Thank you for the opportunity to offer my views on future challenges to achieving conservation on private lands. Founded in 1983, the Henry A. Wallace Institute for Alternative Agriculture is a nonprofit research and education organization. Its mission is to encourage and facilitate the adoption of low-cost, resource-conserving, environmentally sound, and economically profitable farming systems. The Wallace Institute has been a champion of finding scientifically sound ways to help farmers and ranchers meet production and conservation goals that keep their operations economically viable while sustaining the natural environment. Many of those opportunities are presented in our peer-reviewed American Journal of Alternative Agriculture and in our newsletter. We also publish policy studies reports that evaluate new approaches to move those ideas onto the landscape. I encourage you to visit our web site at www.hawiaa.org.
We applaud Secretary Glickman for conducting these conservation forums. The time is right to think in fresh ways about how U.S. farmers and ranchers will maintain and improve their conservation in an era of increasing global competition (which means lower long-run prices), stagnant federal funding for conservation agencies, and an increasing demand for environmental quality by the non-farm public. Add to this list that the U.S. is firmly committed to the principles of open trade spelled out in the Uruguay Round Agreement and in the World Trade Organization, which limits some approaches to conservation. In short, farmers and ranchers are caught between a rock and a hard place on conservation. These forces are not likely to reverse because of strong long-run fundamentals. Because the federal program funding has been stagnant and mostly consumed by one large effort, the Conservation Reserve Program, the cutting edge of conservation and environmental management has shifted to the state and local level.
The conservation problems are real. Assessment after assessment concludes that agriculture plays a major, if not dominant, role in achieving many environmental goals. I led one of those assessments while at the U.S. Congress' Office of Technology Assessment during 1994-1995, the resulting report entitled Targeting Environmental Priorities in Agriculture. We concluded that pollution from erosion/sediment, fertilizer, and pesticide leakage off the farm was the major contributor to water quality problems in many areas across the nation. Animal waste management problems have since surfaced as an area of widespread public concern. We also concluded that many conventional agricultural systems were causing degradation in habitat for wildlife and other species, i.e., reducing biological diversity. This issue is key in the Pacific Northwest with the problems attendant to declining salmon populations.
Despite the persistence of these serious problems, the situation is not hopeless. Indeed, there are a variety of approaches that farmers can use to improve conservation and maintain or increase their long-term profits. Some prominent examples include conservation tillage, integrated pest management, rotational grazing, crop rotations, organic production, and cover cropping. The adoption of such approaches is much more likely to sustain conservation performance than using payments to temporarily rent lands from production, or to subsidize uneconomic practices that are abandoned after payments cease. Not all problems can be solved with improved conservation and increased long-term profit. For those situations, either subsidies or regulation are required.
But, shifting to these new approaches involves real costs in the short run. It may take new equipment, new training, and new field operations, all of which imply new risks. We just noted that farmers and ranchers must become more cost conscious. Moreover, they are risk averse in general. This is where the U.S. Department of Agriculture can play a vital role, but it will require a significant departure from traditional approaches. Let me highlight four principles that should guide the shift in approach.
1. Set clear conservation and environmental performance objectives.
Agriculture has been treated differently than most other industries in environmental management. Non-farm industries must comply with specific performance standards, such as the maximum concentration of sulfur dioxide emissions from smokestacks. For political and technical reasons (e.g., the difficulty of measuring pollutants from nonpoint sources), such an approach traditionally has not been used in agriculture. However, the use of quantifiable objectives is becoming more common, especially at the state and local levels. This trend will likely continue. The Oregon system of using TMDLs (Total Maximum Daily Load regulations) for water quality management is a case in point. While all of the science and administrative wrinkles are not worked out yet, the Oregon approach has merit in clearly defining the end objective to be attained, rather than specifying a set of permissible practices. These objectives should be based on the very best science available, but ultimately must reflect public desires for conservation and environmental performance. The establishment of clear objectives has several key advantages—it makes clear the target for producers, it makes public programs based on the objectives GATT-legal, and it sets in motion private and public research and technology development.
2. Grant maximum flexibility to the producer in meeting the objectives.
Anyone who was raised on a farm or ranch, as I was, knows the importance of this principle. Each farm is unique in its combination of land, biological, climate, and human resources. The farm operators are in the best position to understand this uniqueness, and, most importantly, how all of the pieces fit together in a system. That is the conceptual basis for whole farm planning. Hence, enduring solutions to conservation problems must come from those operators, not from the federal or other governments. This principle, if followed, also works with the trend of devolution to the states and local areas for conservation and environmental management. Given clear conservation objectives set out for the operators, they can be ingenious in finding novel ways to meet those objectives, which a field office technical guide could never anticipate. However, the USDA can play invaluable roles in giving the operators the best available technical information and undertaking more R&D on alternative systems that achieve higher economic and environmental performance.
3. Target program assistance to achieve performance objectives and preserve operator flexibility.
This is a sound program idea that is catching on in agriculture, albeit gradually. The reforms in the Conservation Reserve Program and the new Environmental Quality Incentive Program are examples of moving toward targeted approaches. However, much more could and should be accomplished to improve the cost-effectiveness of these and other programs. But more targeting of program resources must overcome powerful political interests that want to keep government assistance flowing to the same parties. A good example of the targeting principle in action is the Conservation Buffer Initiative. This program is targeted by its very nature to what most analysts believe is one of the most cost-effective approaches to water quality improvement, that of intercepting pollution near the watercourse and improving stream habitat. And it should interfere little with production system flexibility, given that it is confined largely to stream borders, as opposed to taking whole fields out of production. While the program has made considerable progress, it has been hamstrung by insufficient payment rates that do not acknowledge that buffers costs more per acre than whole fields to enroll. Quite simply, the incentives have been insufficient to meet the public objective of 2 million square miles in a timely fashion. Rental rates must be increased substantially, or some type of bonus added, to cover the extra costs and reward the higher level of environmental benefits. Otherwise, the program will flounder.
4. Infuse new federal investment in conservation and environmental programs for agriculture to produce public goods.
In comparison to other environmental pollution sources, agriculture has received a relatively small amount of federal assistance. The huge expenditure for the municipal wastewater treatment program is a good comparison. When I calculated the numbers a few years ago, the amount spent on conservation and environmental funding in agriculture was approximately 5 percent of the total for all sectors. This small figure doesn't square with the industry's large potential to affect environmental quality, because it covers nearly 70 percent of nation's land area. There is an emerging opportunity to change that level significantly as the next Farm Bill approaches. Two forces could foster change. Continued large federal spending on agriculture will likely draw increasing scrutiny by other GATT signatories. Despite our protestations that U.S. agricultural payments are "decoupled" from production, the loan deficiency payments and revenue insurance subsidies are linked to specific crops. We cannot afford to be perceived as subsidizing our agriculture and distorting trade when we are imploring the European Union to reform its policies that do the same. Second, as the pressure on the federal budget grows in the new millennium for health care, etc., the public likely will take a harder look at the returns from so much money going to agriculture.
Linking future payments to conservation and environmental public goods, also referred to as "green payments," is one approach that is GATT-legal and should win broader public support as the political power base of agriculture gets narrower. Any increase in funding should be divided into dual thrusts. One should reverse the decline in capacity to deliver conservation assistance on the ground, emphasizing public-private partnerships at the state and local levels. The other equally important initiative is to shore up the weak government support for research and development of new agricultural systems that deliver improved economic and environmental performance over conventional practices.
The following references give more detail on the four principles. I hope that these comments are useful to your exploration of ways to meet conservation challenges on private lands in the new millennium.
References
Batie, S.S., and D.E. Ervin. 1999. "Flexible incentives for environmental management in agriculture: A typology." F. Casey, S. Swinton, A. Schmitz, and D. Zilberman, eds. Flexible Incentives for the Adoption of Environmental Technologies in Agriculture. p. 55-78.
Batie, S.S., and D.E. Ervin. 1998. "Will business-led environmental initiatives grow in agriculture?" Choices (4th qtr.): 4-10.
Ervin, D.E. 1998. "Shaping a smarter environmental policy for farming." Issues in Science and Technology (Summer): 73-79.
Ervin, D.E, C.F. Runge, E. Graffy, W. Anthony, S. Batie, P. Faeth, T. Penny, and T. Warman. 1998. "Agriculture and the environment: A new strategic vision." Environment 40 (6): 8-15, 35-40.
Ervin, D.E., and E. Graffy. 1996. "Leaner environmental policies for agriculture," Choices (4th qtr.): 27-33.
Ervin, D. and E. Graffy. 1995. "Technology for production and environmental quality: Are we missing opportunities for complementarity?" Journal of Soil and Water Conservation 50: 352-353.
U.S. Congress, Office of Technology Assessment. 1995. Targeting Environmental Priorities in Agriculture: Reforming Program Strategies. OTA-ENV-640. U.S. Government Printing Office, Washington, D.C.
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