Environmental Quality Incentives Program


Program Basics

The Environmental Quality Incentives Program (EQIP) is a voluntary conservation program, administered by USDA’s Natural Resources Conservation Service (NRCS), in which farmers and ranchers implement conservation practices on agricultural working land in return for financial cost-share assistance and technical assistance. The length of an EQIP contract may be from one to ten years, with most EQIP contracts running for two or three years.

Many specific features of EQIP are determined by NRCS State Conservationists with advice from local working groups and State Technical Committees. The program is competitive, with farmers submitting applications for EQIP contracts that are ranked based on criteria developed by both the NRCS National Headquarters and NRCS State Conservationists. The ranking criteria vary from state to state.

Most types of agricultural land and operations are eligible for EQIP. Sixty percent of total EQIP funding is set aside for livestock producers at the national level, and some states also reserve funds for particular types of operations or particular resource concerns.

The 2008 Farm Bill includes a new emphasis within EQIP to support conversion to organic farming systems, which we cover separately in this Guide under the heading Organic Conversion Assistance.

A brief summary of key aspects of the EQIP program, in addition to the 2008 changes described immediately below, is included at the end of this EQIP section.

2008 Farm Bill Changes

EQIP was established in the 1996 Farm Bill and revised in the 2002 and 2008 Farm Bills. The basic EQIP framework was maintained in the 2008 Farm Bill, but numerous changes were made to the program.

New Purposes — The 2008 Farm Bill amended the purposes of EQIP to include forest management as an activity that may be funded by EQIP. The bill also clarifies that organic production systems are also a legitimate EQIP purpose.

Energy Conservation — Energy conservation practices are added to the list of practices that can be funded by EQIP, bringing EQIP into alignment with the Conservation Security (now Stewardship) Program on that issue.

Conservation Planning – A new provision adds the development of conservation plans, including comprehensive nutrient management plans, total resource management system (i.e., comprehensive) conservation plans, and conservation activity plans (CAPs) for specific purposes such as organic conversion, forest management, Integrated Pest Management, or energy conservation, as an eligible EQIP activity for which farmers can receive payments. This planning activity can be funded as a stand alone activity or can be funded in conjunction with a broader EQIP project. It can also be used by farmers to undertake the advanced conservation planning which may be needed for the farmers to become eligible for participation in the Conservation Stewardship Program.

Another new provision requires that USDA consider a farm plan developed for the purpose of acquiring a permit under a water quality or air quality regulatory program to be the same as an EQIP plan of operations, if USDA determines the plan contains all the elements required under EQIP for a plan of operations.

Water Conservation – A new provision requires that producers who receive EQIP payments for water conservation or irrigation efficiency practices agree not to use the associated water savings to bring new land under irrigated production, other than incidental land needed for efficient operations. This provision is intended to ensure that the water saved is retained in or returned to the source. There is an exception, however, for producers participating in a watershed-wide project that as a whole will effectively conserve water, as determined by USDA, even if the individual farm is not returning the water savings to the source.

Ranking — The Farm Bill modifies the ranking criteria for EQIP applications by adding priorities for projects which comprehensively address resource issues, for instance through development of a full-fledged resource management system, and for projects that complete a partially implemented conservation resource management system.

To the extent which it is practical, similar crop and livestock applications are now to be grouped for evaluation purposes. Many NRCS State Conservationists had already administratively created funding pools that grouped together applications projects involving Concentrated Animal Feeding Operations (CAFOs). The new provision is intended to expand this concept to other types of applications. For instance, sustainable grazing management proposals could be grouped and evaluated separately, as could organic conversion proposals, specialty crop IPM proposals, or biomass energy proposals, etc.

The new Farm Bill maintains a provision that prohibits prioritization based on an applicant’s willingness to underbid the cost-share level offered by NRCS for similar contracts. The new Farm Bill also clarifies the priority for selecting applications based on the level of cost-effectiveness to ensure that the conservation practices and approaches selected are the most efficient means of achieving the anticipated environmental benefits.

Payments — The cost-share payment provision is modified by the 2008 Farm Bill. Payments related to the cost of planning, installing and managing practices are still generally limited to up to 75 percent of practice costs, but the new bill also provides for payments to account for 100 percent of any income that may be foregone by the farmer as a result of practice installation. Under an administrative change that is consistent with the new payment definition, payments for EQIP and all other federal working lands conservation programs will no longer be paid on the basis of receipts for work and materials. Instead, farmers will now know at the time they enroll in the program the exact payment rates for each practice.

Beginning, limited resources or socially-disadvantaged farmers or ranchers are eligible for cost-share rates 25 percent above the applicable rate that otherwise applies, and up to 90 percent of the practice costs. In other words, if the regular cost-share rate is 50 percent, the beginning, limited resource or minority farmer will be paid at the 75 percent rate. If the regular rate is 75 percent, they would be paid at the 90 percent rate. The new Farm Bill provision also directs USDA to make advance payments of up to 30 percent of the practice costs for these farmers to help cover costs of equipment and contracting.

In addition, 5 percent of EQIP funding is to be made available in a separate funding pool to beginning farmers and ranchers and another 5 percent is to be made available in a separate funding pool to socially disadvantaged farmers and ranchers.

Payment Limitation — The per farm limits on EQIP payments are amended by the 2008 Farm Bill. In the 2002 Farm Bill, payments were not subject to annual limits but were capped at $450,000 per individual or entity directly or indirectly, during any six-year period. The 2008 Farm Bill limits EQIP payments in the aggregate to $300,000 per person or legal entity, directly or indirectly, during any 6-year period, except that USDA may raise that limit to $450,000 for projects of “special environmental significance.”

Organic Conversion – The 2008 Farm Bill has a new provision for payments for conservation practices related to organic production and the transition to organic production. This new EQIP provision for organic producers is described in detail in a separate section of this Farm Bill Guide under the heading Organic Conversion Assistance.

Conservation Innovation Grants

EQIP also includes a Conservation Innovation Grant (CIG) subprogram that funds innovative conservation projects. This subprogram was first authorized in the 2002 Farm Bill. The 2008 Farm Bill adds forest management as an activity eligible for the CIG program. Projects that involve specialty crop producers or that use innovative technologies and cost-effective methods to address air quality problems are also now expressly included in the program. A 50 percent cap on the federal share of CIG project costs has now been removed.

The total funding level for all CIG purposes is left to the discretion of USDA. However, the 2008 Farm Bill set aside $37.5 million of EQIP funds annually from FY2009 through FY2012 ($150 million in total) specifically for CIG projects that address air quality. The Managers’ Statement directs the funding to projects that help producers comply with federal, state or local air quality problems, including air pollution from mobile and stationary equipment such as irrigation water pump engines.

Agricultural Water Enhancement Program

The Farm Bill renames the EQIP Ground and Surface Water Conservation Program as the Agricultural Water Enhancement Program and expands the purpose from a focus solely on water conservation to also include water quality problems on agricultural land.

This revamped program is provided $280 million in mandatory funding for FY2009 through FY2012. In addition to entering into contracts with individual farmers under this program, the USDA can contract with partners including producer associations, state or local governments and Indian tribes to address water quality and quantity problems on a regional basis.

Legislative Authority

Title II, Subtitle F (Sections 2501-2510) of the Food, Conservation, and Energy Act (FCEA) of 2008 amends Sections 1240A-1240I of the Food Security Act of 1985, to be codified at 16 U.S.C. Sections 3839aa-3839aa-9.

Purposes of EQIP – EQIP is intended to provide environmental benefits by:
assisting producers in complying with local, state, and national regulatory requirements concerning soil, air and water quality, wildlife habitat, and surface and ground water conservation;

  • helping producers avoid the need for resource and regulatory programs to the maximum extend practicable;
  • providing flexible assistance to producers to install and maintain conservation practices; and
  • assisting producers to make beneficial, cost effective changes to land and resource management activities.

Eligible Land – Eligible land is land on which agricultural commodities, livestock or forest-related products are produced, including cropland, grassland, rangeland, pasture land, non-industrial private forest land, cropped woodland, marshes, and agricultural land used for the production of livestock, where there are resource concerns that can be addressed by EQIP.

Ranking Criteria for EQIP Applications – The priorities for selecting EQIP applications for participation in the program include:

  • the overall level of cost-effectiveness to ensure that the conservation practices and approaches proposed are the most efficient means of achieving the anticipated environmental benefits of the project;
  • how effectively and comprehensively the project addresses the designated resource concerns;
  • how best the application would fulfill the EQIP purposes; and
  • whether the EQIP participant would improve conservation practices or systems in place on the operation at the time the contract offer is accepted or will complete a conservation system.

EQIP Payment Provisions – Generally EQIP payments may be for up to 75 percent of the cost to the farmer or rancher in planning, design, materials, equipment, installation, labor, management, maintenance, or training. In addition, a farmer or rancher can also receive a payment for 100 percent of income forgone.

If the participant is a limited resource, socially disadvantaged, or a beginning farmer or rancher, the payment level will be increased to not more than 90 percent of the costs and not less than 25 percent above the payment available to farmers and ranchers not in these categories. Farmers and ranchers in these categories may also be provided up to 30 percent of the cost-share payment in advance to purchase materials or enter contracts for assistance or other purposes.

Farmers and ranchers can receive assistance from other sources including a state agency, private organization or another person to implement one or more practices on the EQIP acreage without the EQIP payment being lowered. But a farmer or rancher cannot receive payments or other benefits for the same practice on the same land under other USDA conservation programs.

Requirements for Agricultural Producers in EQIP Contracts – In return for EQIP payments and technical assistance, the farmer or rancher enters into a contract with USDA that requires that the farmer or rancher to carry out an EQIP program plan. This EQIP plan is a plan of operations that covers the specific conservation practices that will be implemented and any terms or conditions that USDA considers necessary to carry out EQIP, including the purposes to be met by implementing the plan. If the EQIP contract is for a confined livestock feeding operation, the plan of operations must provide for the development and implementation of a comprehensive nutrient management plan. For EQIP contracts on forest land, the plan of operation must be consistent with the purposes of a forest management plan approved by USDA.

The 2008 Farm Bill provides mandatory funding for EQIP of $7.325 billion for FY 2008-2012, a significant increase over the $4.92 billion provided by the 2002 Farm Bill for FY 2002-2007. Congress, however, has cut EQIP’s funding in subsequent appropriations bills. The chart below includes both authorized funding and actual program funding to date.

Environmental Quality Incentives Program (EQIP) Funding

2008

2009

2010

2011

2012

5 year cost

10 yr cost

$1,200 M

$1,000 M (actual)

$1,337 M

$1,067 M

(actual)

$1,450 M

$1,180 M

(actual)

$1,588 M

$1,750 M

$7,325 M

$16,075 M

This funding level includes money for the Conservation Innovation Grants subprogram but not the money for the Agricultural Water Enhancement subprogram. AWEP is funded as follows:

Agricultural WaterEnhancement Program (AWEP) Funding

2008

2009

2010

2011

2012

5 year cost

10 yr cost

$60 M

$73 M

$73 M

$74 M

$60 M

$340 M

$640 M

Please note:The funding levels in the chart above show the amount of mandatory funding reserved by the 2008 Farm Bill for this program to be provided through USDA’s Commodity Credit Corporation.  However, Congress does at times pass subsequent appropriations legislation that caps the funding level for a particular year for a particular program at less than provided by the farm bill in order to use the resulting savings to fund a different program.  Therefore, despite its “mandatory” status, the funding level for a given year could be less than the farm bill dictates should the Appropriations Committee decide to raid the farm bill to fund other programs under its jurisdiction.

Implementation Basics

NRCS issued an interim final rule on January 15, 2009, which took effect immediately. A correction to the interim final rule provision for payment limits for joint operations was issued on March 12, 2009. The agency took public comments on this interim final rule until March 16, 2009 but has not yet issued a final rule for the program. NSAC submitted these comments on the interim rule.

The EQIP sign-up and application information for your state is available from your state NRCS office. You can reach the EQIP application through your state NRCS office by clicking on your state here. NRCS State Conservationists accept EQIP applications continuously. Applications are then ranked in a competitive process and contracts are funded periodically with the number of contracts determined by available funds.

Additional Resources

USDA website for the Environmental Quality Incentives Program

Access your state NRCS State Conservationist office at this website