Environmental Quality Incentives Program

Helping farmers and ranchers share the costs of addressing natural resource concerns

In addition to providing food and fiber, farmers and ranchers are important managers of our natural resources. The Environmental Quality Incentives Program (EQIP) is a voluntary conservation program that offers farmers and ranchers financial cost-share and technical assistance to implement conservation practices on working agricultural land. EQIP assistance is available through a general pool, and also through special initiatives. EQIP’s special initiatives highlight specific practices or natural resources, such as the Organic Initiative, which provides separate funding pools for transitioning and certified organic producers.

Learn more about EQIP:

Program Basics

Through EQIP, the U.S. Department of Agriculture (USDA) supports producers interested in conserving and improving natural resources on their farms and ranches. EQIP is a voluntary program and is administered by USDA’s Natural Resources Conservation Service (NRCS).

EQIP participants install or implement structural, vegetative, and management practices – like improving irrigation efficiency, restoring pasture, or nutrient and pest management – on eligible agricultural land and nonindustrial private forestland. In return, NRCS provides financial cost-share assistance and technical assistance through a contractual agreement.

Payments for conservation improvements and activities cover income foregone, as well as costs incurred that are associated with planning, design, materials, equipment, installation, labor, management, maintenance, and training. When determining the amount and rate of payment to compensate income foregone, USDA can weight practices that promote soil health; water quality and quantity improvement; nutrient management; pest management; air quality improvement; wildlife habitat development (including pollinator habitat); and invasive species management.

EQIP may provide up to 75 percent of the costs of certain conservation practices. However, socially disadvantaged, limited-resource, beginning, and veteran farmer and ranchers are eligible for cost-share rates of up to 90 percent. This same population of producers is also eligible for up to 50 percent advance payment for costs associated with planning, design, materials, equipment, installation, labor, management, maintenance, or training.

The length of an EQIP contract varies; contracts can last up to ten years, though most last for one to three years. Contract activities are carried out according to an EQIP plan of operations developed in conjunction with the producer. The plan identifies the appropriate conservation practice or practices to address the resource concerns. Examples of vegetative and structural conservation practices include terraces, manure waste lagoons, irrigation equipment, grassed waterways, filter strips, and wildlife habitat enhancement. Examples of management practices include conservation crop rotation, nutrient management, drainage management, and integrated pest management. The practices are subject to NRCS technical standards adapted for local conditions. Many specific features of EQIP are determined by NRCS State Conservationists with advice from local working groups and State Technical Committees.

EQIP also supports several national initiatives that may be available to producers engaged in specific kinds of agricultural activities or located in specific geographic areas. Current national initiatives include: the On-Farm Energy Initiative; the Seasonal High Tunnel Initiative; the National Water Quality Incentives Initiative; the Organic Initiative; and a new option for Incentive Contracts within EQIP, which was created in the 2018 Farm Bill.

Eligibility

To be eligible to apply for EQIP funding, an applicant must be the owner or operator of eligible land engaged in agricultural, forestry, or livestock production. Eligible land includes cropland, rangeland, pasture, nonindustrial private forest land, and other farm or ranch lands.

Fifty percent of total EQIP funding is set aside for livestock operations at the national level, including grazing management practices. At least 10 percent of EQIP funds are dedicated for practices that support the restoration, development, protection, and improvement of wildlife habitat. Some states also reserve funds for particular types of operations – such as confined animal feeding operations (CAFOs), or particular resource concerns – such as dedicated funding in certain Midwestern states to support pollinator health, particularly honeybees. Moreover, NRCS has established several separate funding pools through special initiatives, such as the Organic Initiative.

Five percent of EQIP funds are set-aside in a designated pool for beginning farmers and ranchers, and an additional 5 percent is set-aside for socially disadvantaged farmers – including minority and tribal producers. Additionally, veteran farmers are given preference within these two priority set-asides.

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, but in general applications are ranked based on:

• Overall cost-effectiveness of the proposed approach compared to the anticipated conservation benefits of the project.
• How effectively and comprehensively they address specified resource concerns.
• Fulfillment of EQIP program goals.
• Improvement of conservation practices or systems in place on the operation at the time the contract offer is accepted, or will complete a conservation system.

All activities under this program must work toward conservation of natural resources. All approved applicants are responsible for working with NRCS to develop and submit a conservation plan that will address the situation on the applicant’s land relevant to the identified conservation needs or objectives that are to be addressed. The payment limit for General EQIP is $450,000 over the life of the 2018 Farm Bill.

EQIP Organic Initiative

The EQIP Organic Initiative provides financial assistance to organic producers looking to address resource concerns by implementing and installing conservation practices tailored to organic producers. It is available in all states and all counties through local NRCS field offices.

Examples of conservation activities eligible for funding through the Organic Initiative include: developing conservation plans; establishing buffer zones; planning and installing pollinator habitat; improving irrigation efficiency; and enhancing cropping rotations and nutrient management.

Organic, transitioning-to-organic, and producers exempt from National Organic Program (NOP) certification requirements are eligible to contract with NRCS to install and implement organic-specific conservation activities consistent with an organic system plan. These producers compete in separate funding pools, and contract payments are capped at $140,000, which was recently increased from $20,000 annually or $80,000 over any six-year period. Organic producers can also apply for the general EQIP program, which has a higher payment cap, but is also more competitive.

EQIP Seasonal High Tunnel Initiative

The EQIP Seasonal High Tunnel Initiative provides cost-share funding and technical assistance to farmers who want to extend the growing seasons on their farms by using high tunnels.

High tunnels (also known as hoop houses) are structures that modify the growing environment through the construction of hoops covered with plastic that are placed over the growing area.  Unlike some greenhouses, high tunnels require no energy as they rely on natural sunlight to modify the inside climate, creating favorable conditions for producing vegetables and specialty crops.

The seasonal high tunnel initiative began as a three-year pilot program in 2009, establishing high tunnels as an interim conservation practice standard.  The pilot program was designed to help NRCS assess environmental benefits that may result from the use of the tunnels.  After three years of continued growth and interest in the program, the seasonal high tunnel is now an established conservation practice standard (#325 in the NRCS numbering system).

EQIP Incentive Contracts

The 2018 Farm Bill established a new option for Conservation Incentive Contracts within EQIP.  Incentive Contracts offer conservation assistance that is very similar to that of the general EQIP in terms of eligible land, eligible producers, and the fact that they must address a resource concern. While general EQIP contracts can be as short as 1 year, Incentive Contracts must be at least 5 years, and no more than 10 years.

States will need to identify up to three eligible priority resource concerns for specific regions or watersheds. Payments available for Incentive Contracts also differ from general EQIP, as incentive payments include two components – one for adopting and installing, and one for managing and maintaining. The basic payment factors for Incentive Contracts largely mirror how payments are determined for general EQIP, with the addition of consideration for the level and extent of the practice within EQIP Incentive Contracts. Under Incentive Contracts, participants have two different payment options, including funding through annual payments for certain incentive practices to reach increased levels of conservation, or assistance through a practice payment to implement an incentive practice. In the case of annual payments, they are provided at the beginning of each fiscal year, whereas the practice payments are provided for the implementation of a specific practice.

NRCS has yet to release the details of implementation of this new option, but EQIP Incentive Contracts present a useful tool within EQIP for longer-term, management based contracts, and for farmers and ranchers looking to eventually transition to comprehensive stewardship.

The Program in Action

Over the past two decades, EQIP assistance has been used across the country to help farmers conserve natural resources in many ways. Between 2009 and 2018, NRCS obligated over $13.8 billion in financial and technical assistance through EQIP cost-share contracts. Over 384,000 farmers and ranchers received contracts to support conservation efforts on more than 115 million acres. In fiscal year (FY) 2018 alone, over $1.87 billion in financial and technical assistance was obligated to support over 42,800 EQIP contracts covering more than 13.6 million acres.

For example, over 2.6 million acres were planted with cover crops in FY 2018 using EQIP financial and technical assistance. During that same year, over 9,000 contracts were granted to implement prescribed grazing on land covering over 2.6 million acres.

Here are just a few examples of the impact this program is having on the ground:

• Missouri – Improving Plant and Animal Health. A beginning rancher located near Wellsville, Missouri utilized EQIP funds to grow her cow-calf operation. As part of her conservation plan, she implemented a rotational-grazing system on paddocks of warm-season grasses and legumes, separated by solar-powered electric fencing. Management-intensive rotational grazing is better for forage and cattle, because it maximizes the forage base and uses nutrient-rich animal manure as fertilizer.

• Oregon – Assisting Organic Producers. Through the EQIP Organic Initiative, a produce farm located in Kings Valley, Oregon was able to incorporate soil and water quality projects onto their certified organic farm. Projects included installing a grassed waterway to reduce erosion, minimize sediment runoff, and improve habitat for threatened and endangered fish; planting a hedgerow for pollinator habitat; developing a waste management plan; and implementing crop rotations and cover crops for soil health.

• Minnesota – Extending the Growing Season for Vegetable Producers. A small vegetable farmer north of the Twin Cities received an EQIP contract that funded the construction of a seasonal high tunnel. Also called “hoop houses,” high tunnels operate like greenhouses to help producers extend the growing season. NRCS also provided technical and financial assistance to install a native grass field border to keep nutrients and sediments from entering nearby waterways.

Read more about how EQIP has helped farmers and ranchers steward their land:

How to Apply and Program Resources

NRCS accepts EQIP and EQIP Organic Initiative applications year-round on a continuous basis, however, State Conservationists batch and rank applications periodically throughout the year. State and local NRCS offices will have a list of batching dates, as well as information regarding the practices and special initiatives available in that state. To locate the NRCS office nearest you and for additional information on EQIP and EQIP Organic Initiatives, see below:

Program History, Funding, and Farm Bill Changes

EQIP was first authorized in the 1996 Farm Bill, and has been reauthorized and modified in each subsequent farm bill since then. The 2018 Farm Bill increases total funding available for EQIP; up to $2 billion in annual funding by 2023. Within EQIP, the new farm bill also establishes a new EQIP Incentive Contracts option, but does not designate an amount of funding that must go towards those contracts. The 2018 Farm Bill retains the 5 percent set-asides available for beginning and socially disadvantaged producers, and makes important improvements to the advance payment option. Additionally, the farm bill increases the wildlife set-aside from five to ten percent, and also increases the payment rate for the EQIP Organic Initiative to $140,000 over the five years of the bill.

The 2018 Farm Bill also expands EQIP eligibility to include states, irrigation districts, groundwater management districts, acequia, land-grant mercedes, or other similar entities for water conservation or irrigation efficiency projects. To be eligible, land must be controlled directly by a producer, or under the control of an irrigation entity while also adjacent to land controlled by a producer. The farm bill also makes clear that how much funding is allocated to each state can not be modified as a result of this new eligibility.

The overall EQIP payment limit was increased to $450,000 under the 2014 Farm Bill, and the 2018 Farm Bill retains this payment limit. The new farm bill also increases the payment limit for EQIP Organic Initiative participants to $140,000 over five years.

Finally, the 2018 Farm Bill continues to provide EQIP funding on a permanent basis, and gradually increases annual funding levels over the course of the farm bill above the levels provided in the 2014 Farm Bill. As a result, the program will not require new funding at the end of the five-year farm bill period.

Environmental Quality Incentives Program Funding

Fiscal Year
Total Funding Available (millions)

2019
$1,750

2020
$1,750

2021
$1,800

2022
$1,850

2023
$2,250

Please note: The funding levels in the chart above show the amount of mandatory funding reserved by the 2018 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 Committees decide to raid the farm bill to fund other programs under its jurisdiction. In addition, EQIP is subject to automatic cuts as part of an annual sequestration process established by the Budget Control Act of 2011.

For the most current information on program funding levels, please see NSAC’s Annual Appropriations Chart.

Authorizing Language

Section 2302 of the Agriculture Improvement Act of 2018 amends Chapter 4 of subtitle D of title XII of the Food Security Act of 1985, to be codified at 16 U.S.C. 3839aa.

Last updated in May 2019.