NSAC's Blog

Environmental Quality Incentives Program Rules Revised

December 16, 2014

On December 12, 2014 the US Department of Agriculture’s Natural Resources Conservation Service (NRCS) published revised rules for the Environmental Quality Incentives Program (EQIP).

EQIP is a voluntary conservation program that provides farmers and ranchers with financial cost-share assistance and technical assistance to implement conservation practices on working agricultural land. EQIP funds are available through a general pool, and also through special initiatives that highlight specific practices or natural resource concerns, such as the Organic Initiative, Seasonal High Tunnel Initiative, and On-Farm Energy Initiative.

The EQIP interim final rule makes changes to the program as required by the 2014 Farm Bill, and allows the program to resume enrolling applicants in cost-share agreements. When Congress passed the 2014 Farm Bill, it extended NRCS’ authority to run the program under existing rules for 270 days, or until November 4, 2014. This means that – from November 4 through December 12 – there technically was no authority for NRCS to continue operating the program. In practice, this meant that no new contracts could be signed, but applications could be submitted and existing contracts serviced. Now that the new rule has been published, NRCS can start obligating funds to new contracts under the new farm bill authority.

The 2014 Farm Bill made relatively few changes to the program. However, rulemaking provides the agency with an opportunity to note new administrative changes to the program, in addition to the changes required by statute.  Below, we highlight some of the key changes to EQIP from the new rule.

Wildlife Habitat Protection

The 2014 Farm Bill consolidated the separate Wildlife Habitat Incentives Program (WHIP) into EQIP, and established a 5 percent floor for projects that protect and enhance wildlife habitat. NRCS has carried out this statutory directive in the rule, and anticipates that actual funding will exceed the 5 percent floor.

To measure whether this target is met, NRCS will use its contract database to identify the number of contracts with conservation practices for which wildlife habitat is the primary purpose. For reference, 16 of the existing 160 conservation practices are considered as having wildlife habitat as a primary purpose, and another 45 are considered beneficial to wildlife habitat.

Beginning, Socially Disadvantaged, and Veteran Farmers

As directed by the Farm Bill, NRCS has increased the advance payment amount from 30 to 50 percent for historically underserved producers. This advance payment, championed by NSAC, can be used to cover the upfront costs of a project, such as  for the purposes of purchasing materials or contracting services, which is crucial for many new farmers with limited cash flow.

Historically underserved producers include beginning, socially disadvantaged, limited resource, and now also veteran farmers and ranchers. These producers are also eligible to compete in separate ranking pools, with five percent of program funds set aside for beginning farmers and ranchers, and another five percent set aside for socially disadvantaged producers. The 2014 Farm Bill made veteran farmers a priority applicant within each of those pools.

Payment Limits

As directed by the 2014 Farm Bill, NRCS has increased the payment limit for general EQIP contracts from $300,000 to $450,000 over five years. The payment limit for practices related to organic production remains at $80,000 over six years.

During the Farm Bill legislative phase, NSAC worked to decrease, not increase the general EQIP payment limit and also worked to abolish the separate and unequal payment for organic and transitioning-to-organic producers. The inability to reform this limit was an enormous slap in the face to organic producers, especially given the increase in the payment limit for general EQIP participants. NSAC will continue to urge USDA to take all available steps, of which there are several, to create a level playing field.

Animal Feeding Operations

NRCS is clarifying in the revised rules that a comprehensive nutrient management plan (CNMP) is required of all applicants seeking cost-share funds for animal waste storage or treatment facilities on Animal Feeding Operations (AFOs). The rules now state that a contract holder that is an AFO must develop and implement a CNMP by the end of the contract period if the contract includes an animal waste management facility. Previously, the rule just referred to any animal waste storage or treatment facility.

NSAC’s Farm Bill campaign argued that if Congress continues to fund CAFOs through EQIP, it should eliminate payments made to new or expanding operations as well as those located within flood plains. Unfortunately, the 2014 Farm Bill did nothing to change the disappointing use of substantial EQIP funds for CAFO expansion. And while we appreciate this clarification regarding CNMPs from NRCS, it is merely a band aid on a serious environmental problem.

Irrigation History

Through EQIP, producers can receive cost-share payments to help improve irrigation efficiency, but this practice came under scrutiny when it came to light that irrigation savings were simply being funneled into new cropland production, zeroing out any potential irrigation savings. As NRCS states in the new rule: “Funding practices to facilitate new irrigation practices that do not currently exist would use more water than previously and tend to defeat the purpose of the program to provide a conservation benefit.” NSAC pursued amendments throughout the farm bill process to ensure that producers do not use irrigation efficiency payments to bring new land into production, thereby further reducing in-stream flows, but these important changes were not part of the final Farm Bill.

NRCS is revising the irrigation history requirement in EQIP that is used to determine whether proposed irrigation-related practices will result in water conservation or water savings. NRCS currently requires two to five years of irrigation history to help determine whether it is appropriate to fund a water conservation practice. The EQIP rule now includes the possibility that NRCS could waive that requirement.

We expect that this waiver would only be granted under the circumstances and process that NRCS describes in the preamble to the rule: to assist limited resource and socially disadvantaged producers including producers on Tribal land, that may not have sufficient production history, and only after NRCS evaluates the waiver for individual and cumulative adverse impacts on surface and groundwater.

Funding Levels

Though not part of the rule itself, it is important to note the current changes to EQIP funding. The 2014 Farm Bill reauthorized EQIP with permanent, mandatory funding at an overall funding level just slightly below prior levels. However, EQIP – and sometimes other conservation programs with mandatory funding – has suffered in recent years from back-door cuts to program funding through the appropriations process. These changes in mandatory program spending (or “CHIMPS”) mean that money authorized by the committee with jurisdiction (in this case, the agriculture committees, following months of public hearings, debates, and votes) is raided by the appropriations committee to fund other programs. The recent “cromnibus” for FY 15 is no exception, cutting $136 million – or roughly 8.5% – from the program.

NRCS is accepting comments on the interim final rule until February 10, 2015 to Docket No. NRCS–2014–0007.


Categories: Conservation, Energy & Environment

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