Iowa State Research Shows that Iowa State Revolving Fund Loans Help Landowners to Invest More Heavily in Conservation and Leads to Recommendations for Program Improvements

J. Gordon Arbuckle, Jr., Assistant Professor, Sociology


Situation:

The Iowa Department of Natural Resources (IDNR contracted J. Gordon Arbuckle, Jr. to conduct a study of the Iowa State Revolving Fund’s (SRF) Local Water Protection Program (LWPP) and Livestock Water Quality (LWQ) Program. The project’s objectives were to 1) examine the effectiveness of the low-interest loan programs, and 2) generate information that could inform efforts to increase their use as tools to help landowners reach their conservation goals. This research was a joint effort between the Iowa State University Department of Sociology, the Iowa Learning Farm (ILF) project, the Iowa Department of Natural Resources (DNR), and the Iowa Department of Agriculture and Land Stewardship (IDALS).

Objective:

The LWPP and LWQ programs are designed to improve water quality by increasing the scope, scale, and rate of agricultural best management practice establishment. The programs’ low-interest loans are meant to facilitate implementation of conservation practices by relieving capital constraints and decreasing the financial burden associated with practice adoption. At the time that the study was initiated, in late 2007, the programs had not attained desired levels of use among landowners, and use varied widely across the state. The overall research question that the study addressed was: Why are Iowa landowners/producers not taking full advantage of the Local Water Protection and Livestock Water Quality Programs to finance their efforts to establish agricultural best management practices?

Activities/Output:

The study focused on both the individual and organizational levels. Individual-level research consisted of a survey of 1) LWPP and LWQ program participants and 2) landowners who had a) implemented eligible conservation practices through state or federal programs since the LWPP and LWQ program began in 2005, and b) had not taken a loan. A group of landowners who had received state cost-share for conservation practice establishment was selected for comparison with LWPP participants, and a group of NRCS Environmental Quality Improvement Program (EQIP) participants was drawn for comparison with LWQ loan recipients. The survey was mailed to 1,622 farmland owners, and 726 surveys were returned.

The survey collected data that allowed comparison of loan program participants with non-participants on key variables such as conservation behavior, farm size, income, and attitudes toward loans. Data analysis sought to shed light on why some landowners decided to participate in the loan programs while others did not, and evaluated participants’ experiences with and perspectives on the programs.

The objective of the organizational-level research was to assess factors that might be facilitating or impeding the promotion and use of the LWPP and LWQ programs. This component consisted of focus groups with Soil and Water Conservation District (SWCD) staff across the state. Research sites were selected based on level of loan program use, with focus groups being held in high-use, medium-use, and low-use areas across Iowa. Discussion focused on staff knowledge and perceptions of the programs to identify strengths and weaknesses in implementation strategies.

The data that were collected through the survey and focus groups were analyzed and compiled in a final report that was submitted to IDNR.  Results showed that loan recipients invested an average of 25 percent more in conservation practices, established more practices, and were able to reach their conservation goals more quickly than those who relied on cost-share.  The report also contained numerous recommendations for improving the loan programs’ reach.

Outcome Statement:

Short-term results measure awareness and knowledge.

IDNR and IDALS administrators are using study results to demonstrate the effectiveness of the loan programs among funders and other stakeholders and are using the recommendations to improve the programs’ effectiveness and expand its scope.  Patti Cale-Finnegan, of the IDNR explained, “Relying on anecdotal information about program effectiveness can take program managers only so far.  Iowa State University’s study provided an objective evaluation of the State Revolving Fund loans for agricultural best practices.  The study, which used both quantitative and qualitative research methods, showed that the loan programs are serving their purpose to generate additional investments in conservation and water quality.  It also showed some of the strengths and weaknesses of program policies, delivery, and marketing.  We will use the information and recommendations from the study to reexamine the programs with the goal of increasing their effectiveness and reach.” This quote suggests that the research will have both immediate and longer-term impacts on program effectiveness.

Medium-term results measure behavior change.

By 1) documenting that loan program participants are investing more in conservation practices and doing so more quickly and 2) recommending strategies for improving program reach, this research will contribute to improved water quality and land productivity in Iowa over the medium and longer term. In addition, an indirect research finding suggested that state cost-share, as currently structured, may actually be retarding the rate of conservation practice adoption.  As Bill Ehm, IDNR Water Policy Director stated, “This analysis may well be telling us that we are entering a new paradigm in how government can effectively incentivize conservation practices on the landscape. Cost-share may be effectively limiting the amount of investment a landowner is willing to invest on an annual basis. This work may be the beginning of unfolding how we approach conservation incentives in the future.” While more research needs to be conducted on this issue, IDNR administrators are interested in examining it further.

Long-term results measure condition (i.e., new standard).

2009

160 Natural Resources and Stewardship 

Page last updated: August 5, 2009
Page maintained by Linda Schultz, lschultz@iastate.edu