By Jonathan Coppess and Emily Judith Diaz-Vallejo
It is possible that the conceptualization of agricultural conservation, as reflected in federal policy, is insufficient, incomplete, or too narrow, and that helps explain issues such as funding challenges, backlogs in approved applications, farmer frustration, low adoption, discontinuation of critical practices, and more (farmdoc daily, September 11, 2025; February 13, 2025; May 23, 2024; September 28, 2023). Such questions can fuel criticism, but better serve as diagnosis for rethinking conservation policy design. To that end, the Policy Design Lab, in collaboration with the Agroecosystem Sustainability Center (ASC), entered into a cooperative agreement with USDA’s Natural Resources Conservation Service (NRCS) to explore measures of risk associated with the adoption and implementation of conservation practices. The argument, or hypothesis, is that farm risk is integral to developing a more complete understanding of the farmer’s costs of conservation; a more complete concept of costs, in turn, could inform policy designs that better assist farmers with managing the learning curve—the transitions and adjustments necessary for successfully implementing conservation (farmdoc daily, April 24, 2025; May 9, 2025; June 5, 2025; October 30, 2025). This article introduces a series that will discuss the work undertaken pursuant to this cooperative agreement, as well as offer policy suggestions and avenues for future research and work. A topic of this scale and scope needs a place to start. We began with cover crops and the Environmental Quality Incentives Program (EQIP).
Policy Background: EQIP Developments
In EQIP, Congress authorized payments for “performing a practice” that are not to exceed 75% of the “costs associated with planning, design, materials, equipment, installation, labor, management, maintenance, or training” or “100 percent of the income foregone by the producer,” or a combination of the two (16 U.S.C. §3839aa-2(d)(2)). USDA defines income foregone as “an estimate of the net income loss associated with the adoption of a conservation practice . . . one of the costs associated with practice implementation” (7 C.F.R. §1466.3). Note again that Congress has authorized fixed amounts of funding for these payments and practices, moving from $2.655 billion in fiscal year (FY) 2026 to $3.255 billion in FY2031 (16 U.S.C. §3841). Congress has also mandated that at least 50% of the funding be “targeted at practices related to livestock production, including grazing management practices” (16 U.S.C. §3839aa-2(d)(2)). These designs are significant limits on, and complications to, EQIP that impact the farmers seeking the assistance to implement conservation.
When Congress created EQIP in the 1996 Farm Bill, the purpose was to authorize policy that “maximizes environmental benefits per dollar expended” providing both “cost-share payments” and “incentive payments” for implementing conservation practices; funding for the program, however, was set at $200 million per fiscal year at a time when American farmers were planting nearly 270 million acres just to the major row crops on average, representing an investment of less than $0.75 per average planted acre (P.L. 104-127). Congress has evolved EQIP and increased its funding. The 2002 Farm Bill expanded cost-share payments, while increasing funding from $400 million in FY2002 to $1.3 billion in FY2007 (P.L. 101-171). In the 2008 Farm Bill, Congress added the provision authorizing payments for 100 percent of income foregone and increased funding from $1.2 billion in FY2008 to $1.75 billion in FY2012 (P.L. 110-246). Congress generally continued this design for EQIP in the 2014 Farm Bill, with funding from $1.35 billion for FY2014 to $1.75 billion for FY2018 (P.L. 113-79).
In the 2018 Farm Bill, Congress expanded “income foregone” for incentive contracts (in identified watersheds or other appropriate regions) to include “increased economic risk” and any revenue lost “due to anticipated reductions in yield,” as well as any “economic losses” during transitions to resource-conserving systems for conservation incentive contracts (P.L. 115-334, at Sec. 2304(g); 16 U.S.C. 3839aa-2(j)). Congress explained that the intent was “that states should increase EQIP incentives for those practices which are especially effective at addressing local or regionalized priority resource concerns . . . to promote further adoption of these highly beneficial practices by producers in high priority watersheds” (H. Rept. 115-1072, at 576). USDA implementing regulations mirrored the Congressional text, including as income foregone the “increased economic risk” and “[l]oss in revenue due to anticipated reductions in yield” or other economic losses during transition to different resource-conserving systems (7 C.F.R. 1466.44; see also, USDA-NRCS, September 25, 2020). Congress, by adding and expanding the scope of financial assistance for a farmer’s “income foregone” from implementing conservation practices, advanced the design of the program in important ways, although it collides with the overall funding cap and other allocation issues.
Source : illinois.edu