Need Conservation Dollars? Call Your State Ag Commissioner.

A state revolving fund (SRF) is a funding source available to some farmers that originates with federal, state and other capital and then issues loans to borrowers. As loans are repaid with interest, the underlying fund grows, and these increased funds are used to issue more loans. Thus, these funds “revolve.” States can also issue bonds in order to contribute to the SRF.

( Environmental Defense Fund )

Where will the dollars come from to fund that next conservation practice you want to implement on your farm?

Your state department of agriculture might have just the answer—and resources—you need.

That was the message Barb Glenn, CEO, National Association of State Department of Agriculture, delivered to farmers this week as a panelist at the 2019 Sustainable Agriculture Summit in Indianapolis.

“We have some amazing commissioners, and they're leading some programs that you all need to know about,” Glenn said.

She, and fellow presenter, David Festa, senior vice president of ecosystems, Environmental Defense Fund, highlighted various funding opportunities available by state.

The opportunities are also detailed in a new report, Innovative State-Led Efforts to Finance Agricultural Conservation, published by the Environmental Defense Fund and K·Coe Isom. It is available here: https://bit.ly/2O8qTlw

Some of the funding opportunities Glenn and Festa discussed, included:

In Iowa, the Department of Agriculture and Land Stewardship (IDALS) created the Cover Crop-Crop Insurance Demonstration Project in 2017.

“They pay a $5 rebate to farmers for every acre planted to cover crops,” Glenn says.

A coalition of farmers, agricultural organizations and conservation groups developed the program to help meet the goals of the state’s nutrient loss reduction strategy.

The three-year project has been so successful, Illinois Department of Agriculture officials announced earlier this year they will implement a similar program with farmers, called Fall Covers for Spring Savings: Crop Insurance Reward Pilot Program. Similar to the Iowa program, Illinois will also provide $5 per acre to farmers who adopt cover crops.

In Delaware, the state’s Clean Water State Revolving Fund (CWSRF) has a program focused on nonpoint source pollution called the Agricultural Nonpoint Source Pollution Program (AgNPS). The program has historically provided loans for poultry and dairy farmers to implement management practices that reduce nutrient and effluent runoff.

Delaware has a large poultry industry, and 784 of the 830 loans administered under this program have gone to poultry farmers. Producers must be under contract with certain integrators in order to be eligible to receive a loan. These integrators have signed a memorandum of understanding guaranteeing repayment of the loan.

“The guarantee is if you default, you won’t lose the farm. The integrator assumes the risk,” said Festa, who noted there’s been “essentially zero” defaults.

 Integrators assume the loan risks, because they need a robust, sustainable and local supply chain.

“If there’s a big disruption in supply, the integrators will have to go far away to (get product) to meet demand, and that’s complicated and expensive,” Festa explained.

There are currently four poultry integrators (Perdue, Allen Harim, Mountaire and Tyson) and two dairy integrators (Land O’ Lakes and Dairy Farmers of America) that participate in the Delaware program.

Elsewhere, in Pennsylvania, there’s a program available that gives a tax break to companies that help farmers, with financial incentives, adopt conservation practices.

“This is a program that hasn’t been taken on very much because it hasn’t been publicized,” Festa said. “But this is the kind of thing that I get excited about when we start to see all of these little pieces coming together to really fundamentally alter the reality around the economics of farming.”

Festa and Glenn said of all the various ways states are addressing the funding of conservation practices, one that they especially like is in California. There, Secretary of the California Department of Food and Agriculture, Karen Ross, has taken revenue from the state’s 2019-20 Cap & Trade Expenditure program, about $200 million, and set up services to help farmers adopt a variety of conservation practices.

California’s funding available for farmers to tap into for 2019-20 includes:

    $65 million to lower emissions by replacing and upgrading ag diesel engines for equipment such as tractors, harvesters, and heavy-duty trucks;
    $34 million for dairy manure methane reduction programs; and
    $28 million for the Healthy Soils program.

The funding doesn't include grants only, Festa noted. “Ross is helping support more students at the local community colleges that are very important to the ag industry,” he said, as a for instance. “She’s taking a full-spectrum approach. I think that is really a powerful, powerful new way of looking at how to accelerate the ability of farmers to take off on these actions and yes, be good for business and good for the planet.”

Looking forward, Festa said he would like states and the federal government to look at how they spend dollars set aside to address natural disasters. He noted that in 2018 here was $20 billion set aside for that purpose compared to $6 billion in the farm bill earmarked for conservation.

“Imagine if we could direct a portion of that $20 billion towards our farm activities. That would be a whole new source of revenue, and it would be a way for farmers to really participate in helping protect our country from extreme weather events that we see happening,” he said.

Both Festa and Glenn encouraged farmers to reach out to their respective state departments of agriculture to see what is being done to fund the adoption of conservation practices.

“Ask them, “What are you doing for me on this right now? What are we doing together? And who do we need to bring to the table to enhance a new program that's really innovative and provides me with support like what’s going on in Delaware or California is doing,’” Glenn advised.

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