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A new report, Costly versus cost-effective: How EQIP can be improved to serve more farmers and the climate, from IATP published on April 2, 2024 finds that an outsized share of the funding for the conservation program Environmental Quality Incentives Program (EQIP) financed expensive practices with little or no conservation benefits, while two-thirds of farmer applicants were rejected from the program in 2023. As Congress debates the next Farm Bill, the report offers recommendations on how Farm Bill-funded EQIP should be reformed to help more farmers build climate resilience and reduce emissions.

Watch the video to hear from report author IATP Program Associate for Climate and Rural Communities Michael Happ about the key findings of the report. 


Hi, I'm Michael Happ. I am the program associate for climate and rural communities at the Institute for Agriculture and Trade Policy. We're excited to release a new report from IATP. It's called Costly versus cost-effective. And it's looking at one USDA conservation cost-share program called the Environmental Quality Incentives Program. That's known as EQIP. Basically what EQIP does is if farmer has a conservation need on their farm, if they look out into their field and they see erosion going on, or if they want to add trees or a buffer between their field in the stream EQIP can help them pay for that.

EQIP can be a reimbursement program. It can help low-income farmers pay the cost up front with anywhere between 50 and 75% cost share. EQIP can help farmers adapt to climate change, build resilience on their farm, even reduce greenhouse gas emissions and a lot of EQIP practices are eligible for climate-smart funding. There's a whole list of practices that are considered climate smart by the U.S. Department of Agriculture, and that's eligible for a lot more funding through the Inflation Reduction Act (IRA).

And it's helped a lot of farmers do a lot of great conservation practices on their farms. But unfortunately, a lot of money goes toward a large scale industrial practices. And when I am talking about industrial scale practices, these are practices that are only useful for large scale operations. For example, anaerobic digesters. That's the sort of practice that only works if you've got over 500 cows or over 2,000 hogs or are trucking in manure from that many animals.

And there are other practices like waste storage facilities that, you know, really only help confined animal feeding operations. A lot of, potentially thousands, of animals cooped up in one place, where you need to liquefy them in order and keep it stored in a big storage facility. So we still find that two out of three farmers who apply to EQIP are being turned away.

On top of that, we looked at all the different EQIP practices, how much money is going toward them and how many farmers are served by those practices. And there are just 10 EQIP practices that cost over $50,000 per contract. Those 10 practices took up about 11% of the funding. Ten out of 150 EQIP-eligible practices.

We also looked at a couple of states for kind of examples of how funding large-scale operations can come at the expense of small-scale folks. In Vermont, for example, just two anaerobic digester contracts cost over $840,000. With that money, you could instead fund hundreds of conservation cover contracts, costing anywhere between three and $6,000. Those those are the sorts of small-scale contracts that can help small-scale farmers build resilience in their soil, build economic resilience and reduce greenhouse gas emissions. 

Congress is still debating the Farm bill. They're writing drafts right now in the Senate and in the House. And there are a couple of recommendations we have that can help solve this problem.

For one, we think the payment limit for eclipse should go down right now. A farmer can receive up to $450,000 from EQIP over five years. We think that should go down to $150,000 so that instead of funding these large-scale operations, we can find more small-scale and mid-scale folks. We also think that some practices should be removed from the climate-smart list.

For example, anaerobic digester. They've been found to increase herd sizes and the greenhouse gas reductions are not as strong as sometimes advertised. We also think that there should be more of an emphasis on organic practices that reduce the need for synthetic fertilizers and and pesticides. And really focusing in on nitrous oxide as a greenhouse gas, which we know agriculture is a huge contributor to nitrous oxide emissions, a very potent greenhouse gas.

So if people want to learn more, they can read the report at 

Read the report here