Harry Huntley’s essay offers some specific suggestions for how to incentivize conservation results on American farmland. This is an especially pressing issue because most modern industrial farming practices, often driven by the demand for specific crops like ethanol corn, involve heavy use of chemical fertilizers and pesticides, as well as large-scale irrigation. While these practices lead to increased productivity, they may also cause soil degradation, water pollution, and loss of biodiversity unless farmers take particular care with soil maintenance.
“The Renewable Fuel Standard is part of a broader portfolio of federal incentives that drive corn farmers to maximize production at the cost of soil erosion. Federal farm policy in the late 1980s and early 1990s subsidized both production and erosion prevention, which led farmers to implement technologies like grass strips that filter and slow the flow of runoff.Since then, federal enforcement of erosion prevention waned, but massive production incentives, including the RFS, continue to push up production.
The consequence, especially in Iowa, is unsustainable levels of soil erosion. In 2007, townships comprising ten million of Iowa’s thirty-six million acres eroded faster than the government-defined sustainable rate, and six million acres eroded at double that rate.Despite having some of the most productive cropland in the country, Iowa has lost half of its topsoil over the last 150 years.”
“While the government has subsidized some uses of cover crops they are still trying to have their cake and eat it too with corn subsidies. Economic incentives still exist that encourage farmers to ignore most other crops. This is especially true with cover crops. The opportunity cost for adding another planting and harvesting season for farmers is simply not worth it when corn is so much more profitable.”
Ensuring the health of our soil is of paramount national concern as our farmers play a crucial role in feeding the world, and the government heavily influences crop choices and meat sales. Moreover, the American taxpayer often bears the brunt of farm disasters.
Farmers are deeply committed to preserving their land to sustainably nourish Americans for generations to come. We must remain vigilant of laws and policies that get in the way of good farming practices.
Harry recommends authorizing outcomes-based conservation by making three main alterations:
Define “conservation outcome” and a “performance-based payment” through which to buy them.
Authorize performance-based payments as an acceptable method for financial assistance throughout the statute but particularly in the Payments section.
Categorically exclude these nature-positive solutions from the National Environmental Policy Act to prevent innovation from being penalized as it has been through the agency’s past NEPA practices.
Check out his full piece below!
The IRA’s Biggest Conservation Winner Needs A Path To Pay For Results
By Harry Huntley
How frustrating is it when your boss tells you to do a task that you don’t have the tools for?
That must be how the Natural Resource Conservation Service (NRCS) felt after the last Farm Bill. They were told to prioritize Regional Conservation Partnership Program (RCPP) projects that “provide innovation in conservation methods and delivery, including outcome-based performance measures and methods.” However, the overwhelmingly lack of truly outcomes-based projects being implemented must mean that the agency felt something was missing from the direction Congress gave: the tools.
One could very well argue that NRCS did have broad enough statutory authority to pay for outcomes. But whether the barrier was actual or just perceived, the result was the same; outcomes-based projects got lost in a program built to pay for conservation practices.
Let’s back up. What is “outcomes-based” conservation?
Simply put, it’s focusing on the result instead of the way to get there. Most USDA conservation programs are built around paying part of the typical cost of a farmer completing a set of activities to standards set by NRCS. Farmers get paid the same regardless of whether their farm generates more or less of a result; what matters is simply that the activity was completed, not how successful it was.
Outcomes-based conservation defines desired results (e.g. pounds of nitrogen prevented from entering a stream, tons of carbon sequestered in soil, etc) and invites farmers to provide them at a price offered by the farmer. The outcomes can be either directly measured or modeled using sophisticated simulations like the Chesapeake Assessment Scenario Tool or the national Nutrient Tracking Tool.
For instance, instead of getting a contract that pays 50% or 75% of the typical cost for a cover crop, a farmer would get agreed upon compensation per pound of nitrogen prevented from going into a stream. The effect (number of pounds) is calculated by inputting location, soil type, practice details, and more into a model, while the price is set by the farmer and ultimately determined competitively by a market. And just like higher corn yields lead to higher revenue, greater conservation outcomes do too.
As far back as at least 2006, USDA economists have acknowledged that paying farmers for the results of their conservation would be twice as cost-effective as paying for practices. This is because conservation dollars can be targeted to where they have the greatest impact, there’s less paperwork, and farmers have an incentive to innovate to drive down costs.
Recent research from EPIC actually shows that paying for environmental outcomes might be more like three times as cost effective. Imagine if the massive $5 billion investment from the IRA into RCPP could go three times as far!
By buying pounds of nitrogen, we could shrink the Gulf of Mexico’s persistent, Connecticut-sized dead zone. By buying tons of carbon sequestered, we could make agriculture a bigger part of the solution to climate change. And by buying increased habitat for threatened wildlife, farming could better help reverse alarming losses of biodiversity.
Through paying for results instead of practices, we can make conservation dramatically more effective while providing farmers greater flexibility and more cash when they succeed.
There are good reasons not to entirely eliminate practice-based conservation. For each new cutting-edge technique or technology, there could be a time period between having enough data to show they’re effective at improving natural resources but not quite enough to accurately model exactly how much they’ll improve that resource across a wide variety of landscapes. Farmers and others also lack good price information when a technique is new and not widely in use across crops, soils and regions. And some farmers will continue to prefer the cost-share system in which they have to spend some of their own funds in exchange for USDA bearing most of the risk of the practice not working.
However, Congress clearly wants outcomes-based conservation to be a priority, not just an option, for this crucial program. The next Farm Bill must give NRCS very clear certainty that they do have a pathway to pay for conservation outcomes.
While RCPP could use some broad changes (such as to speed up contracting), authorizing outcomes-based conservation really only requires three main alterations:
Define “conservation outcome” and a “performance-based payment” through which to buy them.
Authorize performance-based payments as an acceptable method for financial assistance throughout the statute but particularly in the Payments section.
Categorically exclude these nature-positive solutions from the National Environmental Policy Act to prevent innovation from being penalized as it has been through the agency’s past NEPA practices.
Just like a farmer needs keys to operate a tractor, their natural resources agency needs statutory authority that explains how to implement an outcome-based program, not just a simple direction to do it.
Creating a pathway to pay for conservation outcomes will let them use a key tool that Congress has recognized will be crucial to meeting our shared conservation goals.
Harry Huntley is the Senior Agriculture Policy Analyst at the Environmental Policy Innovation Center where he develops easier, cheaper, faster ways for governments to pay farmers who improve natural resources. He holds degrees in economics and agricultural science from the University of Maryland, College Park and has worked for a variety of environmental and agricultural organizations at the local and national level. Harry can be reached at HHuntley@policyinnovation.org.
