MODERATOR: Good morning, reporters. This is Brenda Curtis from the USDA radio studios in Washington, DC. And with me is Under Secretary of Agriculture Mark Rey and the chief of the Natural Resources Conservation Service, Bruce Knight.

"Today's topic? Conservation Security Program. Good morning, gentlemen. Do you have any opening statements, Mr. Secretary?"

SEC. REY: "We do. Both of us do, Brenda. And thanks for that introduction.

"Last week on St. Patrick's Day we here at USDA and at the Natural Resources Conservation Service had more than the normal reason to celebrate. We had the opportunity to celebrate the release of the final rule and the sign-up for the Conservation Security Program for 2005.

"The Conservation Security Program is in our judgment the future as far as conservation on working land is concerned, and it reflects very directly the President's commitment to and call for new efforts for cooperative conservation.

"The Conservation Security Program will be available under our sign-up to approximately 235,000 farmers and ranchers in 220 watersheds.

"As President Bush has stated, those who depend on the land to make a living are the best stewards of the land. And as our new Agriculture Secretary Mike Johanns has said, this is a unique program that offers payments for enhancing natural resources, rewards those farmers and ranchers who are model conservationists, and provides incentives for other producers to meet those same high standards of environmental performance.

"In that respect, it's a unique program and a perfect way to celebrate St. Patrick's Day.

"These 220 watersheds represent more than 185 million acres in every state of the country and in the Caribbean area as well. Congress funded the fiscal year 2005 Conservation Security Program budget at a $202 million. This will allow the Natural Resources Conservation Service to write an estimated 12,000 to 14,000 contracts. Most working agricultural lands will be eligible including croplands, orchards, vineyards, pasture and rangeland.

"With that, I'm going to ask Natural Resource Conservation Chief Bruce Knight to describe some of the specifics of our announcement and how the program will work in 2005."

CHIEF KNIGHT: "Thank you, Mr. Secretary. At the NRCS we've cleared the decks. We're very excited about this sign-up that will start next Monday, and we've encouraged all the staff in these 220 watersheds to go home, relax, have a nice Easter break, and come back Monday ready to help a lot of farmers engage in and participate in one of the most exciting new conservation programs we've rolled out in a long time.

"In the last year we launched this in 18 watersheds, and we learned a lot, we made some mistakes as an agency and the farmers that participated. We grew a lot, really understanding how this was going to be an exciting new approach to conservation because it rewards the best, motivates the rest. It really fits in with our larger portfolio of conservation.

"So starting Monday in 220 watersheds we'll be offering the Conservation Security Program.

"Now last fall Secretary Veneman announced that we would be doing this in 202 watersheds, and as we went through the winter and we looked, worked on the rule, made changes, Secretary Johanns came in and thought it was very appropriate and fair to ensure that those folks that were in the watershed this last year have a chance to sign up this year. For those producers who may have missed it because we had a very compressed timeframe last year, and so we're offering it in 220 watersheds nationwide.

"Now many producers are wondering how to identify that watershed. All of the local NRCS offices can show you if you're in a watershed or not, but also you can go to the USDA website and pull up the watershed map or pick up a brochure and be able to see if it fits for your farm and your farmer operation."

MODERATOR: "Okay, thank you, gentlemen. That is important for I think everyone to understand, reporters, is that there are 202 new watersheds, 18 from last year, for a total of 220.

"Okay. Before we go to questions, I want to remind reporters, for those of you who are asking questions please press "1" now on your telephone. We will put you in the group of people asking questions, and then we will do that in order. Okay?

"So first up today on the line is the Burns Bureau. From the Burns Bureau, Matt Kay; followed by Successful Farming's Dan Looker.

"So Matt, you are on the line. Go ahead."

REPORTER: "Thank you, Brenda. This is a question directed to NRCS Chief Bruce Knight. Bruce, thank you very much. I wanted to ask you a couple of questions here.

"One is, when we spoke last year about the program the average payment was about $17,000 a contract, and as you know CSP author Senator Harkin has been critical of that, saying that it doesn't provide enough of an incentive. What is the average payment going to be this time around?

"And secondly, the future of this program-- Congress and the administration are obviously looking at budget savings in agriculture. And this particular program may be targeted for cuts."

CHIEF KNIGHT: "This is Chief Knight. On the first part of the question, at this stage it's going to be very difficult to anticipate what the average contract size will be nationwide because we're going to be pulling in a lot of diverse farm operations from different parts of the country-- small farms, large farms. It's truly a size-neutral type of operation.

"And we really will be measuring success based off of the additional conservation benefits that accrue from the program, not necessarily the amount of dollars out there per contract.

"This is not an income transfer program. It is a conservation program. And it's oriented at encouraging cutting-edge new conservation.

"Now Secretary Rey, would you like to address the budget perspective?"

SEC. REY: "From the budget perspective, this is not a program that the administration has targeted to find savings in the agricultural area. We're four-square in favor of implementing this program.

"Now what happens in Congress is obviously going to be a function of the congressional deliberations. I recall at our appropriations hearing last April 7 -- that is April 7, 2004 -- Senator Harkin and I had a dialog where he made it quite clear that as long as he was there, there would be no further cuts in the program. So I'm optimistic that this program will go forward."

MODERATOR: "Okay. Up next is Dan Looker, Successful Farming. Standing by will be Ed Maxiner and Roger Bernard.

"Dan, you're on the air."

REPORTER: "Thank you. For Bruce Knight, I wondered-- I have two questions. One, what would you say is the most important information that a farmer or rancher should have to apply for this program-- if they haven't already looked into it?

"And second, at this rate how long do you think it would take for all farmers who might be able to work with the CSP to be able to participate?"

CHIEF KNIGHT: "Most important information for a producer who's interested in CSP lies first with the producer self-assessment. We have developed a product that's available in a paper workbook format, on a CD and also a web-based delivery that an individual producer can use to determine, are they ready for CSP, would they qualify, and pull in all the information they need.

"You know, and here we are in March. Farmers have finished their taxes, other folks are about ready to do theirs, and it's very appropriate to compare those to the tax preparation software. It tells you what information you need, how to move forward on those things.

"So that is clearly the first step and the most useful product.

"Once producers fill that out, they take that to the NRCS office and start working on the preparation for their contract and for participation.

"Now I'm sorry, Dan-- I forgot your second question."

MODERATOR: "Dan, are you still there? Dan is probably on hold I would say or on mute. So we will go to right now -- and Dan if you wish to do that question again please just press "1" so that we can get you up on the board again, okay? There you go. Okay, Dan is on. Go ahead with your second."

REPORTER: "Thank you. I just wondered how long it would take at the current rate if the program stayed the same size as it is this year for all eligible farmers in the United States to eventually be able to participate in the Conservation Security Program."

CHIEF KNIGHT: "Thank you for your patience, Dan. I'm sorry I forgot that part of the question. We are on-schedule for an eight-year rotation, which means that we are doing about one-eighth of the country at a time with the CSP watershed rotation. We were necessitated to do this because of the very tight constraints Congress imposed on the program as far as the amount of technical assistance. And because it cost so much money to offer a sign-up in every county in the nation, we are focusing on delivery of the services and the expertise on one-eighth of the watersheds in the nation at a time.

"So we'll be through the entire country over the next eight years."

MODERATOR: "Okay. Up next is Phil Brasher. Standing by Ed Maxiner and Roger Bernard. Phil Brasher, Des Moines Register, you are on the air."

REPORTER: "Yes. There's already been some concern that you're doing this during planting season, that farmers may have a hard time getting all this work done."

CHIEF KNIGHT: "I'll take that question. You know, Phil, I'm a farmer myself, and the message I've got to most farmers is that I apologize. I know for farmers in the Midwest we're catching them in the middle of spring planting, we're at the tail-end of it in the South. But we've done everything as an agency to try to clear the decks. We accelerated the sign-up and decision processes on EQIP and all of the other conservation programs to really be able to provide the resources.

"We are now asking our employees to do the same thing that our farm and ranch customers do, watch the skies, if you see a couple days of rain forecast and you're expecting rain delays be anticipating to do as much of the one-on-one work on an individual contract with our farmer customers during those rain delays.

"We are catching folks at planting time. We were delayed because we had to complete the rulemaking. I'm very optimistic that next year's sign-up we'll be able to do earlier in the year outside of that important planting window."

MODERATOR: "Okay. Up next is Ed Maxiner from Kiplinger. Standing by, Roger Bernard. Ed Maxiner, you're on the air. Go ahead."

REPORTER: "Hi. Thank you. A question for Bruce Knight. Follow up a little bit on Phil's question, what kind of time would a guy expect to spend filling out the self-assessment? Is this like a week long, a couple of days, a day project? That's one. Then the other thing I'd ask about is, with all the types of conservation practices on the orchards, on the rangeland, everything that's eligible, what would you anticipate are going to be the main things that are going to be treated across 202 watersheds? I mean, what sort of conservation practices would be the main things that are going to probably happen here?"

CHIEF KNIGHT: "First off, the amount of time is going to vary tremendously based off of the size of the operation and then also quite frankly the producer's recordkeeping capabilities. I know on my farm my records are scattered all over a card table right now; it would take me a little longer than I would hope most farmers, but it's really going to come down to which tier if they're trying to get into Tier I, II or III; and then the nature and complexity of the program.

"The self-assessment is a very simple workbook. It's intended to really be something that can work well for an individual producer and I view this as something that's very farmer-friendly.

"One of the things that struck me throughout all of our conservation programs is that we have our professional staff spending a lot of time sitting across the kitchen table with a producer doing this assessment process. And that, quite frankly, is something that an individual farmer or rancher can do and should do at their own pace at their own kitchen table or in their office. And that's one of the reasons why we rolled out which watersheds we wanted to do new ones last fall, so the people would have that producer self-assessment, be able to make a go of it.

"Now as to what types of things are going to occur within CSP, this is a very comprehensive program. It's holistic in manner. And it is very much oriented towards management as opposed to traditional practices.

"Our other programs tend to be really intended to support practices-- moving earth, building structures, addition of fences, the practices. This is much more oriented towards enhancement. The management of everything from precision ag to precision nutrient management to precision grazing or intensive grazing systems-- those are the sorts of things we're really supposed to enhance and encourage through CSP.

"Now one of the exciting things that's out there in CSP is that Congress gave us the authority for the first time in a conservation program to incorporate energy, the conservation of energy. And we all know agriculture is a very energy-intensive business. Also, renewable fuels.

"And this won't compensate for the full cost of escalating diesel prices right now, but if a producer is interested in using biodiesel blend on their farm as a CSP participant they can get an enhancement payment to offset some of that cost of using the renewable component of their fuel-use.

"The same thing as far as energy conservation, switching to no-till, which is a tremendous saver in energy, or quite frankly switching out outmoded irrigation engines or outmoded grain dryers for a more efficient model will add to that total enhancement payment on these CSP participants."

MODERATOR: "Okay. Good explanation. That is a question that we've been asked a lot too about the energy component. Good answer. Okay. Up next, Roger Bernard, Pro Farmer; and standing by, Bob Huff with the Northwest Ag Network.

"Roger Bernard, you are on the air."

REPORTER: "Thank you very much, Brenda. Thank you, Under Secretary Rey and also Chief Knight for having this call today. Very good. Jim Wiesemeyer also sends his regrets. He had another obligation he had to attend to today-- but we talked about things a little bit before this.

"Bruce, you had mentioned the issue of precision farming. You know, a lot of growers have asked us that question too of late, okay what about things like GPS and stuff like that where I'm doing a lot more specific application of my nutrients and fertilizers, etcetera and like that, and that's really improving the operation? So that is one of those practices that would be covered and that way farmers should look forward to that?

"And my second question, what about the farmer that says, you know this really doesn't offer me much because I'm already doing things like minimum tillage or no-till and things like that, and whereas say my neighbor down the road who hasn't been doing that all of a sudden changes it and he gets paid for it and I've been doing it for years and I don't get paid for it?

"How do you address those type of questions yet?"

CHIEF KNIGHT: "I'll answer the last one first. That is really the dream of CSP is to recognize and reward the efforts of producers who have always been leaders in conservation. Recognize that and then provide them, empower them with the ability to do even more conservation.

"If I look at the portfolio of conservation tools we've had over the decade, the one shortfall of conservation in the past has been that it is oriented towards helping those with the greatest needs, and there isn't much incentive for the leading-edge adopter of conservation. CSP changes that. That is the exciting thing about CSP. That's the real potential of it.

"Now the precision ag question, to go into that a little more in-depth as far as how this will work in the future, one of the challenges a federal agency has is we provide support in a traditional means based off these standards and practices that are in something called our "field office technical guide." If it doesn't fit in that, we can't provide assistance in association with that.

"It's extremely difficult for anyone, whether you're a farmer or you're a part of NRCS, to keep up with the rate of change that's going on in agriculture, precision ag, all sorts of those things. So what we're hoping to do with CSP is move to a payment that is based off of the environmental outcomes as opposed to the practice.

"The outcome that people are interested in is reducing the risk or reducing the nutrient loadings in the streams and lakes-- the nitrogen or phosphorus that's moving into the lakes or streams. That may come from applying those things at or below agronomic rates. It may come with a guidance system on your tractor that takes your overlap from 18 inches down to 3 inches between passes, or it may come from a transition to organic agriculture. Any one of those three solutions or a combination of those has the same result, but it's the outcome that makes the difference, not the particular practice.

"And Roger, tell Jim Wiesemeyer we missed him. Whatever he's covering today can't be as exciting as this."

MODERATOR: "He is so popular. He's probably having lunch at some fabulous restaurant. I mean, what do we know? Anyway, up next Bob Huff with the Northwest Ag Network. And standing by is Rob Soboto (sp), Wallace's Farmer Mag. And Joyce from the Joyce -- glasses are not as good as they used to be -- Joyce Lobeck from the Sun.

"Anyway, if you do want to ask a question I will ask you at this time right now -- this is your final chance to press "1." Okay? That is if you want to ask a question.

"Right now, Bob Huff, you're on the air."

REPORTER: "Yes. Your suggestion that there will be about 14,000 contracts during this sign-up, and with 220 watersheds you're looking at about an average of 63 contracts a watershed. It was suggested to me that could be quite discouraging to all those farmers who want to try but won't be accepted and discouraging too to NRCS people who work with them. Any comments on that?"

SEC. REY: "Oh, I think that the trajectory of almost all of our conservation programs has been one where people don't all get in the same year. You can't implement any program instantaneously across the entire geography of the United States. But for those who tried and made good-faith efforts, there will be next year and the year after that, just as there have been in some of our other programs.

"The exciting thing also about CSP is how it fits into the context of all of our programs. Some of those producers may come in the door interested in CSP and find that the Environmental Quality Incentives Program or the Wildlife Habitat Incentives Program or some of the buffer initiatives that are offered through CRP by the Farm Service Agency better fit their needs.

"And so I really expect a large number of farmers to come in looking at CSP and still be able to walk out the door with a program and help that will help them meet their conservation goals and objectives."

MODERATOR: "Okay. Up next Rob Soboto. Standing by is Joyce Lobeck. Rob, you are on the air."

REPORTER: "For Bruce Knight, some farmers have told me that they're interested in a program but they don't like the idea of giving up records, information that they have regarding how much nitrogen they've applied or do apply, chemicals, that sort of thing. How do you feel about that as a farmer? Do you feel you have to give up too much information to the government?"

CHIEF KNIGHT: "Well, Rob, I've struggled personally to ensure that we find that right balance. And the thing that I want to stress with farmers is that we have a long history of guarding the confidentiality of a conservation plan and our conservation work very, very zealously. And luckily for NRCS the Congress gave us additional authorities in the 2002 Farm Bill that provides even greater protection for confidentiality of those rules and records.

"And so while we may need to look at some of those things, sit down and talk to a farmer, do they have the plan, those sorts of things-- this is not information that will be shared with another federal agency, not information that will be available to the public."

SEC. REY: "And for those farmers who like Bruce aspire to public service, it will give them a chance to practice for the disclosure forms."

MODERATOR: "(laughs) Okay. Up next will be Joyce Lobeck. Standing by is Jackie from the Farm Progress. Joyce Lobeck, you're on the air."

REPORTER: "Thank you. Good morning from the winter vegetable capital of the world here in Yuma, Arizona. Is this going to be a matching grant process, or what would the farmer be required to put into it besides his labor obviously?"

CHIEF KNIGHT: "With CSP this is really oriented at providing some level of compensation for perhaps past investments. There's an ability to provide compensation for maintenance, compensation for the work that's already been invested in conservation so the water savings that might have been put in place, drip irrigation, those sorts of things for that winter vegetable producer will help make them eligible, as would IPM.

"Then there would be payments associated with what additional conservation they're wanting to do. So is this program going to cover 100 percent of the cost that an individual producer may have invested in that conservation practice? Quite frankly, it likely will not. As a matter of fact, in order to keep this within the green box from the World Trade Organization and those important trade rules and ensure that it's not trade-distorting, we need to make sure that we're somewhere below that level and find that right balance.

"This is intended to be a program for leading-edge conservationists to enable them to continue doing more conservation but not an income transfer program that's intended to replace the existing efforts that are out there for supporting America's farmers and ranchers."

MODERATOR: "Okay, thank you, Joyce. The last questioner up today is Jackie Fatka. So Jackie you will be the last one -- from Farm Progress. And go ahead.

REPORTER: "Thanks for taking my question. As you look past with the first sign-up which was the 18, and now the publication of the final rules, what are some main changes that the agency took, just things you learned the first year. And the producers that may not have been able to qualify the first time, is there a chance they might be able to qualify the second time, those 18 initial watersheds?"

CHIEF KNIGHT: "Jackie, thank you much. And I'll run through real quickly some of the highlights. We found that because Congress puts constraints on the spending for the program that we had to have various constraints on the budget exposure, found that we had a few more constraints than were necessary. So we lifted some of those caps.

"One of the things the producers said is they wanted to at Tier I you can go up to five years; at Tier II or III you can go up to 10 years. Some producers had started in Tier I, wanted to graduate up to Tier II or III, want to make sure they can get to a 10-year contract length. We made that change.

"We expanded the opportunity for these environmental improvement enhancement payments. NRCS, we've worked well traditionally with corn and soybeans, wheat, cotton, rice. Fruits and vegetables. We don't have as much market penetration on. So we've learned a lot from those things. A good example is, we learned we needed to do some special things to make sure that maple sugar producers with their sugar bush would be eligible for CSP, and we've done that.

"One of the things we learned right away was that we had internal software that was making this needlessly complex for the farmer and for our own employees we ended up with a contract that was absurdly long with too many signatures. We've streamlined those things. It's kind of common-sense that comes through there.

"The other thing that we're very concerned about is, we want to make sure this program works well for limited resource and beginning farmers, not just well-established farmers. And so we've increased the cost-share percentage for those limited resource and beginning farmers as well.

"All little tweaks, changes and modifications but in sum very necessary and very important because they help make this program work better for the farmers and ranchers we're attempting to serve."

SEC. REY: "And Jackie, in response to part of your question, we did indicate earlier that in this sign-up we are allowing the producers and the original 18 watersheds to be eligible again this year. We got a lot of comments on the proposed rule, and that in turn is what took some of the time to produce the final rule. Because there were so many comments, we wanted to make sure we reached out to all the best comments and reflected those in the final rule."

MODERATOR: "Thank you, Gentlemen. Secretary Rey, do you have a closing comment?"

SEC. REY: "I think what we'd be best served in doing is get back to make sure our folks are busy getting this sign-up underway."

MODERATOR: "Chief Knight?"

CHIEF KNIGHT: "We stand ready to assist America's farmers and ranchers. We're excited about CSP. Starting Monday is a new day for conservation. This is a change agent. CSP is going to change how conservation is delivered and the products and goods and services that both the American public and farmers and ranchers receive from the tax dollars that are invested in conservation."

MODERATOR: "Okay. And just handed a message from Reagan Webber and Terry Bish of the Communications staff. And they're saying, if you guys and girls want a follow-up interview please call the NRCS Communications Office. That is area code 720-3210. Once again, 202-720-3210. And I am Brenda Curtis reporting from the Department of Agriculture's radio studio in Washington.