Introduction of a Bill to Exempt Hawaii from the Adjusted Gross Income Limitation on Participation in Conservation Programs

INTRODUCTION OF A BILL TO EXEMPT HAWAII FROM THE ADJUSTED GROSS INCOME LIMITATION ON PARTICIPATION IN CONSERVATION PROGRAMS -- (Extensions of Remarks - July 27, 2005)

SPEECH OF
HON. ED CASE
OF HAWAII
IN THE HOUSE OF REPRESENTATIVES
WEDNESDAY, JULY 27, 2005

Mr. CASE. Mr. Speaker, I rise today to introduce a bill that exempts my State of Hawaii from the adjusted gross income limitation on participation in Farm Bill conservation programs. These programs assist and incentivize producers and landowners to preserve and conserve the dwindling agricultural lands of our country.

These invaluable programs include the following:

Conservation Reserve Program (CRP), which provides annual rental payments to replace crops on highly erodible and environmentally sensitive lands with long-term plantings that protect the soil. Hawaii is attempting to access this program, the largest of all the conservation programs, by developing a Conservation Reserve Enhancement Program, which is awaiting approval by the USDA.

Conservation Security Program (CSP), which provides financial and technical assistance for improvements in conserving environmental resources on farmland that meets certain soil and water quality criteria standards.

Environmental Quality Incentives Program (EQIP), which provides cost share payments to producers and landowners to plan and install structural, vegetative, and land management practices on eligible lands to alleviate conservation problems, with 60 percent of funds allocated to livestock producers.

Farmland and Ranchland Protection Program (FRPP), which assists state and local governments to acquire easements to limit conversion of agricultural lands to nonagricultural uses.

Grassland Reserve Program (GRP), which retires acres from grazing under arrangements ranging from 10-year agreements to permanent easements and permits the delegation of easements to certain private organizations and state agencies.

Wetlands Reserve Program (WRP), which uses permanent and temporary easements and long-term agreements to protect farmed wetlands.

Wildlife Habitat Incentives Program (WHIP), which provides cost sharing and technical assistance for conservation practices that primarily benefit wildlife.

These programs have become increasingly important in Hawaii, where funding has risen from around $4.9 million in 2003 to $14.2 million in 2005. Unfortunately, especially in the case of the Conservation Reserve Program, Hawaii's ability to access these programs has been severely limited by the application of the adjusted gross income limitation (AGI) placed on the programs by the 2002 Farm Bill to Hawaii's unique conditions. As a result, many of the lands that would deliver the highest environmental benefits are excluded because of this provision.

In Hawaii's case, there are compelling reasons why an exemption from the AGI limitation is not only fair but necessary for these programs to achieve their desired goals. By way of background, during the writing of the 2002 Farm Bill some groups called attention to the fact that some very wealthy individuals were receiving payments under Farm Bill conservation programs. As a result, a limitation was put in place making individuals and corporations with annual incomes of $2.5 million or more ineligible for participation in Farm Bill conservation programs unless 75 percent of that income comes from farming, ranching, or forestry.

This adjusted gross income (AGI) provision seriously disadvantages Hawaii because the major portion of our agricultural lands are owned by families or corporations with diversified holdings. In many cases, these entities have remained engaged in ranching or farming, despite low profit margins, due to a connection to long traditions in ranching, farming, or other activities.

Large agricultural landholdings in Hawaii typically date back more than 100 years and follow the traditional Hawaiian land division of ahupua'a, where land parcels extend from the mountain to the sea, based on the ancient Hawaiian recognition of the interconnectedness of these environments. As a result, we have properties where the upper lands might be used for ranching, the middle lands for crops or residential development, and the lower, oceanside lands for hotels and business developments. Therefore, we have ranches where income from ranching is supplemented by a shopping center and restaurant. A portion of the ranch land may, and in many cases in Hawaii does, harbor endangered plant and animal species. Taking these marginal lands out of cattle production and assisting with reforestation of native species can have a tremendous impact on the prospects of survival for Hawaii's endangered species. But regrettably, the AGI provision has meant that federal funds to assist in these efforts cannot be used toprovide what could be enormous environmental benefits. Thus, as a result of our particular history, we in Hawaii are denied access to a very valuable tool to encourage conservation on many of these marginal agricultural lands.

In addition, as one of the most isolated land masses in the world, Hawaii has a wealth of unique animal and plant species; regrettably we are also the endangered species capital of the United States. Our 255 listed plant species represent approximately one-fourth of the total number of endangered species in the United States. They also comprise more than one-fifth of the entire Hawaiian flora. An Hawaii's endemic birds make up one-third of the list of endangered bird species. Our unique and beautiful endangered birds would benefit greatly from restoration and protection of native forests using funding from the Farm Bill programs. These programs would also help to control runoff into streams and coral reefs providing habitat for more unique endemic species.

Finally, Hawaii should receive special consideration out of simple fairness. Hawaii, especially my Second district, is a rural agricultural state. Despite this, in part because of the AGI limitation, Hawaii comes in dead last of all the states in terms of federal assistance received as a percentage of agricultural production. In fact, we receive less than 1 cent per dollar of production value compared with 17 cents for North Dakota and an average of 6 cents nationwide.

As a prime example, Hawaii has only ever had 21 acres enrolled in the Conservation Reserve Program, which covers some 39.2 million acres nationwide. The Conservation Reserve Program (CRP) was enacted in 1985 and has grown to become the biggest USDA conservation program, costing just under $2 billion annually in recent years. Under this program, producers bid to retire highly erodible or environmentally sensitive land from production during national signup periods. The Farm Service Agency ranks bids based on their estimated environmental benefits and cost to the government. (I have no doubt that Hawaii would deliver very high environmental benefits, especially when one considers the impact on coral reefs and endangered species.) Successful bidders receive annual rental payments, as well as cost sharing and technical assistance, to install conservation practices. Almost all the enrolled land is retired for 10 years. Enrollment is limited to 25 percent of the crop land in a county.

In July 2004, Hawaii's Governor Lingle submitted the ``Hawaii Conservation Reserve Enhancement and Coordinated Conservation Plan.'' The proposal is currently under review by the Farm Service Agency.

If approved, the plan will restore 30,000 acres of native forest--10,000 acres in riparian buffers along streams and 20,000 acres in large blocks in groundwater recharge and sediment source areas. The plan covers the islands of Maui, Hawaii, Molokai, Lanai, Kauai, and Oahu. The principal goals of the project are to improve water quality in streams, reduce flow of polluted runoff to near shore waters and coral reefs, and restore terrestrial and aquatic wildlife habitat.

Unfortunately, the proposal has been stalled because of concerns that not enough suitable land will be eligible under AGI limitations.

Hawaii's agriculture has many unique characteristics due to our isolated location, land use patterns dating from the days of the Kingdom of Hawaii, tropical climate, and year-round growing season. Few USDA programs address our special needs, and we do not benefit from any of the general commodities programs. Hawaii has traditionally received relatively little assistance from the Farm Bill conservation programs, although they seek to address problems that are central to our islands: protecting water quality, preserving endangered species, and controlling invasive pests.

An AGI exemption for Hawaii would remove a barrier that effectively eliminates roughly 80 percent of Hawaii's agricultural land from participation in conservation programs. I ask my colleagues for their support for this exemption to help to protect Hawaii's special environment and vulnerable endangered wildlife both on the land and in our nearshore waters and to provide Hawaii with equal and fail access to the great benefits of these programs.

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