Agricultural Conservation Easement Program: Between Farm Bills
Agricultural Conservation Easement Program: Between Farm Bills
June 28, 2022
The Agricultural Conservation Easement Program (ACEP) was created in the 2014 Farm Bill through the combination of the Wetlands Reserve Program (WRE), the Grassland Reserve Program, and the Farm and Ranch Lands Protection Program. The program is administered through Natural Resources Conservation Service (NRCS,) and is divided into two tracks: a wetland easement component and an agricultural land easement (ALE) component.
The purpose of the wetland easement component is to restore, protect, and enhance the values and functions of wetlands that have been in agricultural production. The agricultural land easement component is utilized to protect farms from development and ensure farm viability for future generations by preventing land (including rangeland, pasture, and shrubland) from being converted to other uses.
Under the agricultural land easement track, ACEP funds are awarded to non-profit organizations, state and local agencies, and Indian tribes to purchase easements. These easements are permanent, or in states that do not allow permanent easements, as long-term as allowed by law. Under the wetland easement track, funding goes directly to landowners for the purchase of 30-year easements, or in states that do not allow permanent or 30-year easements, as long-term as possible.
Farm Bill Changes
The 2018 Farm Bill gave ACEP a major increase in annual funding – adding $200 million per year as compared to levels under the 2014 Farm Bill. This increase restored the cut that ACEP suffered after three previously separate easement programs – the Wetlands Reserve Program, the Grassland Reserve Program, and the Farm and Ranch Lands Protection Program – were consolidated into ACEP under the 2014 Farm Bill. The 2018 Farm Bill, however, does not dictate how ACEP funding should be divided between wetland easements and agricultural land easements – that decision is left to USDA. USDA has historically allocated funding based on demand.
The 2018 Farm Bill also added new provisions to prioritize projects that maintain farm viability and land affordability.
The 2018 Farm Bill also retains the established structure of ACEP, making a limited number of policy and structural changes. For example, the new farm bill expands ALE to include buy-protect-sell transactions, which allow land owned by an organization to be eligible for ACEP. This is subject to the transfer of ownership to a farmer or rancher within three years following the acquisition of the agricultural land easement. It also adds a new priority for applications for the purchase of an agricultural land easement that maintains the agricultural viability of the land.
Additionally, the new farm bill allows for entities holding an ALE to add deed terms that address mineral development. Within ALE, the 2018 Farm Bill also removes the requirement that an easement be subject to an agricultural land easement plan, unless the land is highly erodible. The bill does, however, include report language encouraging USDA and eligible entities to work with landowners entering into an ALE easement to undertake conservation planning activities on the land in order to maximize the environmental value of the protected land.
In terms of the Wetland Reserve Easement (WRE) component of ACEP, the 2018 Farm Bill includes additional provisions for a WRE plan to protect and enhance the wetland functions and the values of land currently enrolled in WRE. The farm bill also includes direction around the establishment or restoration of a hydrologically appropriate native community or alternative naturalized vegetative community as part of a wetland easement, in order to support or benefit wetland wildlife.
Finally, Section 2208(a) of the 2018 Farm Bill establishes a new provision that directs USDA to give priority to land enrolled in a Conservation Reserve Transition Incentive Program (CRP-TIP) contract within ACEP.
ACEP (and several other conservation programs) was administered under the existing regulations of the 2014 Farm Bill until NRCS developed implementation plans for the new provisions of the 2018 Farm Bill. NRCS was directed by the 2018 Farm Bill to have their new implementation plans in place in time for the fiscal year (FY) 2020 sign-up period. More details on the specific changes that went immediately into effect for FY 2019 are available here.
NRCS ultimately put in place a Final Rule (FR) for 2018 Farm Bill changes to ACEP on February 4, 2021. This rule tweaked the Interim Final Rule (IFR) implemented and was posted for public comment on January 6, 2020. NSAC submitted a formal comment requesting changes to the IFR in 2020 and is pleased to see a number of our changes adopted. Of greater concern are the issues that remain unaddressed.
One clear win is that the 2018 Farm Bill directed NRCS to prioritize parcels enrolled in the Conservation Reserve Transition Incentive Program (CRP-TIP) for acceptance into ACEP. The IFR did not establish this priority; however the final does. NSAC applauds this change as CRP-TIP is an important tool for assisting beginning and Black, Indigenous, and people of color (BIPOC) producers in accessing land and pairing the program with ACEP helps ensure long term viability for participating farms.
Similarly, the IFR clarifies that ACEP participants writing succession plans may transfer farms to non-family members. Further, the definition of succession plan explicitly states that such plans should provide opportunities for ‘historically underserved landowners,’ an agency term the IRF notes includes BIPOC and beginning farmers and ranchers. This is an important change that supports both retiring farmers and first generation farmers, BIPOC and otherwise, seeking to maintain agricultural stewardship on ACEP acres.
Some changes in the final rule were a bit more ambiguous. NSAC called for a consistent definition of ‘agricultural viability’ used throughout the rule and the program as a whole, that would include accessibility for beginning farmers and succession planning as key components of agricultural viability. NSAC even submitted draft language for NRCS to use. However, the agency did not make this change, and instead stated the existing definition of ‘future viability’ was expansive enough to address our concerns. To cement this position, NRCS added succession planning to the definition of ‘future viability’. Given the changes to what is possible through succession planning in ACEP, this is a step towards greater land access for beginning and BIPOC producers that NSAC advocated for, even if it did not come in our preferred form.
NSAC also expressed concern in our comment about matching requirements for the Wetland Reserve and Enhancement Program (WREP), which historically required only a 5% match from participants. NRCS responded directly to our comment in the final rule by stating no set amount of match is required for WREP and that any required match will be determined annually at the agency’s discretion. This is a partial win in that a high match amount is not required by default. However, high match requirements are not prohibited either, leaving a lot to NRCS’ discretion each year.
While the 2018 Farm Bill did away with requirements for conservation planning, except on Highly Erodible Cropland, NRCS maintained discretion to prioritize applicants to ACEP that completed conservation plans. The IFR asserts that this discretion is best utilized at the state level and encourages state offices to support conservation planning associated with ACEP applications. However, the IFR does not fully utilize agency discretion by establishing a national ranking criteria for conservation planning. NSAC is glad to see NRCS maintain some emphasis on conservation planning, but believes a national criteria establishing preference for parcels completing conservation plans would be a better exercise of agency authority.
Finally, NSAC would prefer that cash match requirements for Agricultural Land Easements (ALE) were eliminated entirely. This would maximize participation in the program by diverse stakeholders. This change was made in the 2018 Farm Bill and implemented by the agency, but NRCS has maintained a preference in national ranking criteria for bids containing a cash match. In short, the match situation improved, but there is room for more change.
Some changes NSAC advocated for were simply not made. NSAC called for state-level ranking criteria that prioritize applications that support BIPOC and beginning farmers, even offering sample text to include in the FR. NRCS stated the rule does this as written and refused to make any changes.
NSAC also called for a national ranking criteria prioritizing applications utilizing affordability deed terms, like Options to Purchase at Agricultural Value (OPAV). The FR claimed existing rules provided sufficient opportunity to use OPAVs and similar tools within ALE and failed to create a national ranking criteria supporting applications that include them.
Our comment also called on NRCS to prioritize ALE landowner applications to both the Conservation Stewardship Program (CSP) and the Environmental Quality Incentives Program (EQIP). NRCS responded that CSP and EQIP priorities are set by State Technical Advisory Committees and failed to establish preferential treatment for ALE acres within these programs.
Given that Confined Animal Feeding Operations (CAFOs) cause significant environmental harm, NSAC called on NRCS to bar CAFOs from enrollment in ACEP. NRCS refused to do this and asserted its authority to enroll CAFOs on a case-by-case basis.
NSAC called for a longer possible extension for applicants using the complicated Buy-Protect-Sell (BPS) option to preserve farmland. NRCS rejected this idea.
Our comment also called for the allowed use of OPAVs and similar tools in BPS transactions. NRCS stated that encumbered land must be sold at agricultural value to an eligible farmer, so this explicit change was not needed.
Finally, two additional NSAC concerns were not addressed in any way in the FR. NSAC called for the animal waste storage facilities to count towards a parcel’s impervious surface limit, therefore minimizing ACEP’s ability to protect and preserve bad manure management practices. NSAC also called for the creation of a lease-to-own option within BPS transactions to allow for greater program participation by limited-resource farmers. Neither suggestion was addressed by NRCS and thus neither change was made to ACEP.
Farm Bill 2023
With the 2018 Farm Bill set to expire in September of 2023, the next Farm Bill represents a massive opportunity to address both the shortcomings of the 2018 Bill and the missteps made in the implementation process. The new Farm Bill is also an opportunity to address new challenges that have arisen within the program, as well as reimagine ACEP to address new and emerging concerns of producers. NSAC will work hard throughout the Farm Bill cycle to ensure crucial elements of ACEP are preserved and that needed changes are made so the program best serves our members and sustainable producers across the country.