Sometimes the best way to move forward is to shift into reverse. If we want to continue increasing our successes in agricultural conservation by expanding acreage treated, reducing erosion, upgrading waste management and conserving energy, we need to look at ways to accomplish more with less. Market-based approaches, such as reverse auctions, might help us extend money to support conservation. It’s a strategy I believe Congress should seriously consider for the next farm bill.
In the last few weeks, the press has been reporting that House Ag Committee Chair Mike Conaway has a draft farm bill ready to go. The word is he’s just waiting until next year to introduce it.
One of the issues that will certainly be raised is the size of the Conservation Reserve Program (CRP). Some people would like to see acreage increase while others believe CRP should remain the same or decrease. Some like Iowa Senator Joni Ernst point out that acreage locked in CRP is land unavailable to beginning farmers who would love to be able to rent or buy land to get started in farming. The concern is that some landowners may find it more profitable to re-sign CRP contracts with Uncle Sam than rent to those eager to move forward in agricultural careers.
As always, conservation will be competing against many other interests and priorities for limited dollars in the next farm bill. We could stretch the value of the funding allotted to conservation for both short-term and long term conservation efforts by holding reverse auctions for both CRP and the Agricultural Conservation Easement Program (ACEP). Basically, instead of letting landowners know what payment rate the government is offering, the USDA would ask producers to make the agency an offer—propose the parcel and the price—for the land they wish to place in CRP or ACEP. In previous farm bills, Congress has placed acreage limits on both programs, and USDA has managed the program accordingly. But maybe fiscal constraints will be more important than acreage limitations as we move forward.
When I was chief of Natural Resources Conservation Service (NRCS), we established a pilot project for reverse auctions for the Wetlands Reserve Program (WRP), since superseded by ACEP. As a result, the agency was able to acquire easements through lower payments. However, since WRP operated under a congressionally imposed acreage cap rather than budget constraints, the agency did not pursue this cost-saving approach further. Now is the time to take another look. Savings realized from a market-based approach like a reverse auction could maximize easement enrollments within a tight budget, while also ensuring that rates reflect the market place.
The same strategy could work for CRP, providing acreage enrolled at a lower cost. And, in some cases, it might provide more opportunity for beginning farmers to rent or purchase good land currently enrolled in CRP at a competitive rate that would enable them to get started or expand.
As we look toward the next farm bill, everyone wants to get the biggest bang for the buck for every program. I’d especially like to see us try creative ways to stretch our limited conservation dollars. I think reverse auctions are a great strategy to harness market forces to work in favor of farmers, would-be farmers and taxpayers.
About the author: Bruce I. Knight, Principal, Strategic Conservation Solutions, was the Under Secretary for Marketing and Regulatory Programs at the U.S. Department of Agriculture (USDA) from 2006 to 2009. From 2002 to 2006, Knight served as chief of Natural Resources Conservation Service.
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