Iowa pork producers Max Schmidt and Jon Caspers recall what the last EQIP was like. They say it greatly benefited crop producers, who had no size limitations. But it disadvantaged livestock producers, who were mostly shut out by the 1,000 animal unit restriction. An animal unit is equal to 2.5 pigs.

“The rules for EQIP before were targeted to just the small producer, and by the time they got around to applying for it, there would be another program that offered them more money,” recalls Schmidt, an Elma, IA, producer. Swaledale, IA, producer Caspers says he also could never qualify to use the EQIP program.

Schmidt charges that the previous EQIP was set up as a social program designed to limit participation, not a program to really protect the environment. Both agree the new EQIP should benefit producers in ramping up current conservation practices.

Secretary of Agriculture Ann Veneman concurs. Changes were needed to streamline and simplify participation in EQIP and the Conservation Reserve Program (CRP), she says.

“We are trying to cut the red tape to get the job done and enable producers to participate in our conservation programs in a timely manner,” she says. “This type of teamwork among USDA agencies is particularly critical as we implement the new farm bill.”

Program Funding

Kirk Ferrell, vice president of public policy, National Pork Producers Council (NPPC), explains the farm bill provides $11 billion in funding for EQIP (see Table 1). That includes $9 billion in new funding and $2 billion in reserve. Of that total, livestock producers get a 60% cut, or $6.6 billion for the 10-year life of the program. There is a $450,000 cap on livestock environmental expenditures for any individual or business enterprise.

That means Smithfield Foods would qualify for one allotment with a $450,000 cap, and their contract growers would also be eligible to participate.

Ferrell explains that based on NPPC's understanding of the EQIP rules, producers and/or companies found in violation of the Environmental Protection Agency's (EPA) Clean Water Act by a court of law, will be ineligible to qualify for EQIP funds.

The funds are targeted to improve conservation and environmental practices to comply with the EPA's new Confinement Animal Feeding Operation (CAFO) regulations. Those are due to be released by court order on Dec. 15, explains Ferrell.

“The goal is that rank-and-file professional pork producers will use this program to help lessen the environmental footprint their hog operations have on the nation's air, water and soil,” observes Ferrell.

EQIP is a cost-share program, estimated at 75% federal and 25% producer-funded. Ferrell urges producers to participate when the funding is made available.

“I can't imagine producers not participating in this cost-share program when they are going to be asked to raise the bar on environmental performance in their operations. It will help them develop a comprehensive nutrient management plan and help them build the waste nutrient structures that will be required of them under this CAFO and state regulations,” he observes. The federal CAFO rules are designed as a “floor,” meaning that states can impose additional regulations if they so choose, he notes.

Next Steps

USDA plans to roll out a comprehensive educational program to explain how the EQIP program will work, says Ferrell. County Natural Resources Conservation Service (NRCS) offices will have more program details.

To ensure accountability, NPPC is pressing NRCS/USDA officials to develop an index to document the environmental benefit of EQIP.

“We want to quantify how the environment is being enhanced with these EQIP dollars,” says Ferrell. That way, the groundwork will be laid for reauthorization of funding in six years in the next farm bill.

The EQIP funding was half the conservation puzzle for the pork industry, observes Ferrell. The other half is release of the new CAFO regulations. He says those federal rules will be tough. But he is confident EPA has revised them so that livestock producers are able to comply.

Table 1. EQIP Program Funding, 1996 vs. 2002

Provision 1996 Farm Bill 2002 Farm Bill Comments
Program Funding $200 million a year
$2 billion over 10 years
$400 million in '02
$700 million in '03
$1 billion in '04
$1.2 billion in '05 and '06
$1.3 billion in '07-'11
$11 billion over 10 years
The livestock and poultry community worked hard to secure the funds necessary to address the projected 10-year costs of federal, state and local mandatory manure management, water and air quality protection requirements.
Payment Limits $10,000 per year $450,000 from all contracts entered during the course of this farm bill. Livestock producers supported the use of a realistic payment limit over the size limits created in the '96 measure. A payment limit can effectively ensure that producers who really need this assistance can get it.
Funding Split Funds split evenly between livestock and row crop producers. 60% of funds reserved for livestock and poultry producers. Noting the needs of the livestock community, Congress reconfigured the funding ratio.
Total Funds
for Livestock
$1 billion over 10 years $6.6 billion over 10 years Funds will adequately address the needs of most independent producers.
Size Limits Funds limited to operations less than 1,000 animal units. No size limitation If family-owned or operated livestock operations were to remain economically viable addressing environmental concerns, it was imperative that access to financial assistance NOT be size-related.
Priorities Priority areas required USDA to determine need based on small geographic areas, like a watershed. Priority “areas” are eliminated. The Secretary of Agriculture is directed to prioritize animal waste management systems. There is a substantial number of high value, high priority conservation practices providing valuable environmental benefits that producers across broad parts of the country need assistance to implement. EQIP must place major emphasis on helping producers adopt conservation practices that are not defined on a geographical basis.
Available Cost-Share Up to 75% Up to 75%
Technical Assistance Allowed the Secretary of Agriculture to decide on the amount of EQIP funds to be used for technical assistance. Allows the Secretary of Agriculture to decide on the amount of EQIP funds to be used for technical assistance. A well-developed and well-funded program will be unsuccessful if technical expertise is not available to guide producers.
Contracts No limit on the number of contracts a producer can have. Contract available from 5-10 years. Limits contracts to one structural practice. No limit on the number of contracts a producer can have. Contract shall be one year longer than it takes to install the conservation practice(s). Allows contracts involving one or more structural practices. Allows producers flexibility under the payment limit to address needs at more than one location, and to not have a contract any longer than necessary to ensure the practices are installed and up and running properly.
Purpose of EQIP Carries out a program that maximizes environmental benefits in: protecting soil, water, grazing lands, wetlands and wildlife habitat and assists producers in complying with environmental laws. Promotes agricultural production and environmental quality as compatible goals; optimizes benefits by helping producers comply with environmental laws. Adds “air” to the list of protected resources. Meets livestock's number one goal of ensuring adequate EQIP funds are available to help producers deal with environmental laws and regulations; includes “air” as a top resource to be protected by EQIP; eliminates cumbersome and unworkable 1996 requirements.
Means Testing Other than the prohibition against allowing “large” livestock operations (defined by the Secretary of Agriculture as 1,000 animal units), there is no means testing in the 1996 bill. $2.5 million means test; Any producer with an adjusted gross income exceeding $2.5 million and who receives more than 25% of their income from a non-agricultural source is not eligible for participation in any federal farm program. Requirement is designed to help ensure that EQIP funds are going to producers who are almost exclusively dependent on farming for their income, and not to producers with the means to otherwise bear the costs of these conservation practices.