The Environmental Quality Incentives Program (EQIP) awarded more than $1 billion in financial assistance (FA) to American farmers and ranchers in fiscal year (FY) 2016. These funds are provided through the U.S. Department of Agriculture (USDA)’s Natural Resources Conservation Service (NRCS) and offer financial cost-share and technical assistance to help growers implement conservation practices on working agricultural lands. In the twenty years since EQIP’s inception the program has significantly expanded its reach and capacity. Despite this growth, however, EQIP funds are insufficient to support even half of applicant projects, and many funds that could otherwise be used to support conservation projects continue to be directed toward confined animal feeding operations (CAFOs).

In this blog we analyze how EQIP financial assistance was utilized in FY 2016 through the EQIP general pool as well as through special initiatives, which highlight specific practices, natural resources, or eco-regions. This post does not include an analysis of EQIP funding for technical assistance, nor does it assess the investments made with EQIP funds through the Regional Conservation Partnership Program.

EQIP: The Basics

EQIP participants can select from a wide variety of practices that improve conservation and environmental quality on their farm, including structural, vegetative and management practices. Through EQIP, NRCS may reimburse up to 75 percent of the costs for these practices, and up to 90 percent of the costs for beginning, socially disadvantaged, limited resource and veteran farmers and ranchers. This group of farmers and ranchers are also eligible for up to 50 percent advance payment for costs associated with planning, design, materials, equipment, installation, labor, management, maintenance, or training.

EQIP has grown steadily over the last 20 years, however, it is important to note that the increase in FY 2016 obligations includes funding that was re-allocated from previous years’ canceled or terminated contracts. The 2014 Farm Bill authorized NRCS to reallocate this “no year” money, and FY 2016 was the first fiscal year that the Agency was able to utilize these funds.

Despite the general upward trend in obligated funding since 2001, farmer and rancher demand for EQIP has consistently outstripped available funding. In FY 2016, among all eligible applicants across the US, only 26 percent actually received contracts. Among approved contracts there were considerable disparities in acceptance rates between states; however, no state came close to approving all eligible applicants.

State Trends in FY 2016

In FY 2016, Hawaii had the highest rate of contract approval at 49 percent, while Illinois had the lowest rate with only 11 percent of contracts approved. There was also considerable variance in the total amount of obligated funds across each state. California and Texas were the top recipients of total funds by far in FY 2016.

The considerable variance in acceptance rates across the country suggests not only differing levels of demand, but also differences in state ranking criteria and varying levels of outreach and promotion by state NRCS offices and partner groups.

Funding for Cover Crops Nearly Doubles

Of all available conservation practices eligible for EQIP funding in FY 2016, the largest amount was obligated for cover crops. Cover crops, which include grasses, legumes, and other seasonable vegetative cover, help producers to reduce erosion, improve soil health, suppress weed pressures, and reduce water quality degradation.

NRCS obligated more than $90 million in EQIP funding for cover cropping in FY 2016, nearly double the amount obligated for the practice in FY 2015. This funding provided support for over 1.88 million acres of cover crops across the country, another near doubling since FY 2015. The charts below illustrate the top five states that received cover crop funding, as well as those that planted the most acres of cover crops through EQIP in FY 2016.

North Dakota is the only state that ranked amongst the top states for cover crop acreage, but did not fall within the top states for funding obligated. This difference is the result of a lower reimbursement rate per acre (referred to as a “payment schedule”) for cover crops in North Dakota. Payment schedules are set regionally, and the region that North Dakota falls within has a considerably lower rate than the other top ranking states because cover crop seed is cheaper and more available in that area.

Other Sustainable Management Practices

In addition to cover crops, EQIP funding is available for a wide range of other sustainable management practices (both vegetative and land management practices). These practices include but are not limited to: conservation crop rotation, riparian forest buffer installation, pest management, and prescribed grazing. Overall, NRCS allotted over $250 million for these sustainable practices in FY 2016. Cover crops received the most funding at $90 million, followed by forest stand improvement ($25 million) and tree and shrub establishment ($21 million).

For sustainable livestock producers, prescribed grazing is a particularly important practice because it confers many of the same benefits to livestock producers as cover crops do for crop growers.

EQIP supports livestock producers with financial and technical assistance that helps them manage the harvest of vegetation with the grazing and/or browsing of animals. Prescribed grazing enables producers to improve species diversity and plant vigor, mitigate erosion, support water quality, and improve the quality of food available for livestock. The chart below highlights the top five states by acres of prescribed grazing supported through EQIP in FY 2016.

While funding levels for prescribed grazing remained relatively static between FY 2015 and FY 2016 (around $13 million) the number of acres under this grazing practice has actually decreased by 13 percent over the same period – from 5 to 4.6 million acres. This trend is particularly worrisome, as pasture-based livestock production is an integral piece of sustainable agriculture systems. The National Sustainable Agriculture Coalition (NSAC) has long advocated that NRCS direct a larger percentage of EQIP dollars toward small and mid-sized family farms seeking to implement or maintain prescribed grazing and other sustainable livestock practices, and significantly reduce use of EQIP funds for confined animal feeding operations.

Confined Animal Feeding Operations

Unfortunately, while the number of acres enrolled in sustainable grazing practices has declined, NRCS has continued to dedicate large amounts of funding to help CAFOs pay for structural practices such as waste lagoons, animal mortality facilities and waste treatment facilities.

CAFOs have extreme, negative impacts on water quality, air quality, and human health. As an environmental program, EQIP should not be underwriting these operations, particularly in regions where they significantly contribute to water and air quality impairments.

In FY 2016, 11 percent ($113 million) of EQIP funds were allocated toward CAFO operations. Top supported practices include: waste storage facilities ($51,634,622); waste facility covers ($33,582,510); animal mortality facilities (8,867,865); and manure transfer ($7,779,326).

With such a significant portion of EQIP funding going toward the support of CAFO practices, less support is available for small and mid-sized farms trying to implement sustainable management practices on their lands. We continue to urge NRCS to prioritize applications for livestock practices that enhance or help transition producers toward sustainable livestock management systems, rather than supporting the expansion of CAFOs.

Irrigation Practices

Similar to FY 2015, irrigation practices (e.g., pipelines, sprinkler systems, canal construction, and land leveling) once again secured a significant portion of EQIP funds in FY 2016. NRCS obligated $181 million towards irrigation funding – 17 percent of all EQIP funding for FY 2016.

While irrigation is crucial to many farming systems, there are certain irrigation practices (funded by EQIP) that overuse water and ultimately reduce in-stream flows. We have serious concerns about the significant portion of EQIP funds that support irrigation practices in circumstances when water savings are used to expand irrigated crop production. As such, we continue to urge NRCS to explore options for ensuring that EQIP funding does not incentivize the over-consumption of water resources.

Conservation Stewardship Program Data Coming Soon

The Conservation Stewardship Program (CSP) is the farm bill’s largest working lands conservation program and often seen as a “sister program” to EQIP. While EQIP provides one-time assistance to correct a problem or add farm infrastructure, CSP provides ongoing performance-based stewardship payments to support advanced conservation systems. Together, these two conservation programs provide enormous opportunities for farmers and ranchers to increase their stewardship levels on land in agricultural production.

Stay tuned for a follow-up post that will dig into CSP activities and enrollment numbers from FY 2016.