Conservation Stewardship Program, 37499-37519 [E9-17812]

Agencies

• DEPARTMENT OF AGRICULTURE
• Commodity Credit Corporation

[Federal Register Volume 74, Number 144 (Wednesday, July 29, 2009)]
[Rules and Regulations]
[Pages 37499-37519]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-17812]


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DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1470

RIN 0578-AA43


Conservation Stewardship Program

AGENCY: Commodity Credit Corporation, Natural Resources Conservation 
Service, United States Department of Agriculture.

ACTION: Interim final rule with request for comment.

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SUMMARY: Section 2301 of the Food, Conservation, and Energy Act of 2008 
(the 2008 Act) amended the Food Security Act of 1985 to establish the 
Conservation Stewardship Program. The purpose of the Conservation 
Stewardship Program is to encourage producers to address resource 
concerns in a comprehensive manner by undertaking additional 
conservation activities, and improving, maintaining and managing 
existing conservation activities. This interim final rule, with request 
for comment, sets forth the policies, procedures, and requirements 
necessary to implement the Conservation Stewardship Program as 
authorized by the 2008 Act amendments.

DATES: Effective Date: This interim final rule is effective July 29, 
2009.
    Comment Date: Submit comments on or before September 28, 2009.

ADDRESSES: You may send comments (identified by Docket Number NRCS-IFR-
09004) using any of the following methods:
     Government-wide rulemaking Web site: Go to https://regulations.gov and follow the instructions for sending comments 
electronically;
     E-mail directly to NRCS: CSP2008@wdc.usda.gov;
     Mail: Gregory Johnson, Director, Financial Assistance 
Programs Division, U.S. Department of Agriculture, Natural Resources 
Conservation Service, 1400 Independence Avenue, SW., Room 5237-S, 
Washington, DC 20250-2890;
     Fax: (202) 720-4265;
     Hand Delivery Room: USDA South Building, 1400 Independence 
Avenue, SW., Room 5237-S, Washington, DC 20250, between 9 a.m. and 4 
p.m., Monday through Friday, except Federal Holidays. Please ask the 
guard at the entrance to the South Building to call (202) 720-4527 in 
order to be escorted into the building;
     This interim final rule may be accessed via the Internet. 
Users can access the NRCS homepage at https://www.nrcs.usda.gov; select 
the Farm Bill link from the menu; select the Interim final link from 
beneath the Final and Interim Final Rules Index title. Persons with 
disabilities who require alternative means for communication (Braille, 
large print, audio tape, etc.) should contact the USDA TARGET Center 
at: (202) 720-2600 (voice and TDD).

FOR FURTHER INFORMATION CONTACT: Gregory Johnson, Director, Financial 
Assistance Programs Division, U.S. Department of Agriculture, Natural 
Resources Conservation Service, 1400 Independence Avenue, SW., Room 
5237-S, Washington, DC 20250; Phone: (202) 720-1845; Fax: (202) 720-
4265; or e-mail CSP2008@wdc.usda.gov.

SUPPLEMENTARY INFORMATION:

Regulatory Certifications

Executive Order 12866

    Pursuant to Executive Order 12866 (FR Doc. 93-24523, September 30, 
1993), this interim final rule with request for comment is an 
economically significant regulatory action since it results in an 
annual effect on the economy of $100 million or more. The 
administrative record is available for public inspection in Room 5831 
of the South Building, USDA, 1400 Independence Avenue, SW., Washington, 
DC. Pursuant to Executive Order 12866, NRCS conducted an economic 
analysis of the potential impacts associated with this program. A 
summary of the economic analysis can be found at the end of this 
preamble and a copy of the analysis is available upon request from 
Gregory Johnson, Director, Financial Assistance Programs Division, 
Natural Resources Conservation Service, Room 5237-S, Washington, DC 
20250-2890 or electronically at: https://www.nrcs.usda.gov/programs/csp/ 
under the CSP Rules and Notices with Supporting Documents title.

Regulatory Flexibility Act

    NRCS has determined that the Regulatory Flexibility Act is not 
applicable to this interim final rule because NRCS is not required by 5 
U.S.C. 553, or any other provision of law, to publish a notice of 
proposed rulemaking with respect to the subject matter of this rule.

Environmental Analysis

    Availability of the Environmental Assessment (EA) and Finding of No 
Significant Impact (FONSI). A programmatic environmental assessment has 
been prepared in association with this rulemaking. The analysis has 
determined that there will not be a significant impact to the human 
environment and as a result an Environmental Impact Statement is not 
required to be prepared (40 CFR part 1508.13). The EA and FONSI are 
available for review and comment for 30 days from the date of 
publication of this interim final rule in the Federal Register. A copy 
of the EA and FONSI may be obtained from the following Web site: https://www.nrcs.usda.gov/programs/Env_Assess/. A hard copy may also be 
requested from the following address and contact: Matt Harrington, 
National Environmental Coordinator, Ecological Sciences Division, NRCS, 
1400 Independence Ave., SW., Washington, DC 20250. Comments from the 
public should be specific and reference that comments provided are on 
the EA and FONSI. Public comment may be submitted by any of the 
following means: (1) E-mail comments to NEPA2008@wdc.usda.gov; (2) e-
mail to e-gov Web site at https://www.regulations.gov; or (3) written 
comments to: Matt Harrington, National Environmental Coordinator, 
Ecological Sciences Division, NRCS, 1400 Independence Ave., SW., 
Washington, DC 20250.

Civil Rights Impact Analysis

    NRCS has determined through a Civil Rights Impact Analysis that the 
interim final rule discloses no disproportionately adverse impacts for 
minorities, women, or persons with disabilities. The data presented 
indicates producers who are members of the protected groups have 
participated in NRCS conservation programs at parity with other 
producers. Extrapolating from historical participation data, it is 
reasonable to conclude that NRCS programs, including CSP, will continue 
to be

[[Page 37500]]

administered in a non-discriminatory manner. Outreach and communication 
strategies are in place to ensure all producers will be provided the 
same information to allow them to make informed compliance decisions 
regarding the use of their lands that will affect their participation 
in USDA programs. CSP applies to all persons equally regardless of 
their race, color, national origin, gender, sex, or disability status. 
Therefore, the CSP rule portends no adverse civil rights implications 
for women, minorities and persons with disabilities.

Paperwork Reduction Act

    Section 2904 of the 2008 Act provides that the promulgation of 
regulations and the administration of Title II of the 2008 Act, which 
contain the amendments that authorize CSP, shall be made without regard 
to chapter 35 of Title 44 of the United States Code, also known as the 
Paperwork Reduction Act. Therefore, NRCS is not reporting recordkeeping 
or estimated paperwork burden associated with this interim final rule.

Government Paperwork Elimination Act

    NRCS is committed to compliance with the Government Paperwork 
Elimination Act, which requires Government agencies, in general, to 
provide the public the option of submitting information or transacting 
business electronically to the maximum extent possible. To better 
accommodate public access, NRCS has developed an online application and 
information system for public use.

Executive Order 12988

    This interim final rule has been reviewed in accordance with 
Executive Order 12988, Civil Justice Reform. The provisions of this 
interim final rule are not retroactive. The provisions of this interim 
final rule preempt State and local laws to the extent that such laws 
are inconsistent with this interim final rule. Before an action may be 
brought in a Federal court of competent jurisdiction, the 
administrative appeal rights afforded persons at 7 CFR parts 614, 780, 
and 11 must be exhausted.

Federal Crop Insurance Reform and Department of Agriculture 
Reorganization Act of 1994

    Section 304 of the Department of Agriculture Reorganization Act of 
1994, Public Law 103-354, requires that a risk assessment be prepared 
in conjunction with any notice of proposed rulemaking for a major 
regulation. Pursuant to Section 2904 of the 2008 Act, NRCS is 
promulgating this interim final rule, and therefore, a risk assessment 
is not required. However, risks associated with the interim final rule 
have been assessed pursuant to the analysis prepared in compliance with 
Executive Order 12866.

Unfunded Mandates Reform Act of 1995

    NRCS assessed the effects of this rulemaking action on State, 
local, and tribal governments, and the public. This action does not 
compel the expenditure of $100 million or more by any State, local, or 
tribal governments, or anyone in the private sector; therefore, a 
statement under section 202 of the Unfunded Mandates Reform Act of 1995 
is not required.

Economic Analysis--Executive Summary

    Pursuant to Executive Order 12866, Regulatory Planning and Review, 
the Natural Resources Conservation Service (NRCS) conducted a cost-
effectiveness analysis (CEA) of the Conservation Stewardship Program 
(CSP) as formulated for the interim final rule. This CEA describes how 
financial assistance (FA) and technical assistance (TA) are made 
available through CSP with the program objective being to have 
producers adopt additional conservation activities. The CEA attempts to 
compare the impact of these activities in generating environmental 
benefits with program costs. Many of these improvements can produce 
beneficial impacts concerning on-site resource conditions (such as the 
maintenance of the long-term productivity of their land), and can 
potentially produce significant off-site environmental benefits, such 
as reduced non-point source pollution, improved air quality due to 
lower carbon dioxide emissions, and enhanced wildlife habitat.
    In considering alternatives for implementing CSP, the United States 
Department of Agriculture (USDA) followed the legislative intent to 
establish a clear and transparent method and determine in an open 
participatory process, potential participants' current level of 
conservation stewardship attainment levels in order to gauge their 
environmental impact and compare them. The CSP is a voluntary program, 
and therefore, the program is not expected to impose any obligation or 
burden upon agricultural producers and non-industrial private 
forestland owners who choose not to participate.\1\ Congress authorized 
the enrollment of 12,769,000 acres for each fiscal year (FY) for the 
period beginning October 1, 2008, and ending on September 30, 2017. For 
fiscal years 2009 through 2012, CSP has been authorized 51,076,000 
acres (four years multiplied by a 12,769,000 acre program cap per 
year).
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    \1\ An impact could be expected in cases where CSP funds 
activities that lead to large increases of certain environmental 
services and goods where those markets are beginning to get started.
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    This analysis builds on the former Conservation Security Program 
introduced in 2004 with its foundation set in the Farm Security and 
Rural Investment Act of 2002, Public Law 107-171 (2002 Farm Bill). 
While the spirit of both programs is similar, the main focus of the 
2008 Act CSP is to assist landowners with adopting additional 
conservation enhancements. This focus is characterized by the emphasis 
placed on new enhancement activities selected by participants in the 
application ranking process. However, basic eligibility criteria and 
ranking will also consider the benchmark level of stewardship and 
planned conservation activities to be adopted (if needed in those cases 
where participants do not meet the stewardship threshold requirements). 
The environmental benefits expected to be generated by enhancement and 
maintenance activities are based on extrapolations of the environmental 
benefits generated from many traditional NRCS conservation practices 
(these are described in detail in Appendix B). However, while 
environmental impacts from many traditional NRCS conservation practices 
have been assessed, the impacts generated from enhancement and 
maintenance activities are not well understood. In conducting economic 
analyses where benefits are not well understood or difficult to 
measure, but costs are available, economists often turn to a cost-
effectiveness analysis (CEA) framework over the more traditional 
benefit-cost analysis approach. The environmental impacts from 
enhancement and maintenance activities are not well understood, and 
therefore, NRCS is adopting the CEA approach for this CSP economic 
analysis.

Methodology Employed in This Study

    As stated above, many conservation practices have been extensively 
studied, but similar studies pertaining to enhancement activities have 
not been conducted. As a result, estimation of a true baseline of 
environmental conditions before and after CSP implementation is not 
possible. The methodology employed in this study involves the modeling 
of baseline environmental conditions through Microsoft Access. The 
model is complex

[[Page 37501]]

because it is based on the major decision rules in the Conservation 
Measurement Tool (CMT). The CMT refers to the procedures developed by 
NRCS to estimate the existing and proposed conservation performance to 
be achieved by a producer. This model has a high degree of uncertainty 
because CSP is a new program and it is difficult to project the 
potential pool of applicants without historical enrollment data. This 
study's model distills the basic rules of the CMT and couples it with a 
historical data on producer characteristics. These data include 
internal NRCS program data, past studies on conservation stewardship, 
other USDA data and information as well as expert opinion from agency 
technology and program specialists. This expert opinion was needed in 
making several key assumptions about expected producer response to CSP 
and in turn likely participation as well as resource response to 
conservation activities. The model applies questions, similar to those 
in the CMT, to a representative set of farms constructed with the 
historical data. Using simulated responses for the representative farms 
to the questions in the CMT regarding the applicant's agriculture 
operation, the model predicts expected participation by land-use type 
and farm type along with expected program costs and conservation 
performance points.
    The responses can be grouped by CSP's ranking factors. The first 
ranking factor, RF-1, is the level of conservation treatment on 
priority resource concerns at the time of application. RF-1 is used to 
establish an initial or baseline ``hypothetical'' index of 
environmental conditions for each applicant's operation. The total 
level of conservation performance points reflects the number of 
existing and planned conservation activities multiplied by a range of 
points from -5 to +5 for each activity; producers are assigned a point 
estimate based on their response on the CMT. Individual applicant's 
conservation performance points are aggregated to create a 
``hypothetical'' baseline of environmental conditions for the Nation 
(in this case, the Nation is that sub-set of all farmers and ranchers 
by farm type and land-use type expected to apply for CSP).
    Based on responses to the remaining three ranking factors \2\ in 
the CMT, the model then produces an index of environmental benefits 
reflecting the total level of additional enhancement activities 
selected by participants to be addressed (the ``additionality'' point 
total). Given this basic data on potential participants' stewardship 
benchmarks and willingness to adopt new activities, the model compares 
expected producer activity costs with their expected CSP annual 
payments. The major producer decision to participate in CSP in the 
model is if expected CSP payments offset at least 50 percent of the 
costs of adopting the associated conservation activities.
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    \2\ These remaining three ranking factors are: RF-2 is the 
degree to which treatment on priority resource concerns increases 
conservation performance by the end of the CSP contract; RF-3 is the 
number of priority resource concerns to be treated to meet or exceed 
threshold by the end of the CSP contract; and, RF-4 is the extent to 
which other resource concerns will be addressed to meet or exceed 
the stewardship threshold by the end of the CSP contract. These 
three ranking factors determine the level of ``additionality'' 
created through the new enhancement activities associated with the 
CSP contract, whereas the previous ranking factor establishes the 
benchmark level of conservation stewardship.
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    The baseline in this analysis represents a pre-statute scenario. 
Due to the fact that each policy scenario selects applicants from 
different pools, no ``generic'' baseline scenario could be determined. 
Instead the analysis adjusts the level of benchmark conservation 
performance points in each scenario to account for what would have been 
generated without CSP (pre-statute).
    The model allows USDA to verify if the national CSP average per 
acre annual payment rate has been met under a number of different 
program designs. More importantly, it can also estimate the trade-off 
between different policy designs and expected conservation performance 
outcomes in a cost-effectiveness framework. Such program design choices 
include varying the relative weights across ranking factors used in the 
participant ranking process and the expected results from varying other 
program parameters, such as relative weights on different priority 
resource concerns and stewardship threshold levels. The main policy 
options studied in this analysis involve the first item listed above; 
that is, the impact on acreage, conservation performance points, and 
program costs from associated options varying the relative weights 
across ranking factors used in the participant ranking process.

Conclusions and Recommendations

    Results of alternative policy options suggest that there may be a 
set of general conclusions that policy makers should consider. These 
include:
     The policy constraints on the statutory requirements for 
the program posed serious challenges for the model developers. It is 
obvious that these constraints will pose similar challenges in 
implementing this program. In particular, achieving the national annual 
acreage enrollment goal at the designated average costs per acre 
mandated in legislation will be a challenge given the heterogeneity of 
producers' baseline resource conditions and demand for enhancements.
     When large operations enter into the program and reach 
their annual contract limit ($40,000), CSP gains program acreage, but 
pushes per acre program costs down. By effectively lowering total 
program costs on a per acre basis, the additions of large operations 
enable the program to offer higher payment rates for other farm types 
and sizes, holding all else constant. For example, a 10,000 acre wheat 
farm in Montana that ``hits'' its payment limitation would be recorded 
as having a $4 per acre program cost ($40,000 divided by 10,000 acres).
    Conservation activity costs were adjusted to account for economies 
of scale on the part of large operations. Without such adjustments, 
larger farms tended not to enter into CSP contracts because their per-
acre costs would remain constant as their per-acre payments were 
effectively lowered (as their payment cap was ``hit'' as explained 
above). Thus without such adjustments, their large size increased their 
farm-level costs while at the same time restricted their ability to 
accrue additional CSP payments beyond the payment cap. This finding 
shows the importance that farm size will play in an applicants' 
decision to participate in CSP. It also shows how sensitive actual 
enrollment and program costs are to the types and sizes of farms 
expected to enroll in CSP.
    The ability to place different weights on ranking factors in a 
predictive model provides insights into expected changes in program and 
conservation performance outcomes. Program design is critical in 
satisfying the statutory requirements of this program. In comparing 
several alternative policy options, model results showed that the cost-
based conservation performance point payment levels used in this 
analysis were not capable of achieving the legislated national $18 
average per acre program cost in all options. This is due to the 
changing land-use compositions and conservation performance outcomes 
which resulted under each alternative policy option. They also 
highlight the trade-offs that exist between alternative policy options 
with respect to attaining as close an acreage goal as is mandated; 
program costs; cost-effectiveness; and conservation performance.

[[Page 37502]]

    Comparisons of alternative policy options (see Table 1) indicate 
that enrolled program acreage is maximized by adopting policy option 4 
(PO-4). However, PO-4 violates the national program per acre cost 
constraint. All other alternative policy options produced lower program 
acreage totals as compared with PO-1.
    Comparisons showed that program costs were lowest in PO-2, which 
also showed good cost-effectiveness, but whose program acreage, as 
compared to PO-1 and all other alternative policy options, was the 
lowest. Total program costs were highest with PO-4, which provided 
strong evidence of luring strong participation and production of 
conservation performance points from new enhancements, but violated the 
national program per acre cost constraint.
    Cost-effectiveness estimates suggest that all alternative policy 
options and the baseline produce about the same cost-effectiveness 
(about $0.37 to $0.39 per point on a total point basis). PO-2 and PO-5 
produced the most favorable cost-effectiveness estimates on a total 
point basis, but results are different when benchmark conservation 
performance points are adjusted. Making these adjustments puts PO-3 and 
PO-4 in strong contention for policy consideration.
    Both PO-2 and PO-5 satisfied the national program per acre cost 
constraint. However, both options produced much lower totals of 
conservation performance points than other policy alternatives. In 
addition PO-5 produced a more equitable distribution of program acreage 
across land-use types than any other policy option.
    These comparisons showed that the total conservation performance 
points generated would be maximized in PO-4 and at the least cost-
effectiveness rate on an adjusted point basis. However, PO-4 violates 
the $18 average per acre program cost constraint. In its favor, PO-4 
produces the highest level of conservation performance points emanating 
from new conservation activities. PO-3 attained the next highest 
conservation performance point total, but PO-3 violated the $18 average 
per acre program cost constraint to a greater extent than did PO-4.
    The analysis assumes full participation each year that the program 
is made available. Only Government costs are included in this cost 
estimate given the wide set of possible initial resource conditions and 
enhancement practices likely to be adopted. Because of this diversity 
in initial resource conditions, it was not possible to ascertain 
whether (or to what extent) CSP payments off-set expected costs to 
adopt enhancement and other conservation stewardship activities by 
producers or past costs incurred to attain stewardship thresholds. 
Given this caveat, cumulative program costs for four program sign-ups 
are estimated to be $3.27 billion in constant 2007 dollars, discounted 
at 7 percent. At a 3 percent discount rate, this estimation increases 
to $3.86 billion. These costs assume that the duration of each contract 
is five years and the program duration is offered for four years (FY 
2009 to FY 2012). In the case where program duration is offered for 
nine years (FY 2009 to FY 2017), cumulative program costs for nine 
program sign-ups are estimated to be $6.3 billion using constant 2007 
dollars discounted at 7 percent. At a 3 percent discount rate, this 
estimate increases to $8.1 billion.

             Table 1--Summary of Simulation Results of Program Acreage and Associated Program Costs, by Land-Use Type for CSP Policy Options
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                                                                    Acres funded in program (in millions of       Total program cost (in millions of
                                                                                    acres)                                     dollars)
             Cost per acre                  Policy option \1\    ---------------------------------------------------------------------------------------
                                                                   Cropland   Pasture   Rangeland  Total \2\   Cropland   Pasture   Rangeland    Total
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N/A...................................  No Program \3\..........        0          0          0          0         $0         $0         $0         $0
17.78.................................  PO-1....................        8.3        2.2        1.1       11.6      182.7       18.3        4.5      205.5
15.74.................................  PO-2....................        8.6        1.9        0.9       11.3      160.0       14.6        3.8      178.3
19.25.................................  PO-3....................        9.0        1.6        0.8       11.5      204.2       13.8        3.3      221.3
18.96.................................  PO-4....................        9.0        1.8        0.9       11.8      203.4       15.8        3.7      222.9
16.93.................................  PO-5....................        8.0        2.4        1.2       11.5      170.6       19.5        4.9      195.0
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\1\ PO-1 assumes an equal weight on each ranking factor.
PO-2 assumes a 62.5 percent weight on RF-1 and a 12.5 percent weight on RF-2, RF-3, and RF-4.
PO-3 assumes a 62.5 percent weight on RF-2 and a 12.5 percent weight on RF-1, RF-3, and RF-4.
PO-4 assumes a 62.5 percent weight on RF-3 and a 12.5 percent weight on RF-1, RF-2, and RF-4.
PO-5 assumes a 62.5 percent weight on RF-4 and a 12.5 percent weight on RF-1, RF-2, and RF-3.
\2\ Annual CSP acreage cap is 12.769 million acres with 10 percent allocated to non-industrial private forestland (NIPF) leaving roughly 11.5 million
  acres for cropland, pasture, and rangeland acreage.
\3\ No program scenario assumes that CSP is not available to landowners. As discussed in the text, some level of benchmark conservation performance
  points are assumed to be generated in the absence of CSP. The exact amount is difficult to determine because maintenance of existing conservation
  measures vary due to several factors, such as fluctuations in personal economic conditions and preferences, advancing age, and changing resource
  priorities. In addition, the applicant pool in each alternative policy scenario is made up of different farm types and land-use types. These
  conditions preclude the estimation of a ``generic'' baseline applied to all alternative policy options. As a result, maintenance on existing
  conservation measures is assumed to generate 90 percent of the benchmark conservation performance points estimated in each scenario.


         Table 2--Summary of Simulation Results of the Conservation Performance Points and Cost Effectiveness Indicators for CSP Policy Options
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                                             Benchmark  (in millions of conservation performance points)                         Dollars per point
                                           --------------------------------------------------------------                -------------------------------
             Policy Option \1\                                                                             Total points     Incremental
                                                    Baseline \2\            Incremental     Enhancement                        plus        Total points
                                                                                                                            enhancement
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No Program \2\............................  Indeterminate...............            None             N/A             N/A             N/A             N/A
PO-1......................................  124.47......................           13.83           329.8           468.1           $0.51           $0.38

[[Page 37503]]

 
PO-2......................................  135.36......................           15.04           251.8           402.2            0.56            0.37
PO-3......................................  106.2.......................            11.8           377.2           495.2            0.50            0.39
PO-4......................................  107.46......................           11.94           385.6           505.0            0.49            0.38
PO-5......................................  126.99......................           14.11           309.0           450.0            0.51            0.37
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\1\ PO-1 assumes an equal weight on each ranking factor.
PO-2 assumes a 62.5 percent weight on RF-1 and a 12.5 percent weight on RF-2, RF-3, and RF-4.
PO-3 assumes a 62.5 percent weight on RF-2 and a 12.5 percent weight on RF-1, RF-3, and RF-4.
PO-4 assumes a 62.5 percent weight on RF-3 and a 12.5 percent weight on RF-1, RF-2, and RF-4.
PO-5 assumes a 62.5 percent weight on RF-4 and a 12.5 percent weight on RF-1, RF-2, and RF-3.
\2\ Baseline (pre-statute) assumes that CSP is not offered.
\3\ No program scenario assumes that CSP is not available to landowners. As discussed in the text, some level of benchmark conservation performance
  points are assumed to be generated in the absence of CSP. The exact amount is difficult to determine because maintenance of existing conservation
  measures vary due to several factors, such as fluctuations in personal economic conditions and preferences, advancing age, and changing resource
  priorities. In addition, the applicant pool in each alternative policy scenario is made up of different farm types and land-use types. These
  conditions preclude the estimation of a ``generic'' baseline applied to all alternative policy options. As a result, maintenance on existing
  conservation measures is assumed to generate 90 percent of the benchmark conservation performance points estimated in each scenario.

    NRCS analysis indicates that policy options PO-3 and PO-4 
demonstrated the highest degree of cost-effectiveness and environmental 
performance improvement. As a result, NRCS is giving strong 
consideration to policy options PO-3 and PO-4 for subsequent signup 
periods.
    For the initial signup period, NRCS recommends that the CSP program 
design place equal weight on the considered program ranking factors 
until program performance is established. Given that program 
performance has not been established, NRCS seeks public comment on 
which option best enables NRCS to meet program objectives. In addition, 
NRCS is requesting public comment on the appropriate weighting of the 
five ranking factors to maximize cost-effectively environmental 
benefits while maintaining consistency with the statutory purposes of 
the program. NRCS will consider these public comments when revising the 
weighting of these ranking factors prior to the next subsequent ranking 
period. The CSP rule will be finalized in FY 2010.

Section 2708 of the 2008 Act

    Section 2708, ``Compliance and Performance,'' of the 2008 Act added 
a paragraph to Section 1244(g) of the 1985 Act entitled, 
``Administrative Requirements for Conservation Programs,'' which states 
the following:

    ``(g) Compliance and performance.--For each conservation program 
under Subtitle D, the Secretary shall develop procedures--
    (1) To monitor compliance with program requirements;
    (2) To measure program performance;
    (3) To demonstrate whether long-term conservation benefits of 
the program are being achieved;
    (4) To track participation by crop and livestock type; and
    (5) To coordinate activities described in this subsection with 
the national conservation program authorized under section 5 of the 
Soil and Water Resources Conservation Act of 1977 (16 U.S.C. 
2004).''

    This new provision presents in one place the accountability 
requirements placed on the Agency as it implements conservation 
programs and reports on program results. The requirements apply to all 
programs under Subtitle D, including the Wetlands Reserve program, the 
Conservation Security Program, the Conservation Stewardship Program, 
the Farm and Ranch Lands Protection Program, the Grassland Reserve 
Program, the Environmental Quality Incentives Program (including the 
Agricultural Water Enhancement Program), the Wildlife Habitat Incentive 
Program, and the Chesapeake Bay Watershed initiative. These 
requirements are not directly incorporated into these regulations, 
which set out requirements for program participants. However, certain 
provisions within these regulations relate to elements of Section 
1244(g) of the 1985 Act and the Agency's accountability 
responsibilities regarding program performance. NRCS is taking this 
opportunity to describe existing procedures that relate to meeting the 
requirements of Section 1244(g) of the 1985 Act, and Agency 
expectations for improving its ability to report on each program's 
performance and achievement of long-term conservation benefits. Also 
included is reference to the sections of these regulations that apply 
to program participants and that relate to the Agency accountability 
requirements as outlined in Section 1244(g) of the 1985 Act.
    Monitor compliance with program requirements. NRCS has established 
application procedures to ensure that participants meet eligibility 
requirements, and follow-up procedures to ensure that participants are 
complying with the terms and conditions of their contractual 
arrangement with the government and that the installed conservation 
measures are operating as intended. These and related program 
compliance evaluation policies are set forth in Agency guidance 
(Conservation Programs Manual--440--Part 512 and Conservation Programs 
Manual --440--Part 508) (https://directives.sc.egov.usda.gov/). The 
program requirements applicable to participants that relate to 
compliance are set forth in these regulations in Sec.  1470.6, 
``Eligibility requirements,'' Sec.  1470.21, ``Contract requirements,'' 
Sec.  1470.22 ``Conservation stewardship plan,'' and Sec.  1470.23, 
``Conservation activity operation and maintenance.'' These sections 
make clear the general program eligibility requirements, participant 
obligations for implementing a conservation stewardship plan, contract 
obligations, and requirements for operating and maintaining CSP-funded 
conservation activities.
    Measure program performance. Pursuant to the requirements of the 
Government Performance and Results Act of 1993 (Pub. L. 103-62, Sec. 
1116) and guidance provided by OMB Circular A-11, NRCS has established 
performance measures for its

[[Page 37504]]

conservation programs. Program-funded conservation activity is captured 
through automated field-level business tools and the information is 
made publicly available at: https://ias.sc.egov.usda.gov/PRSHOME/. 
Program performance also is reported annually to Congress and the 
public through the annual performance budget, annual accomplishments 
report, and the USDA Performance Accountability Report. Related 
performance measurement and reporting policies are set forth in Agency 
guidance (GM--340--401 and GM--340--403 (https://directives.sc.egov.usda.gov/)).
    The conservation actions undertaken by participants are the basis 
for measuring program performance--specific actions are tracked and 
reported annually, while the effects of those actions relate to whether 
the long-term benefits of the program are being achieved. The program 
requirements applicable to participants that relate to undertaking 
conservation actions are set forth in these regulations in Sec.  
1470.21, ``Contract requirements,'' Sec.  1470.22 ``Conservation 
stewardship plan,'' and Sec.  1470.23, ``Conservation activity 
operation and maintenance.'' These sections make clear participant 
obligations for implementing, operating, and maintaining conservation 
stewardship activities, which in aggregate result in the program 
performance that is reflected in Agency performance reports.
    Demonstrating the long-term natural resource benefits achieved 
through conservation programs is subject to the availability of needed 
data, the capacity and capability of modeling approaches, and the 
external influences that affect actual natural resource condition. 
While NRCS captures many measures of ``output'' data, such as acres of 
conservation practices, it is still in the process of developing 
methods to quantify the contribution of those outputs to environmental 
outcomes
    NRCS currently uses a mix of approaches to evaluate whether long-
term conservation benefits are being achieved through its programs. 
Since 1982, NRCS has reported on certain natural resource status and 
trends through the National Resources Inventory (NRI), which provides 
statistically reliable, nationally consistent land cover/use and 
related natural resource data. However, lacking has been a connection 
between these data and specific conservation programs.\3\ In the 
future, the interagency Conservation Effects Assessment Project (CEAP), 
which has been underway since 2003, will provide nationally consistent 
estimates of environmental effects resulting from conservation 
practices and systems applied. CEAP results will be used in conjunction 
with performance data gathered through Agency field-level business 
tools to help produce estimates of environmental effects accomplished 
through Agency programs, such as CSP. In 2006 a Blue Ribbon panel 
evaluation of CEAP \4\ strongly endorsed the project's purpose, but 
concluded ``CEAP must change direction'' to achieve its purposes. In 
response, CEAP has focused on priorities identified by the Panel and 
clarified that its purpose is to quantify the effects of conservation 
practices applied on the landscape. Information regarding CEAP, 
including reviews and current status, is available at https://www.nrcs.usda.gov/technical/NRI/ ceap/. Since 2004 and the initial 
establishment of long-term performance measures by program, NRCS has 
been estimating and reporting progress toward long-term program goals. 
Natural resource inventory and assessment, and performance measurement 
and reporting policies are set forth in Agency guidance (GM--290--400; 
GM--340--401; GM--340--403) (https://directives.sc.egov.usda.gov/).
---------------------------------------------------------------------------

    \3\ The exception to this is the Conservation Reserve Program; 
since 1987 the NRI has reported acreage enrolled in CRP.
    \4\ Soil and Water Conservation Society. 2006. Final Report from 
the Blue Ribbon Panel Conducting an External Review of the US 
Department of Agriculture Conservation Effects Assessment Project. 
Ankeny, IA: Soil and Water Conservation Society. This review is 
available at (https://www.nrcs.usda.gov/technical/NRI/ceap/).
---------------------------------------------------------------------------

    Demonstrating the long-term conservation benefits of conservation 
programs is an Agency responsibility. Through CEAP, NRCS is in the 
process of evaluating how these long-term benefits can be achieved 
through the conservation practices and systems applied by participants 
under each of its programs. The CSP program requirements applicable to 
participants that relate to producing long-term conservation benefits 
are located in Sec.  1470.21, ``Contract requirements,'' Sec.  1470.22 
``Conservation stewardship plan,'' and Sec.  1470.23, ``Conservation 
activity operation and maintenance.'' These requirements and related 
program management procedures supporting program implementation are set 
forth in Agency guidance (Conservation Programs Manual 440--Part 512 
and Conservation Programs Manual --440--Part 508).
    Coordinate these actions with the national conservation program 
authorized under the Soil and Water Resources Conservation Act (RCA). 
The 2008 Act reauthorized and expanded on a number of elements of the 
RCA related to evaluating program performance and conservation 
benefits. Specifically, the 2008 Act added a provision stating,

    Appraisal and inventory of resources, assessment and inventory 
of conservation needs, evaluation of the effects of conservation 
practices, and analyses of alternative approaches to existing 
conservation programs are basic to effective soil, water, and 
related natural resources conservation.

    The program, performance, and natural resource and effects data 
described previously will serve as a foundation for the next RCA, which 
will also identify and fill, to the extent possible, data and 
information gaps. Policy and procedures related to the RCA are set 
forth in Agency guidance (GM--290--400 and GM--130--402) (https://directives.sc.egov.usda.gov/).
    The coordination of the previously described components with the 
RCA is an Agency responsibility and is not reflected in these 
regulations. However, it is likely that results from the RCA process 
will result in modifications to the program and performance data 
collected, to the systems used to acquire data and information, and 
potentially to the program itself. Thus, as the Secretary proceeds to 
implement the RCA in accordance with the statute, the approaches and 
processes developed will improve existing program performance 
measurement and outcome reporting capability and provide the foundation 
for improved implementation of the program performance requirements of 
Section 1244(g) of the 1985 Act.

Discussion of Program

    The Food, Conservation, and Energy Act of 2008 (2008 Act) amended 
the Food Security Act of 1985 (1985 Act) to establish the Conservation 
Stewardship Program (CSP) and authorize the program in fiscal years 
2009 through 2012. The purpose of CSP is to encourage producers to 
address resource concerns in a comprehensive manner by: (1) Undertaking 
additional conservation activities; and (2) improving, maintaining, and 
managing existing conservation activities. The Secretary of the United 
States Department of Agriculture (USDA) has delegated authority to the 
Natural Resources Conservation Service (NRCS) to administer CSP.
    Through CSP, NRCS will provide financial and technical assistance 
to eligible producers to conserve and enhance soil, water, air, and 
related natural resources on their land. Eligible lands include 
cropland, grassland,

[[Page 37505]]

prairie land, improved pastureland, rangeland, nonindustrial private 
forest lands, agricultural land under the jurisdiction of an Indian 
tribe, and other private agricultural land (including cropped woodland, 
marshes, and agricultural land used for the production of livestock) on 
which resource concerns related to agricultural production could be 
addressed. Participation in the program is voluntary.
    CSP encourages land stewards to improve their conservation 
performance by installing and adopting additional activities, and 
improving, maintaining, and managing existing activities on 
agricultural land and nonindustrial private forest land. NRCS will make 
funding for CSP available nationwide on a continuous application basis.
    The State Conservationist, in consultation with the State Technical 
Committee and local work groups, will focus program impacts on natural 
resources that are of specific concern for a State, or the specific 
geographic areas within a State. Applications will be evaluated 
relative to other applications addressing similar priority resource 
concerns to facilitate a competitive ranking process among applicants 
who face similar resource challenges.
    The 2008 Act requires NRCS to manage CSP to achieve a national 
average rate of $18 per acre, which includes the costs of all financial 
and technical assistance, and any other expenses associated with 
program enrollment and participation. NRCS will use a producer self-
screening checklist to help potential applicants decide for themselves 
whether CSP is the right program for them and their operation. The 
process focuses on basic information about CSP eligibility requirements 
and contract obligations.
    When examining applicant eligibility, CSP bases determinations on 
how applicants delineate their operation for other USDA programs. 
Specifically, any potential participant must be the operator in the 
Farm Service Agency (FSA) farm records management system. This 
requirement is needed because the FSA record system provides applicant 
eligibility information for Adjusted Gross Income and highly erodible 
land and wetland conservation provisions. Potential applicants who are 
not in the FSA farm records management system, or whose records are not 
current, must establish or update their records prior to making a CSP 
application. The 2008 Act also requires that the agricultural operation 
must include all agricultural land under the effective control of the 
applicant for the term of the proposed contract that is operated 
substantially separate from other operations.
    The 2008 Act directed the development of the conservation 
measurement tool (CMT) to estimate the level of environmental benefit 
to be achieved by a producer in implementing conservation activities. 
The term ``environmental benefit'' used in the context of the CMT is 
misleading. The CMT considers the relative physical effects of existing 
and proposed conservation activities to estimate improvements in 
conservation performance. It does not measure true environmental 
benefits, e.g., tons of carbon sequestered, or tons of soil saved.
    The CMT combines functions of existing NRCS tools for soil and 
water, grazing lands, and wildlife habitat; considers the physical 
effects of conservation activities, such as establishing permanent 
vegetative cover, across natural resource concerns and energy; and 
integrates and supports the processes of inventorying resources, 
determining eligibility, and ranking applications.
    NRCS will assist applicants with completing the inventory of 
resource conditions in the CMT. The inventory will enable the CMT to 
calculate a conservation performance score that will assist in ranking 
applications within State-identified geographic area ranking pools. For 
approved applicants, NRCS will request records of the applicants' 
conservation activity and production system information and conduct on-
site field verification to substantiate, prior to contract approval, 
that the resource inventory information provided for the CMT was 
accurate.
    CSP provides participants with two possible types of payments:
    (1) Annual payment for installing and adopting additional 
activities, and improving, maintaining, and managing existing 
activities. Compensation for on-farm research and demonstration 
activities, or pilot testing will be made through the annual payment.
    (2) Supplemental payment for the adoption of resource-conserving 
crop rotations.
    Setting the annual payment rates will be a significant challenge 
for NRCS. In addition to managing the program within the national 
average rate of $18 per acre, the 2008 Act also provides an acreage 
enrollment limit of 12,769,000 acres for each fiscal year. To address 
these constraints, NRCS intends to use the first ranking period as a 
payment discovery period to arrive at a uniform payment rate per 
conservation performance point by eligible land use type. NRCS requests 
public comment on ways to address program acreage and payment 
constraints, refine their payment approach, and make annual payments 
more consistent and predictable.
    Additionally NRCS seeks public comment on the proper distribution 
of CSP annual payment between payment for additional activities and 
payment for existing activities.
    Section 1470.26 of this interim final rule provides that NRCS will 
permit contract renewals to foster participant commitment to increased 
conservation performance. NRCS seeks public comment on the contract 
renewal criteria in the interim final rule.
    NRCS can broaden CSP's impact by offering participants the 
opportunity to install innovative conservation activities that appeal 
to all levels of land stewards, and increase conservation performance 
across all land uses, operation sizes and types, and production 
systems, including specialty crops and organic production. NRCS 
specifically requests through the comment process information on 
innovative enhancements NRCS should offer under CSP to improve 
participant's conservation performance.
    A step-by-step explanation of how CSP works from sign-up to 
fulfillment of the conservation stewardship contract is as follows:
    (1) CSP is available nationwide and sign-up will be continuous with 
announced ranking period cutoff dates.
    (2) A producer self-screening checklist will be available at local 
NRCS field offices and on the NRCS Web site. Producers will complete 
the checklist independently to help them decide if they meet CSP 
eligibility requirements.
    (3) Potential applicants who decide to apply for CSP complete a 
Contract Program Application Form, NRCS-CPA-1200, and submit 
information on their operation. The extent of an applicant's 
agricultural operation will be based on how the applicant represents 
their operation for other USDA programs.
    (4) Once applicant and land eligibility are determined, the NRCS 
field office will assist the producer with completing the CMT resource 
inventory.
    (5) CMT will estimate the level of environmental benefit to be 
achieved by the applicant. The CMT conservation performance scoring 
will enable NRCS to determine if the stewardship threshold requirement 
is met, rank applications, and establish payments.
    (6) Applicants will be ranked relative to other applicants who face 
similar resource challenges in State-established ranking pools using 
conservation performance ranking scores.

[[Page 37506]]

    (7) For approved applicants, NRCS will conduct on-site field 
verification to substantiate that conservation activity and production 
system information represented by the applicant was accurate.
    (8) After the conservation system information is verified, NRCS and 
the applicant proceed to develop the conservation stewardship plan and 
contract.
    (9) Upon approval, the contract will obligate the participant to 
achieve a higher level of conservation performance by installing 
additional activities scheduled in their conservation stewardship plan 
and to maintain the level of existing conservation performance 
identified at the time of application. For the initial sign-up, NRCS 
will consider a participant ``enrolled'' based on the fiscal year the 
application is submitted, once NRCS approves an applicant's contract. 
For subsequent ranking cut-off periods, NRCS will consider a 
participant enrolled in CSP based on the fiscal year the contract is 
approved.
    (10) NRCS will make payments as soon as practical after October 1 
of each fiscal year for activities carried out in the previous fiscal 
year. A participant's annual payment is determined using the 
conservation performance estimated by the CMT, and computed by land-use 
type for enrolled eligible land. A supplemental payment is also 
available to a participant receiving annual payments who also agrees to 
adopt a resource-conserving crop rotation.

Summary of Provisions

    The regulation is organized into three subparts: Subpart A--General 
Provisions; Subpart B--Contracts; and Subpart C--General 
Administration. Below is a summary of each section.

Subpart A--General Provisions

Section 1470.1 Applicability
    Section 1470.1, ``Applicability,'' sets forth the purpose, 
procedures, and requirements of CSP. In paragraph (b), NRCS defines 
that the program's purpose is to encourage producers to address 
resource concerns in a comprehensive manner by undertaking additional 
conservation activities; and improving, maintaining, and managing 
existing conservation activities.
    NRCS included paragraph (c) to specify where CSP assistance is 
available. CSP is available to eligible persons, legal entities, or 
Indian tribes in all 50 States, the District of Columbia, the 
Commonwealth of Puerto Rico, Guam, the Virgin Islands of the United 
States, American Samoa, and the Commonwealth of the Northern Mariana 
Islands.
    Paragraph (d) identifies that NRCS will provide CSP participants 
financial and technical assistance for the conservation, protection, 
and improvement of soil, water, and other related natural resources.
Section 1470.2 Administration
    Section 1470.2, ``Administration,'' describes the roles of NRCS at 
the National and State levels. NRCS will make CSP available nationwide 
on a continuous application basis. NRCS will operate the program to 
achieve a national average rate of $18 per acre, which includes the 
costs of all financial and technical assistance, and any other expenses 
associated with program enrollment and participation. As directed by 
the 2008 Act, NRCS will establish a national target to set aside five 
percent of CSP acres for socially disadvantaged farmers or ranchers and 
an additional five percent of CSP acres for beginning farmers or 
ranchers. State conservationists will obtain advice from State 
Technical Committees and local working groups on State program 
technical policies, outreach efforts, and program issues.
Section 1470.3 Definitions
    Section 1470.3, ``Definitions,'' sets forth definitions for terms 
used throughout this regulation. These definitions include: 
``agricultural land,'' ``animal waste storage or treatment facility,'' 
``applicant,'' ``beginning farmer or rancher,'' ``Chief,'' 
``conservation district,'' ``conservation practice,'' ``Designated 
Conservationist,'' ``enrollment,'' ``field office technical guide,'' 
``Indian tribe,'' ``Indian lands,'' ``joint operation,'' ``legal 
entity,'' ``liquidated damages,'' ``local working group,'' ``National 
Organic Program,'' ``Natural Resources Conservation Service,'' 
``nonindustrial private forest land,'' ``operation and maintenance,'' 
``participant,'' ``person,'' ``producer,'' ``Secretary,'' ``socially 
disadvantaged farmer or rancher,'' ``State Conservationist,'' ``State 
Technical Committee,'' ``technical assistance,'' and ``Technical 
Service Provider (TSP).'' Other definitions, such as: ``agricultural 
operation,'' ``conservation activities,'' ``conservation measurement 
tool,'' ``conservation stewardship plan,'' ``contract,'' 
``enhancement,'' ``management measure,'' ``payment,'' ``priority 
resource concern,'' ``resource concern,'' ``resource-conserving crop 
rotation,'' and ``stewardship threshold'' are definitions established 
to implement CSP's authorizing legislation.
    A number of these definitions are shared with other conservation 
programs administered by NRCS. The following definitions are unique or 
have special relevance to CSP implementation, or have been modified 
from how the term is defined in other NRCS conservation program rules:
    The definition of ``agricultural land'' describes those areas 
identified by CSP's authorizing legislation--working agricultural land 
being actively managed for agricultural production purposes upon which 
CSP will be focused, including cropland, grassland, improved 
prairieland, and land used for agro-forestry. NRCS does not intend to 
exclude working lands such as cropped woodlands and marshes, but will 
consider those as cropland.
    NRCS includes the definition of ``agricultural operation'' to 
specify an agricultural operation's parameters. An ``agricultural 
operation'' is defined as ``all agricultural land and other land as 
determined by NRCS, whether contiguous or noncontiguous: (1) Which is 
under the effective control of the applicant for the term of the 
proposed contract; and (2) which is operated by the applicant with 
equipment, labor, management, and production or cultivation practices 
that are substantially separate from other operations.'' The term 
``other land'' in this definition includes ineligible land identified 
in Sec.  1470.6, incidental areas that are not in agricultural 
production, and developed areas on the farm or ranch such as farm 
headquarters, ranch sites, barnyards, feedlots, manure storage 
facilities, machinery storage areas, and material handling facilities.
    The term ``applicant'' is defined as ``a person, legal entity, 
joint operation, or Indian tribe that has an interest in an 
agricultural operation, as defined in 7 CFR part 1400, who has 
requested in writing to participate in CSP.'' All applicants must 
establish records in the Farm Service Agency (FSA) farm records 
management system prior to submitting an application.
    The term, ``beginning farmer and rancher,'' is the same as the 
definition used by other NRCS conservation programs, which adopt the 
definition established by 7 U.S.C. 1991(a), except that the definition 
incorporates the term nonindustrial private forest land to ensure 
policies pertaining to beginning farmers and ranchers include those 
producers having nonindustrial private forest land.
    A definition for ``conservation activity'' is included to describe 
in a more comprehensive fashion the conservation systems, practices, or 
management measures needed to

[[Page 37507]]

address a resource concern or improve conservation performance.
    A definition for ``conservation measurement tool'' refers to the 
procedures that NRCS will use to estimate the level of environmental 
benefit to be achieved by a producer using the proxy of conservation 
performance improvement.
    The term ``conservation stewardship plan'' is defined as a record 
of the participant's decisions that describes the schedule of 
conservation activities to be implemented, managed, or improved by the 
participant. The definition clarifies that associated supporting 
information inventories the agricultural operation's resource concerns 
and existing conservation activities, establishes benchmark data, and 
identifies the participant's conservation objectives and will be 
maintained with the plan.
    The term ``enhancement'' means a type of activity installed and 
adopted to treat natural resources and improve conservation 
performance. Enhancements are installed at a level of management 
intensity that exceeds the sustainable level for a given resource 
concern, and those directly related to a practice standard are applied 
in a manner that exceeds the minimum treatment requirements of the 
standard. An example of an enhancement includes a grass-type cover crop 
used to scavenge nitrogen left in the soil after the harvest of a 
previous crop.
    The term ``enrollment'' means for the initial sign-up for FY 2009, 
NRCS will consider a participant ``enrolled'' in CSP based on the 
fiscal year the application is submitted, once NRCS approves the 
participant's contract. For subsequent ranking cut-off periods, NRCS 
will consider a participant enrolled in CSP based on the fiscal year 
the contract is approved. The acres enrolled for each fiscal year count 
against each year's annual 12.8 million acre enrollment limit.
    The terms, ``Indian Tribe'' and ``Indian lands'' reflect the terms 
used by other NRCS conservation programs. An Indian Tribe is any 
``Indian Tribe, band, nation, pueblo, or other organized group or 
community, including any Alaska Native village or regional corporation 
as defined in or established pursuant to the Alaska Native Claims 
Settlement Act (43 U.S.C. 1601 et seq.), which is recognized as 
eligible for the special programs and services provided by the United 
States to Indians because of their status as Indians.'' NRCS adopts 
terminology ``Indian lands'' in an effort to be more inclusive of all 
lands held in trust by the United States for individual Indians or 
Indian Tribes, all land, the title to which is held by an individual 
Indian, Indian family, or Indian Tribe.
    The term, ``management measure,'' is defined as one or more 
specific actions that is not a conservation practice, but has the 
effect of alleviating problems or the treatment of natural resources.
    The term ``National Organic Program'' has been inserted to refer to 
a program administered by the Agricultural Marketing Service. The rule 
contains provisions related to conservation activities associated with 
organic production. The National Organic Program is a national program 
which regulates the standards for any farm, wild crop harvesting, or 
handling operation that wants to sell an agricultural product as 
organically grown.
    The term, ``nonindustrial private forest land'' is based on the 
definition in the 2008 Act. Nonindustrial private forest land is rural 
land that has existing tree cover or is suitable for growing trees; and 
is owned by an individual, group, association, corporation, Indian 
Tribe, or other private legal entity that has definitive decision-
making authority over the land.
    NRCS includes the definition of ``operation and maintenance'' to 
identify that participants are expected to maintain existing 
conservation activities and additional conservation activities 
installed and adopted over the contract period.
    The definition of ``participant'' reflects the 2008 Act's 
definition of ``person'' and ``legal entity'' and the definition used 
by other NRCS conservation programs. A participant is a ``person, legal 
entity, joint operation, or Indian Tribe that is receiving payment or 
is responsible for implementing the terms and conditions of a CSP 
contract.''
    NRCS defines the term ``payment'' to mean the financial assistance 
provided under the terms of the CSP contract.
    NRCS includes the term, ``person'' to reflect the requirements of 7 
CFR part 1400, the regulation which details CCC's payment limitation 
policies.
    NRCS includes the term ``priority resource concern,'' which 
reflects the definition in the 2008 Act. A priority resource concern is 
a resource concern that is identified by the State Conservationist, in 
consultation with the State Technical Committee and local work groups, 
as a priority for a State, or the specific geographic areas within a 
State.
    The term ``producer'' means a person or le