Farm Programs:

Conservation Reserve Program Could Be Less Costly and More Effective

RCED-90-13: Published: Nov 15, 1989. Publicly Released: Nov 15, 1989.

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Pursuant to a congressional request, GAO discussed the Department of Agriculture's (USDA) Conservation Reserve Program (CRP).

GAO noted that: (1) 6 percent of about 28 million CRP-enrolled acres were planted in trees, making CRP one of the largest public tree-planting programs, despite falling short of the USDA 12.5-percent goal; (2) USDA was not targeting the highest erodible land first, because it relaxed CRP eligibility criteria to attain its tree-planting goal; (3) USDA failed to address water quality issues and favored wind-caused erosion over water-caused erosion, although water erosion was the greater problem; (4) CRP outlays will total over $22 billion by 1999; (5) USDA unnecessarily increased CRP costs to achieve its tree-planting goal by employing a noncompetitive bid system, using excessive tree initiatives, and paying inflated rental rates; (6) USDA efforts to implement congressional rental rate limits were inadequate, because management did not establish internal controls; and (7) legislative county-enrollment restrictions may increase program costs, while limiting enrollment of highly erodible acreage.

Matters for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: Congress did not include this provision when it reauthorized the CRP in the 1990 farm bill.

    Matter: Congress may wish to place a limit on either annual or overall program costs for the remainder of the 45-million-acre CRP program or for an expanded program.

  2. Status: Closed - Not Implemented

    Comments: Congress chose not to include this provision when it reauthorized the CRP in the 1990 farm bill.

    Matter: In order to both realize the benefit achieved by land enrolled in CRP and help minimize overall government expenditures, Congress may wish to either: (1) further limit CRP eligibility to farmland enrolled in USDA price and income support programs; or (2) target acreage enrolled in USDA commodity programs by requiring USDA to offer incentives as it did for corn acreage during the fourth sign-up.

  3. Status: Closed - Implemented

    Comments: Congress did encourage Agriculture to use the CRP to make more use of environmentally sensitive lands, but did not make a specific change requiring such action.

    Matter: Congress may wish to remove these mandated goals and permit USDA more flexibility to address the full range of objectives established for CRP.

  4. Status: Closed - Not Implemented

    Comments: Congress chose not to include this provision when it reauthorized the CRP in the 1990 farm bill.

    Matter: Congress may wish to limit annual funding to encourage more cost-effective administration.

  5. Status: Closed - Not Implemented

    Comments: Congress chose not to make this change when it reauthorized CRP programs in the 1990 farm bill.

    Matter: Congress may wish to limit or target eligibility to commodity program crops.

  6. Status: Closed - Implemented

    Comments: Congress changed the 25 percent restriction on individual county enrollment to allow additional land to be enrolled to meet conservation or other environmental provisions in the 1990 farm bill.

    Matter: Congress may wish to modify the restriction on the amount of acreage that can be enrolled in a county.

  7. Status: Closed - Implemented

    Comments: Congress changed this provision to allow a flexible overall goal of 40-45 million acres and removed the annual goals.

    Matter: Congress may wish to allow flexible annual and overall acreage goals.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: Because Congress directed USDA to use a competitive bidding system, this recommendation is no longer applicable.

    Recommendation: If USDA does not implement a competitive bid system and must limit rental rates to prevailing local rental rates for an acre of comparable land, the Secretary of Agriculture should direct the Administrator, ASCS, to use more objective data in protecting farmers against future increases in land values for acreage enrolled in CRP by developing and requiring county offices to use escalation factors tied to local farmland values or rental rates in CRP in calculating prevailing local rental rates for an acre of comparable land.

    Agency Affected: Department of Agriculture

  2. Status: Closed - Not Implemented

    Comments: Congress directed USDA to use a competitive bidding system making this provision no longer applicable.

    Recommendation: If USDA does not implement a competitive bid system and must limit rental rates to prevailing local rental rates for an acre of comparable land, the Secretary of Agriculture should direct the Administrator, ASCS, to issue revised, more specific guidance to county offices detailing how they should calculate prevailing local rental rates for an acre of comparable land. The revised guidance should: (1) remove the redundancy in the adjustment factor for the cash rental value over the 10-year life of the contract and the adjustment factor for future land values and economic trends; and (2) clarify what is to be included in adjusting rental rates for other impacts on land values.

    Agency Affected: Department of Agriculture

  3. Status: Closed - Implemented

    Comments: Congress included provisions to extend the contract terms and base protection for land planted to trees as part of the 1990 farm bill.

    Recommendation: Regarding the CRP tree-planting initiative, the Secretary of Agriculture should require the Administrator, ASCS, to evaluate the use of other incentives to plant trees, such as providing additional technical assistance to producers or extending the period of time that the land planted with trees could remain out of production yet still qualify for federal farm program benefits.

    Agency Affected: Department of Agriculture

  4. Status: Closed - Not Implemented

    Comments: Neither Congress nor USDA took any action on this provision. Due to other changes made in the 1990 farm bill, this recommendation is no longer applicable.

    Recommendation: Regarding the CRP tree-planting initiative, the Secretary of Agriculture should require the Administrator, ASCS, to restrict incentives for tree planting to only those producers who actually plant trees rather than any producer in a geographic area, as is now occurring.

    Agency Affected: Department of Agriculture

  5. Status: Closed - Not Implemented

    Comments: Neither Congress nor USDA took any action on this provision. Due to other changes made in the 1990 farm bill, this recommendation is no longer applicable.

    Recommendation: Regarding the CRP tree-planting initiative, the Secretary of Agriculture should require the Administrator, ASCS, to return to the previous eligibility criteria that two-thirds of the land must be eroding at three times the soil loss tolerance level, instead of the relaxed standard now being used (one-third of the land at two times the soil tolerance level).

    Agency Affected: Department of Agriculture

  6. Status: Closed - Not Implemented

    Comments: Congress directed USDA to use a competitive bidding system in the 1990 farm bill, therefore, this provision is no longer applicable.

    Recommendation: If USDA does not implement a competitive bid system and stays with the offer system it now uses, the Secretary of Agriculture should require the Administrator, ASCS, to reduce the maximum acceptable rental rates to bring the rates more in line with prevailing local rental rates.

    Agency Affected: Department of Agriculture

  7. Status: Closed - Not Implemented

    Comments: Although USDA was directed to use a competitive bidding system, Congress chose to let this provision stand.

    Recommendation: In adopting a competitive bid approach, the Secretary of Agriculture should request Congress to eliminate the limitation restricting CRP contract rental rates to the prevailing local rental rate for an acre of comparable land, since this provision would be unnecessary under a competitive bid system, which enrolls the most cost-effective acres first.

    Agency Affected: Department of Agriculture

  8. Status: Closed - Implemented

    Comments: Congress directed USDA to use a competitive bidding system in the 1990 farm bill, but was not specific as to the type or intent.

    Recommendation: To improve the administration of CRP, as well as minimize rental costs over the remainder of the program, the Secretary of Agriculture should direct the Administrator, ASCS, to develop and use a competitive bid system. In using such a system, USDA should accept those acres into CRP that make the maximum contribution to CRP objectives per dollar spent. Such a system would also be consistent with Congress' suggestion to use a competitive bid system in administering CRP.

    Agency Affected: Department of Agriculture

  9. Status: Closed - Not Implemented

    Comments: Because Congress directed USDA to use a competitive bidding system, this recommendation is no longer applicable.

    Recommendation: If USDA does not implement a competitive bid system and must limit rental rates to prevailing local rental rates for an acre of comparable land, the Secretary of Agriculture should direct the Administrator, ASCS, to reject CRP bids that exceed the prevailing local rental rates established under the revised guidance.

    Agency Affected: Department of Agriculture

  10. Status: Closed - Not Implemented

    Comments: Because Congress directed USDA to use a competitive bidding system, this recommendation is no longer applicable.

    Recommendation: If USDA does not implement a competitive bid system and must limit rental rates to prevailing local rental rates for an acre of comparable land, the Secretary of Agriculture should direct the Administrator, ASCS, to establish the internal controls necessary to ensure that county offices are properly calculating prevailing local rental rates. The controls developed should, at a minimum, provide ASCS managers with assurance that the rates are calculated consistent with both legislative intent and the revised guidance.

    Agency Affected: Department of Agriculture

  11. Status: Closed - Not Implemented

    Comments: Because Congress directed USDA to use a competitive bidding system, this recommendation is no longer applicable.

    Recommendation: The Secretary of Agriculture should report the lack of internal controls as a material weakness in the Department's 1989 Financial Integrity Act report.

    Agency Affected: Department of Agriculture

  12. Status: Closed - Implemented

    Comments: Congress made this change in the 1990 farm bill, therefore, action by Agriculture is no longer needed.

    Recommendation: The Secretary of Agriculture should direct ASCS to develop a plan that targets the most highly erodible acres and those that contribute the most to water quality problems. As part of this plan, the Secretary should request that Congress modify the limit on individual county enrollment to allow additional acres to be enrolled by those counties that are at the limit, provided that those acres meet specific program goals, such as removing from production the most highly erodible acres, or those contributing to water quality problems.

    Agency Affected: Department of Agriculture

  13. Status: Closed - Implemented

    Comments: Congress directed USDA to consider the extent that lands enrolled in the CRP contributed to soil erosion and water quality when deciding on acceptability of contracts.

    Recommendation: To improve the benefits realized by CRP, the Secretary of Agriculture should direct the Administrator, Agricultural Stabilization and Conservation Service (ASCS), to develop a bid acceptance approach that targets the most highly erodible acres available for enrollment as well as those that contribute most to water quality problems.

    Agency Affected: Department of Agriculture

 

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