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Environmental Quality Incentives Program

File A1-42
Written May, 2002

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Farm Security and Rural Investment Act of 2002

The Environmental Quality Incentives Program (EQIP) was reauthorized through FY2007 under the Farm Security and Rural Investment Act (FSRIA). There were some significant changes made.

The language describing EQIP is found under Title II, Subtitle D (pp 125 – 130) of FSRIA.

The funding under the new EQIP will increase yearly and eventually reach $1.3 billion. There are provisions in FSRIA that livestock producers will receive 60 percent of the funds annually and crops producers will receive the remaining 40 percent.

The purpose of EQIP is “… to promote agricultural production and environmental quality as compatible goals, and to optimize environmental benefits, by…”

1. Assisting producers in complying with regulatory requirements
2. Avoiding the need for resource and regulatory programs
3. Providing flexible assistance to install and maintain conservation practices
4. Assisting producers to make beneficial, cost effective changes
5. Consolidating and streamlining conservation planning and regulatory compliance processes to reduce administrative burdens on producers

EQIP includes crop, range, grass, and pasture land. It also includes private, nonindustrial forest land. Both land management and structural practices can be funded. A land management practice is a site-specific nutrient or manure, integrated pest, tillage or residue, grazing or air quality management. A structural practice would be an animal waste management facility, terrace, grassed waterways, and so forth. These would also include capping abandoned wells and constructing wetlands.

The producers will enter into a contract that will last at least one year past the time when all the practices have been implemented but not exceeding 10 years. Producers are eligible for cost-share funding if they implement structural practices and they are eligible for incentive payments if they implement a land management practice or develop a comprehensive nutrient management plan.

The cost share payments to implement one or more practices “… shall not be more than 75 percent of the cost of the practice, as determined by the Secretary.” Beginning farmers may receive up to 90 percent cost share. In some cases the producer will be eligible to receive the EQIP cost share payment in addition to other payments.

The producer may also receive an incentive payment for various land management practices. The payment rates are “… at a rate determined by the Secretary to be necessary to encourage a producer to perform one or more land management practices.”

The plans will be approved by the Secretary of Agriculture (USDA). There will be higher priority given to those that use cost-effective conservation practices or those that address national conservation priorities.

One of the major changes in EQIP is the increase in the maximum amount of payments a farmer may receive. In FSRIA a farmer may receive a maximum of $450,000 for all EQIP contracts. The maximum is, in aggregate, over the life of the provision (FY2002 through FY2007).

To be eligible for cost share with a confined livestock feeding operation there must also be a comprehensive nutrient management plan.

If there is a change in tenure interest in the land the producer must return all cost-share payments and incentive payments unless the new operator agrees to the terms of the contract. The producer also agrees to supply required information and to comply with all the provisions, as well as, not to conduct any practices on the farm that would tend to defeat the purposes of the program.


Michael D. Duffy, retired economist. Questions?