed is through its grants to State Forestry agencies and
nongovernmental partners under the Forest Stewardship Program, Urban
and Community Forestry Program, and Forest Legacy Program authorized
by the Cooperative Forestry Assistance Act. State Forestry grants support
many forest management and protection activities that are directly or
indirectly oriented to improving Bay water quality. Over the 10 years
ending in fiscal year 2004, FS spent $61 million in the Chesapeake Bay
watershed. Approximately $11 million of the $61 million FS spent was over
and above routine spending and directly targeted to improving water quality
or addressing other Bay restoration goals.
Funding for Research
A similar contradiction exists between the national objectives of USDA's science
agencies and the regional needs of the Chesapeake Bay Program. Neither ARS nor
CSREES has any means of providing funding specifically for the Bay. In other
words, CSREES and ARS do not perform or fund water quality research within the
Chesapeake Bay watershed with any higher priority than they do elsewhere. Both
CSREES and ARS share national responsibility for conducting water quality
research. Land grant institutions within the Chesapeake Bay watershed use
CSREES funds for regional and national research, just as ARS conducts research in
other parts of the U.S. that is applicable to water quality within the Chesapeake
Bay. Within USD A, research funding for Chesapeake Bay watershed studies
competes with other research projects nationwide, including the need to assess
nutrient loads that exacerbate harmful algae blooms in the Gulf of Mexico,
containment loading studies within the Colorado and Rio Grande (and many other
river basins), and research on how to mitigate and slow the decline of water
resources in U.S. aquifers. Such water quality research may apply to many bodies
of water, including the Chesapeake Bay. Land grant institutions within the
watershed use CSREES funds for vital research,7 just as ARS performs research
applicable to water quality in Chesapeake Bay. But neither agency can demonstrate
any research funded to better understand or resolve a problem specific to the
7 During the 10-year period ending in fiscal year 2004, CSREES provided almost $7 million for research on issues that
are consistent with the Chesapeake Bay Program goals.

Chesapeake Bay, and neither agency has the flexibility to change its mission to
address EPA's tributary strategies.
In October 2005, ARS signed a "Non-funded Cooperative Agreement" (NFCA)
with the EPA Chesapeake Bay Program and the Mid-Atlantic Regional Water
Quality Program of the Land Grant Universities. The stated purpose of the NFCA
is to strengthen cooperation among the parties to fulfill the commitments of the
Chesapeake 2000 Agreement.
One of USD A's challenges in providing stronger leadership within the Chesapeake Bay
Program is enabling its agencies to reasonably allocate resources to resolve regional
challenges. Although the existence of the Chesapeake Bay Program indicates that EPA has
moved to confront environmental problems by watershed, USD A does not, in general,
work in similar terms. The institutional difficulty involved in reorienting these agencies to
address watersheds - rather than States - as the fundamental unit for environmental
cleanup is formidable; however, by making the Chesapeake Bay a high priority we believe
that the Federal Government has indicated that this reorientation is essential.
Evaluating USDA's Performance
Because strengthening USDA's role in the Chesapeake Bay Program requires identifying
how different agencies within USD A can contribute to the program and coordinating those
agencies' contributions, it is vital that the Department be able to evaluate the relative
success of its different programs. Although several agencies are running programs
contributing to the Chesapeake Bay Program's goals, they have not developed effective
processes for collecting and summarizing accomplishment data. In other words, these
agencies are able to cite the number of conservation projects they have funded in the
Chesapeake Bay watershed, but not how those projects have contributed to the Bay's water
quality. USD A thus cannot evaluate how its programs are contributing to the goals of the
Chesapeake Bay Program. Without this information, effective overall coordination of Bay
restoration efforts is difficult, if not impossible.
Since the Government Performance and Results Act of 1993, the Federal Government has
begun to move away from evaluating its programs' performance based on how much they
do, and towards evaluating how effectively their actions accomplish clearly defined goals -
i.e., away from evaluating output and towards evaluating outcome. Instead of stating, for
instance, how many acres of agricultural land in a watershed have been taken out of
production (output), FSA would be expected to state how effectively these actions have
improved water quality in that watershed (outcome). Though implementing these results-
oriented performance measures is a challenging process, agencies will be expected, over
time, to identify high-quality outcome measures, accurately monitor the performance of
programs, and begin integrating this information with the costs associated with their
actions. Since achieving the Chesapeake Bay Program's goals involves evaluating how
effectively a variety of programs are improving the water quality of the Bay and allocating
resources accordingly, it is imperative that the participating agencies develop useful
outcome-based performance measures.

Although NRCS, FSA, and FS each have goals that include working to improve water
quality in the Chesapeake Bay, these agencies have not yet developed and implemented
performance measures capable of providing useful, outcome-oriented information. Until
they have done so, they cannot state the degree to which their programs have succeeded.
Likewise, without accurate performance information, USDA can have little assurance that
agencies' reported performance reflects their actual performance.
Evaluating NRCS' Performance
At the time of our fieldwork, NRCS had four strategic goals: "enhance natural
resource productivity to enable a strong agricultural and natural resource sector,"
"reduce the unintended adverse effects of natural resource development to ensure a
high-quality environment," "reduce risks from drought and flooding to protect
individual and community health and safety," and "deliver high quality services to
the public to enable natural resources stewardship." Among its 11 objectives to
support these strategic goals, NRCS aims to protect water and air resources from
agricultural nonpoint sources of pollution, and maintains, restores, or enhances
wetland ecosystems and fish and wildlife habitats by:
•	providing areawide planning and coordinating assistance in watersheds with
nonpoint source pollution problems;
•	intensifying efforts to protect rivers and streams from the effects of nutrient
loading; and
•	promoting stream, bank restoration, and riparian area establishment.
To gauge how well NRCS is achieving its goals, the agency identified performance
measures that associate program activities with appropriate units of input; these
units measure how many acres or miles have been treated with a given conservation
practice rather than how effectively that practice has improved water quality. In
other words, these units do not measure outcome, but output. Thus, NRCS can
reasonably show the number of conservation practices completed or the number of
acres in the Wetland Reserve Program, but it cannot show the effect of the first acre
or mile on water quality. Without outcome-based performance measures, NRCS
cannot confidently state the degree to which its programs have succeeded.
To correct this shortcoming, NRCS is developing the Conservation Effects
Assessment Project (CEAP). The agency asserts that CEAP will provide
scientifically credible estimates of the environmental benefits obtained from NRCS
conservation programs. Begun in 2003, CEAP is collecting data to determine the
best methodology and remains a work in progress. CEAP results will be supported
with data from up to five components (cropland, wetland, wildlife, livestock, and
grazing). NRCS anticipates releasing the final data results on the cropland
component of CEAP, which is furthest along in testing and gathering data, by
January 2008. However, preliminary cropland component data may be available as
soon as January 2007.

While NRCS' conservation practices have almost certainly resulted in some
improvement in Chesapeake Bay's water quality, the agency cannot quantify any
given practice's effect on water quality - precisely the information USDA and EPA
need for planning purposes.
In May 2006, NRCS published a new strategic plan for 2005 - 2010 entitled,
Productive Lands - Healthy Environment NRCS Strategic Plan. The new strategic
plan has six new goals (High Quality, Productive Soils; Clean and Abundant Water;
Healthy Plant and Animal Communities; Clean Air; An Adequate Energy Supply;
and Working Farm and Ranch Lands) with outcome-based performance measures.
For example, for the Clean and Abundant Water goal, NRCS has a clear outcome-
based performance measure that addresses agricultural sediment and nutrient
influence on water quality, The performance measure calls for agricultural
producers to reduce potential delivery of a specific number of tons of sediment and
nutrients from their operations. Specifically, agricultural producers are to reduce
sediment delivery from agricultural operations by 70 million tons (of a total 970
million tons from agricultural operations in 2003); reduce delivery of nitrogen from
agricultural operations by 375,000 tons (of an estimated 6 million tons in 2003);
and reduce delivery of phosphorus from agricultural operations by 70,000 tons (of
an estimated 360,000 tons in 2003). Once these performance measures are fully
implemented, they will provide USDA with useful outcome-based data concerning
the success of NRCS' programs in the Chesapeake Bay watershed area.
Evaluating FSA's Performance
FSA has three strategic goals: "supporting productive farms and ranches,"
"supporting secure and affordable food and fiber," and "conserving natural
resources and enhancing the environment." To accomplish this third goal, FSA
strives to reduce erosion rates, reduce ground and surface water contamination,
increase the populations of targeted species, and sequester more tons of carbon
dioxide. To gauge how well FSA is accomplishing its goals, the agency has
identified a number of performance measures, including:
•	maintaining or increasing the percentage of acres in compliance with highly
erodible land and wetland provisions;
•	increasing the percentage of conservation acres with invasive species
•	increasing acres managed under Continuous Conservation Reserve Program
•	increasing CRP acres of riparian and grass buffers; and
•	increasing CRP-restored wetlands acres.
Like NRCS' performance measures, FSA's performance measures record how
many acres or miles have been treated with a given conservation practice rather
than how effectively that practice has improved water quality. In other words, FSA
can show the number of acres enrolled in CRP or the number of miles of riparian

buffers enrolled in CRP, but it cannot show the effect of the first acre or mile on
water quality. Without outcome-based performance measures, FSA cannot state the
degree to which its programs have succeeded.
To correct this shortcoming, FSA officials informed us they will soon announce a
new system to quantitatively show the achievement of its outcomes. Currently,
however, this new system remains a work in progress.
While FSA's conservation practices have almost certainly resulted in some
improvement in Chesapeake Bay's water quality, the agency cannot quantify any
given practice's effect on water quality - precisely the information USDA and EPA
need for planning purposes.
Evaluating FS' Performance
Among its national strategic goals, FS aims to "increase the area of forest and
grassland watersheds in fully functional and productive condition." To achieve that
goal, FS determined that it should focus on the following objectives:
•	assess and restore high-priority watersheds and maintain riparian habitat in
these watersheds;
•	monitor water quality impacts of activities on National Forest System lands;
•	restore and maintain native and desired normative plant and animal species
diversity in terrestrial and aquatic ecosystems; and
•	reduce the rate of species endangerment by contributing to species recovery.
To gauge how well it is achieving its objectives, FS identified several performance
measures, including determining:
•	the number of inventoried forest and grassland watersheds in fully
functioning condition as a percent of all watersheds;
•	acres of nonindustrial private forest land under approved stewardship
management plans;
•	the percent of projects on National Forest System lands fully implementing
best management practices;
•	allotment acres and percent administered to 100 percent of standard;
•	terrestrial and aquatic habitats enhanced to achieve desired ecological
conditions; and
•	the value of partnership contributions that support habitat enhancement.
Like NRCS and FSA, FS is currently developing a more comprehensive system of
measures to better quantify how well its programs are meeting goals. Although
these measures are still being developed, it appears they will continue to report
primarily how many acres or miles have been treated with a given conservation
practice rather than how effectively that practice has improved water quality. FS
asserts that it currently makes rough estimates of the water quality and other

benefits of its tree planting practices - these are not, however, outcome-based
performance measures.
While FS' conservation practices have almost certainly resulted in some
improvement in the Chesapeake Bay's water quality, the agency cannot quantify the
effect on water quality of the majority of its actions - precisely the information
USD A and EPA need for planning purposes.
One of USD A's challenges to providing stronger leadership within the Chesapeake Bay
Program will be to establish effective, outcome-based performance measures for evaluating
how its conservation efforts are improving the Bay's water quality. Though the significant
sums spent on conservation over the past 10 years have almost certainly improved the
quality of water in the Bay, the Department does not have adequate information to evaluate
their impact or to plan future efforts.
Overall conclusions and recommendations are in Chapter 5.

Chapter 5
Conclusions and Recommendations
The Chesapeake Bay watershed partners have measurably reduced nutrients flowing to the
Bay since 1985, primarily by improving wastewater technology. However, their current
rate of progress in reducing nutrients does not approach what is needed to remove the Bay
and its tributaries from EPA's impaired waters list by 2010. Most likely it will take
decades to achieve the Bay water quality restoration goals.
The latest nutrient reduction allocation relies on the agricultural community to voluntarily
make the most significant contributions. For example, the agricultural community is
expected to assume 64 percent of the Bay watershed's total nitrogen reduction goal. The
States prepared tributary strategies that were overly ambitious in reaching the 2010
deadline and have not determined how all the practices will be financially supported. Most
of the agricultural practices included in State tributary strategies have not been widely
implemented by Bay farm producers. While the practices may be environmentally sound,
they may not be economically beneficial to a business with a limited profit margin. USD A,
a Bay partner, with its many conservation assistance programs and its extensive field
offices and experience working with producers and landowners, can play a key role in
recommending, developing, and implementing conservation practices that will help the
agricultural community meet the Bay goals. To date, USDA and its many programs have
not emphasized achieving the Bay goals. Even though USDA has expressed its
commitment in signing two agreements with the Chesapeake Executive Council, there has
not been a coordinated Department-wide strategy or policy on addressing this commitment.
Furthermore, the Department has not been able to fully meet the requests by producers and
landowners in the Bay watershed for technical assistance and other conservation assistance
that could help meet the Bay Goals.
EPA is responsible for obtaining the support of the appropriate State and Federal officials
in achieving the objectives of the Chesapeake 2000 Agreement using a combination of
regulatory authorities and consensus agreements among the partners. While EPA has
achieved success coordinating goals with environmental programs (e.g., developing
consistent water quality standards across State lines; a basinwide National Pollutant
Discharge Elimination System regulatory permitting approach), EPA is still grappling with
how to effectively coordinate with the agricultural community. The agricultural
community has reduced nutrient runoff, but this sector will still have to substantially cut
loads to meet expectations set in the tributary strategies. Current practices and policies are
not resulting in the significant nutrient reductions needed to improve the Bay. Therefore it
is crucial, at the Federal level, for EPA and USDA to partner to identify workable strategies
and coordinate available resources. The partnership of EPA and USDA will also need to
identify and fast-track the use of alternative practices to obtain the level of effort needed to

meet the current goals. EPA needs to be more aggressive in engaging the highest level of
USD A management to identify new policies and practices that can both improve water
quality and be compatible with agricultural operations. Continuing business as usual will
not result in the substantial reductions required to restore the Bay.
We recommend that the EPA Administrator:
1.	Propose executing a Memorandum of Agreement with the USDA to assist the
Bay partners in meeting their nutrient reduction goals by:
a.	Identifying conservation practices USDA will promote with either
technical assistance or cost-share programs.
b.	Developing procedures for promoting and fast-tracking alternative
practices for cost-share programs and technical assistance.
c.	Establishing a task force to identify how USDA cost-share programs can
better assist the States in carrying out their tributary strategies.
d.	Establishing demonstration projects to emphasize producer benefits, not
just environmental benefits of best management practices in tributary
e.	Conducting research to quantify accurately the nutrient load reductions
from alternative best management practice strategies to ensure these
practices are the best for removing nutrients and to improve the models.
f.	Developing a tracking system to determine a more accurate picture of
the agricultural community's commitment to implementing the tributary
We recommend that the EPA Region 3 Regional Administrator instruct EPA/CBPO to:
2.	Work with USDA, the States, local governments, land grant universities, and
agricultural organizations to revisit State tributary strategies to ensure that the
mix of best management practices chosen are those most suitable to the area,
have the greatest potential for implementation, and can effectively reduce
nutrient and sediment loss.
3.	Include development of implementation plans as a special condition in
Chesapeake Bay Program grant agreements for States that have not submitted
an implementation plan.

We further recommend that the USDA Secretary or Deputy Secretary:
4. Assign a senior level Departmental official to coordinate USDA goals and
programs with EPA and the Chesapeake Bay Program. Delegate to that official
authority to direct and coordinate goals and programs across USDA mission
areas and agencies, and to monitor USDA actions to meet the Chesapeake Bay
Program goals.
5. Review the feasibility of targeting or redirecting USDA funds (or allocating
USDA funds) on a regional and/or geographical basis to coordinate with the
environmental restoration of the Chesapeake Bay, including the possibility of
linking the availability of financial and technical assistance to proximity to the
Chesapeake Bay watershed.
6. Direct USDA agencies to expedite the development and implementation of
outcome-based performance measurements for evaluating the effectiveness of
their conservation efforts and programs.
We also recommend that the USDA NRCS Chief:
7. Develop a tracking system for maintaining a list of technical assistance and
financial assistance requests from landowners and agricultural producers that
cannot be completed due to limited funding.
EPA and USDA Responses and OIGs' Comments
EPA and USDA generally concurred with the findings, conclusions, and recommendations.
EPA said it is continuing to work with its USDA partners to further enhance their
collective efforts directed toward restoring Chesapeake Bay water quality. USDA will
address the USDA responses and OIG position, as well as USDA actions needed to achieve
final action, in a separate memorandum. See Appendices E and F for the entire responses.

Appendix A
Agricultural Best Management Practices
for Chesapeake Bay Watershed
Best Management
1. Conservation Tillage
Leaves crop residue (plant materials from past harvests) on the soil surface (minimum
30-percent cover). Reduces runoff and soil erosion, and keeps nutrients on the field.
2. Continuous No-Till
No-Till is a type of conservation tillage (above) where crop is seeded directly into
vegetative cover so minimal soil surface is disturbed (see previous index). Continuous
No-Till is the practice of no-till for each crop planting for up to 5 years.
3. Cover Crops
(early only)
Non-harvested crops (e.g., rye, wheat, barley) planted to maintain vegetative cover on
cropland, holding nutrients at the root zone. Trapped nitrogen can be released and used
by the following year's crop.
4. Small Grain
Enhancement -type of
cover crop (early)
May be harvested for grain, hay, or silage. Some fertilizer is applied, but intent is to
modify normal small grain production practices by eliminating Fall and Winter fertilization
so that the crops scavenge available soil nitrogen.
5. Land retirement (on
highly erodible land)
Takes marginal and highly erosive cropland out of production by planting permanent
vegetative cover such as shrubs, grasses, and/or trees.
6. Riparian forest buffers
Linear wooded areas along rivers, stream, and shorelines (100-foot width recommended,
35-foot width required). Filter nutrients, sediments, and other pollutants from runoff and
remove nutrients from groundwater.
7. Riparian grass buffers
Linear strips of grass or other non-woody vegetation maintained between the edge of
fields and streams, rivers, or tidal waters (100-foot width recommended, 35-foot width
required). Filter nutrients, sediment, and other pollutants from runoff.
8. Wetland restoration
Re-establishes the natural hydraulic condition in a field that existed prior to the installation
of subsurface or surface drainage.
9. Tree planting
Includes any tree planting on agricultural land (riparian buffers not included), converting
agricultural land to forest. Targets lands that are highly erodible or identified as critical
resource areas.
10. Nutrient Management
Plan Implementation
Plans are developed to match crop nutrient needs with the expected crop yield based on
soil productivity data or site yield history. Plans recommend appropriate rates of nutrient
application, timing of applications and placement of nutrients to result in economically
optimum crop yields while managing the level of nutrient loss.
11. Yield reserve
(Enhanced Nutrient
Reduces nitrogen application 15 percent below nutrient management plan
recommendation (recommendation is typically set 35 percent higher than crop needs).
An incentive or crop insurance is used to cover the risk of yield loss.
12. Soil Conservation
Plans that meet criteria of the USDA-NRCS Field Office Technical Guide. Includes
cultural and structural practices that control erosion, such as grass waterways, terraces,
diversions, sediment basins, or drop structures.
13. Managed precision
Uses multiple management systems beyond standard nutrient management practices to
further minimize nutrient loss. Identifies variables such as soil types, weather conditions,
and yield data to more specifically apply and vary nutrients within field areas.
14. Animal Waste
Management Systems
Allow for collection and containment of waste generated by confined animals. They are
designed for the proper handling, storage, and utilization of wastes. Lagoons, ponds, or
steel concrete tanks are used for the treatment and/or storage of liquid wastes. Storage
sheds or pits are common for solid wastes.
15. Phytase feed additive-
Phytase is a manufactured enzyme that improves the digestibility of organic phosphorus
compounds contained in corn, soybean meal, and other poultry feed. Manure
phosphorus reductions occur because less phosphorus needs to be blended into feed.

Best Management
16. Phytase feed additive-
Same as above, but for swine.
17. Precision feeding -
Reduces excess dietary nutrients in feed to reduce manure nutrient content.
18. Alternative uses of
manure/ manure
Reduces excess nutrient application by transporting the manure outside of the watershed
or finding an alternative use for the excess manure. Alternative uses include: fertilization
of commercial tree plantations, new fuel technologies, and pelletizing for fertilizer.
19. Off-stream watering
with fencing
Limit livestock access to streams with fencing and by providing an alternative drinking
water source. Fences can be planted with trees or grass, but are typically not wide
enough to constitute a buffer.
20. Off-stream watering
without fencing
Use alternative drinking water systems that partially remove livestock and animal waste
from streams.
21. Off-stream watering
with stream fencing
and rotational grazing
Combines stream fencing and alternative watering with cross fencing to enable rapid
grazing of small areas in sequence. Once an area is intensively grazed of most
vegetation, animals are moved to another area to allow pasture recovery.
22. Precision rotational
No Chesapeake Bay Program definition found.
23. Horse pasture
Use of rotational grazing practices to minimize nutrient and sediment loss from horse
pastures. Practices include: streambank fencing, cross-fencing, off-stream watering, and
stabilization of heavy use areas.
24. Ammonia emissions
reduction (poultry,
swine, dairy)
Reduction in livestock housing ammonia emissions through use of capture or control
25. Non-urban stream
Stabilizes stream channel by restoring a stream's natural hydrology and landscape.
26. Carbon sequestration
Conversion of cropland to hayland (warm season grasses) and managed as a permanent
cover, providing a mechanism for sequestering carbon within the soil.
Sources: Chesapeake Bay Program, EPA's Watershed Academy Website, and Chester County (Pennsylvania)
Tributary Strategy

Appendix B
Details on Scope and Methodology
We interviewed experts from academia and other fields involved in Chesapeake Bay restoration to
identify areas of concern. We also interviewed staff from EPA Region 3's Chesapeake Bay
Program Office to identify the program's goals, structure, and process. We interviewed staff from
USDA's Natural Resources Conservation Service, Agricultural Research Service, Forest Service,
and Farm Service Agency, and EPA's nonpoint source and concentrated animal feeding operation
programs, to determine how these programs influenced agricultural activities in the Chesapeake
Bay watershed. We interviewed environmental and agricultural staff from Maryland, Virginia, and
Pennsylvania State agencies to determine how State tributary strategies were developed and
We reviewed State tributary strategies for Maryland, Pennsylvania, and Virginia to identify best
management practices selected by the States and their implementation goals. We also reviewed
data provided by the Chesapeake Bay Program Office showing the progress the States were
making in meeting their implementation targets as of 2004. In our analysis of progress and
challenges, we included the 26 agricultural best management practices for which one or more of
these three States had set an implementation goal. We did not validate the implementation rates
reported in the tributary strategies.
We also conducted site visits of farms implementing best management practices. These producers
volunteered in response to a request by the Virginia State Department of Conservation and
We also identified conservation practices not commonly used within the Chesapeake Bay
watershed to determine whether these practices or technologies could be adopted in the Bay area.
From the National Agricultural Library's Conservation Effects Assessment Bibliography, we
selected 187 articles related to controlling nitrogen and phosphorus and improving water quality.
We then selected 14 articles that merited further research. Additional alternative conservation
practices were brought to our attention through interviews, conferences, and background reading.
We then asked staff from the Chesapeake Bay Program Office and an agricultural expert from the
University of Maryland to assess the benefits and limitations of the practices identified when
applied to the Chesapeake Bay watershed.
Management Controls
Due to a concurrent review of the Chesapeake Bay's Program Office operations and watershed
model by the Government Accountability Office, we limited our review of management controls to
understanding EPA's and USDA's role in working with the agricultural community to encourage
the use of best management practices. See Chapters 3 and 4. EPA reported in its 2005 Annual
Performance and Accountability Report that current pollutant loads continue to exceed the level
needed to meet water quality standards. See Chapter 2 on the progress being made by the
Chesapeake Bay partners in reducing nutrients and sediments. We did not audit the validity of

financial data and other data used in our report for informational purposes. EPA financial data is
subject to an annual audit by the Office of Inspector General. The Chesapeake Bay Program's
Scientific and Technical Advisory Committee had reviewed assumptions used in the Bay's
watershed model and these conclusions have been reported in Chapter 3.
Prior Reviews
The Government Accountability Office issued Agricultural Conservation: State Advisory
Committee's Views on How USDA Programs Could Better Address Environmental Concerns
(GAO-02-295) in February 2002. The Government Accountability Office found that programs
targeted to specific environmental concerns were more effective at improving water quality than
those programs that address environmental issues more generally.
The Government Accountability Office issued Agricultural Conservation: USDA Needs to Better
Ensure Protection of Highly Erodible Cropland and Wetlands (GAO-03-418) in April 2003. The
Government Accountability Office reported that, nationally, almost half the Natural Resources
Conservation Service's field offices do not implement the conservation compliance provisions of
the 1985 Food Security Act as required.
The Joint Legislative Audit and Review Commission of the Virginia General Assembly issued its
Review of Nutrient Management Planning in Virginia on January 6, 2005. In this report, the
Commission stated that nutrient management plans written were generally of good quality but
implementation was mixed and enforcement weak.
The Government Accountability Office issued Chesapeake Bay Program: Improved Strategies Are
Needed to Better Assess, Report and Manage Restoration Progress (GAO-06-96) in October 2005.
The Government Accountability Office reported that the Chesapeake Bay Program (1) had not yet
developed and implemented an integrated assessment approach for measuring progress; (2) did not
effectively communicate the status of the health of the Bay to the public; and (3) did not have a
comprehensive, coordinated implementation strategy to meet the goals of the Chesapeake 2000

Appendix C
Agricultural Best Management Practices'
Progress and Challenges
Practice 8
Percent of Goal
Bay-Wide (2004)
Factors Affecting Implementation and Impact
1. Conservation
Widely implemented, but decreases land available for manure transport/land
application because it limits ability to incorporate manure into soil.
Can increase infiltration and subsequent nutrient transport to groundwater.
2. Continuous
Benefits may take several years to be realized. Therefore, implementation
requires technical assistance and trust.
Single year State contracts can hinder long term investment. Producers must
invest in a no-till planter (-$15,000), expensive for a small farm and takes a
higher level of management. Not practical for dairy farms because they use
crop residue for silage.
3. Cover Crops
(early only)
According to Chesapeake Bay Commission, traditional cropping patterns and
winter grain crops make it difficult to apply cover crops to more than about half
of row crop acreage in the Chesapeake Bay region each year.
Efficiency depends highly on timing of planting - nitrogen uptake and trapping
diminishes rapidly if crops are planted too late in season. Producers have
difficulty getting cover crops planted early enough to be efficient due to
weather and time of harvest, and because optimal planting time coincides with
a farmer's busiest time of year.
Little economic incentive for cover crop planting - costs to producer include
seed, herbicide, and labor, but crops are not harvested so there is no
immediate economic benefit.
Without an inherent benefit to the farmer, a consistent yearly funding source is
necessary to obtain participation. For example, in Maryland, producers
resisted implementation because funding was not sustainable. Now, a "flush
tax" provides consistent funding, but funding is still substantially short of need.
4. Small Grain
Enhancement -
type of cover crop
This type of cover crop is also known as a "commodity cover crop" and thus
may be harvested for grain, hay, or silage. This addresses the cost-
effectiveness challenge of traditional cover crop implementation since the crop
can be harvested to be used or sold, though upfront costs could hinder
application. However, since fertilizer may be applied to these crops, its
nitrogen reduction efficiency is less than that of traditional cover crops.
5. Land retirement
(on highly erodible
Takes land out of production; USDA provides cost-share to farmers to convert
cropland to grassland and yearly per-acre payments to make up for lost
income. Consistent funding from farmer's perspective (contracts are
10-15 years), but costs to government do not always result in ultimate
behavior change.
8 Though a goal was set for each of the practices above, several of these are part of a category of management options,
and thus compete for the same available acreage. The goal is to convert one practice to another that can yield greater
enviromnental benefit. For example, continuous no-till would replace conservation tillage, and enhanced nutrient
management or precision agriculture would replace nutrient management implementation to achieve greater nutrient
and sediment reduction. The off-stream watering practices 19, 20, and 21 and precision rotational grazing are
considered pasture grazing best management practices and also compete with each other for the same available acres
for implementation.

Practice 8
Percent of Goal
Bay-Wide (2004)
Factors Affecting Implementation and Impact
6. Riparian forest
Effective at controlling nutrient and sediment loss. Could be more effective
when combined with other practices, though this concept is not always
promoted. Significant up-front investment in plant materials, labor, and
technical design, and several years of maintenance required, but buffers can
then last with minimal management for many years.
7. Riparian grass
Cost effective, but some concern with land leasing agreements.
8. Wetland
Wet soils are taken out of production. Can serve to filter water and sequester
9. Tree planting
Farmers may be reluctant to plant trees because of the effort it takes to
convert back to cropland.
10. Nutrient
Management Plan
Exceeds goal
Nitrogen-based plans will result in over-application of phosphorus because
phosphorus is more prevalent in manure than is needed by crops. States are
just now shifting to phosphorus-based plans.
Difficult for producers to know how to comply and translate plan into practice
Some producers believe the plan is unrealistic and prescribes insufficient
nutrients for crops.
Requires adequate enforcement and compliance to ensure effectiveness
When excess manure is transported off-site, there is little control over
application by those accepting manure.
11. Yield reserve
Agricultural community hesitant to adopt a practice that might reduce yields
and profits. According to a Virginia official, the practice is "not field-friendly"
Therefore, the practice would require generous incentive payments and crop
risk insurance.
Wide annual variability makes it difficult to control for other factors impacting
yields, such as climate and pests. Despite limitations, practice is still under
consideration in Virginia, but needs greater proof of correlation between
practice and reductions to warrant payment.
12. Soil Conservation
Lack of technical assistance funding for plan revision/update.
13. Managed
Though Pennsylvania has a target in its tributary strategy, stakeholders are
unsure as to whether the goal can be achieved per the definition used on
larger farms in Midwest.
Other drawbacks include: perceived risk, labor and farm economics, high level
of technical expertise required (and time and effort to learn new technology),
cost/fear of a "leaky pipe" (i.e., if I buy this one piece of equipment, will I then
need additional pieces?), and that the use of such technology may not
ultimately change how and what decisions are made.
14. Animal Waste
Cost to farmer may be prohibitive even with cost share assistance.
15. Phytase feed
additive- poultry
Generally accepted and implemented at 16+% efficiency level for phosphorus;
States have committed to a 30% reduction if science shows no harm to birds
will occur.
Phytase enzyme is widely utilized since it is introduced at feed mills and
poultry industry is integrated (several company owners making all decisions
regarding feed for the region).
Phytase enzyme reduces phosphorus only; no equivalent for nitrogen has yet
been introduced to the region.

Practice 8
Percent of Goal
Bay-Wide (2004)
Factors Affecting Implementation and Impact
16. Phytase feed
additive- swine
With the exception of Pennsylvania, Bay States have not set goals for swine
phytase/ phosphorus reduction. Chesapeake Bay Program Office attributes
this to the difficulty in tracking operations using phytase. The swine industry
has a different marketing and distribution set-up than the poultry industry,
which makes it difficult to determine which operations are using it.
Although adopted by some swine producers, efficiencies are not well
17. Precision feeding
- dairy
The dairy industry is not integrated like swine and poultry; each dairy producer
makes individual decisions about feed with veterinarians and feed
consultants. Thus, achieving behavior changes throughout the industry is a
greater challenge. Further, any effort to effect such behavior change must
address farmers' concerns regarding adverse impact on milk production.
Also, this practice may not have an impact on cropland nutrient loss for small
dairies since these operations tend to have a nutrient deficit for crops.
18. Alternative uses
of manure/
14.8% (Nitrogen);
11.7% (Phosphorus)
State subsidies in Maryland and Delaware cause displacement of markets
(i.e., Pennsylvania haulers cannot compete, even in Pennsylvania); Virginia
has subsidy program but only within Virginia.
A pellet plant makes poultry litter easily transportable for fertilizer use where
needed, but additional markets are needed. Pellets are not yet profitable;
however, a plant representative indicated that Senator Mikulski has been
assisting in getting pellet fertilizer on the Federal purchase list.
Regardless of market development activities, majority of crop farmers
(specifically those without livestock) are not willing to accept manure from
animal feeding operations because nutrient content varies, cannot be easily
verified (as opposed to commercial fertilizer in which the content is identified),
and manure is not used by crops as efficiently as commercial fertilizer.
Special equipment is needed to apply manure (cost) versus commercial
fertilizer, which is more convenient to obtain and apply (application often
included in delivery price). Manure is associated with odor and neighbors
may complain. Manure application may bring the producer under scrutiny of
State and Federal regulators.
Competition from biosolids industry is also a significant limiting factor.
19. Off-stream
watering with
This off-stream watering practice requires investment in developing off-site
watering systems, though funding assistance is available. Other limiting
factors include availability of water and labor required for maintenance and
weed control.
20. Off-stream
watering without
21. Off-stream
watering with
stream fencing
and rotational
grazing (pasture)
Exceeds goal
22. Precision
rotational grazing
Limiting factors similar to off-stream watering practice. Producer must be
more involved in animal behavior. More management intensive, but less labor
intensive than confined feeding. Though production may decrease, total profit
may increase since the practice requires fewer inputs.
23. Horse pasture
Practice needed to manage horses at large facilities not the same as Bay
model definition. Horse management is not considered under USDA
jurisdiction, so pasture not eligible for Federal cost-share dollars. Owners
often do not have an agricultural background and thus may not be familiar
with proper manure management practices; technical assistance could
promote better management.

Practice 8
Percent of Goal
Bay-Wide (2004)
Factors Affecting Implementation and Impact
24. Ammonia
reduction (poultry,
swine, dairy)
Included in strategy but not defined. High tech is now used on large farms in
Midwest, but stakeholders are not yet sure how to adapt for small farms.
Not economically feasible. Some pilot studies conducted, but there is yet no
meaningful way to measure efficiencies. USDA's Natural Resources
Conservation Service has a standard but it is new, broad, and not yet applied
through tech assistance or other programs.
25. Non-urban stream
If implementation involves fending, farmer must provide alternate water source
for livestock. Stream buffer must be certain width so cows can still graze with
adequate protection for stream.
26. Carbon
Currently no market for alternative crops, nor infrastructure to support the
practice. Widespread implementation would require a major shift in markets
and require incentives.
Sources: For progress, OIG analysis of Chesapeake Bay Program data. For challenges, interviews with EPA and
USDA staff, State environmental and agricultural agency staff, agricultural associations, experts, and agricultural
producers; and search of literature sources.

Appendix D
Alternative Agricultural Management Practices
Whole farm nutrient budget
Balanced nutrient
inputs and outputs-
penalties leveled
Producer's incentive -
avoidance of tax if nutrient
balance is not achieved.
Record-keeping burden
on producers, lack of
political will.
Mineral Accounting System program in
the Netherlands, which required
producers to balance nutrient flow, is now
Best management
practices implemented
as a suite of practices
Holistic approach - producers
use modeling tools to
calculate inputs and outputs.
Technical assistance on
a farm-by-farm basis
would be required.
Scientific and Technical Advisory
Committee9 Report recommends moving
from individual best management
practices to nutrient budget approach.
New York and Pennsylvania have
already developed modeling tools.
Forage systems
Cropping systems
with crop cycles
Forage cropping systems in
two or three crop cycles as a
means of removing nutrients.
Producer preference to
grow more profitable
feed crops. May be
limited by climate.

Specific plant species
1.	Forage species such as
legumes and Bermuda grass
identified as having high
nutrient uptake properties.
2.	Warm season grasses
grown for ethanol production.
Root growth could be used
for carbon credit system.
1.	Lack of market for
forage crops. Corn,
wheat, and soybeans are
most economically
feasible feed crops.
2.	Special equipment
required, lack of
Need a pilot study to see if ethanol/
carbon credits are economically feasible
Haylage/other storage
1.	Haylage as a method of
preserving forage to reduce
nitrate concentration in
2.	Potential for higher quality
livestock feed.
1.	Increased production
costs and greater risk of
2.	No significant
advantage to using
haylage versus other
storage methods.
Top growth from cover crop cut, stored
as haylage and used for animal feed.
Feeding regimes
(Animals are inefficient at using nutrients - about 70-75 percent of the nutrients that they consume are eventually excreted.)
Dairv cattle
Significant reduction
of phosphorus in diet
1.	Reduces phosphorus
excreted and causes no
adverse response in dairy
2.	Producer's incentive -
cost of feed reduced.
3.	Producer's incentive -
compliance with
environmental regulations.
Must get buy-in from
veterinarians and
nutritionists before
changing diet.
Focus on education and outreach to
veterinarians and nutritionists.
New York, Pennsylvania, Virginia, and
Maryland are working on dairy feed
Scientific and Technical Advisory Committee drafted a report in 2004, Innovation in Agricultural Consen>ation for
the Chesapeake Bay: Evaluating Progress & Addressing Future Challenges, that identified emerging science-based
practices, programs, and policies that will aid nutrient reduction.

Dairv cattle
Urea in milk (MUN)
as measure of
nitrogen in diet
Promising as a means for
assessing nitrogen in diet.
Would aid in making feed
Producer's incentive -
reduced cost of feed.
•	Must get buy-in from
veterinarians and
nutritionists before
changing dairy diet.
•	Need to do a large-
scale pilot project to
assess economic
Large-scale demonstration projects are
Poultry and swine
Phytase and further
reductions of
phosphorus in diet.
With the use of phytase as
feed additive, amount of
phosphorus can be reduced
much further than initially
predicted. Possible
reductions 20% or more.
Must establish the
minimum phosphorus
needs in diet for each
animal species

Precision agriculture
Real time monitoring
and nutrient mapping
Application of less nutrients
than the recommended rate.
Requires special
equipment and a lot of
technical assistance.
May not be feasible for
small farm operations.

Fertilizer application
based on hydrology to
manage nitrogen
Application of less nutrients
than the recommended rate.
Requires equipment and
a lot of technical
assistance. May not be
feasible for small farm

Anaerobic digestion
•	Manure becomes a
•	Methane can generate
energy and save energy
costs for producer.
•	Work well with wet, harder -
to-dispose dairy manure
•	Further development of
process and markets.
•	Lack of established
•	Disposal of byproduct -
contains nutrients.
•	Burning poultry litter
can release arsenic.
USDA Agricultural Research Service
efforts are focused on bio-energy rather
than feed adjustment.
Generation of energy from biomass is
very promising. More large-scale
demonstration projects are needed.
Cellulosic ethanol
production from switch
grass and manure
1.	Ethanol is a marketable
2.	Switchgrass removes more
nutrients from the soil than
feed crops.
•	Lack of infrastructure;
•	Disposal of byproduct -
contains nutrients;
1.	Competition from corn
ethanol industry;
2.	Producers prefer to
grow feed crops.
Great potential but needs investment and
government subsidies.
Cellulosic ethanol from switchgrass
mentioned in the 2006 State of the Union
Soil treatments and manure additives
Injection method for
manure application to
no-till crops
Reduces atmospheric
ammonia loss
•	Application rate very
•	Limited to dairy
•	Costs for special
•	Phosphorus builds up
in the plow layer so must
mix every few years

Synthetic soil
amendments to
reduce erosion
The addition of polymers are
a way to reduce irrigation-
induced erosion.
Byproduct of polymer
degradation has been
identified as a toxin.


Co-blend aluminum,
iron, or other materials
with manure to bind
phosphorus and make
1.	Aluminum is already used
by poultry industry in the litter
to bind phosphorus
2.	Gypsum as soil additive
will bind phosphorus
3.	Iron sulfate as a treatment
for poultry litter will bind
1.	Aluminum may be
toxic to fish and
associated with
2.	Gypsum only works
for 5-10 years
3.	Iron rejected by the
poultry industry due to
poultry health concerns;
• Long term effects on
birds, soil and humans
Alum proposed as best management
practice by manufacturer.
Iron sulfate as soil
Can be used as chemical
buffer at edge of field will
make phosphorus insoluble
and reduce runoff.
•	When used near
poultry, may impact
•	Has not been adopted
by producers
Need to set up a demonstration project
for use of iron sulfate as chemical buffer.
Nutrient trading
•	It can act as an incentive to
achieve pollution reductions
versus Total Maximum Daily
Load caps.
•	Brings in money beyond the
usual funding sources.
•	Producer's liability and
responsibility for doing a
practice that is not
•	Easiest practices done
first so difficult practices
may not be done.
•	Balancing the purchase
of credits for practices
with tributary strategy's
goals may be
of credit estimations.
•	No trade transparency.
Pennsylvania is active in development of
nutrient trading.
Algal systems to
produce commercial
•	On-the-farm treatment for
dairy manure and creation of
an transportable fertilizer
•	Inexpensive and easy to
set up for producer.
•	Has not been tested in
a large-scale pilot study
•	Establish infrastructure
to manufacture and
market end product.
Need to set up a demonstration project.
wetland to take up
Install wetland to take up
Economic impact to
producers due to land
taken out of production.
Wet areas in fields can be source of
nutrient runoff.
Test ideas such as planting hydrophilic
species in wet areas instead of installing
Sources: Online literature searches and interviews with EPA/CBPO and USDA staff, a Chesapeake Bay Program
Scientific and Technical Advisory Committee agricultural expert, and Maryland Department of Natural Resources staff.

Appendix E
EPA Response to OIG Draft Report
1650 Arch Street
Philadelphia, Pennsylvania 19103-2029
OCT 2 3 2006
EPA Response to September 12,2006 Draft "Evaluation Report: Saving the
Chesapeake Bay Watershed Requires Better Coordination of Environmental and
Agricultural Resources"
, Regional Administrator, Region III
TO:	Dan Engelberg, Director, Water Issues, Office of Program Evaluations,
Office of Inspector General, U.S. Environmental Protection Agency
Robert W. Young, Assistant Inspector General for Audit
Office of Inspector General, U.S. Department of Agriculture
EPA acknowledges that the respective EPA and USD A Offices of Inspector General
effectively addressed the extensive comments submitted by EPA and USDA on the May 2006
discussion draft evaluation report within the September 12, 2006 official draft.
We concur with the findings as described in the report in Chapters 1, 2, 3 and 5 as they
relate to EPA and its mission. We concur with the three recommendations directed to EPA on
page 43 as stated in the September 12, 2006 draft "Evaluation Report: Saving the Chesapeake
Bay Watershed Requires Better Coordination of Environmental and Agricultural Resources."
We are continuing to work with our USDA partners to further enhance our collective
efforts directed towards restoring Chesapeake Bay water quality. If you or your staff have any
questions related to our response to the draft report, please contact Rebecca Hanmer at
410-267-5709 or Richard Batiuk at 410-267-5731.
Benjamin Grumbles, Assistant Administrator, Office of Water, EPA
Mark Rey, Under Secretary, Natural Resources and Environment, USDA
Jon Scholl, Counselor to the Administrator for Agricultural Policy, EPA
Rebecca Hanmer, Director, Chesapeake Bay Program Office, EPA
Jon Capacasa, Director, Region 3 Water Protection Division, EPA
Richard Batiuk, Associate Director for Science, Chesapeake Bay Program Office, EPA
Lorraine Fieury, Audit Coordinator, Region 3, EPA
Michael Mason, Audit Coordinator, Office of Water, EPA
3c& o o
Printed on 100% recycled/recyclable paper with 100% post-consumer fiber and process chlorine free.
O	Customer Service Hotline: 1-800-438-2474

Appendix F
USDA Response to OIG Draft Report
United States Department of Agriculture
Office of the Secretary
Washington, D.C. 20250
OCT 1 5 20D6
SUBJECT: Official Draft Office of the Inspector
General (OIG) Report 50601-10-Hq, Saving the
Chesapeake Bay Watershed Requires Better
Coordination of Environmental and Agricultural Resources
Robert W. Young
Assistant Inspector General for Audit
Office of the Inspector General
Thank you for the opportunity to respond to the Official Draft OIG Report 50601-10-Hq, Saving
the Chesapeake Bay Watershed Requires Better Coordination of Environmental and Agricultural
Resources. This memorandum transmits the U.S. Department of Agriculture (USDA) response
for recommendations 4 through 7, Unless stated in the response, all recommendations are
scheduled for completion by September 30, 2007.
USDA works through cooperative conservation partnerships to aid agricultural producers with
conservation plans and practices that contribute to a healthier Chesapeake Bay environment.
USDA has devoted significant financial and technical assistance through a variety of programs,
research, and grants. In addition, USDA recognizes the importance of this ecosystem and is
pursuing such actions as manure management strategy implementation, sub-aquatic vegetation
research and propagation techniques, and more collaboration with local. State, Federal and non-
federal Chesapeake Bay partners.
Between 1995 and 2005, through USDA programs alone, over $650 million in technical and
financial assistance has been invested to install practices and systems to reduce non-point source
pollution to the Bay and its tributaries. Our partners in this effort agricultural and forest owners
and operators. State and local conservation agencies, and others-have contributed funds over that
same time period. As noted in the report, the benefits of these conservation investments are
delivered over the long term, in time periods of years or decades.
USDA has been an integral partner in developing and implementing the manure management
strategy signed by the Chesapeake Executive Council in 2005. All six Chesapeake Bay
watershed States have developed, or are developing, feed management/precision feeding
conservation practice standards. The application of conservation practices and systems through
these programs are adding significant benefits that will help to achieve Chesapeake Bay
restoration. The Forest Service (FS) established the Chesapeake Watershed Forestry Program in
1992 to provide leadership specifically on Chesapeake Bay agreements as they relate to forestry,
including riparian forest buffers. Since 1992, the FS championed the 1994, 1996, and 2003
Executive Council directives on Riparian Forest Buffers.
An Equal Opportunity Employer

Page 2
While USD A concurs with the finding I hat mors.- can be dune to improve the condition of the
Chesapeake Bay Watershed, the limitations of the predictive model used to estimate non-point
source pollution and conserv atictn effects are a source of concern. The report uses the Day
Program's "best management practice1!," and I 'SDA's "conservation practices" interchangeably.
It may seem that these terms are interchangeable, but they are not. A comparison of the Bay
Program's best management practices list with USDA's conservation piactiee .standards reveals
significant definitional di(Terences. These differences lead to inconsistencies and inaccuracies
when States and the Bay Program attempt to account for Natural Resources Conscn ation
Service (NRCS") and producer accompli shin en is through State 'Iributurv Strategies and the
watershed model ISDA and the Bay Program have initiated a collaborative approach to
impiose the accuracy of State conservation practice reporting. This would, in turn, improve the
watershed model's measurement of agriculture's contributions to Bay restoration.
OIG recommends thai the USDA Secretary or Deputy Secretary;
Assign a senior-level Departmental official to coordinate USDA goals and programs with
the Environmental Protection Agency (EPAl and the Chesapeake Bay Program. Delegate
to this official the authority to direct and coordinate goals and programs across USDA
mission areas and agencies, and to monitor USDA actions to meet 'the Chesapeake Bay
Program goals,
We recognize that collaboration between USDA agencies to address Chesapeake Bay
issues can be strengthened 1 he Secretary has assigned leadership for coordination on
Bay issues to the t liider Secretary for Natural Resources and fcnvironment (NRF). The
N'RF C fncter Vetetaiy, in turn, assigned individuals to a number of key positions: an
NRE Deputy Under Secretary has been designated as USDA's representative to the
Chesapeake 1 • \ecuti ve Council, the NRCS Bast Regional Assistant Chief represents
USDA on the Executive Council's Principals' Staff Committee, and the X'RCS Maryland
State Conservationist is a member of the Federal .Agency and Implementation
In recognizing that more needs to be accomplished cooperatively to restore the Bay
ecosystem, IJSDA. continues to improve Chesapeake Bay coordination across all relevant
Department agencies. NRCS has embarked on an effort to improve coordination of its
conservation activities across the sis Bay watershed States and tht- District of Columbia.
Agency leaders from all six States are meeting on a regular basis to discuss issues of
common concern and explore opponunities for regional cooperation. This is a new
approach for NRCS. and one that has already yielded promising results. USDA is also
working to improve and culm ate cooperative conservation efforts with non-government
agencies. Federal and State government officials, and Chesapeake Bay

Page 3
stakeholders. USD A agencies mil also strengthen collaboration for watershed,
cooperative conservation, and market-based approaches within the Bay watershed,
Review the feasibility of largeiing or redirecting USDA funds (or allocating of USDA
funds) on a regional and-or geographical basis to coordinate with the environmental
restoration of the Chesapeake Bay. including the possibility of linking the availability of
financial, and technical assistance to proximity to the Chesapeake Bay watershed.
USDA has worked for decades to build relationships and credibility through its locally-
led decision making process that includes farm and forest landowners as well as
stakeholders in the natural resource conservation community. Local work groups and
State Technical Committees provide programmatic advice and funding priority
recommendations to USDA leadership in each State. Chesapeake Bay stakeholders are
routinely invited 10 participate in this priority -recommendation process. Since the 2002
Farm Bill, NRCS has developed transparent natural resource-based funding formulas for
its major prognitns that benefit the Ba>. NRCS recently contracted wills an independent
third partj' selected competitively to examine the efficacy of its program allocation
formulas. We anticipate the results of this independent assessment will yield information
valuable to our farther refinement of the allocation formulas in future years.
Furthermore, ARS and CSREES each have unique means of providing funding for
research that is specifically relevant to the health of the Chesapeake Bay. Both CSREES
and ARS have national responsibility fot conducting water quality and quantity research.
J .and grant institutions within the Chesapeake Bay watershed use CSREES funds for vital
regional and national research, just as ARS conducts research in other parts of the U.S.
that is applicable to water quality within the Chesapeake Bay Also, funding has become
available to promote innovative conservation programs. In each of the past two years, the
Bay region has received over $4 million, which is over 20 percent of nationwide funds
available in NRCS Conservation Innovation Grants to promote such technology. In
addition, NRCS uses local conservation through the State Technical Committees and
Local Work (jroups to ensure that funds are distributed in each State based on priority
natural resource needs.
Direct LSD A agencies to expedite the development and implementation of outcome-
based pet formance measurements for evaluating the effectiveness of their conservation
efforts and programs.

Page 4
USDA agrees with this recommendation, USDA Agencies have a number of outcome
oriented performance measures in place for their conservation programs, addressing
resource concerns such as sediment and nutrient loss to water resources, water
conservation, health and vigor of grasslands and forest ecosystems, and wildlife habitat
quality and populations, among others. These measures are articulated in USDA and
agency-level Strategic Plans as long-term objectives for conservation programs. In
addition, most measures have been assessed and found acceptable through the Office of
Management and Budget (OMB) Program Assessment Rating Tool (PART) process.
While approaches exist to report results for many of these outcome measures, some are
being refined to yield more reliable results and others are under development.
The Conservation Effects Assessment Project (CEAP) is a significant multi-agcncy effort
designed to quantify the benefits of conservation practices implemented by private
landowners participating in selected USDA conservation programs. The Agencies expect
that CEAP will provide much needed data, methods, and information to improve
measurement of program performance, and will also assist in development of improved
measures that better reflect desired environmental outcomes. Five USDA agencies are
collaborating in leading the national, regional, and watershed effects assessments.
Another seven USDA and external agencies, including EPA are participating in various
CEAP activities as well.
Table: Selected USDA Outcome Oriented Measures
Outcome Measure/Metric
In USDA/Agency

Strategic Plan
Working cropland with soil
condition improved

Potential sediment delivery
from agricultural operations
-** -iBf ^ - ifffPp|w

>11 m

Potential nitrogen delivery from NRCS, FSA	Yes
agricultural operations reduced
Potential phosphorus delivery
from agricultural operations
; '.V - ' i fjjk
llSilp M ,.V'V
m HI
i -'L: i o. •

Water conservation


Restore, create, or enhance

Grassland and forest land	NRCS, FSA, FS	Yes
condition, health, and
Quality of fish and wildlife	NRCS, FSA, FS
habitat for desired species and
species of concern improved
Important lands retained in	NRCS, FS	Yes
agricultural and forest uses

Page 5
GIG also recommends that the USDA NKCS Chief:
Develop a tracking system for maintaining a list of technical assistance and financial
assistance requests from landowners and agricultural producers that cannot be completed
due to limited funding.
OSDA agrees with this recommendation. Unfunded applications for financial assistance
are already tracked by specific program, NRCS intends to develop a tracking system for
technical assistance requests in fiscal year 2007.
If you have questions or need further assistance, please contact Daniel Runnels, Director,
Operations Management and Oversight Division, at (202) 720-9135.

Under Secretary
Natural Resources and Environment