As if the budget and immigration battles that have dominated the news cycle and legislative calendar weren’t enough, Congress has another big-ticket, must-pass piece of legislation on the horizon. The current iteration of the farm bill expires this September, and Congress will soon begin negotiating the massive bill that authorizes funding for federal food and farm-support programs.
If the last farm bill debate is any indication, the process could be contentious and drawn-out. Fortunately for lawmakers, there is a glimmer of bipartisan agreement on some of the bill’s key components—including, perhaps surprisingly, funding for federal conservation programs.
Reauthorized every five years, the farm bill allocates roughly $5 billion annually in conservation funding through the U.S. Department of Agriculture (USDA). Ever since the 1930s, the farm bill has been the largest single source of conservation funding in the United States. Water quality, habitat management and other environmental programs have joined soil conservation in the suite of issues that USDA conservation programs cover.
However, according to a new report by the left-of-center Center for American Progress (CAP) and right-of-center R Street Institute, conservation and management of natural resources remain subject to chronic underinvestment. Recent research suggests that global philanthropic and government expenditures cover only 10-15 percent of the $300 billion in annual spending needed to maintain and restore ecosystems.
At the same time, lawmakers negotiating this year’s farm bill will face serious budget constraints. In this environment, R Street and CAP highlight a path forward that would give taxpayers more bang for their buck by effectively doubling the impact of working lands programs under the farm bill’s conservation title. The proposal relies on leveraging private investment in environmental markets. Studies suggest that at least $3 billion in private capital is available to fund things like clean air, clean water and wildlife habitat, though these markets are still just emerging.
Lawmakers can use the farm bill to provide investments to pull this capital off the sidelines and into conservation projects. One option is to allow the USDA to support what are known as pay-for-success contracting models, which award payment to contractors only when a desired environmental outcome is achieved. Since payment is tied to measurable outcomes, these models give taxpayers a better return on their investment and enhance efficiency, while also creating better environmental outcomes.
An example of pay-for-success at work can be seen in Nevada’s efforts to save the greater sage-grouse. To protect the endangered bird, the state created a system that gives financial incentives to landowners who restore its habitat. When an evaluator verifies that a landowner has done so successfully, the owner earns habitat credits that can be sold to developers. In Arkansas, rice farmers can earn carbon credits in exchange for measurable reductions in the methane emissions stemming from the crop’s production. These credits have been bought by Microsoft, as the company sought to offset its own emissions.
In addition to supporting pay-for-success contracting models, the next farm bill could support private investment in projects like organic farming by creating a revolving loan-fund within the Natural Resources Conservation Service. These projects are costly to start but generate good returns.
The CAP/R Street report also recommends that Congress expand the Conservation Innovation Grants program, which has supported dozens of novel conservation programs, and calls for investment in timely, publicly available research on the economic value of conservation. Some conservation funds should also be devoted to research on how and why landowners participate in conservation programs, in order to better understand their motivations.
Lawmakers have many tough decisions to make this farm bill cycle, but smarter investment in conservation should be an easy one. The farm bill reauthorization provides a unique opportunity to invest in market-oriented solutions for private lands conservation, which will lead to better economic and environmental outcomes for us all.