United States General Accounting Office Report’to the Chairman, Committee on ’ GAO Agriculture, House of Representatives September l!H@ . FARM PROGRAMS Conservation Compliance Provisions Could Be Made More i Effective Resources, Community, and Economic Development Division B-240470 September 24,199O The Honorable E (Kika) de la Garza Chairman, Committee on Agriculture House of Representatives Dear Mr. Chairman: In response to your request and subsequent discussions with your office, this report discusses the Department of Agriculture’s administration of the conservation compliance, sodbuster, and swampbuster provisions of Title XII of the Food Security Act of 1985. As requested by your office, we obtained oral comments from the Department of Agriculture. Department officials generally agreed with a draft of the report. We plan to distribute this report today to the Secretary of Agriculture and other interested parties. This report was prepared under the direction of John W. Harman, Director, Food and Agriculture Issues (202) 275-5138. Other major contributors to this report are listed in appendix II. Sincerely yours, $-. D*@ Assistant Comptroller General substantial erosion. Expanding the criterion would provide additional soil savings, but would also involve additional costs. Second, the act does not fully protect highly erodible land or wetlands from conversion because violations are not recognized until crops are actually planted on converted land. Although USDA has successfully helped farmers develop conservation plans, it faces implementation obstacles. Because of budget constraints, USDA expects that it will not have sufficient technical and financial resources to help farmers implement their plans, which will adversely affect farmers’ ability to achieve the soil savings anticipated by the plans. As of July 1990, USDA'S Soil Conservation Service (scs) had not calculated the national savings expected when producers implement their plans. Since USDA concentrated on developing conservation plans to meet the deadline set by law, it has only identified about 7.5 million acres of wet- lands of the estimated 82 million acres of wetlands on nonfederal land.’ USM plans to make wetland determinations on those lands on or near cropland of farm program participants, but has not made any estimate of the number of wetland acres it expects to identify for compliance with the act. Further, in permitting some wetlands to be drained, IJSDA has not consistently applied criteria established to make these decisions nor has it always consulted the Fish and Wildlife Service as required. Principal Findings Opportunities to Protect USDA conservation criteria, implementing the act for highly erodible More Land land, do not protect all erodible lands and wetlands. USDA requires con- servation plans for cropland that has a potential to erode eight or more times the erosion rate at which the land would remain productive-142 million acres using this erosion criterion. The Department’s data show that millions of other cropland acres have an erosion potential just below this level. For example, about 75 million acres of land are eroding at 5 to 8 times the soil tolerance level. Any increased soil savings associ- ated with changing IWA'S criterion should be balanced against the addi- tional implementation costs. 'Identification of wetlands refersto the processwhereby USDAdeterminesif a land areaexhibits the soil, water, and plant charactensticsthat define a wetland page3 GAO/RCED-90206ConservationCompliance the Fish and Wildlife Service in a number of instances when allowing certain wetlands to be drained, as required by the act. If the Congress wishes to protect more erodible land, it may wish to con- Matters for sider requiring USDA to lower its criterion to a level that would protect Congressional more lands that erode at substantial rates but at less than the current Consideration USDAcriterion. While such a change would reduce erosion, it would also increase USDA's costs for administering the act’s provisions on more land. Among other things, the Congress may also wish to consider amending the act so that benefits are lost when highly erodible land or wetlands are converted for planting, and require the restoration of such con- verted wetlands or the mitigation of such damages before eligibility can be regained. (See chs. 2 and 3.) makes several recommendations to the Secretary of Agriculture to Recommendations GAO improve the administration and effectiveness of the conservation provi- sions of the act. Agency Comments agency officials to obtain their oral comments. USDA offered a number of observations about GAO'S findings and recommendations, including the following: (1) its selected erosion level covered lands with the greatest need for soil erosion treatment, (2) wetland determinations were neces- sary only on lands on or adjacent to cropland and, as such, not all of the wetlands would need to be identified, and (3) GAO'S draft did not fully recognize USDA’S ongoing efforts to review and correct previous com- menced conversion decisions. Regarding the first observation, GAO did not recommend that USDA change its criterion, but suggested that if the Congress wishes to protect more erodible land, considering the increased costs, lowering the crite- rion could be used to do so. (See ch. 2.) While USDA’S second observation is reasonable, until it identifies wetlands, it will be difficult for it to enforce the swampbuster provisions of the act. (See ch. 4.) Finally, GAO modified the report to reflect USDA’S efforts on commenced conversions. (See ch. 4.) page 6 contents Chapter 5 36 Enforcement Needs Weaknesses in ASCS’ Compliance Monitoring Conclusions 36 38 Improvement Recommendations to the Secretary of Agriculture 38 Agency Comments and Our Evaluation 39 Appendixes Appendix I: Sampling Methodology 40 Appendix II: Major Contributors to This Report 41 Tables Table 3.1: Examples of Planned Soil Savings Under Each 22 Conservation Alternative Table 3.2: SCS’ Estimate of Major Conservation Practices 23 Planned Table 3.3: Estimated Cost-Share Funding Needed for 24 Conservation Plans in Iowa, Kansas, and Missouri Table 4.1: Changes in USDA Exemption Criteria for 30 Commenced Conversions Table 5.1: Violations Reported and Resolved 38 Table 1.1: Sample of Farms With Conservation Plans 40 Figures Figure 2.1: Amount of Cropland and Wetlands in the 14 IJnited States Figure 2.2: Erosion Potential of the Nation’s 423 Million 16 Cropland Acres Figure 3.1: Estimated Frequency of Conservation 20 Applications Planned in Counties We Visited Abbreviations ASCS Agricultural Stabilization and Conservation Service FCIC Federal Crop Insurance Corporation hIHA Farmers Home Administration GAO General Accounting Office scs Soil Conservation Service USFWS US. Fish and Wildlife Service I:SDA U.S. Department of Agriculture page 7 GAO/RCEMtO-206 Conservation Compliance Chapter 1 Introduction Erosion is a natural process whereby water and wind move soil. Erosion Why Soil Erosion and decreases soil productivity by removing nutrients and organic matter Loss of Wetlands Are a and by thinning and modifying the soil zone where plants grow. Erosion Problem on land covered by vegetation is probably no more than 1 inch every 100 years, and much of this loss is offset by the formation of new soil. However, wind and water erosion on bare cropland can gradually reduce productivity. Erosion also contributes to sedimentation of streams and other water bodies and damage to surface and groundwater quality. A variety of benefits are lost when wetlands are drained. Wetlands are essential habitat for a variety of fish and wildlife species. Some wet- lands play an important role in the life cycle of many fish species. Waterfowl depend on wetlands for breeding areas, and fur-bearing and other game species depend on wetlands for food, cover, or water. Wet- lands store flood waters, may retard flood peaks, and can improve water quality by trapping sediment and removing nutrients, pesticides, and other toxic substances. Wetlands are also popular recreation sites. The act’s conservation provisions restrict the use of highly erodible land How the Conservation and wetlands through the sodbuster and swampbuster provisions, Provisions Work respectively. To remain eligible for USDA benefits, producers must apply an approved conservation system to highly erodible land that they farm, and they must not convert and plant an agricultural commodity on cer- tain wetlands. Violations are subject to loss of USDA benefits, Conservation Compliance The conservation compliance and sodbuster provisions of the act pro- and Sodbuster Provisions hibit the cropping of highly erodible land without applying an approved conservation system. The distinction between the two provisions is that the conservation compliance provisions apply to cropland that was being farmed at the time the act was passed4 and the sodbuster provi- sions apply to land that was converted to cropland after the act was passed.5 Farmers of highly erodible land must develop and implement a plan that uses approved conservation systems to reduce erosion to an acceptable 4Theconservationcomplianceprovision appliesto highly erodiblecroplandthat was usedfor planting an agricultural commodity(a crop planted and producedby annual tilling of the soil, or sugarcane)or set asideat least 1 year between1981and 1985. “The sodbuster provision appliesto highly erodibleland that was not usedfor planting an agricul- trral commodityor set asidebetween1981and 1986. Page 9 GAO/‘RCEDSO-206 Conservation Compliance Chapter 1 Introduction with the Department of the Interior’s U.S. Fish and Wildlife Service (usnvs) on certain questions involving wetlands. The Chairman of the House Committee on Agriculture asked us to Objectives, Scope,and review USDA’S implementation of the Food Security Act’s conservation Methodology provisions. The Committee was interested in learning how the programs have been working to determine if changes to the act were needed. As agreed with the Chairman’s office, our objectives were to address the following questions: . What is the status of USM’S implementation of the conservation pro- grams, and how many acres have been affected? (See chs. 2,3, and 4.) . As a result of these activities, what soil and wetland savings have resulted? (See chs. 3 and 4.) - How has USDA enforced the conservation provisions, and how many pro- ducers have lost benefits? (See ch. 5.) l What changes in the conservation provisions of the Food Security Act or in their implementation should be made? (See chs. 2,3,4, and 5.) The scope of our work and methodology used to meet the objectives con- sisted of reviewing pertinent implementation and enforcement informa- tion and interviewing knowledgeable officials at the national, state, and county levels. This included ASCSand m headquarters; state offices in Iowa, Kansas, Minnesota, Missouri, and North Dakota; and six county offices in these states. We also obtained information and reports from FhHA, PCIC, the Economic Research Service, USFWS,and environmental and farm organizations. We considered the amounts of highly erodible land and wetlands identi- fied by SCS, the number of sodbuster and swampbuster violations reported by ASCS,and the time and resources available for our review in selecting Iowa, Kansas, Minnesota, and Missouri, and the four counties visited in those states. The number of commenced conversion requests and the resulting decisions were considered in selecting North Dakota and the two counties visited in that state. (The five states we visited contained a total of 38.9 million acres of highly erodible land, or 27.5 percent of the total highly erodible land in the llnited States as identi- fied by USDA.) To determine USDA'S status of implementing the conservation programs, the acres affected, and the soil and wetland savings, we reviewed USDA’S procedures, status reports, and national resources inventories, and we Page 11 GAO/UCEDW206 Conservation Compliance The Act Does Not Protect All Highly Erodible Land and Wetlands The act’s conservation compliance, sodbuster, and swampbuster provi- sions do not protect all of the nation’s erodible land and wetlands. The act protects only those lands that are farmed by USDA program partici- pants. The amount of land actually protected is further limited by USDA’S criteria for requiring conservation systems on erodible cropland. USDA requires that land have a high erosion potential to qualify for conserva- tion compliance or sodbuster protection. This erosion potential is the only criterion used by the Department to determine land that will be protected. This contrasts with the conservation reserve program, where USDA considers other factors besides erosion potential, such as whether trees are planted or if there is serious gully erosion, to qualify land for enrollment and rental payments. The act withdraws farm benefits on highly erodible land and wetlands converted for planting purposes. The 1.94 billion acres of the United States includes about 423 million Land Protected by the acres of cropland and 82 million acres of wetlands that are not federally Act owned.’ Figure 2.1 shows the amount of the nation’s cropland and wet- lands relative to other land uses. ‘Both federally owned and nonfederally owned(private) lands are coveredby the act. However,most of the nation’s faming activities occuron private lands. Page 13 GAO/RCEDgo-206 Conservation Compliance chapter 2 The Act Does Not Protect AU Highly Emdible Land and Wetlands As implemented by scs, the conservation compliance provisions focused primarily on reducing soil erosion on some of the nation’s most erodible cropland. On the other hand, the conservation reserve program, while similarly designed to reduce soil erosion on cropland, was also envi- sioned as a program to improve water quality and fish and wildlife habitat, and as a means to curb the production of surplus commodities, among other things. As such, the conservation reserve program uses a number of criteria for determining soil erodibility. For example, under this program, land can be enrolled if it has an actual erosion as low as twice the soil loss tolerance level-2T-if trees are planted or if there is serious gully erosion. ’ Further, in this example, if a field were to have trees planted, only one-third of the field would have to be eroding at 2T instead of two-thirds of the field as is normally the requirement under the program. IJSDA identified 142 million acres of highly erodible cropland using its erosion potential criterion of 8 times the soil tolerance level. As shown in figure 2.2, this USDA criterion does not cover about two-thirds of the nation’s cropland. On the basis of USDA data, millions of other acres of land are eroding at substantial rates within the 281 million acres of cropland not covered by USDA’S criterion. For example, about 75 million acres of land are eroding at five to eight times the soil tolerance level. Reducing the erosion criterion to a level below eight times the soil toler- ance level would result in increased soil savings through reduced ero- sion, but would also increase program costs. As such, USDA would have to use its limited resources to develop additional conservation plans on these cropland acres as well as provide technical and financial assis- tance in some cases in order to implement the plans. Therefore, including additional lands in IJSDA’S coverage of highly erodible acres would have to be considered in light of the cost of this additional cov- erage and competing Department objectives. Nonetheless, as existing conservation plans are implemented to meet the 1995 requirement set by the act, conservation planning for other highly erodible lands could be phased-in as departmental resources allow, thereby increasing the environmental benefits associated with reduced soil erosion. “The soil losstolerancelevel, or T asit is cmnmonlyreferred to, is the rate at which soil can erode and maintain continuedproductivity. 2T refers to twice this erosionlevel. The T level varies dependingon the geographicarea,solI t,ype,and water and wind conditions,amongother things. Page 15 GAO/RCED90206 Conservation Compliance Chapter 2 The Act Does Not Protect All Hiy Emdible Land and Wetlands Producers who do not participate in USDA'S farm programs are exempt Conclusions from the act’s conservation provisions. For farmers participating in farm programs, USDA is applying the conservation compliance and sodbusterprovisions to the most erodible land. There are opportunities for USDA to cover more erodible cropland by expanding its criterion to include, among other factors, lower erosion potential and actual erosion. However, the additional soil savings would have to be considered in light of the added cost to protect these lands and other departmental objectives. In addition, the sodbuster and swampbuster provisions of the act do not come into effect when highly erodible land and wetlands are converted. The act could protect more erodible lands and wetlands if farm program benefits are withheld when these lands are converted for planting and benefits are reestablished if wetlands are repaired or restored. If the Congress wishes to increase the amount of erodible land and wet- Matters for lands protected and the amount of soil erosion and wetlands saved by Congressional the act’s conservation provisions, it could consider revising the provi- Consideration sions to . require the Secretary of Agriculture to use a lower erosion potential or other factors to define land covered by the conservation compliance and sodbuster provisions and . withhold benefits when highly erodible lands or wetlands are converted for planting, and require the restoration of such converted wetlands or mitigation of damages to converted wetlands before farm program eligi- bility can be regained. USDA took issue with our matter for congressional consideration that dis- Agency Comments and cussed the possibility of lowering the erosion level used to define highly Our Evaluation erodible lands. The Department told us that an erosion level of 8T was selected because it included those lands estimated to have the greatest need for soil erosion treatment. IJSDA also said that resource constraints would have significantly affected its ability to cover more land had the erosion level been set at a lower level. Further, the Department believes that few additional farms would be involved if USDA subjected more land to the act and thus, only a small additional soil loss reduction would occur. Page 17 GAO/RCED4CL206 Conservation CanpRance Chapter 3 Planned Conservation Systems Will Reduce Erosion, but All May Not Be Implemented by the Deadline As of January 1990, scs had identified virtually all of the nation’s highly erodible cropland and most producers had prepared plans to reduce ero- sion on this land. To ease the financial burden on producers in planning conservation measures, scs relaxed its initial requirement that all pro- ducers generally reduce erosion to the T level. Thus far, scs has not cal- culated the total soil savings expected for the nation when producers fully implement their conservation plans. Our review of a limited sample of conservation plans in six counties in five states indicates that, when implemented, soil erosion will be reduced on most of the fields in these counties. However, despite the relaxed soil loss erosion requirement, many of the systems planned may not be implemented by the deadline of January 1, 1995. According to SCS, this is because it will not have the staff or cost-share funding needed to assist producers in implementing the plans. scs estimates that it has identified virtually all of the nation’s highly Producers Have erodible cropland and that participants have planned conservation sys- Prepared tems to reduce soil erosion on most of this land. In January 1990, scs Conservation Plans for reported that, including land in the conservation reserve program Most Highly Erodible l it had identified 142 million acres, or an estimated 99 percent, of the Cropland nation’s highly erodible cropland; l producers had prepared conservation plans for about 135 million acres, or about 95 percent, of the highly erodible cropland; and l producers had applied conservation systems to 36 million acres of this highly erodible land. Although IJSDA initially required that all producers generally reduce ero- sion to the T level, it later relaxed the requirement to ease the financial burden on producers for installing conservation systems. USDA’S interim rules that applied through June 1987 required producers to adopt con- servation plans that would generally reduce soil erosion to the T level. Subsequent interim rules and the September 1987 final regulation allowed producers to meet a lesser or alternative erosion reduction requirement in those areas where reducing erosion to the T level could impose an economic hardship.’ Later, in May 1988, IJSDA announced that ‘The alternative levrl that fanners must meetvaries by geugrapiucalarea. Page 19 GAO/RCEJMO-206 Conservation Compliance Chapter3 Planned c!on!3ervation syst.2ms will Reduce Erosion, but All May Not Be Implemented by the Deadline no national estimate of the amount of soil that will be saved when the Plans Are conservation systems planned for 135 million acres of highly erodible land are implemented. Our sample of conservation plans for farms in six Implemented counties in five states shows that, in most instances, soil savings will be realized when the conservation systems planned are fully implemented. The two exceptions are sodbusted land on which a net soil loss occurs, and land where no changes in farming practices were required to meet the T level or alternative T level. Estimated Soil Savings While scs has soil savings data on individual farms at its county offices, an scs representative said that there are significant differences between sczscounty offices’ capability to aggregate this information and arrive at a national savings estimate. Some scs county offices have the informa- tion readily available on computers, while others have only hand- written estimates. Although KS is upgrading and modernizing its com- puter system in order to report progress, it does not know when national estimates of the soil savings resulting from implementing conservation plans will be available. Without a national estimate of soil savings, scs will not be able to determine how well conservation systems are working to reduce overall erosion on cropland in the United States. Most of the conservation plans we reviewed will reduce soil erosion when implemented. In our sample of conservation plans for 58 farms in 6 counties, we estimate that, when implemented, between about 59 and 100 percent of the plans will result in some soil savings. The soil savings ranged from 1 ton per acre per year to 109 tons per acre per year. Table 3.1 shows examples of savings for fields (with identical soil losses prior to conservation planning) under each of the three conservation alterna- tives. As shown, erosion is reduced in all three conservation altema- tives. However, land taken out of productive use in the conservation reserve program reduced erosion most. Page 21 Chapter 3 Planned Conservation Systems Will Reduce Erosion, but All May Not Be Implemented by the Deadline scs has traditionally assisted producers in designing, laying out, and supervising the application and construction of conservation systems. scs estimated the major conservation practices included in producers’ conservation plans that it will help implement. Table 3.2 shows SCS’ national estimate of the major conservation practices planned. These practices include agronomic and engineering applications. An agronomic practice involves changing farming practices. An engineering practice involves construction or changes to the layout of the land. Table 3.2: SCS’ Estimate of Major Conservation Practices Planned’ Figures in thousands Unit of Applied practice measure Amount Agronomic practices Cropping system A&es 85,200 Crop residue Acres 55,000 Conservation tillage Acres 45,500 Contouring Acres 25,800 Contour strips Acres 3,300 Field strips Acres 2,000 Critlcal area Acres 552 Engineering practices Grassed waterways Acres 1,300 Terraces Miles 216 Sediment basins Quantity 91 Structures Quantity 46 DiversIons Miles 5 aMore than one practice may be applied to the same field On the basis of its estimated workload, scs representatives estimate that scs will not have sufficient staff to provide producers the technical assistance necessary to design and install the planned conservation sys- tems. scs representatives said that field office staffing will be 37 percent less than the estimated average 9,500 staff-years needed during each of fiscal years 1990 through 1994. ASCS,scs, and states have also traditionally assisted producers in paying for up to 75 percent of the cost of conservation practices and their installation. USDA has three programs-the Agricultural Conservation Program, the Great Plains Conservation Program, and the Watershed Protection and Flood Prevention Program-that provide cost-sharing Page 23 GAO/RCED9@206 Conservation Compliance - chapter 3 PlanlId commvation system will Redwe Erosion, but All May Not Be Implemented by tbe Deadline even if the additional cost-share funds and needed staffing were pro- vided, the state lacks sufficient contractors to install the conservation systems planned. scs has largely met the January 1,1990, requirements of the Food Conclusions Security Act of 1985 to (1) identify highly erodible cropland and (2) assist producers in developing conservation plans for reducing erosion on the land identified. However, according to scs, meeting the January 1, 1995, requirement of implementing the conservation plans will be diffi- cult because scs estimates that it will not have enough staff and cost- share funds. As such, these limitations may make the deadline imprac- tical for some farmers. As of July 1990, KS had not determined what plans can be implemented by January 1, 1995, with the resources it will have available and had not developed a plan to use these resources most effectively. Although one objective of the conservation provisions is to reduce soil erosion, scs has not estimated soil savings resulting from the implemen- tation of conservation plans. Without a national estimate of soil savings, scs will not be able to determine how well conservation systems are working to reduce overall erosion on cropland in the United States. In instances where sodbusting has occurred, soil erosion increased when the land was converted to cropland use. The increase is greater on land where scs allowed producers to apply alternative conservation systems. These alternative systems do not reduce erosion to the level prior to sodbusting or the T level set by USDA. We recommend that the Secretary of Agriculture direct the Adminis- Recommendationsto trator, scs, to the Secretary of Agriculture . prioritize its limited cost-share funds so that the Department’s resources are allocated in a manner that achieves the greatest conservation benefit and l build on ongoing efforts and report accomplishments (soil erosion sav- ings) achieved by implementing the conservation compliance and sodbuster provisions Page 26 GAO/ECED-90-206 Conservation Compliance Implementation Delays and Inconsistently Applied Criteria May Result in Fbrther Wetland Losses Implementation of the act’s swampbuster provisions lags behind those of the conservation compliance and sodbuster provisions. scs gave pri- ority to identifying highly erodible land and developing the conservation plans, rather than identifying wetlands, because the act required such plans by January 1, 199O.l Critical to saving the wetlands covered by the act is KS identification of wetlands so that ASS, in checking compli- ance, can ensure that wetlands are protected. However, scs has identi- fied only about 7.5 million acres of wetlands of the estimated 82 million acres of wetlands on nonfederal lands in the continental United States.2 USDA plans to make wetland determinations on only those lands on or near cropland of farm program participants. scs expects to complete its wetlands identification by the end of 1991. As a result, some wetlands may have been converted to cropland that otherwise could have been protected. Implementing the act’s swampbuster exemption provision has, in some instances, been a source of controversy because the criteria used to make decisions for group projects have frequently changed.3 Further, application of the criteria has not always been consistent; the documen- tation provided does not, in many instances, support the exemption deci- sions; and consultation with the Fish and Wildlife Service was not always carried out as required by law. KS has not identified and classified all wetlands. As of January 1990, Implementation of scs reported that it had made more than 860,000 wetland determina- Swampbuster tions and identified almost 7.5 million wetland acres in the process.’ ProviSioiI Has Beer‘I USDA estimates, on the basis of its National Resource Inventory, 1987, that there are about 82 million acres of wetlands on nonfederal land in Delayed the continental United States. However, an scs official responsible for overseeing USDA’S wetland determinations said that scs is not making determinations for all of this land. Wetland determinations are only being made for cropland and land adjacent to cropland on farms of USDA ‘Identification of wetlands refers to the processwhereby USDAdeterminesif a land areaexhibits the soil, water, and plant characteristicsthat define a wetland. ‘No data exist on the extent of nonfederalwetlandsm Alaska.Therefore,our discussionis limited to the 48 continental states. “Group pr"J&S involve two or more farrows or producers. 40nly onestate we vislted, North Dakota,had a completeowentory of its wetlands Page 27 GAO/RCEDSO-206Conservation Compliance Chapter 4 Implementation Delays and Inconsistently Applied Criteria May Result in Further Wetland Losses number of individuals within a group project area. For reporting pur- poses, the county recorded all persons involved in the projects even though the individuals did not file separate requests. ASCS issued new instructions to state and county offices in March 1990 for summarizing commenced conversion activity that occurred prior to January 1990 and then reporting on this activity on a monthly basis. ASCS advised us that a new national report was planned, but that its issuance date was unclear. Exemption Criteria ASCS has amended or modified the exemption criteria for commenced conversion decisions several times since the publication of the interim rules in June 1986. These changes occurred for a variety of reasons, such as litigation by environmental groups and requests from special interests. Table 4.1 highlights changes in USDA'S criteria between June 1986 and December 1989. Page 29 Chapter 4 Implementation Delays and Inconsistently Applied Criteria May Result in Further Wetland Losses Changing Criteria Resulted Because of the changing criteria and sometimes contradictory nature of commenced conversion decisions, county committees and other ASCSoffi- in Draining Wetlands cials made decisions which would allow the draining of wetlands. The impacts of the changes, which have primarily affected group projects, and the differences in the application of the criteria are illustrated by the following example of an actual situation in one county we visited. During the 5-year period, 1981 to 1985, assessed landowners voted for and approved the installation’of five separate group drainage projects. In mid-1986, the county water resource district sought advice and clari- fication from ASCSon whether two of the projects met the commenced conversion criteria since earth moving had not been started, nor had a contract committing substantial funds for earth moving been entered into. Responding to this request, ASCSamended the provisions on Sep- tember 19, 1986, so that persons assessed for the drainage activity would be exempt from swampbuster if the drainage plan was approved before December 23,1985, and the ASCScounty committee determined that the plan reasonably contemplated each person’s drainage activity. Using this criterion, the ASCScounty committee approved the requests on October 1, 1986. As a result of requests from conservation groups, the criterion used to make commenced conversion decisions was changed in February 1987. Consequently, in March of that year the county committee was instructed by USDA to rescind its earlier approval. As a result, only those persons who took actions such as earth moving or contracting for earth moving between October 1,1986, and the February 4,1987 amendment, would be exempt. Other persons, in order to be exempt, would be required to meet the new criteria, including the specific identification of drainage activity in the plan. Subsequently, special interests convinced ASCS to reverse its decision in May 1987, and thus ASCSdid not require the specific identification of wetlands to be drained. i Continuing concern about the exemptions prompted the National Wild- life Federation to request that ASCSreview the decisions again. In its November 1988 response, ASCSconcluded that neither of the projects met the commenced criteria in place at the time the projects were exempted. However, since some drainage had started on one of the projects on the basis of the earlier decisions, ASCSexempted this activity but would not allow any additional wetlands to be drained. However, in terms of the second project, ASCSdetermined that it was still in the plan- ning phase, no funds had been spent toward converting wetlands, and therefore the exemption was being reversed. Page 31 Chapter 4 Implementation Delays and Incona~~ntiy Applied Criteria May Result in Fiuther Wetland Losses as proof of commenced activity.6 In another instance, the producer indi- cated that he had done all the work using his own equipment, and the only verification was by visual inspection-no documentation was pro- vided. In none of the cases did the producer submit evidence such as construction receipts or cancelled checks indicating the commitment of funds prior to December 23,1985, as required by the ASCShandbook. The final program rules dated September 17, 1987, specifically instruct ASCSDid Not Always A%%to consult with the Fish and Wildlife Service on commenced deter- Consult With the Fish minations.6 Our review of records at the counties visited showed that and Wildlife Service often, such consultations are not held. Of the 27 cases we reviewed where ASCScounty committees approved or denied requests (23 approved and 4 denied), we found that the Fish and Wildlife Service was not consulted on 18, or 67 percent, of the decisions. All of these instances occurred after the final program rules were implemented and the Fish and Wildlife Service was specifically designated as the Depart- ment of the Interior’s consultation point. Although the requirement for consultation has existed since the act’s passage, county officials informed us that they were not aware of the need to consult until it was incorporated into the AX% handbook in Sep- tember 1987. In one instance, the state office advised the county that the Fish and Wildlife Service did not need to be consulted because its opposition to the project was already known. Nonetheless, AX& hand- book specifically states that the Fish and Wildlife Service should be con- sulted for commenced conversion decisions. Given its limited resources and the timetable imposed by law, the Conclusions Department deferred making wetland identifications until after it devel- oped conservation plans. By delaying the identification of wetlands, USDA’S decision may have allowed some wetlands to be drained. Like- wise, the lack of firm and clearly understood criteria for exempting cer- tain wetlands and the inconsistent application of the criteria have resulted in additional wetland losses. 5The A%S handbook does not allow tax assessment notices to be used as documentation for wetland conversion activities. ‘USDA is required by the Food security Act to consult with the Department of the Interior as of December 23,1985, on all wetland commenced determinations. Page 33 GAO/RCELL2@296 Conservation Compliance Chapter 4 Implementation Delays and Inconsistently Applied Criteria May Result in Further Wetland Losses While USDA has undertaken these actions, they have not been completed and as such we did not change our recommendations. Further, as a result of previous ASCS commenced conversions decisions, some wetlands have been converted to cropland that otherwise would have been protected. Page 36 GAO/RCED-90206 Conservation Compliance Chapter 5 Enforcement Needs Improvement programs may not be subject to being selected for this compliance verification. Although not required by law, the Fish and Wildlife Service in both Min- nesota and North Dakota has reported suspected swampbuster viola- tions to ASCS. The Fish and Wildlife Service reported 203 suspected swampbuster violations to the Minnesota state ASCS office in June 1989, but ASCS had not followed up on the suspected violations as of December 1989. We did not identify this condition in the other states visited. As of December 1989, Minnesota and North Dakota required county offices to complete a report detailing the investigation and disposition of sus- pected violations reported by the Fish and Wildlife Service and other outside parties, to maintain a file of the reports, and to notify the state office of any violations arising from the investigations. Sodbuster, Swampbuster IJntil April 1989, x(‘s had reported national data that showed the Data Are Not Current and extent to which sodbusting and swampbusting violations were identified and benefits withheld. However, ASCS representatives said that national May Not Accurately reporting was suspended because they believed that county and state Reflect Violations offices were incorrectly interpreting reporting instructions and there- fore the accuracy of’ the reports was questionable. ASCS issued new reporting instructions in March 1990 and plans to resume national reporting. WCS’ system for counting sodbuster and swampbuster violations actu- ally counts potential \-iolations and their ultimate disposition. The potential violation may be resolved with ASCS county office representa- tives if the producer presents additional evidence. In addition, producers can appeal ASCS determinations of violations first to ASCScounty commit- tees, then to AXS state committees, and finally to the ASCSDeputy .4dministrator for Statct and County Operations. -4s shown in table 5. I, ixs(‘s’ latest national report, as of April 1989, showed that most rcl KHYed violations were resolved in favor of producers. Page 37 GAO/RCEDW-206 Conservation Compliance cbepter 5 Jhforcement Needa Improvement l develop a procedure to ensure that all USDA farm program participants, including those participating in FCIC or FIIIHA programs, are included in ASS’ universe for sampling participants’ compliance. In response to our recommendations, USDA noted that (1) it will be on Agency Comments and alert for potential violations of swampbuster or sodbuster provisions Our Evaluation during the course of its normal business, including random spot checks and (2) it requires all producers requesting USDA benefits to file forms AD-1026 and AD-1026A. Thus, the Department believes that all pro- ducers requesting benefits will be represented in the ASS computer system and subject to spot checks. However, current ASCSprocedures are such that not all program participants are involved in its sampling universe. Pege 39 GAO/RCED-904206 Conservation Compliance Major Contributors ID This Report Edward Zadjura, Assistant Director Resources, Daniel Haas, Assignment Manager Community, and Economic Development Division, Washington, D.C. Carl Aubrey, Regional Mana@ment Representative Kansas City Regional William Gansler, Evaluator&Charge Office Diane Gadberry, Staff Evaluator Darryl Meador, Staff Evaluator Susan Blobaum, Operations Research Analyst Darrell J. Rasmussen, Site Senior Chicago Regional Milo Dukic, Evaluator Office David R. Lehrer, Evaluator (022966) Page 41 Ordering Information The fast five copies of each GAO report are free. Additional copies are $2 each. Orders should be sent to the following address, accom- panied by a check or money order made out to the Superintendent of Documents, when necessary. Orders for 166 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 6015 Gaithersburg, MD 20877 Orders may also be placed by calliug (202) 275-6241. i Appendix I Sampling Methodology A total of 96 farms were sampled-20 farms were selected from Macon County, Missouri, and 15 farms were selected from each of the other 5 counties. However, only those farms (58) that had conservation plans are discussed in chapter 3 or reflected in table I. 1 below. Table 1.1: Sample of Ferms W&h Conservation Plans Universe with Sample with conservation plans conservation plans countv & state Farmr Acres Farms ACWLS Poweshiek, Iowaa 1,298 226,704 13 2,012 Dickinson. Kansas 1.316 126.173 13 1 495 Stearns, Minnesota 531 15,629 7 322 Macon, Missouri 766 90,513 15 2,980 Grand Forks, North Dakota 294 20.784 - 3 49 Wells, North Dakota 368 60,386 7 683 Total 4.575 549.199 50 7.514 ‘Poweshiek County, Iowa, reports on a tract basis The number of farms in the unwerse was dewed by dwding 2,077 tracts wth conservation plans I” Poweshlek County by the average tracts per farm I” that county, 1.6. Our sample Included 16 tracts on 13 farms page 40 GAO/ICED-90-206 Conservation Compliance chapter 6 Enforcement Needs Improvement Table 5.1: Violations Reported and Resolved Violations Sodbuster Swampbuster Reported 584 427 Appealed 386 393 Decided m favor of producer 330 243 Decided against producer 31 71 Not yet decided 25 79 Our review of reported sodbuster and swampbuster violations showed that they were resolved in favor of the producer for reasons such as the following: (1) violations were reported in error, (2) land was not highly erodible, (3) land was cropped during 1981 to 1985, and (4) a conserva- tion system was being applied. Because these are all legitimate reasons for resolving reported violations in favor of producers, these USDA data tend to overstate the extent of violations. On the other hand, because reporting has been suspended, additional violations could be occurring but are not being identified through USDA’S enforcement and reporting process. USDA’S report further shows that benefits that had been or would be withheld totaled $970,598 for sodbusting and $843,265 for swampbusting. The number of producers that had benefits withheld was not identified. ASCSissued new instructions to state and county offices in March 1990 for reporting enforcement activity that occurred prior to January 1990 and monthly activity thereafter. ASCS advised us that a new national report is planned, but that its issuance date is unclear. tics procedures do not adequately monitor participating producers for Conclusions violations of the conservation provisions. All participants do not file annual compliance certifications as required, and all participants are not included in AXS’ universe from which producers are sampled for compliance. To improve AXS’ enforcement of the conservation provisions, we recom- Recommendationsto mend that the Secretary of Agriculture require ASCS to the Secretary of develop controls to verify the compliance of all USDA farm program par- Agriculture l ticipants who fail to certify their compliance annually with AXS and Page 38 GAO/RCED-90206 Conservation Compliance Chapter 5 Enforcement Needs Improvement As a result of LJSDA'Senforcement activities, the Department estimates that farmers forfeited $1.8 million in farm program benefits. However, USDA'S procedures do not ensure that all farm program participants are included in annual compliance reviews. Because of the way conservation compliance is currently administered, some producers do not file the necessary forms needed by the Department to enforce these provisions of the act. Further. IMA has no current national statistics on sodbuster and swampbuster violations or on benefits lost due to violations. Data presently used by the Department may not accurately reflect sodbuster and swampbuster violations. ASCS is the IJSDA agency responsible for determining whether producers Weaknessesin ASCS’ comply with the conservation provisions, and is to obtain two docu- Compliance ments from producers each year that are key to its compliance- Monitoring monitoring process. These are the producers’ (1) certification of compli- ance with the conservation provisions of the act and (2) land use report. However, our review indicates that ASS does not always obtain these documents. Further, in one state we visited, ASCS had not followed up on suspected swampbuster violations reported by the Fish and Wildlife Service. On annual compliance certifications (Form AD-1026), producers must identify land they have sodbusted or swampbusted or plan to convert to cropland. ASCSreviews the certifications for indications of possible vio- lations and, if necessary, follows up to determine whether there has been a violation. Our review of 1989 certifications required from ASCS, FCIC, and FIIIHA program participants in four Iowa, Kansas, Minnesota, and Missouri counties showed that ASCS did not have certifications from 6 of the 100 ASCSparticipants, 9 of the 50 FCICparticipants, and 7 of the 50 FmHA participants that we checked. Annual certifications could be filed with .4scs, FU(‘. or FmH.4 before 1990. Beginning in 1990, the certifi- cation must be filed with xxx Each year, ASCS also stllects a sample of 15 percent of the farms of pro- ducers who file land use reports (Form ASCS-578) to check their compli- ance with the conservation provisions. Participants in ASCSprograms must submit land use reports and others may voluntarily submit them, but the report is not generally required from producers who only par- ticipate in FCIC or FIJIII,Iprograms. As a result, the universe from which ASCSselects its sample may not include all participating producers’ farms. Therefore. some producers who only participate in FCIC and FmHA Page36 Chapter 4 Implementation Delays and lnconsLtently Applied Criteria May lledt in Further Wetland Lames Exemptions to the swampbuster provisions because of commenced con- version determinations are sensitive issues, and require consistent deci- sions These decisions can be enhanced by using the assistance available from the Fish and Wildlife Service. Consultation with the Fish and Wild- life Service, as required by the act and later through implementing regu- lations, might have avoided the problems and controversies sometimes accompanying ASGSdecisions. To prevent any further loss of wetlands and to improve program lmple- Recommendationsto mentation of the swampbuster provisions, we recommend that the Sec- the Secretary of retary of Agriculture (1) monitor the application of the wetlands commenced conversion criteria so the decisions made are consistent and Agriculture (2) enforce the requirements for the Fish and Wildlife Service consulta- tions on commenced conversion decisions in order to utilize its expertise in the area. In terms of identifying wetlands, USM noted that it needs to make wet- Agency Comments and land determinations only on those lands ONor adjacent to cropland. Our Evaluation Therefore, not all of the 82 million acres of wetlands in the United States would need to be identified according to USM. Although we pro- posed a recommendation that scs complete its wetland determinations by the end of 1991, USM stated that it intends to complete wetland determinations as scheduled. Since USDAplans to meet its 1991 timeframe, we removed our recommendation. USDA also noted that the identification of wetlands will not prevent them from being converted. We agree with usw that the wetlands moat likely to be converted will be located on or near cropland and that probably something less than 82 million acres would need to be identified. Nonetheless, we believe that until USDAidentifies wetlands, it will be difficult for ASCSto enforce the swampbuster provisions of the act and prevent wetlands from being converted. Therefore, it is important that the Department complete its identification of wetlands as scheduled. USDA also noted that we did not adequately recognize its ongoing efforts to review and correct previous commenced conversion decisions. Specifi- cally, the Department told us that all commenced conversion decisions are being reconsidered, that the Fish and Wildlife Service is being con- sulted in instances where they were previously overlooked, and that questionable commenced conversion decisions were being reopened. Page 34 GAO/BCED4@200 Conservation Compliance Less than a year later, in September 1989, ASCSreceived inquires again from special interests and responded to the inquiries and appeals sur- rounding these projects by reversing itself. Concerning the first project, ASCSsaid that any wetlands identified to be drained in the project area could receive an exception, regardless of whether construction activities were underway. USDA also believed that the second project that was pre- viously denied warranted an exemption because the project had been planned, the farmers in the assessed area had been identified, and the plan had been approved by vote before the act became law. A9c9 also concluded that, for both projects, the more appropriate basis to grant an exemption was that undue financial hardship would result in the absence of a commenced determination because individual land- owners expended funds both before and after the act’s passage, and became obligated for payment of the project costs incurred. This A.%S deci$on adds another dimension to the established criteria. Up to the time of this decision, only costs, obligations, or activities which took place before the act were considered in determining whether an exemp- tion was warranted. Documentation for On the basis of 23 approved commenced conversion requests, we found that producers provided various types of documentation in the form of Exemptions Often Lacked project plans, assessments, engineering or legal bills, or receipts and can- Sufficient Information celled checks for construction work or supplies acquired before December 23, 1985. In 14 of the 23 cases, the documentation was suffi- cient to verify that funds had been committed, the installation of drainage measures had begun, or other criteria had been met. The nine other approved requests lacked specific documentation to make a com- nrsRced determination. Of the requests lacking specific documentation, the primary support provided in most of the cases was the tax assessment and/or the project plan. However, the AEKShandbook specifically requires that the farmer provide documentation, such as cancelled checks, invoices, or contracts showing that the farmer has spent or is legally committed to spending funds for the primary and direct purpose of converting a wetland. Fur- ther, the documentation is to show to whom the funds were committed and the purpose of such funds. In one of the cases we reviewed, the producer furnished, and the county accepted, the tax assessment notide P@ge22 GAO/RCRD-90.206 Conservation Compliance Chapter 4 Implementation Delays and Inconsistently Applied Criteria May Result in Further Wetland Losses Table 4.1: Changes in USDA Exemption Criteria for Commenced Conversions Date - Criteria June 24,1966 Defined that a wetland cG=was commenced if, before December 23, 1985, earth movrng for purposes of draining was started, or substantral funds had been committed legally and financially by entenng into a contract for earth moving, or otherwise, for the conversion. Sept. 19, 1986 Added a prowsron that personswrthrn the funsdiction of a water resources board or srmilar group project could receive an exemption to dram a wetland If they met the followrng conditions in place of those spelled out on June 24, 1986 1 They were or could be assessed for the actrvrtres of the drarnage project. 2 Therr plan was approved by a vote or approval of landowners wrthrn the project area before December 23, 1985. 3. An ASCS county committee determined that the approved plan reasonably contemplated such person’s drarnage activrty. Nov. 20. 1986 Added to the September 19. 1966, criterra a requrrement that substantral funds for rmplementatron must have been commrtted before the act’s passage. Feb 4.1987 Revrsed and restated crrtena used to make wetland conversion decrsrons and Included the followlng. 1 Deletrng ASCS county commrttee’s authority to approve cases that were reasonablv contemolated, but were not Included rn the drarnage plan. ’ 2 Adding that one or more of the followrng requirements had to be met orior to December 23. 1965 - earth movrng or land clkaring had begun,, - a contract for these actrvrtres had been srgned, or - substantral funds had been legally commrtted. 3 Requrnng that the person’s drarnage activrty had to be specrfrcally ~~-~. rdentrfred In .~~ the plan Sept. 10, 1987 Elrminated the term “earth moving” and changed language to - encompass actrvrtres such as draining, dredgrng, leveling, fillrng, or other manrpulatron that results rr- impairing or reducing the flow, crrculatron, or reach of water that was actually started before December 23, 1985. Further deftned what acts constrtute the legal commrtment of funds to Include those listed above, as well as purchasing construction supplies or materials for the primary and drrect purpose of converting the wetlands. Added a provrsron that the Frsh and Wrldlrfe Service must be consulted on each request for a commenced determrnatron. Added the requirement that persons must show that the wetland conversron was the basis for a frnancral obltgation, and a specific assessment for protect constructron or legal obligation to pay a specrfrc assessment was made prior to December 23, 1985 Also, it must be shown that efforts toward the completron of the conversron actrvrty have continued on a regular basrs. Dec. 8, 1989 Added procedures for handlrng drsagreements between SCS and the Frsh and Wrldlrfe Service on wetland matters and late filed renIIAStS requests Page 30 GAO/RCED-90206 Conservation Compliance Chapter 4 Implementation Delays and Inconsistently Applied Criteria May Result in Further Wetland Lasses participants. These wetlands would be most susceptible to cropland con- version. While this seems reasonable, scs has no estimate of the amount of wetland acres it expects to identify for compliance with the act. USDA officials told us that they were able to make only a limited number of wetland determinations because of constraints on staff resources and the fact that XX gave priority to identifying highly erodible land and developing conservation plans to meet the January 1990 deadline set by the act. Nonetheless, most of the wetland determinations that have been made to date reflect only those cases where farmers have indicated that they had converted or planned to convert wetlands. When wetlands are drained, flood control and water quality can decrease, fish and wildlife habitat decline, and recreational opportunities can be lost. scs’ present goal is to complete wetlands determinations by the December 31, 1991 deadline. Wetland conversions started before the act’s passage are exempted from Wetlands Exemption its provisions. Exemptions are granted if the criteria for commenced Criteria Changed conversion are met. However, the criteria for exemptions, notably those Frequently involving group projects, have changed frequently as ASCS developed the final program rules and regulations. The lack of firm and consistent cri- teria from the outset of the program has raised questions about some decisions and created controversy. AXS’ latest national statistics reported that producers requested 5,259 exemptions for commenced conversions. Of these requests, 45 percent were approved, 13 percent. were denied, and the remaining 42 percent were pending when national reporting was suspended in April 1989. USDA officials told us that reporting was suspended because they believed the data received from states were not accurate. We found differences in reporting procedures that tend to overstate pro- gram statistics on the number of commenced conversion requests and exemptions granted. In two of the six counties visited, we found that the reported activity does not reflect the actual activity. For example, while 1 county reported that 84 commenced conversion requests were denied, our review of the files showed that the county had received only 4 requests. Another county reported the approval of 136 requests, but records showed that the county received just 10 requests. These discrep- ancies resulted from requests by water resource districts on behalf of a Page28 GAO/KCELNO-206 Conservation Compliance Chapter 3 Planned Conservation Systems Will Reduce Erosion, but AR May Not Re Implemented by the Deadline If the Congress wishes to increase the protection of erodible lands, it Matters for may want to consider requiring that conservation systems applied to Congressional sodbusted land, whether or not they are converted from native vegeta- Consideration tion, limit erosion to no more than the soil loss tolerance level. Land used for planting a nonagricultural crop during 1981-85 in a long-term rota- tion approved by scs should be excluded. With regard to our first recommendation, we initially proposed that scs Agency Comments and determine which plans are likely to be implemented by 1995 in addition Our Evaluation to prioritizing its cost-share funds. In commenting, USDA said that it believes that all plans are likely to be implemented, and that the scs effort has been based on that assumption. In support of this belief, the Department noted that in many cases the continued eligibility for partic- ipation in IJSDA programs should be sufficient incentive for implementing the plans. USDA also commented that there is no requirement or expecta- tion that cost-share funds would be sufficient to provide for all of the planned conservation practices. As a result of the Department’s comment on this recommendation, we removed our reference to SCS’determining which plans will be imple- mented since IJSDA believes all plans are likely to be implemented. How- ever, because the Department believes that not all conservation practices can be funded, it is all the more important that its limited cost share funds are prioritized to achieve the greatest conservation benefit. In commenting on our second recommendation, USDA noted that scs is establishing a national sampling system for reporting progress so that details of accomplishments would be readily available. As a result of this comment, we made adjustments to the report where appropriate. However, we did not change our recommendation because this sampling system is not yet in place. Page 26 GAO/RCEL%90.206 Conservation Compliance Chapter 3 Planned Gmaervation systems will Redwe Erosion, but AR May Not Be Implemented by the Deadline assistance to producers in implementing conservation practices. In addi- tion, states have various cost-sharing conservation programs that are coordinated with USDA’S administration of its cost-sharing programs. scs had not prepared a national estimate of the cost of installing conser- vation systems. However, scs representatives in Iowa, Kansas, and Mis- souri estimated that the shortage of cost-share funding in their states during the next 5 years will be about $409 million. Table 3.3 shows the scs representatives’ estimated total installation costs, federal and state cost-share funding, and the shortage of these funds. Table 3.3: Estimated Cost-Share Funding Needed for Conservation Plans in Iowa, Dollars in mllllons____ ~~~~~_~..____. _____- -___- Kansas, and Missouri Amount projected Total Amount needed to be available installation from federal/ from federal/ Estimated State costs state sources state sources0 shortage Iowa -- $808 $404b $87 $317 Kansas 134 67c 46 21 Missouri 268 1766 105 71 Total $1,210 9647 $238 9409 ‘Based on current funding projected for fiscal years 1990 through 19%. beased on 50percent of total costs. ‘Based on combined federal and stale cost-sharing at 50 percent of total costs. %ased on combtnad federal and state cost-sharing at 50 to 75 percent of total costs. The percentage varies depending on the conservation practice and the county. The extent that scs shares the costs of implementing conservation plans with a producer varies between states. scs can share up to 75 percent of the cost of specified conservation practices not to exceed an established maximum amount. However, scs state and county offices may establish priorities and approve cost-sharing at less than 75-percent if they choose to do so. For example, the Missouri scs office estimated it would share from 50 to 75 percent of the costs, while Kansas limited federal- state cost sharing to 50 percent of the costs so that assistance could be provided to more producers. Providing additional cost-share funding may not necessarily enable scs to assist producers in instaIling all the conservation systems planned by the 1995 deadline. For example, an xs assistant state conservationist in Missouri said that additional cost-share funds could not be effectively utilized without the additional staff needed to provide the related tech- nical assistance. An scs state conservationist in Kansas also noted that Page 24 GAO/RCED9IMG8 Conservation Cmnpliance Chapter 3 Planned Conservation Systems Will Reduce Erosion, but AR May Not BP Implemented by the Deadline Table 3.1: Examples of Planned Soil Savings Under Each Conservation Figures in tons per acre per year Alternative Erosion Savings Erosion Conservation alternative before plan based on plan after plan Conservation reserve program Field 1 74 7 74.0 0.7 Field 2 41 6 41.3 0.3 Field 3 100 90 10 Conservation system to meet T level Field 4 74.7 67 6 6.9 Field 5 41 6 36 1 55 Field 6 100 50 5.0 Conservation system to meet alternative level Field 7 74 7 60.9 13% Field 6 41 6 34.9 67 Field 9 inn sn 5f-l Estimated Soil Losses While most conservation plans are designed to reduce erosion on cropland, our sample data show that some conservation plans were for sodbusting. In other words, some producers broke out new cropland and thus had to develop a conservation plan. Of the 354 fields contained in the conservation plans we reviewed for 58 farms, 13 sodbusted fields showed increased soil losses (i.e., soil erosion was higher after the devel- opment of the conservation plan for the sodbusted acres than it was prior to being converted to cropland). Plans to bring four fields to the T level indicated increases in expected losses ranging from 1 to 2 tons per acre per year. Plans for the nine remaining fields, which used the alter- native level, indicated increased losses ranging from 4 to 5 tons per acre per year. XX estimates that it will not, have the staffing and cost-share funding Producers May Not Be needed to assist producers in implementing conservation plans (on the Able to Implement 135 million acres covered) by the deadline of January 1, 1995. scs offi- Conservation Plans by cials believe this may limit, producers’ ability to fully implement conser- vation plans by the required date, and they would like the deadline 1995 Deadline extended to about 2000 If plans are not implemented as required by the act, soil savings, associated with reduced erosion, will be less than anticipated. Page 22 GAO/RCRD-90206 Conservation Compliance chapter 3 Planned co~ervation systems will Reduce Erosion, but AU May Not Be Implemented by the Deadline all producers could elect to meet the alternative requirement without showing economic hardship.2 While not required, some producers plan to reduce soil erosion to the T level. We reviewed a sample of conservation plans for 58 farms from a universe of 4,575 farms (covering 548,189 acres) in 6 counties in Iowa, Kansas, Minnesota, Missouri, and North Dakota.3 As shown in figure 3.1, our sample indicates that, in these 6 counties as a whole, producers plan to meet the conservation requirements by enrolling about 37 percent of their acres in the conservation reserve, reducing erosion to the T level on about 35 percent of the acres, and reducing erosion to the alternative level on the remaining 28 percent of the acres. C&servation Applications Planned in Counties We Visited (Percentage of Acres) Reduced erosion to an alternative level Reduced erosion through the conservation reserve program Reduced erosion to T Note:Samplingerrors for these data are as follows conservation reserve program, 21 9. conservation systems to reduce erosbon to T, 15 7, conservation systems to meet an alternative level, 17.7. Sampling errors lndlcate the range wIthIn which the actual value would lkkely fall at the 95.percent confl- dence level (IX ,95 times out of 100) Source: GAO analyw of conservation plans “An exceptionis highly ercdible fields convertedfrom native rang&m& or woodlandvegetation. Both must meetthe T level “Thesedata on soil erosioncannotbeextrapolatedto other countiesin the United States.See appendii I for details about our sample. Page 20 GAO/RCRIMO-206 Conservation Compliance Chapter 2 The Act Does Not Protect All Hiiy Emdible Land and Wetlands In response to this comment, and realizing that USDA may have short-run resource constraints, we did not recommend that the Department change its criterion. Rather, we directed our observation about the amount of land covered by USDA’S criterion to the Congress. If the Congress wishes to protect more erodible land, considering the increased costs, lowering the USDA criterion could be used to do so. For example, about 75 million acres of land are eroding at 5 to 8 times the soil tolerance level, and controlling erosion on these lands could produce significant soil savings. Page 18 GAO/RCEDS@206 Conservation Cmnphnce - Chapter 2 The Act Doea Not Prutect All Highly lhdible hd and Wetlands Figure 2.2: Erosion Potential of the N&ion’s 423 Million Cropland Acres Highly erodible land with erosion potential of 8 Tor more (142 million acres) Other erodible land with erosion potential of less than 8 T (281 million acres) Source: GAO estimate based on 1987 National Resource Inventory, USDA, and Jan. 1990 Food Sectmty Act Progress, USDA In addition to the criterion used by USDA, in some instances, the act allows producers to convert highly erodible land and wetlands without the loss of farm program benefits-further limiting the protection of fragile lands. For example, with regard to sodbusting, a loss of benefits does not occur unless a producer converts highly erodible land and plants an agricultural commodity on the land without applying an approved conservation system. Similarly, concerning swampbusting, a loss of benefits does not occur unless a producer converts wetlands and plants an agricultural commodity on the land. In both cases, benefits are not lost if the producer does not plant an agricultural commodity during the crop years that he/she chooses to participate in a USDA farm pro- gram. Yet, in the case of converted wetlands, the environmental value of the wetlands is lost. The act does not require farmers to restore con- verted wetlands to remain eligible for federal farm program benefits. Because of the extensive nature of the task, we did not attempt to iden- tify instances where farmers actually drain wetlands and still obtain federal farm benefits. Nonetheless, it appears that the Congress is con- sidering, as part of its changes to the Food Security Act, remedying this situation.4 4TheHousepasseda bill in August 1990which will withhold benefitsfrom programparticipants who convert wetlandsfor the purposeof producingan agricultural commodity. Page 16 GAO/RCED-96266 Conservation Compliance Chapter 2 The Act Does Not Protect All H@ly Emdibk Land and Wetlands Figure 2.1: Amount of Cropland and Wetlands in the United States (Total Surface of the tinted States Is 1 94 Bullion Acres) Cropland 4% Wetlands Federal Lands 2% Water Areas Other Land Uaes Note Data exclude Alaska Source 1987 NatIonal Resource Inventory, USDA Only these lands that USDA classifies as highly erodible or wetlands and that are farmed or planned to be farmed by USDA participants are cov- ered by the act. Producers who do not participate in USDA farm programs are not required to comply with the act’s conservation provisions.2 The act allows USDA to establish criteria for classifying land as highly Other Fragile Lands erodible in carrying out the conservation compliance provisions. USDA’s Remain Unprotected criterion requires land to have the potential to erode at least eight times the soil loss tolerance level to be classified as highly erodible for the conservation compliance and sodbuster provisions. This criterion pro- tects the most erodible land. In contrast, usw used a broader eligibility criterion for removing land from production and enrolling it in the con- servation reserve program for USDArental payments. This criterion included the land’s potential and actual erosion, current and future use, and potential to flood. ‘According to the National ResearchCouncil’sreport, AkematiVe&#mkwe, W39,about 70 percent of the nation’s croplandwas enrolled in federal commodity program at the time of its report. Page 14 GAO/RCXDSG206 CoMervatlon Compliance interviewed USDArepresentatives at the offices identified above. We also sampled ASCSand scs county office implementation records to determine whether producers’ annual certifications of compliance were received from USDA program participants, whether highly erodible land and wet- land determinations had been made, whether producers had developed conservation plans and determined their effect on soil erosion and farming practices, and the circumstances of commenced conversion requests and decisions and whether USFWS had been consulted. To determine how USDA enforced the conservation provisions and how many producers lost benefits, we reviewed ASCSenforcement reports and reporting procedures, and ASCS’and KS compliance-monitoring proce- dures. We interviewed representatives at the offices identified above, and we sampled ASCSand scs county office records to determine the rea- sons why violations occurred and were appealed and overturned. Sam- ples were also selected to look for unreported violations and to determine whether USFWS had been consulted on wetland decisions. To identify and recommend changes needed in the conservation provi- sions and in their implementation, we reviewed the conservation provi- sions of the act, the implementing regulations, USDA’S procedures, and various implementation and enforcement records and reports; inter- viewed USDA representatives at the offices identified above; obtained opinions from representatives of environmental and farm organizations; and analyzed the results of the samples discussed above. We made our review in accordance with generally accepted government auditing standards from July 1989 through February 1990. As agreed with the Chairman’s office, we obtained oral comments on a draft of this report from the Department of Agriculture. Page 12 GAO/RC~~ZO6 Conservation Compliance - Chapter1 Introduction level. The USDA'S Soil Conservation Service (SCS) must certify that the plan is technically correct, and the local conservation district must approve the plan. Producers who plant an agricultural commodity on existing cropland must have filed an approved soil conservation plan with the local scs and have begun actively applying the plan by January 1,199O. They must fully apply the plan by January 1, 1995.” Producers who plant an agricultural commodity on land converted to cropland after the act’s passage (Le., sodbuster) must file an approved conservation plan with the local scs and fully apply the plan before planting. Swampbuster The swampbuster provision applies to naturally occurring wetlands. Producers cannot plant an agricultural commodity on naturally occur- ring wetlands that were converted to cropland after December 23, 1985. However, certain wetlands are exempt from the swampbuster provision, such as: wetlands on which conversion was commenced before December 23, 1985, but not yet completed,7 and wetlands on which the production of an agricultural commodity is possible as a result of nat- ural conditions, such as drought. Penalties and Violators of the act’s conservation provisions lose their eligibility to par- ticipate in USDA farm programs. Eligibility is lost during the crop year of Administration the violation. The programs include: price supports or payments, farm program loans, crop insurance, disaster payments, and payments for storage of agricultural commodities. Within USDA, scs and the Agricultural Stabilization and Conservation Service (ASCS) administer and enforce the act’s conservation provisions. IJSDA'S Farmers Home Administration (FWIA) and Federal Crop Insur- ance Corporation (FCIC) are to coordinate with ASCSto ensure that pro- ducers participating in their programs are in compliance with the act’s conservation provisions The act also requires scs and ASG to consult “Producerswho did not prepare:Lconservationplan by .January1, 1990,mustdevelopand apply an approvedplan when growing their first crop.Producerswho did not participate in IJSDAprogmms between1986and 1989have rmtll Jm~ary 1, 1996,to apply their plans. 7Prcducenwho started to co~mw wetlandsprior to the act are grantedexemptionsto the swampbusterprovision if they meetcertain cntena Theseexemptionsare called “commenced conversions” Page10 GAO/RCED-90.296ConservationCompRmce Chapter 1 - Introduction The Food Security Act of 1985 (P.L. 99-198, Dec. 23, 1985) contains con- servation provisions intended to reduce soil erosion and protect wet- lands by removing incentives for producing agricultural commodities on highly erodible land or converted wetlands. By removing these incen- tives, the Congress intended to: reduce soil loss due to wind and water erosion, assist in preserving the nation’s wetlands, reduce sedimentation and improve water quality, curb the production of surplus commodities, and protect the nation’s long-term capability to produce food and fiber. Before the act became law, the U.S. Department of Agriculture (USDA) estimated that . 3.1 billion tons of soil were eroding annually on much of the 420 million acres of cropland in the United States; l 3.7 million acres of land were being converted from uses such as pas- ture, range, and wetlands to cropland annually; and l about 153 million acres of noncropland (including 5.2 million acres of wetlands) had a medium to high potential for conversion to cropland. The act included provisions on conservation compliance, “sodbuster,” “swampbuster,” and conservation reserve. The conservation compliance provisions protect highly erodible cropland’ farmed during 1981 to 1985, while the sodbuster and swampbuster provisions, respectively, protect highly erodible land and wetlands2 that may be converted to cropland after the act’s passage. This report covers the first three provisions which impose conservation requirements on producers who participate in USDA farm programs. We reported on the act’s fourth provision, the conservation reserve pro- gram, in November 1989.:’ ‘USDAclassifieshighly erodibleland as land consistmgof fields in which a mmimumof one-third or 50 acresof the field contain so11with a potential to erodeat least 8 tunesthe soil losstolerancelevel. The soil losstolerancelevel is defined asthe rate at which the soil can erodeand maintain continued productivity. ‘USDAclassifieswetlands as areaswith a predommanceof soils that are mundatedor saturatedby water to the point where the soil cansupport water-loving plants. 3F~ Programs:ConservationReserveProgramCould Be LessCostly and More Effective (GAO/ 90-13, Nov. 16, 1989). Page 8 GAO/RCED-90-206Conservation Compliance Contents Executive Summary 2 Chapter 1 Introduction Why Soil Erosion and Loss of Wetlands Are a Problem How the Conservation Provisions Work Objectives, Scope, and Methodology 11 Chapter 2 13 The Act Does Not Land Protected by the Act Other Fragile Lands Remain Unprotected 13 14 Protect All Highly Conclusions 17 Erodible Land and Matters for Congressional Consideration 17 Wetlands Agency Comments and Our Evaluation 17 Chapter 3 19 Planned Conservation Producers Have Prepared Conservation Plans for Most Highly Erodible Cropland 19 Systems Will Reduce Soil Savings Will Occur as Conservation Plans Are 21 Erosion, but All May Implemented Producers May Not Be Able to Implement Conservation 22 Not Be Implemented Plans by 1995 Deadline by the Deadline Conclusions 25 Recommendations to the Secretary of Agriculture 25 Matters for Congressional Consideration 26 Agency Comments and Our Evaluation 26 Chapter 4 27 Implementation Implementation of Swampbuster Provision Has Been 27 Delayed Delays and Wetlands Exemption Criteria Changed Frequently 28 hCOIlSiSkntly Applied ASCS Did Not Always Consult With the Fish and Wildlife 33 Criteria May Result in Con~~~%‘~ 33 Further Wetland Recommendations to the Secretary of Agriculture 34 Losses Agency Comments and Our Evaluation - 34 Page 6 GAO/RCED-9024J6 Conservation CbmpUance In some instances, the law allows farmers to convert highly erodible land or wetlands to cropland without losing federal farm program bene- fits. Farmers who convert these lands can still receive farm program benefits in any year that they do not plant on them. In other years, those farmers can plant on the converted lands, provided they forego participating in federal farm programs. In either case, the lands are lost and farmers are not required to restore them to regain their right to farm program benefits. Conservation Plans May Our review of a limited sample of conservation plans in six counties in Not Be Implemented and, five states shows that soil erosion should be reduced on most of the fields ln these counties2 However, uso~ expects a shortage of staff and Thus, Soil Savings May Be funding used to provide farmers with technical and financial assistance Less Than Anticipated in applying conservation systems. scs told us that field office staffing will be 37 percent below the level needed during fiscal years 1990 through 1994. Also, although scs has no national estimate of the cost to install conservation systems, scs personnel in Iowa, Kansas, and Mis- souri estimate that the shortage in funding assistance in their states during the next 6 years will be about $409 million. As a result, farmers will not apply conservation systems on all of the 135 million acres planned, or they may apply less effective and less costly systems. Implementation of Given limited staff resources, USDA deferred making wetland determina- Wetland Provisions Slow tions because it gave priority to developing conservation plans which were required by 1990. To date, US~Ahas identified about 7.5 million and Inconsistently Applied acres of wetlands. USDA estimates that there are about 82 million acres of wetlands on nonfederal lands in the continental United States. Of these 82 million acres, USDA plans to make wetland determinations only on cropland and land adjacent to cropland on farms of USDA participants. While this is reasonable, USDA does not know how much of this acreage is susceptible to cropland conversion. Until wetland acres are identified, USDA cannot ensure that they are protected as required by the act. IJSDA expects to complete wetland determinations by December 3 1, 1991. USDA has amended or modified the criteria for exempting wetland con- versions several times since it issued interim rules in 1986. As a result, USDA did not consistently apply the criteria to determine which wetlands can be drained without violating the act. USDA also did not consult with ?hese data on soil savingscannot be extrapolatedto other countiesin the United States. Page 4 GAO/RCTl?DWm Conservation Compliance Executive Summary Every year billions of tons of soil erode from the nation’s cropland while Purpose millions of other acres are converted into new cropland. To address this problem, the Food Security Act of 1985 requires farmers who partici- pate in federal farm programs to reduce erosion on highly erodible cropland and, with certain exceptions, prohibits the conversion of wet- lands to cropland. The Chairman of the House Committee on Agriculture asked GAO to review the Department of Agriculture’s (USDA) administration of the act’s conservation provisions by focusing on, among other things, (1) the number of acres of land affected, (2) the implementation of conservation plans to reduce soil erosion, and (3) the implementation of the wetland provisions to reduce wetland conversions. Before the act, about 3.1 billion tons of soil eroded annually on over 420 Background million acres of cropland in the United States, and pasture, range, wet- lands, and other lands were converted to cropland at a rate of 3.7 mil- lion acres a year. Soil erosion gradually reduces the productivity of land, increases sedimentation of water bodies, and damages surface and groundwater quality. When wetlands are drained, flood control and water quality can decrease, fish and wildlife habitat decline, and recrea- tional opportunities can be lost. The act requires farmers to conserve highly erodible land and wetlands by linking their conservation activities with eligibility for USDA farm program benefits. To be eligible, farmers must (1) develop plans to apply approved conservation systems by 1995 to reduce erosion on highly erodible lands they farmed between 1981 and 1985 and (2) not convert and farm certain wetlands. Farmers who plant on highly erod- ible land that was not previously farmed (the act’s sodbuster provision) must apply a conservation system before planting. In general, farmers cannot plant on naturally occurring wetlands that were converted to cropland after the act, (the act’s swampbuster provision). IJSDA is responsible for administering these provisions, enforcing compli- ance, providing technical assistance to producers, and assisting with funding to implement conservation measures. IJsing IJSDA'S criterion, the act covers about 142 million acres of highly Results in Brief erodible farmland. Opportunities exist to increase this amount. First, L'SDA'S highly erodible land criterion does not include certain lands with
Farm Programs: Conservation Compliance Provisions Could Be Made More Effective
Published by the Government Accountability Office on 1990-09-24.
Below is a raw (and likely hideous) rendition of the original report. (PDF)