Public Sector Incentives to Adopt Conservation Practices

Published on: 09:31AM Aug 14, 2020

With Skip Hyberg

This is the fourth in a series of occasional blogs aimed at providing information to farmers considering the adoption of conservation practices on their operations.  This blog will focus on public sector incentives and assistance available to farmers, both at the federal and state levels.

Financial and Technical Assistance is Available from the Public Sector, but Demand Exceeds Supply

Some farmers have been able to defray the cost of adopting new practices by enrolling in voluntary conservation programs operated by the U.S. Department of Agriculture (USDA), which provides cost-share or other forms of financial assistance to farmers whose proposals are approved for funding. There are two main programs that provide financial assistance to farmers the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP).  These programs help eligible farmers to adopt conservation practices on working farmland.
 Under EQIP, farmers in general may receive up to 75% cost share for installing their practices, and up to 90% if they qualify as having limited resources or being socially disadvantaged, such as farmers beginning their farming career or military veterans. Under CSP, farmers are eligible for payments for implementing new practices under a CSP contract, which would cover some portion of the costs of doing so. Farmers are also eligible to seek technical assistance from county NRCS staff for help in planning and implementing the use of new conservation practices, whether they receive program funding or not.

In 2019, CBO estimated that there would be approximately $3.9 billion available to fund farmers’ conservation efforts in fiscal year 2020 between these two programs. However, program history shows that there is almost always more demand for both types of assistance (financial and technical) than can be met under existing funding levels. Between 2000 and 2010, only about 40% of projects proposed under the EQIP program were actually funded on average, and requests for technical assistance often faced long waiting periods.

USDA also offers additional programs to encourage farmer adoption of conservation practices, but both require broader engagement of farmers within defined geographical or hydrologic regions.  These are the Conservation Reserve Enhancement Program (or CREP), a component of the Conservation Reserve Program, and the Regional Conservation Partnership program (RCPP).  Both programs establish projects in areas with high-priority conservation issues, in partnership with non-federal organizations.  In the case of CREP, most of those partnerships are with state, local, or tribal governments, and involve incentives for farmers to retire land (in return for rental payments) to reconstruct wetlands or install edge-of-field practices such as filter strips or forested buffers under 10 to 15 year contracts.  The RCPP allocates funding to supplement partner organizations’ (including local conservation and/or water districts, conservation NGO’s as well as state, local, and tribal governments) investments to undertake projects that integrate multiple conservation approaches to deliver conservation solutions.  Since the RCPP was established in the 2014 farm bill, there have been more than 375 projects approved through fiscal year 2018 to undertake conservation on more than 4.7 million acres.  Farmers interested in participating in these types of projects should inquire at their county USDA service centers to find out if such an effort is ongoing in their region.  As part of CRP, CREP activities are overseen by the Farm Service Agency (FSA), while RCPP is overseen by NRCS staff. NRCS works closely with its conservation partners (including FSA, state Departments of Agriculture, Soil and Water Districts), and can often help farmers identify the programs that will best help farmers identify and adopt the conservation practices best suited for their farms. 

In addition, most state Natural Resource Conservation Services (NRCS) offices have a backlog of requests for assistance on a range of conservation activities from farmers in their states that would take months or even years at current resource levels to address, even if no additional requests are made. For example, the North Dakota state NRCS office had a backlog of 700 requests for wetland determinations as of 2016, a significant decline from the 4,000 request backlog in 2012, but still representing more than a year’s worth of work for that office.

Some states also have incentives in place to encourage farmers to adopt specific types of conserving practices. For example, both Maryland and Iowa have programs that provide per acre incentives to farmers to begin cover cropping on their farmland. For the 2019/20 crop year, Maryland farmers were eligible for as much as $90/acre in payments for planting cover crops in order to reduce agricultural runoff into the Chesapeake Bay. In Iowa, farmers have been eligible for a $5 per acre discount on their crop insurance premium for planting cover crops. Over the past two crop years, more than 300,000 acres were newly cover-cropped in Iowa.  However, the current crop year is scheduled to be the last year of a three-year pilot program.  

In Washington state, farmers can apply for state funding to help cover the costs of implementing practices that protect critical areas, under the Voluntary Stewardship Program (VSP).  Pennsylvania offers tax credits to farmers and landowners who implement ‘best management practices’ under the Resource Enhancement and Protection (REAP) Program. In other states, farmers should inquire with their state departments of agriculture about the availability of direct financial assistance or tax benefits from such programs.