1. Green Payments Now—What’s Missing? WWF Workshop Building the Scientific Basis for Green Payments April 14-15, 2005

2. We Have Green Payments Now—The Conservation Security Program Passed in the Farm Security and Rural Investment Act of 2002 Amendment to Interim Final Rule March 18, 2005 Implemented in 18 watersheds in 2004 Signups in 220 watersheds in March 28 to May 27, 2005 Will have spent $242 million by the end of FY 2005

3. How Does CSP Work? Who gets paid? Eligible producers meeting a minimum level of conservation performance. What do they get paid for? –Stewardship component--Existing base level conservation –Existing Practice component--Maintenance of existing practices –Enhancement component--Additional conservation practices or activities beyond the prescribed level –New Practice component--Additional needed practices What are payments based on? –Rents –Practices

4. What Do Producers Have To Do? For Tier I, the producer must have addressed soil quality and water quality to the described minimum level of treatment for eligible land uses on part of the agricultural operation prior to acceptance. For Tier II, the producer must have addressed soil quality and water quality to the described minimum level of treatment on all eligible land uses on the entire agricultural operation prior to acceptance and agree to address one additional resource by the end of the contract period. For Tier III, the producer must have addressed all applicable resource concerns to a resource management system level that meets the NRCS Field Office Technical Guide standards on all eligible land uses on the entire agricultural operation before acceptance into the program and have riparian zones adequately treated.

5. What’s Wrong With CSP? Practice-based versus Performance-based criteria Rent or Cost-based versus Benefit-based payments Farm-based versus Area-based 15% technical assistance cap forcing too much reliance on farmer self-assessment Too many and too confusing a system of levels, payments and criteria

6. Practice-based versus Performance-based Soil erosion, soil quality only performance-based criteria No performance measures for nutrients, pesticides, range or pasture condition, wildlife habitat, other resource concerns NRCS has many science-based assessment tools…. –RUSLE2, SCI, Soil Quality Test Kit –WIN-PST –Stream Visual Assessment Protocol, Indicators for Rangeland Health, Pasture Condition Score Sheet –Wildlife Habitat Evaluation Models …..but is not requiring their use or setting performance goals in terms of their outputs

7. Consequently…Heavy Emphasis on Practices What practices are currently in place? What practices need to be maintained? What practices are or could be enhancements? What new practices need to be installed? Not fundamentally different than EQIP or old ACP

8. Rent/Cost-based Versus Benefit-Based Payments Legislation used rental rates as a payment basis—what possible relation to environmental performance? Rule whittles these to miniscule amounts, so irrelevant anyway Practice-based program leads to cost-based payments—If you measure performance in practices, you pay for costs If green payments intends to help farmers produce environmental goods, they should be paid on that basis— What are these improvements “worth” to beneficiaries?

9. Farm-Based Versus Area-Based The farm IS the unit of conservation… but NOT the unit of environmental improvement What does it mean to assess water quality on a farm-by-farm basis? What does it mean to address “wildlife resource concerns” at the farm level? Must consider the FARM’s contributions to the AREA’s environmental problems No bold national goals such as reducing N input to Gulf hypoxia or focusing on recovery of particular at-risk species

10. What’s All the NRCS JARGON About, Anyway? Land management practice Management intensity Minimum level of treatment Resource management system Resource concern Significant resource concerns Nationally significant resource concerns Priority resource concern Stewardship payment Enhancement payment Maintenance payment Quality criteria Field Office Technical Guide (FOTG) Conservation stewardship plan Enrollment categories Tiers

11. The Rule and the Law The Law and the Rule added separate layers of complexity to the program design Some rule complexity deals with real limits to “entitlement” funding Neither law nor rule complexity addresses environmental performance or environmental benefits directly This is not a lack of SCIENCE, but a lack of MANPOWER and WILLPOWER

12. The Role of Science and The Needs of Policy It is NOT necessary to trace every step in the movement of pollutants from agricultural fields to ultimate receiving waters to base a conservation program on pollution reduction It is NOT necessary to estimate precise dollar values of environmental damages/benefits in order to base payments on relative environmental performance Performance measures and payments just need to bear a reasonable relationship to these outcomes—they don’t have to be proved in a court of law or a dissertation defense.

13. Recommendations for CSP/Green Payments Pay for performance relative to some standard minimum performance level on a few, simple, measurable quantities ( soil erosion, soil carbon, N and P balances, a pesticide index, wildlife habitat indices for relevant species ) Base payments on relative environmental benefits Relate on-farm contribution to off-farm problems, but tolerate some “unscientific” approximations Set some bold national environmental goals Recognize that assessing performance takes $ and manpower