2007 Federal Farm Bill Concepts for Conservation Reform in the Chesapeake Bay Region

1. 2007 Federal Farm Bill Concepts for Conservation Reform in the Chesapeake Bay Region Ann Pesiri Swanson Executive Director Marel Raub Pennsylvania Director Chesapeake Bay Commission

2. Over 90% of the Bay and its tidal rivers are impaired due to low dissolved oxygen levels and poor water clarity, all related to nutrient and sediment pollution. Impaired Water

3. Agriculture offers one of the greatest opportunities to improve water quality in the Bay and its tributaries Nitrogen Phosphorus 2003 Loads to the Tidal Chesapeake Bay by Source

4. WHY? Agriculture is a Vital Component of the Bay’s Economy, Landscape and Culture • Nearly one-quarter of the land use in the watershed is agricultural • 13% of the region’s gross domestic product • 5.7% of the nation’s agricultural cash receipts • Crops make up two-thirds of ag production: corn, wheat and soybeans dominant tradable commodities • Poultry and milk are highest valued animal commodities— poultry ranks sixth to ninth and PA dairy ranks fourth in U.S. production

5. WHY?Agricultural practices are some of the most cost-effective to reduce nutrient and sediment pollution • Wastewater treatment plant upgrades • Animal diet and feed adjustments • Nutrient management • Enhanced nutrient management • Conservation tillage • Cover crops

6. Tributary Strategies are designed to remove the Bay from the impaired waters list. All rely heavily upon agriculture to meet their water quality goals. The Chesapeake Bay Watershed is broken into 36 Tributary Strategy Basins

7. Every state is relying on agriculture to achieve the Tributary Strategy reductions(2003-2010 Tributary Strategy delivered load reduction) Source: MD, VA, PA, DE, WV, & NY State Tributary Strategies

8. Buffer to Protect Water ways FACT: The FEDERAL FARM BILLis the primary funding source to enhance funding for agricultural conservation measures in the Bay watershed… Proper Nutrient & Manure Management Stream bank Fencing

9. Of a $94 B bill, about $34 billion actually goes to the farmers How the $34 billion breaks down: Source: USDA budget summary for 2005

10. Farm Bill Conservation Support to Pennsylvania, FY ’06 • Receive approximately $40 M in Federal Funds EQIP, FRPP, WRP, WHIP, CSP, AMA, CRP, CREP • Need $215/year to meet Tributary Strategy goals • In general, state funding provides 25% cost-share • Farmers usually cost-share another 25%

11. ORIGINS OF THE “FEDERAL FARM BILL REFORM PROJECT” • CBC Cost-Effectiveness Report • Blue Ribbon Panel Report • Directive #04-2 “. . .establishment of an ad hoc workgroup composed of representatives from each of the signatory and headwater states, as well as the Chesapeake Bay Commission, to identify opportunities associated with the 2007 Farm Bill for further nutrient and sediment reduction in the Chesapeake Bay region. The group will develop a regional proposal in 2005.”

12. 2005 Activities Federal Farm Bill Reform Project • 9 Months • 6 states • Phase I: 25 Listening Sessions  Draft • Phase II: 15 Listening Sessions  Report • Adoption of Recommendations by Executive Council: November 29, 2005 • 2006: Now in Phase III

13. RECOMMENDATIONSOur Guiding Principle “Support the successful attainment of the Chesapeake Bay nutrient and sediment reduction goals while strengthening the economic viability of agriculture in the watershed.”

14. Encourage Innovation Technical assistance Risk management tools Market Development Allow for Flexibility Between States ex. Farmland Preservation, Energy Outcome-Driven Awards based on pollution reduced, not acres enrolled Routine monitoring and tracking of results THREE THEMES EMERGED

15. 2007 FARM BILL REFORM RECOMMENDATIONS Report Breaks Down into 3 Categories: • Funding Needs • Overarching Issues • Specific Program Reform Ideas

16. PRIMARY RECOMMENDATIONS 5 Top Priorities 1. Establish a Regional Stewardship Fund 2. Implement the Conservation Security Program as an entitlement program 3. Target funds to maximize environmental benefits 4. Enhance the viability of agriculture 5. Expand technical assistance and outreach

17. PRIORITY #1. Regional Stewardship Funds • Similar to Block Grants • Focus on Water Quality • Funding to states or multiple states • Region would have to have established goals and specific objectives • Practices would have to result in measurable water quality gains • 75:25 Federal state match

18. PRIORITY#2. Conservation Security Program • Financially reward farmers for the environmental benefits that they provide. • Entitlement program or at least substantially expanded to all watersheds • Continuous sign-up basis • Incorporate performance-based payments

19. PRIORITY #3. Maximize Environmental Benefits • Incentives to reward stewardship • Possibly tiered • Target funds to achieve local and regional water quality improvements • Shift from program- to outcome-driven • Increased flexibility • Conservation Innovation Grants • Measure results

20. PRIORITY #4. Viability of Agriculture • Market Development • Renewable Energy • Risk Management • Cover risk associated with innovation • Increase maximum guaranteed loans

21. PRIORITY #5.Technical Assistance • Increase funding • Adjust funding formulas from 15-25% (formulated on a state-by-state basis) so that the provision of technical assistance is a given. • Expand TA to support enhanced nutrient management, manure management and feed formulation. • Make greater use of TSPs

22. ROLE OF STATE LEGISLATORS • Encourage cooperation/communication • Ex. Today’s hearing • Communicate importance of agriculture and the Farm Bill to federal leaders • Direct communication • Participation in national forums, such as NCSL • Demonstrate leadership at state level • Continue/increase long-term support for state cost-share and technical support to farmers and support for agriculture in general

23. Ann Pesiri Swanson Chesapeake Bay Commission 60 West Street, Suite 406 Annapolis, Maryland 21401 410-263-3420 annswanson@covad.net Marel Raub G-O5 North Office Building Harrisburg, Pennsylvania 17120 717-772-3651 marelraub@covad.net