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Political Opening to Increase Conservation Subsidies in Next Farm Bill

www.farmpolicy.com, Jan. 24, 2006

An item posted yesterday at the farm gate blog
<http://www.farmgate.uiuc.edu/archive/2006/01/post_7.html> , a blog
published by the University of Illinois Extension, discussed funding levels
for conservation programs and the next Farm Bill.

Specifically, the post stated that, "Agricultural Economist Brent Sohngen at
Ohio State University
<http://aede.osu.edu/people/sohngen.1/OER/OER_2(5).htm> believes
conservation funding will average $5 billion per year over the life of the
2007 Farm Bill. The 1985 Farm Bill and Agriculture Secretary John Block
provided the Conservation Reserve Program
<http://www.nrcs.usda.gov/programs/crp/> . Since that time, Farm Bill
funding for conservation and other environmental programs has grown. The
current legislation pays out about 13% of its funds for conservation. So
what makes Sohngen believe that percentage will increase?

"1) World Trade Organization negotiations will have a lot of impact on the
next Farm Bill, and US negotiators are fighting hard for unlimited payments
to farmers that are related to conservation, which is strongly endorsed in
Europe and acceptable to the developing nations.

"2) For the past 20 years, the CRP program has been popular, and sister
programs like EQIP <http://www.nrcs.usda.gov/programs/eqip/> also have
strong support from agriculture, as seen by the quantity of applicants for
funding.

"3) States want the federal government to expand conservation programs,
because their budgets are strained by requirements of the Clean Water Act.
Sohngen says states have little incentive for development of their own
conservation programs and see the Farm Bill as the means to meet water
quality standards.

"Sohngen says, 'Thus, pressure from the WTO and pressure from states,
combined with the success the Natural Resource Conservation Service has
shown in allocating current conservation funds to farmers, will lead to an
expansion of farm bill conservation programs. This expansion will occur even
if overall farm bill subsidy programs decline.'"

The farm gate post also noted that, "Supporting Sohngen’s analysis of WTO
forces supporting increased conservation spending is Ag Policy Specialist
Robert Thompson at the University of Illinois
<http://www.farmdoc.uiuc.edu/policy/research_reports/Thompson%20IPC%20brief%200905.pdf>, who says, 'In the Doha Round of trade negotiations, payments
for conservation and environmental programs that are not linked to the
production of any specific commodity would be categorized in the Green Box.
European farm groups, who foresee lower traditional farm program benefits,
would like to increase direct payments to underwrite the cost of soil
conservation, protection of the landscape, and investments in other measures
beneficial to the environment, as well as in rural development. It is
likely, therefore, that an agreement would be easily achieved with the
European Union for these kinds of payments to be exempted from any 'binding'
or cap in the Doha Round Agreement on Agriculture (DRAA). This may open a
window for increased conservation payments in the United States.'"