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**United States Department of Agriculture**

**Natural Resources Conservation Service**

Interim Final Benefit-Cost Analysis

for the

Environmental Quality Incentives Program

(EQIP)

**Food, Conservation, and Energy Act of 2008**

**Title II -- Conservation**

**Subtitle F -- Environmental Quality Incentives Program**

January 9, 2009

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########### USDA Nondiscrimination Statement {#usda-nondiscrimination-statement .unnumbered}

########### The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, age, disability, and where applicable, sex, marital status, family status, parental status, religion, sexual orientation, genetic information, political beliefs, reprisal, or because all or a part of an individual's income is derived from any public assistance program. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact USDA\'s [**TARGET Center**](http://www.usda.gov/oo/target/) at 202-720-2600 (voice and TDD). {#the-u.s.-department-of-agriculture-usda-prohibits-discrimination-in-all-its-programs-and-activities-on-the-basis-of-race-color-national-origin-age-disability-and-where-applicable-sex-marital-status-family-status-parental-status-religion-sexual-orientation-genetic-information-political-beliefs-reprisal-or-because-all-or-a-part-of-an-individuals-income-is-derived-from-any-public-assistance-program.-not-all-prohibited-bases-apply-to-all-programs.-persons-with-disabilities-who-require-alternative-means-for-communication-of-program-information-braille-large-print-audiotape-etc.-should-contact-usdas-target-center-at-202-720-2600-voice-and-tdd. .unnumbered}

########### To file a complaint of discrimination write to USDA, Director, Office of Civil Rights, 1400 Independence Avenue, S.W., Washington, D.C. 20250-9410 or call 800-795-3272 (voice) or 202-720-6382 (TDD). USDA is an equal opportunity provider and employer {#to-file-a-complaint-of-discrimination-write-to-usda-director-office-of-civil-rights-1400-independence-avenue-s.w.-washington-d.c.-20250-9410-or-call-800-795-3272-voice-or-202-720-6382-tdd.-usda-is-an-equal-opportunity-provider-and-employer .unnumbered}

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# Forward

Pursuant to Executive Order 12866, Regulatory Planning and Review, the
Natural Resources Conservation Service (NRCS) has conducted a
benefit-cost analysis (BCA) of the Environmental Quality Incentives
Program (EQIP) as formulated for the Interim Final Rule. The analysis
estimates EQIP will have a beneficial impact on the adoption of
conservation practices and, when installed or applied to technical
standards, does so in a cost-effective manner. In addition, estimated
benefits would accrue to society for long-term productivity maintenance
of the resource base, non-point source pollution damage reductions, soil
carbon storage, energy conservation and wildlife habitat enhancement.

The Federal Crop Insurance Reform and Department of Agriculture
Reorganization Act of 1994, Title III, Section 304, requires that for
each proposed major regulation with a primary purpose to regulate issues
of human health, human safety, or the environment, USDA is to publish an
analysis of the risks addressed by the regulation and the costs and
benefits of the regulation. NRCS has determined that such a risk
assessment does not apply to this interim final rule.

In considering alternatives for implementing EQIP, USDA followed the
legislative intent to optimize environmental benefits, address natural
resource problems and concerns, establish an open participatory process,
and provide flexible assistance to producers who apply appropriate
conservation measures that enable Federal and State environmental
requirements to be satisfied.

Because it is a voluntary program, EQIP will not impose any obligation
or burden upon agricultural producers who choose not to participate. The
program was authorized by the Congress at \$7.325 billion over the
five-year period beginning in fiscal year (FY) 2008 through FY 2012,
with annual amounts specified at \$1.2 billion for FY 2008, \$1.337
billion in FY 2009, \$1.45 billion in FY 2010, \$1.588 billion in FY
2011, and \$1.75 billion in FY 2012.

# Table of Contents

[**Forward ii**](#forward)

[**Table of Contents ii**](#table-of-contents)

[**Lists of Figures and Tables ii**](#lists-of-figures-and-tables)

[**Executive Summary 2**](#executive-summary)

[**Methodology 2**](#methodology)

[**Conclusions 2**](#conclusions)

[**Background 2**](#background)

[**Legislative Authority 2**](#legislative-authority)

[**Need for the Regulation and Rationale for the Rule
2**](#need-for-the-regulation-and-rationale-for-the-rule)

[**Program Description and Features
2**](#program-description-and-features)

[**Program Objective 2**](#program-objective)

[**Program Overview 2**](#program-overview)

[**Application Prioritization 2**](#application-prioritization)

[**Funding 2**](#funding)

[**Participant Requirements 2**](#participant-requirements)

[**Description of Baseline Conditions
2**](#description-of-baseline-conditions)

[**Current Land Use and Resource Concern Trends:
2**](#current-land-use-and-resource-concern-trends)

[**Farm/Ranch Demographics: 2**](#farmranch-demographics)

[**Analytical Model 2**](#analytical-model)

[**Modeling Producer Participation
2**](#modeling-producer-participation)

[**Model Assumptions 2**](#model-assumptions)

[**Program Parameters 2**](#program-parameters)

[**Economic Parameters 2**](#economic-parameters)

[**Conservation Practices 2**](#conservation-practices)

[**Expected Costs 2**](#expected-costs)

[**Expected Environmental Benefits
2**](#expected-environmental-benefits)

[**Benefit Categories 2**](#benefit-categories)

[**Discounting of the Flow of Benefits over Time
2**](#discounting-of-the-flow-of-benefits-over-time)

[**Procedure to compare total Program Costs and Benefits by Benefit
Category
2**](#procedure-to-compare-total-program-costs-and-benefits-by-benefit-category)

[**Construction of the "Baseline" 2**](#construction-of-the-baseline)

[**Discussion of Policy Scenarios 2**](#discussion-of-policy-scenarios)

[**References 2**](#references)

[**List of Preparers (in alphabetical order)
2**](#list-of-preparers-in-alphabetical-order)

[**Appendix A. How NRCS Conducts Its Business.
2**](#appendix-a.-how-nrcs-conducts-its-business.)

[**Financial Assistance moving from cost-share rates to payment rates:
2**](#financial-assistance-moving-from-cost-share-rates-to-payment-rates)

[**Appendix B. Concentrated Animal Feeding Operations and EPA
Regulations
2**](#appendix-b.-concentrated-animal-feeding-operations-and-epa-regulations)

[**Appendix C. Relationship of EQIP to Other Farm Bill Conservation
Programs
2**](#appendix-c.-relationship-of-eqip-to-other-farm-bill-conservation-programs)

[**Conservation Reserve Program CRP) / Conservation Reserve Enhancement
Program (CREP)
2**](#conservation-reserve-program-crp-conservation-reserve-enhancement-program-crep)

[**Wetlands Reserve Program (WRP) 2**](#wetlands-reserve-program-wrp)

[**Wildlife Habitat Incentives Program (WHIP)
2**](#wildlife-habitat-incentives-program-whip)

[**Farm and Ranch Lands Protection Program (FRPP)
2**](#farm-and-ranch-lands-protection-program-frpp)

[**Conservation Security Program (CSP)
2**](#conservation-security-program-csp)

[**Conservation Stewardship Program (CStP)
2**](#conservation-stewardship-program-cstp)

[**Grassland Reserve Program (GRP) 2**](#grassland-reserve-program-grp)

[**State and Private Forestry Programs (U.S. Forest Service)
2**](#state-and-private-forestry-programs-u.s.-forest-service)

[**Summary of EQIP Interaction with Other Programs
2**](#summary-of-eqip-interaction-with-other-programs)

[**Appendix D. Development of Expected Costs by Benefit Category
2**](#appendix-d.-development-of-expected-costs-by-benefit-category)

[**Sheet and Rill Water Erosion 2**](#sheet-and-rill-water-erosion)

[**Grazing Land Productivity 2**](#grazing-land-productivity)

[**Irrigation Water Use 2**](#irrigation-water-use)

[**Air Quality 2**](#air-quality)

[**Fertilizer Use 2**](#fertilizer-use)

[**Wildlife Habitat 2**](#wildlife-habitat)

[**Energy Use 2**](#energy-use)

[**Carbon Sequestration 2**](#carbon-sequestration)

[**Animal Waste Management 2**](#animal-waste-management)

[**Appendix E: Development of Expected Benefits by Benefit Category
2**](#appendix-e-development-of-expected-benefits-by-benefit-category)

[**Sheet and Rill Water Erosion 2**](#sheet-and-rill-water-erosion-1)

[**Off-site Benefit Estimates: 2**](#off-site-benefit-estimates)

[**Grazing Land Productivity 2**](#grazing-land-productivity-1)

[**Irrigation Water Use 2**](#irrigation-water-use-1)

[**Air Quality 2**](#air-quality-1)

[**Fertilizer Use 2**](#fertilizer-use-1)

[**Wildlife Habitat 2**](#wildlife-habitat-1)

[**Energy Use 2**](#energy-use-1)

[**Carbon Sequestration 2**](#carbon-sequestration-1)

[**Animal Waste Management 2**](#animal-waste-management-1)

[**Appendix F: Producer Demographics and Its Possible Linkages to EQIP
2**](#appendix-f-producer-demographics-and-its-possible-linkages-to-eqip)

[**Introduction 2**](#introduction)

[**Potential impact of lower cost-share rate by "historically
underserved producers" on their numbers in EQIP and possible impact on
the environmental performance of EQIP
2**](#potential-impact-of-lower-cost-share-rate-by-historically-underserved-producers-on-their-numbers-in-eqip-and-possible-impact-on-the-environmental-performance-of-eqip)

[**Socially disadvantaged farmer or rancher
2**](#socially-disadvantaged-farmer-or-rancher)

[**Past Participation in NRCS Conservation Activities and Programs
2**](#past-participation-in-nrcs-conservation-activities-and-programs)

[**NRCS Responses 2**](#nrcs-responses)

[**Methods to Increase Participation
2**](#methods-to-increase-participation)

[**Beginning Farmer or Rancher 2**](#beginning-farmer-or-rancher)

[**Definition 2**](#definition)

[**Trends 2**](#trends)

[**Data 2**](#data)

[**Limited Resource Farmers or Ranchers (LRFRs)
2**](#limited-resource-farmers-or-ranchers-lrfrs)

[**Definition 2**](#definition-1)

[**Self-verification 2**](#self-verification)

[**Outreach 2**](#outreach)

# Lists of Figures and Tables

[**Figure 1. Location of socially disadvantaged operators and limited
resource farmers. 2**](#__RefHeading___Toc219115318)

[**Figure 2. Number of principal operators \-- African American,
Hispanic, Asian American and American Indian in 1992, 1997, and 2002.
2**](#__RefHeading___Toc219115319)

[**Figure 3. Land in farms by socially disadvantaged group.
2**](#__RefHeading___Toc219115320)

[**Figure 4. Percentages of beginning farmers and ranchers nationally.
2**](#__RefHeading___Toc219115321)

[**Figure 5. Distribution of farms by size with beginning farmer and
rancher principal operators. 2**](#__RefHeading___Toc219115322)

[**Figure 6. Number and distribution of limited resource farmers and
ranchers. 2**](#__RefHeading___Toc219115323)

[**Table 1. Summary of cumulative 5-year EQIP benefits and costs over FY
2008--FY 2012, using a seven percent discount rate.
2**](#__RefHeading___Toc219115373)

[**Table 2. Major agricultural uses of land in the United States.
2**](#__RefHeading___Toc219115374)

[**Table 3. Historical participation in EQIP.
2**](#__RefHeading___Toc219115375)

[**Table 4. Classes of benefits and their benefit transfer values used
in EQIP by source\*. 2**](#__RefHeading___Toc219115376)

[**Table 5. Distribution of benefits over time from year of installation
related to selected practices by benefit category.
2**](#__RefHeading___Toc219115377)

[**Table 6. Calculation of benefits and costs with a continuance of 2007
EQIP budget and program parameters by benefit category, FY 2008--FY
2012, using a seven percent discount rate.
2**](#__RefHeading___Toc219115378)

[**Table 7. Calculation of benefits and costs with expanded funding as
authorized by 2008 Act by benefit category, FY 2008--FY 2012, using a
seven percent discount rate. 2**](#__RefHeading___Toc219115379)

[**Table 8 Summary of cumulative 5-year EQIP benefits and costs over FY
2008--FY 2012, using a seven percent discount rate.
2**](#__RefHeading___Toc219115380)

[**Table 9. Summary of cumulative 5-year EQIP benefits and costs over FY
2008--FY 2012, using a three percent discount rate.
2**](#__RefHeading___Toc219115381)

[**Table 10. EQIP enrollment backlog by state, FY 2007.
2**](#__RefHeading___Toc219115382)

[**Table 11. EQIP cost-share rates by benefit category.
2**](#__RefHeading___Toc219115383)

[**Table 12. EQIP practices contracted and installed, FY 2007.
2**](#__RefHeading___Toc219115384)

[**Table 13. Historical and projected EQIP technical and financial
assistance, FY 1996--FY2012. 2**](#__RefHeading___Toc219115385)

[**Table 14. Summary of cumulative 5-year EQIP benefits and costs over
FY 2008--FY 2012, using a seven percent discount rate.
2**](#__RefHeading___Toc219115386)

[**Table 15. Historical EQIP data on practices affecting sheet and rill
water erosion. 2**](#__RefHeading___Toc219115387)

[**Table 16. Historical EQIP data on practices affecting grazing land
productivity. 2**](#__RefHeading___Toc219115388)

[**Table 17. Historical EQIP practices affecting irrigation water use.
2**](#__RefHeading___Toc219115389)

[**Table 18. Historical EQIP data on practices affecting air quality.
2**](#__RefHeading___Toc219115390)

[**Table 19. Historical EQIP practices affecting wildlife habitat.
2**](#__RefHeading___Toc219115391)

[**Table 20. Historical EQIP data on practices affecting energy use.
2**](#__RefHeading___Toc219115392)

[**Table 21. Historical EQIP data on practices affecting carbon
sequestration. 2**](#__RefHeading___Toc219115393)

[**Table 22. Historical EQIP data on practices used with CAFOs.
2**](#__RefHeading___Toc219115394)

[**Table 23. Previous estimates of farms needing CNMPs (2003).
2**](#__RefHeading___Toc219115395)

[**Table 24. Percent change in numbers of farms by livestock type from
1997 and 2002. 2**](#__RefHeading___Toc219115396)

[**Table 25. Percent changes applied to previous EPA estimates of CNMP
farms from 1997 to 2002. 2**](#__RefHeading___Toc219115397)

[**Table 26. CNMPs completed by NRCS. 2**](#__RefHeading___Toc219115398)

[**Table 27. Parameters for the benefits and costs of CNMPs
2**](#__RefHeading___Toc219115399)

[**Table 28. Distribution of benefits over time for practices affecting
sheet and rill water erosion.
2**](#table-28.-distribution-of-benefits-over-time-for-practices-affecting-sheet-and-rill-water-erosion.)

[**Table 29. Estimate of per-ton benefits from reduced sheet and rill
water erosion (in 2007 dollars). 2**](#__RefHeading___Toc219115401)

[**Table 30. Distribution of benefits over time for practices affecting
grazing land productivity. 2**](#__RefHeading___Toc219115402)

[**Table 31. Distribution of benefits over time for practices affecting
irrigation water use. 2**](#__RefHeading___Toc219115403)

[**Table 32. Distribution of benefits over time for practices affecting
air quality. 2**](#__RefHeading___Toc219115404)

[**Table 33. Average nutrient applications on corn by class of nutrient
management adopters. 2**](#__RefHeading___Toc219115405)

[**Table 34. Average estimated nutrient application with adoption of
NRCS conservation practice 590. 2**](#__RefHeading___Toc219115406)

[**Table 35. Reduced corn fertilizer input costs per acre with adoption
of nutrient management according to NRCS standards.
2**](#__RefHeading___Toc219115407)

[**Table 36. Distribution of benefits over time for practices affecting
wildlife habitat. 2**](#__RefHeading___Toc219115408)

[**Table 37. Distribution of benefits over time for practices affecting
energy use. 2**](#__RefHeading___Toc219115409)

[**Table 38. Distribution of benefits over time for practices affecting
carbon sequestration. 2**](#__RefHeading___Toc219115410)

[**Table 39. Estimated benefits and costs analysis of CNMPS, using a
seven percent discount rate. 2**](#__RefHeading___Toc219115411)

[**Table 40. Possible impacts of the increased cost-share rate for
"historically underserved producers" in EQIP.
2**](#__RefHeading___Toc219115412)

[**Table 41. Participation by minorities in conservation technical
assistance and programs for FY 2007\*.
2**](#__RefHeading___Toc219115413)

[**Table 42. National program participation summary, FY 2004\*.
2**](#__RefHeading___Toc219115414)

[**Table 43. FY 2002 to FY 2008 NRCS parity reports on customers served
through EQIP. 2**](#__RefHeading___Toc219115415)

[**Table 44. Farm bill response to the trends of socially disadvantaged
farmers. 2**](#__RefHeading___Toc219115416)

[**Table 45. Racial characteristics of principal operator who is a
beginning farmer or rancher\*. 2**](#__RefHeading___Toc219115417)

[**Table 46. Beginning farmer and rancher activity under EQIP, FY
2003--FY 2005. 2**](#__RefHeading___Toc219115418)

[**Table 47. FY 2006 beginning and limited resource farmer summary.
2**](#__RefHeading___Toc219115419)

[**Table 48. EQIP funding for limited resource farmers and ranchers.
2**](#__RefHeading___Toc219115420)

[**Table 49. Limited resource farms and other farm typology groupings.
2**](#__RefHeading___Toc219115421)

**Interim Final Benefit-Cost Analysis**

**Environmental Quality Incentives Program (EQIP)**

# Executive Summary

Pursuant to Executive Order 12866, Regulatory Planning and Review, the
Natural Resources Conservation Service (NRCS) has conducted a
benefit-cost analysis (BCA) of the Environmental Quality Incentives
Program (EQIP) as formulated for the Interim Final Rule. This
requirement provides decision makers with the opportunity to develop and
implement a program that is beneficial, cost effective, and that
minimizes negative impacts to health, human safety, and the environment.
Congress passed amendments to the program that requires the Secretary of
Agriculture, within 90 days after the enactment of the EQIP amendments,
to promulgate regulations necessary to carry out the program.

In considering alternatives for implementing EQIP, the United States
Department of Agriculture (USDA) followed the legislative intent to
optimize environmental benefits, address natural resource concerns and
problems, establish an open participatory process, and provide flexible
assistance to producers who apply appropriate conservation measures that
enable the satisfaction of Federal and State environmental requirements.
Because EQIP is a voluntary program, the program will not impose any
obligation or burden upon agricultural producers who choose not to
participate. The program has been authorized by the Congress at \$7.325
billion over the five-year period beginning in fiscal year (FY) 2008
through FY 2012, with annual amounts of \$1.2 billion for FY 2008,
\$1.337 billion in FY 2009, \$1.45 billion in FY 2010, \$1.588 billion
in FY 2011, and \$1.75 billion in FY 2012.

The EQIP technical and financial assistance facilitates the adoption of
conservation practices that, when installed or applied to technical
standards, can mitigate degradation of the environment. These actions
are not limited to their beneficial impacts on resource conditions
on-site, but produce significant off-site environmental benefits for the
public-at-large, such as the reduction of non-point source water
pollution, leading to enhancements to freshwater and marine water
quality and fish habitat, improved aquatic recreation opportunities, and
reduced sedimentation of reservoirs, streams, and drainage channels;
more efficient irrigation water usage; improved air quality by reducing
wind erosion; an increase in carbon stored in the soil, leading to
reduced atmospheric amounts of carbon; reduced pollution of surface and
ground water, leading to enhanced drinking water supplies; reduced flood
damages; conserved energy; and enhancements to wildlife habitat. Most of
these factors are taken into consideration in the transfer benefit
values used in this analysis.

Other significant environmental impacts have an appearance of being
solely a private benefit, such as: the maintenance of the long-term
productivity of the resource base, improved grazing productivity, more
efficient crop use of animal waste and fertilizer and the fostering of
energy conservation. However for this analysis, these impacts are
considered as public benefits in that they have also have impacts in
input and output markets, i.e. increasing the availability of those
inputs at lower prices and/or for use in other sectors of the economy.
This analysis did not utilize a social welfare impact model or general
equilibrium model that would show these final producer and consumer
welfare changes (brought about by changes in inputs used and output
levels of EQIP participants). Thus, the economic impacts estimated in
this analysis by these changes should be considered as first
approximations of possible social welfare gains in input and output
markets. In this analysis, the benefit categories which could be
construed as having a high component of private benefit are clearly
identified.

There is another group of benefits derived from EQIP which can not be
empirically estimated at this time. As explained in the body of the
report, there are also many conservation practices for which economic
benefit estimates are not available. For example, the benefits derived
from the remaining five percent of the EQIP funds used for 23 practices
for which monetary benefits are important but could not easily be
estimated (over half of these remaining funds were for the Pest
Management Practice--595). As a result, they are not included in the
quantitative estimates of benefits. In addition, many other
environmental impacts were not included in this economic analysis
because no clear conversion methods of the environmental impacts to
economic terms were available. For additional information on these
environmental impacts, see the NEPA environmental assessment for this
regulation. In the future, nationally consistent estimates of beneficial
environmental outcomes resulting from conservation practices and systems
will be possible through the use of the results from the interagency
Conservation Effects Assessment Project (CEAP). CEAP has been underway
since 2003, and is composed of multiple components focusing on cropland,
grazing land, wetlands, and wildlife. Initial CEAP results will be
available for the cropland component in FY2009 while results from the
other CEAP components will follow. These results are expected to improve
the Agency's ability to report on long-term conservation benefits being
delivered by programs, such as EQIP.

Despite these limitations in our ability to estimate environmental
benefits, the new EQIP is expected to have a substantial effect on the
environment due to expanded funding compared with a baseline of
continuing EQIP at an annual funding level of roughly \$1 billion.
Resource treatments are estimated to increase protection for an
additional 3.9 million acres for sheet and rill water erosion reduction,
3.9 million acres for wind erosion reduction improving air quality, 5.6
million acres for improved fertilizer management, 2.0 million acres for
net irrigation water reduction, 17.5 million acres for grazing land
productivity, and 2.8 million acres of improved wildlife habitat. Also,
the waste from an additional 1.3 million animal units[^1] will be
treated under the new program directly improving water quality. Using
these quantity changes plus benefit transfer values derived from the
literature, total benefits are estimated at \$10.4 billion for EQIP with
the 2008 Act expanded funding allocation. Throughout the analysis,
benefit estimates are compared to \$10.4 billion total costs which
include both the EQIP funds and costs borne by participants, producing a
net benefit of approximately \$57 million above total costs.

## Methodology

In developing the BCA for EQIP, it is necessary to identify a baseline
for comparison. The baseline for this analysis is EQIP as reauthorized
in the 2002 Act with FY 2007 funding levels. In the 2002 Act, EQIP
funding for FY 2005 through FY 2008 was capped at roughly \$1 billion
until the 2008 Act was passed when additional funding was provided. The
actual FY 2007 funding level of \$978 million is used as the baseline.

Public costs quantified in this analysis are the total TA and FA
assistance funds outlined in the Congressional Budget Office's (CBO)
scoring of the 2008 Act. Private costs are out-of-pocket costs paid
voluntarily by participants. As stated above, the quantifiable benefits
are a subset of the environmental benefits that accrue to the types of
practices implemented through EQIP. Available data and literature
support benefits in the following benefit categories:

-   Animal waste management (leading to improved water quality through
    better management) 1/ [^2];

-   Sheet and rill water erosion (reducing soil erosion);

-   Grazing land productivity (increasing yields) 1/;

-   Irrigation water use (reducing quantity used);

-   Air quality (through reduced wind erosion);

-   Fertilizer use (reduced fertilizer expense through nutrient
    management not associated with animal waste) 1/;

-   Wildlife habitat (enhanced wildlife viewing and hunting);

-   Energy use (reduced energy consumption associated with conservation
    tillage practices); and,

-   Carbon sequestration (higher soil carbon levels associated with
    conservation tillage and grassland practices).

In order to conduct the analysis, certain assumptions were made based on
the available data.

-   The practice mix for the current (2007-base) and the new EQIP is the
    same. The new rule places additional emphasis on energy, organic
    practices, and forest management; however, due to the lack of
    benefit data for these types of practices, their associated benefits
    are not included in this analysis[^3].

-   Quantifiable and per-unit benefits are constant and based on
    national average estimates.

-   Technical assistance costs incurred by NRCS are based on the full
    workload associated with implementing EQIP and take into
    consideration projected average contract sizes.

-   Average annual and net present value calculations use discount
    factors of seven and three percent, which are recommended by the
    Office of Management and Budget (OMB). All tables are presented
    using the seven percent discount rate. The analysis is also
    calculated using the three percent discount rate (see table 9).

-   Environmental benefits generated in the animal waste management
    benefit category were adjusted downward by 42 percent to account for
    mandatory regulatory requirements associated with large concentrated
    animal feeding operations (CAFOs). This reduction is necessary to
    avoid any double counting of benefits attributed to EPA's CAFO
    regulations. . The total CAFO-related costs associated with
    conservation practices were reduced by 23 percent.

-   Other than large CAFOs meeting EPA regulatory requirements, the
    adoption of conservation practices by EQIP participants is assumed
    to be solely attributed to their participation in EQIP.

## Conclusions

The EQIP interim benefit-cost analysis assumes that the basic program
features of EQIP created in 2002 (the "current program") remains the
same, but is funded at higher funding allocations as a result of the
2008 Act.

The summary table below shows the estimated values of each benefit
category and the estimated costs associated with EQIP for the "current"
(2007-base) and "new" (with increased funding) scenario. Under the
assumption that the current program continues at level funding, the
expected present value of benefits over the period of FY 2007 to FY 2012
is estimated at \$7.1 billion, with \$0.5 billion coming from improved
animal waste management and \$6.6 billion from improved land treatment.
Expected net benefits are estimated at \$39 million above total costs,
including producer costs, other non-federal costs, and federal (EQIP)
costs.

With expanded funding, the estimated present value of benefits over the
period of FY 2007 to FY 2012 was \$10.4 billion with \$0.8 billion
coming from improved animal waste management and \$9.6 billion from land
treatment. Estimated net benefits were \$57 million above total costs.
This provides \$18 million in additional net benefits due to the
expansion of EQIP funds in the 2008 Farm Bill over the roughly \$1.0
billion annual baseline funding.

+------------------+-------+------+------+------+-------+-------+-----+
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| .a               |       |      |      |      |       |       |     |
| nchor}**Table 1. |       |      |      |      |       |       |     |
| Summary of       |       |      |      |      |       |       |     |
| cumulative       |       |      |      |      |       |       |     |
| 5-year EQIP      |       |      |      |      |       |       |     |
| benefits and     |       |      |      |      |       |       |     |
| costs over FY    |       |      |      |      |       |       |     |
| 2008--FY 2012,   |       |      |      |      |       |       |     |
| using a seven    |       |      |      |      |       |       |     |
| percent discount |       |      |      |      |       |       |     |
| rate.**          |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| (\$ million of   |       |      |      |      |       |       |     |
| 2007 dollars)    |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| **Benefit        | **To  | **   | **   | **I  | *     | *     | **  |
| Category:**      | Not   | 2007 | 2008 | ncre | *2007 | *2008 | Uni |
|                  | Impl  | EQIP | Act  | ases | EQIP  | Act** | t** |
|                  | ement | with | Be   | with | with  |       |     |
|                  | E     | \$1  | nefi | the  | \$1   | **(   |     |
|                  | QIP** | bil  | ts** | 2008 | bi    | Acres |     |
|                  |       | lion |      | A    | llion | or**  |     |
|                  |       | /    | **&  | ct** | /     |       |     |
|                  |       | ye   | Cos  |      | y     | **A   |     |
|                  |       | ar** | ts** |      | ear** | nimal |     |
|                  |       |      |      |      |       | Uni   |     |
|                  |       | **FY |      |      | **(   | ts)** |     |
|                  |       | 2008 |      |      | Acres |       |     |
|                  |       | -**  |      |      | or**  |       |     |
|                  |       |      |      |      |       |       |     |
|                  |       | **FY |      |      | **A   |       |     |
|                  |       | 20   |      |      | nimal |       |     |
|                  |       | 12** |      |      | Uni   |       |     |
|                  |       |      |      |      | ts)** |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| > Animal waste   | \$0   | \$   | \$   | \$   | 2,72  | 4,06  | Ani |
| > management\*   |       | 554  | 816  | 262  | 4,000 | 1,000 | mal |
|                  |       |      |      |      |       |       | Un  |
|                  |       |      |      |      |       |       | its |
+------------------+-------+------+------+------+-------+-------+-----+
| > Sheet and rill | \$0   | \$1  | \$2  | \$   | 8,01  | 11,95 | Ac  |
| > water erosion  |       | ,948 | ,869 | 920  | 9,000 | 5,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| > Grazing land   | \$0   | \$3  | \$4  | \$1  | 35,58 | 53,05 | Ac  |
| > productivity   |       | ,111 | ,580 | ,470 | 6,000 | 7,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| > Irrigation     | \$0   | \$   | \$   | \$   | 4,01  | 5,98  | Ac  |
| > water use      |       | 231  | 341  | 109  | 4,000 | 5,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| > Air quality    | \$0   | \$   | \$   | \$   | 8,03  | 11,98 | Ac  |
|                  |       | 181  | 266  | 85   | 9,000 | 5,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| > Fertilizer use | \$0   | \$   | \$   | \$   | 11,37 | 16,95 | Ac  |
|                  |       | 601  | 885  | 284  | 0,000 | 3,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| > Wildlife       | \$0   | \$   | \$   | \$   | 5,66  | 8,43  | Ac  |
| > habitat        |       | 172  | 254  | 81   | 0,000 | 9,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| > Energy use     | \$0   | \$   | \$   | \$   | 7,44  | 11,10 | Ac  |
|                  |       | 210  | 309  | 99   | 6,000 | 2,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| > Carbon         | \$0   | \$   | \$   | \$   | 41,52 | 61,91 | Ac  |
| > sequestration  |       | 82   | 121  | 39   | 5,000 | 1,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| **Grand Total    | \$0   | \$7  | \$10 | \$3  |       |       |     |
| Benefits**       |       | ,091 | ,441 | ,350 |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
|                  |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| **Costs:**       |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| > Total          | \$0   | \$7  | \$10 | \$3  |       |       |     |
| > costs\*\*      |       | ,053 | ,384 | ,332 |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
|                  |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| **Net            |       |      |      |      |       |       |     |
| Benefits:**      |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| > Net benefits   | \$0   | \$39 | \$57 | \$18 |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| \*Environmental  |       |      |      |      |       |       |     |
| benefits from    |       |      |      |      |       |       |     |
| improved animal  |       |      |      |      |       |       |     |
| waste management |       |      |      |      |       |       |     |
| attributed to    |       |      |      |      |       |       |     |
| EQIP are 42      |       |      |      |      |       |       |     |
| percent below    |       |      |      |      |       |       |     |
| the total CAFO   |       |      |      |      |       |       |     |
| related benefits |       |      |      |      |       |       |     |
| to account for   |       |      |      |      |       |       |     |
| environmental    |       |      |      |      |       |       |     |
| benefits         |       |      |      |      |       |       |     |
| captured by EPA  |       |      |      |      |       |       |     |
| regulatory       |       |      |      |      |       |       |     |
| requirements on  |       |      |      |      |       |       |     |
| large CAFOs.     |       |      |      |      |       |       |     |
| Likewise, costs  |       |      |      |      |       |       |     |
| associated with  |       |      |      |      |       |       |     |
| large CAFOs      |       |      |      |      |       |       |     |
| represent about  |       |      |      |      |       |       |     |
| 23 percent of    |       |      |      |      |       |       |     |
| NRCS costs       |       |      |      |      |       |       |     |
| related to CAFOs |       |      |      |      |       |       |     |
| of all sizes     |       |      |      |      |       |       |     |
| were deducted    |       |      |      |      |       |       |     |
| from the         |       |      |      |      |       |       |     |
| analysis.        |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| \*\*Total costs  |       |      |      |      |       |       |     |
| include all      |       |      |      |      |       |       |     |
| federal costs    |       |      |      |      |       |       |     |
| plus private and |       |      |      |      |       |       |     |
| other            |       |      |      |      |       |       |     |
| non-federal      |       |      |      |      |       |       |     |
| costs which have |       |      |      |      |       |       |     |
| historically     |       |      |      |      |       |       |     |
| matched federal  |       |      |      |      |       |       |     |
| EQIP FA funding  |       |      |      |      |       |       |     |
| at an overall 50 |       |      |      |      |       |       |     |
| percent          |       |      |      |      |       |       |     |
| cost-share rate  |       |      |      |      |       |       |     |
| discounted at    |       |      |      |      |       |       |     |
| seven percent    |       |      |      |      |       |       |     |
| and also the     |       |      |      |      |       |       |     |
| CAFO adjustment  |       |      |      |      |       |       |     |
| above of 23      |       |      |      |      |       |       |     |
| percent,         |       |      |      |      |       |       |     |
| discounted at    |       |      |      |      |       |       |     |
| seven percent..  |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+

**Interim Final Benefit-Cost Analysis**

**Environmental Quality Incentives Program (EQIP)**

# Background

## Legislative Authority

The NRCS is promulgating a regulation to implement the Environmental
Quality Incentives Program (EQIP), authorized by 16 USC 3830aa et seq.
EQIP was authorized by the Federal Agriculture Improvement and Reform
Act of 1996, P.L. 104-127, April 4, 1996 ("the 1996 Act"), and was
amended by the Farm Security and Rural Investment Act of 2002, P.L.
107-171, May 13, 2002 ("the 2002 Act"), and most recently by the Food,
Conservation, and Energy Act of 2008, P.L. 110-246 June 18, 2008
(hereafter referred to as "the 2008 Act"). The 2008 Act resulted in
minor changes to the basic program features of EQIP which are discussed
in this document. A provision in the 2008 Act requires the Secretary of
Agriculture, within 90 days after the enactment of the Act, to
promulgate regulations necessary to carry out the program.

This analysis follows the rules and documentation covering the intent
and design of Benefit-Cost Analyses as described in:

-   Executive Order 12866, Regulatory Planning and Review[^4]

-   Unfunded Mandates Reform Act of 1995[^5]

-   Federal Crop Insurance Reform Act of 1994[^6]

-   OMB Circular A-4, Regulatory Analysis[^7]

## Need for the Regulation and Rationale for the Rule

Based on past program experience, environmental benefits generated from
conservation practices may be thought of as originating from different
natural resource and the environmental situations that can lead to a
market failure:

-   The first type involves negative externalities or spillover effects
    where agricultural production results in environmental damage that
    imposes no mitigation costs on the producer and for which the
    producer is not otherwise held accountable and,

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-   The second type considers opportunities for environmental benefits
    from land use management changes where private costs exceed private
    benefits, i.e., positive externalities, but public benefits exceed
    private costs.

EQIP enables private landowners and society to realize benefits by
overcoming these market failures. In addition, while other regulatory
provisions may have addressed some of these potential market failures in
the past, conservation programs may enable farmers and ranchers to meet
regulatory requirements while continuing production. This is especially
important for some specialized crops and in some areas where established
livestock farmers are under regulatory pressures due to increasing
animal concentrations. These cases are discussed in detail below under
separate subheadings.

# Program Description and Features

## Program Objective

EQIP is a voluntary program providing both technical and financial
assistance to agricultural producers across the nation. The purpose of
EQIP, as amended by the 2008 Act, is to promote agricultural production,
forest management, and environmental quality as compatible national
goals. Furthermore, EQIP is charged to optimize environmental benefits
by:

1.  Providing assistance to producers so that they can comply with
    local, State and national regulatory requirements concerning:

    a.  soil, water, and air quality;

    b.  wildlife habitat; and

    c.  surface and ground water conservation;

2.  avoiding, to the maximum extent practicable, the need for resource
    and regulatory programs by assisting producers in protecting soil,
    water, air, and related natural resources and meeting environmental
    quality criteria established by Federal, State, tribal, and local
    agencies;

3.  providing flexible assistance to producers to install and maintain
    conservation practices that sustain food and fiber production while-

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(a) enhancing soil, water, and related natural resources, including
    grazing land, forestland, wetland, and wildlife; and

(b) conserving energy;

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4.  assisting producers to make beneficial, cost effective changes to
    production systems (including conservation practices related to
    organic production), grazing management, fuels management, forest
    management, nutrient management associated with livestock, pest or
    irrigation management, or other practices on agricultural and
    forested land; and

5.  consolidating and streamlining conservation planning and regulatory
    compliance processes to reduce administrative burdens on producers
    and the cost of achieving environmental goals.

## Program Overview

The fundamental purpose of EQIP, assisting farmers and ranchers to
implement conservation practices to provide environmental benefits, has
not changed from the 2002 Act. Revisions to EQIP focus primarily on
expanding participation among historically underserved producers and
organic growers; limiting payments to \$300,000 per legal entity or
person, except for environmentally significant projects; streamlining
the application and ranking process; and expanding practices and
activities that are eligible for payment under EQIP. Listed below are
the major changes in EQIP along with a brief discussion of how they are
treated in this analysis.

-   NRCS is directed to provide payments up to 75 percent of the costs
    associated with planning, design, materials, equipment,
    installation, labor, management, maintenance, or training, and/or up
    to 100 percent of income foregone by a producer to implement
    particular conservation practices. Historically, NRCS has partially
    reimbursed for foregone income through the use of incentive
    payments. However, incentive payments authorized in the 2002 Act
    have been eliminated in the 2008 Act. This analysis assumes that the
    provision above for foregone income compensates for the elimination
    of incentives payments in the 2008 Act. Thus the analysis assumes
    that this change will produce a negligible effect.

-   When determining payment rates for foregone income, the State
    Conservationist, as delegated by the Chief, has discretion to accord
    great significance to a conservation practice that the Secretary
    determines promotes residue management, nutrient management, air
    quality management, invasive species management, pollinator habitat,
    animal carcass management technology, or pest management. NRCS has
    historically emphasized many of these conservation practices. Given
    the broad range of resource concerns across the United States and
    the use of the locally led process, this analysis assumes that this
    provision will have a negligible effect.

-   NRCS is required to lower the payment limitation for participants
    from \$450,000 to \$300,000 during any six-year period. The
    exception is for projects having special environmental significance,
    where the payments will be limited to \$450,000. NRCS requires that
    contracts above \$150,000 be submitted to the NRCS Regional
    Assistant Chief for approval. An analysis of those requests in FY
    2007 showed that 0.21 percent of contracts of \$300,000 or greater.
    Based on the historic number of contracts over \$300,000 this
    provision will have a minimal effect.

-   NRCS is directed to create criteria to evaluate an acceptable
    watershed-wide project for the purpose of implementing water
    conservation or irrigation practices on newly irrigated lands.
    Implementation of this provision would enhance the potential
    benefits of water-saving projects.

-   NRCS is required to reaffirm EQIP's eligible lands to include
    non-industrial private forest (NIPF) lands. The analysis is not
    conducted by land use. The costs and benefits of conservation
    practices associated with NIPF lands are analyzed in the land
    treatment categories such as grazing productivity and wildlife
    habitat; others are included in the five percent non-analyzed
    conservation practices which are not quantified at this time.

-   NRCS is directed to provide payments for conservation practices
    related to organic production and for conservation practices related
    to the transition to organic production. NRCS is also required to
    limit payments to \$20,000 per year or \$80,000 during any six-year
    period for persons or legal entities who receive payments for
    conservation practices related to organic production or the
    transition to organic production.

-   Through EQIP, conservation practices may be applied to agriculture
    systems, whether they are organic or conventional. NRCS is currently
    providing payment for conservation practices regardless of
    agriculture system. However, at this time NRCS does not have
    sufficient data to distinguish the effects of conservation practices
    between organic and conventional agriculture systems.

-   NRCS is required to prioritize applications: (1) based on overall
    cost-effectiveness; (2) based on how effectively and comprehensively
    the project addresses the designated resource concern or resource
    concerns; (3) that best fulfill the purposes of EQIP; and (4) that
    improve conservation practices or systems in place at the time the
    contract offer is accepted or that will complete a conservation
    system. NRCS currently has a rigorous system, which includes item 1
    above, to prioritize all EQIP applications. Items 2 and 3 are
    included in the existing EQIP regulations. States currently have the
    option to include Item 4 in prioritization of EQIP applications,
    thus ensuring that conservation systems near completion have a
    higher priority.

-   NRCS is required to group applications of similar crop or livestock
    operations for evaluation purposes. This item is likely to improve
    the overall transparency of the application process. NRCS does not
    have sufficient data to determine how benefits and costs will be
    affected.

-   NRCS will require a forest management plan when the EQIP plan of
    operations addresses forestland. The effect of this provision is
    more comprehensive, higher quality plans on forestland. It is
    expected that NRCS will incur some additional costs associated with
    these plans along additional producer expenses.

-   NRCS will provide an increased payment rate to historically
    underserved producers that include limited resource, beginning, and
    socially disadvantaged farmers or ranchers. NRCS is currently
    providing a higher payment rate to beginning and limited resource
    farmers and ranchers. The historically underserved producers will
    now include socially disadvantage farmers and ranchers. Providing
    service to new producers requires more TA. The higher payment rate
    for the historically underserved producers will slightly decrease
    funding available for other producers. An example is provided in
    appendix F (table 40) which shows that the higher payment rate will
    reduce the funding available to other participants, but will
    increase the number of historically underserved producers. This
    factor is outweighed by the additional EQIP funding authorized in
    the 2008 Act.

-   NRCS will establish a national target to set aside five percent of
    EQIP funds for socially disadvantaged farmers or ranchers and an
    additional five percent of EQIP funds for beginning farmers or
    ranchers. NRCS data suggests that three to seven percent of current
    EQIP contracts are made to socially disadvantaged producers (see
    appendix F, tables 42 and 44). Any increase of participation due to
    this provision is expected to only change the composition of
    participation not total benefits or costs.

-   NRCS will provide advance payments, of up to 30 percent of the
    anticipated costs to be incurred for the purpose of purchasing
    materials or services to implement a conservation practice, to
    historically underserved producers. Installation costs for certain
    conservation practices can be prohibitive to adoption by many
    historically underserved producers. This provision provides funds at
    the beginning of a contract as opposed to the NRCS traditional
    payment method at the completion of a conservation practice. This is
    expected to stimulate participation by historically underserved
    producers. It is expected that NRCS may be exposed to some
    additional risk of uncompleted practices on producer contracts
    resulting in increased administrative costs.

## Application Prioritization

Provisions relating to the evaluation of EQIP applications were changed
by the 2008 Act. The 1996 Act required the Secretary to give a higher
priority to payments made in conservation priority areas, payments that
maximized environmental benefits per dollar expended, or payments made
in areas in which State or local governments provided financial or
technical assistance to producers for the same conservation or
environmental purposes.

In comparison, the 2002 Act stated that in evaluating applications for
cost-share and incentive payments, the Secretary accorded a higher
priority to assistance and payments that encouraged the use of
cost-effective conservation practices and addressed national
conservation priorities.

In the 2008 Act, NRCS must develop criteria for evaluating applications
that ensure national, State, and local conservation priorities are
effectively addressed. In order to do this, Congress stated that NRCS
shall prioritize conservation practice applications in the following
manner:

-   based on their overall level of cost effectiveness to ensure that
    the conservation practices and approaches proposed are the most
    efficient means of achieving the anticipated environmental benefits;

-   based on how effectively and comprehensively the project addresses
    the designated resource concern or resource concerns;

-   that best fulfill the purpose of EQIP; and

-   that improve conservation practices or systems in place on the
    operation at the time the contract offer is accepted or that will
    complete a conservation system.

In addition, NRCS is directed, to the greatest extent possible, to group
applications with similar crop and/or livestock types for evaluation
purposes or otherwise evaluate applications based on similar farming
operations.

## Funding

The initial 1996 Act authorization for EQIP was set at \$200,000 per
year. The 2002 Act authorized EQIP funding at \$5.8 billion through FY
2007. However, the annual appropriation was capped at roughly \$1
billion annually instead of growing to the \$1.3 billion in FY 2007 as
originally set in the 2002 Act. The 2008 Act authorized funding for EQIP
at \$7.325 billion, with annual appropriations reaching \$1.75 billion
in FY 2012. See appendix A, table 13, Historical and Projected EQIP
Technical and Financial Assistance, FY 1996-FY 2012 for relevant
historical and projected TA and FA outlays.

## Participant Requirements

To achieve the purposes of EQIP, NRCS provides technical and financial
assistance to producers who agree to implement one or more conservation
practices. Participants in EQIP must also agree to, or plan to maintain
all conservation practices receiving financial assistance through EQIP
for the life of the conservation practice.

## Description of Baseline Conditions

### 

### Current Land Use and Resource Concern Trends:

The Nation's non-federal lands constitute a tremendous resource that
yields food and fiber as well as the livelihood and recreation for
private land users.

+----------------------------------------+-----------------+-----------+
| []{#__RefHeading___Toc219115374        |                 |           |
| .anchor}**Table 2. Major agricultural  |                 |           |
| uses of land in the United States.**   |                 |           |
+----------------------------------------+-----------------+-----------+
| **[Land Use]{.underline}**             | **[Acres        |           |
|                                        | (millions)      |           |
|                                        | ]{.underline}** |           |
+----------------------------------------+-----------------+-----------+
| Cropland                               | 368             |           |
+----------------------------------------+-----------------+-----------+
| Pastureland                            | 117             |           |
+----------------------------------------+-----------------+-----------+
| Rangeland                              | 405             |           |
+----------------------------------------+-----------------+-----------+
| Hayland (included in cropland)         | \--             |           |
+----------------------------------------+-----------------+-----------+
| Forestland\*                           | 406             |           |
+----------------------------------------+-----------------+-----------+
| Other lands (homesteads, feedlots,     | 82              |           |
| etc.)\*\*                              |                 |           |
+----------------------------------------+-----------------+-----------+
| \*Forestlands include State and County |                 |           |
| land.                                  |                 |           |
+----------------------------------------+-----------------+-----------+
| \*\*Includes 31.5 million acres in the |                 |           |
| Conservation Reserve Program (CRP)     |                 |           |
| that are not cropped and currently     |                 |           |
| under vegetative cover.                |                 |           |
+----------------------------------------+-----------------+-----------+
| Source: USDA-NRCS, 2003 National       |                 |           |
| Resources Inventory                    |                 |           |
|                                        |                 |           |
| <http://www.nrcs.usda.gov/tec          |                 |           |
| hnical/NRI/2003/nri03landuse-mrb.html> |                 |           |
+----------------------------------------+-----------------+-----------+

Soil erosion is a natural resource concern due to climatic factors, soil
characteristics, landscape features, and cropping practices.
Conservation practices and programs have proved effective in addressing
soil erosion. The National Resources Inventory (NRI) estimated soil
erosion on United States cropland decreased 43 percent between 1982 and
2003 (USDA, NRCS, 2007). Soil erosion is comprised of sheet and rill
water erosion as well as wind erosion. Sheet and rill water erosion on
cropland in 2003 was down to 971 million tons per year, and erosion due
to wind was at 776 million tons per year.

Despite these improvements, many of the Nation's lands have resource
problems and limitations that decrease their productive use, cause
on-site and off-site (or external) damages, and reduced efficiency in
the agricultural sector. The following cases illustrate the nature of
the resource concerns that EQIP attempts to address.

-   The 2003 Annual NRI (USDA, NRCS, 2007) indicates that a total of 102
    million acres of cropland, pastureland, and rangeland have annual
    rates of soil erosion that exceed "T", the soil loss tolerance rate
    at which the productivity of a soil can be maintained indefinitely.

-   In the 2002 EPA National Water Quality Inventory (USEPA, 2007),
    assessment of the nation's surface water quality indicates that 45
    percent of assessed river and stream miles, 47 percent of assessed
    lake areas, and 32 percent of assessed estuaries area had water
    quality impairment relative to one or more designated uses.
    Agriculture, including non-point source pollution, was named a top
    source of impairment.

-   The 1996 revisions to Safe Drinking Water Act required states to
    assess contaminant threats to public water systems. Based on this
    assessment, agriculture was identified as one of the top potential
    contaminating activities in many states. In a recent survey
    summarized in "The State of the Industry 2008," member utilities of
    the American Water Works Association identified source water quality
    and quantity as their top near-term and future concern.

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-   A significant evolution has occurred in the livestock production
    sector that increases the challenges for dealing with animal waste.
    A June 1995 briefing report by the General Accounting Office for the
    Senate Agriculture Committee outlines the patterns of change. These
    patterns indicated that animal manures are significant sources for
    nitrogen inputs to watersheds in the regions of the United States
    and that consolidation trends and geographical shifts in animal
    production are occurring for some portions of the industry,
    particularly for hog operations as well as for turkeys. Some
    analyses suggest that risks of contamination of surface waters from
    fecal coliform bacteria require attention.

The global demand for commodities, such as food stock and biofuels, will
affect the natural resource base underlying agricultural production.
Increased agricultural production will lead to growing demand on the
Nation's natural resources. These changes plus the cases listed above
support the continuation and intensification of natural resource
conservation efforts.

### Farm/Ranch Demographics:

The 2002 Census of Agriculture identifies 2.1 million agricultural
producers in the United States. In FY 2007 eight percent of the total
agricultural producers were serviced by NRCS through EQIP. The 2008 Act
introduces the group, "socially disadvantaged farmer or rancher" and
merges it with two existing population groups, "beginning farmers and
ranchers" and "limited resource farmers and ranchers." All three groups
form a new designation of participants referred to as "historically
underserved producers." The introduced group, socially disadvantaged
farmer or rancher, means a group whose members have been subjected to
racial or ethnic prejudice because of their identity as members of a
group without regard to their individual qualities.

The 2002 Census of Agriculture identified five percent of farms as
minority agricultural producers. In FY 2007 3.1 percent of NRCS's EQIP
customers were minority agricultural producers. Data was not available
for the demographics for 19.8 percent of NRCS's EQIP customers.
Consequently, there is uncertainty about the true demographics of EQIP
participants.

Appendix F further presents the farm and ranch demographics for
historically underserved producers that include limited resource,
beginning, and socially disadvantaged farmers and ranchers.

# Analytical Model

## Modeling Producer Participation

There has been roughly a one-year backlog of participants who have
applied for EQIP, but were not funded (table 3). Comparison of several
years of EQIP data suggests that this backlog will continue into the
foreseeable future. Observing such data and expected trends, this
analysis makes the assumption that producers will be fully enrolled
every year through FY 2012 (see appendix A, "How NRCS conducts its
business").

+-----------+----------------+------------------------+--------------+
| []{#      |                |                        |              |
| __RefHead |                |                        |              |
| ing___Toc |                |                        |              |
| 219115375 |                |                        |              |
| .ancho    |                |                        |              |
| r}**Table |                |                        |              |
| 3.        |                |                        |              |
| H         |                |                        |              |
| istorical |                |                        |              |
| part      |                |                        |              |
| icipation |                |                        |              |
| in        |                |                        |              |
| EQIP.**   |                |                        |              |
+-----------+----------------+------------------------+--------------+
| *         | **             | **Applications with**  | **           |
| *Fiscal** | Applications** |                        | Contracted** |
|           |                | **[Funds               |              |
| **[Y      | **[Received]   | Ob                     | *            |
| ear]{.und | {.underline}** | ligated]{.underline}** | *[Percent]{. |
| erline}** |                |                        | underline}** |
+-----------+----------------+------------------------+--------------+
| 2004      | 87,000         | 47,986                 | 55%          |
+-----------+----------------+------------------------+--------------+
| 2005      | 79,287         | 49,478                 | 62%          |
+-----------+----------------+------------------------+--------------+
| 2006      | 72,807         | 41,400                 | 57%          |
+-----------+----------------+------------------------+--------------+
| 2007      | [72,39         | [41,851]{.underline}   | 58%          |
|           | 8]{.underline} |                        |              |
+-----------+----------------+------------------------+--------------+
| **Total** | **311,492**    | **180,715**            | **58%**      |
+-----------+----------------+------------------------+--------------+

## Model Assumptions

Besides the expected full participation assumption made above, the EQIP
model constructed for this analysis made several assumptions concerning
program parameters, economic parameters, the conservation practices,
expected costs, and expected environmental benefits.

### Program Parameters

There are two main program parameters assumed in this analysis: (1) the
breakdown of TA and FA available to producers and (2) the payment rate
for each conservation practice.

The historical proportion of EQIP funding devoted for TA, 26 percent,
was assumed to hold over FY 2009 -- FY2012. The remaining 74 percent was
assumed to be available for direct use in the form of FA to producers
(appendix A, table 11)

Practice payment rates were based on FY 2007 EQIP contracts. Although
this analysis recognizes that in FY 2008 NRCS adopted a Practice Payment
Schedule in lieu of the traditional cost-share payments. It is assumed
that these payments rates will be similar to historical cost-share rates
(see appendix A, "How NRCS conducts its business").

### Economic Parameters

Two main economic assumptions were necessary in this analysis concerning
appropriate discount rates and inflation rates. In both cases, this
analysis relies on OMB suggested rates. First, discount factors of seven
and three percent were used to calculate net present values of cost and
benefit streams. All costs and benefits are expressed in constant 2007
dollars.

### Conservation Practices

There are three types of conservation practices: vegetative, structural,
and management. The types and number of conservation practices to be
implemented in any year is assumed to be proportional to the practices
that were in FY 2007 contracts, as described in NRCS' Program
Contracting System (ProTracts[^8]) and Performance Reporting System
(PRS[^9]) databases.

The types of conservation practices are further broken down into nine
benefit categories listed below[^10]:

-   Animal waste management

-   Sheet and rill water erosion

-   Grazing land productivity

-   Irrigation water use

-   Air quality

-   Fertilizer use

-   Wildlife habitat

-   Energy use

-   Carbon sequestration

### Expected Costs

Vegetative and structural practice implementation costs and units
installed are based on ProTracts. Management practice costs are based on
ProTracts while some unit implementation numbers are PRS based. Due to
the fact that management practices may be installed without cost, but
are a required part of an EQIP-funded conservation system, PRS data
proved to be a better source of data for management practices. Only
units listed in ProTracts or PRS as funded by EQIP are included. NRCS
has limited data on conservation activities related to energy, expanded
forestry and organic production and transition.

Practice implementation costs are based on FY 2007 ProTracts payment
data. Management practice treatment acres, as mentioned above, are based
on FY 2007 PRS data for several reasons. ProTracts treats management
practices as recurring practices; treated acres may receive payments in
multiple years (up to three years). This creates the potential for
counting treated acres in multiple years. For example, the amount of
acreage implemented in FY 2007 ProTracts may include acreage reported
also in FY 2006 and/or FY 2005. As a result, it was decided that PRS
data would be a better source to estimate acreage of management
practices implemented. Table 11 illustrates the cost of implementation
and units implemented based on PRS and ProTracts for FY 2007. Only
acreage reported for programs EQIP, EQIP-GSWC (Ground and Surface Water
Conservation), and Klamath Basin were used.

ProTracts data on EQIP cost and total costs for implemented (installed)
practices, were used to estimate costs for FY 2009-FY 2012 by benefit
category, except for animal waste practices.

For animal waste practices, the publication, Costs Associated with
Development and Implementation of Comprehensive Nutrient Management
Plans (USDA, NRCS, 2003), was used to estimate costs for the development
and implementation of CNMPs nationwide. Development costs relate to the
technical expertise required to write a CNMP and the implementation
costs relate to the actual costs of constructing and installing the
conservation practices called for in the CNMP. Both of these costs are
accounted for in the analysis (see appendix D, Animal Waste Management).
An examination was completed on animal waste cost to show that indexed
CNMP costs were comparable to CNMP-related costs from ProTracts. Total
costs include producer cost as well as program cost-share.

### Expected Environmental Benefits

EQIP provides funding for a wide range of conservation practices on
agricultural lands and animal feeding operations, treating a wide range
of resource concerns. EQIP treats a wide range of resource concerns due
to the fact that agriculture, climate, soils, environmental concerns,
and product markets vary considerably across the United States.

Implementation of conservation practices nationwide has been shown to
result in a mixture of environmental improvements in water quality and
quantity, wildlife habitat, air quality, soil health, and aesthetic
values for the public.

When estimating benefits of non-point source (NPS) pollution reductions,
the individual effects of management actions on each resource unit
cannot easily be linked to measurable changes in environmental
attributes of nearby water bodies (Ribaudo and Hellerstein, 1992). The
relationship between pollutant emissions from the land and an
environmental attribute is often cumulative and variable over both time
and location. The effects of NPS pollution reduction measures are
difficult to quantify. NRCS intends to use results from the Conservation
Effects Assessment Project (CEAP) to strengthen this area of analysis in
future studies. CEAP results may be able to be tailored to estimate
expected effects by NRCS program across major US land types and major
resource concern (similar to the benefit categories used in this
analysis).

The overall methodology to estimate benefits is to project the units
(acres or animal units) of conservation practices that will be installed
and multiplied the projected units by the per-unit benefit value. This
section deals exclusively with the calculation of the per-unit benefits
for the nine benefit categories.

#### Benefit Categories 

Conservation practices historically funded by EQIP are categorized
according to the type of benefits that they are expected to
produce[^11]. Benefits quantified in this analysis represent a portion
of the total benefits expected to accrue due the conservation practices
implemented through EQIP funding. Throughout this analysis, there are
nine benefit categories (table 4).

+--------+-------------------------------+-----+-------+-------------+
| [      |                               |     |       |             |
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| values |                               |     |       |             |
| used   |                               |     |       |             |
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| EQIP   |                               |     |       |             |
| by     |                               |     |       |             |
| sourc  |                               |     |       |             |
| e\*.** |                               |     |       |             |
+--------+-------------------------------+-----+-------+-------------+
| **B    | **Source of Benefit**         | **B | **Be  | **Citation  |
| enefit |                               | ene | nefit | for Benefit |
| Cate   |                               | fit | U     | per         |
| gory** |                               | per | nit** | Unit**[^12] |
|        |                               | uni |       |             |
|        |                               | t** |       |             |
|        |                               |     |       |             |
|        |                               | *   |       |             |
|        |                               | *(2 |       |             |
|        |                               | 007 |       |             |
|        |                               | \$  |       |             |
|        |                               | )** |       |             |
+--------+-------------------------------+-----+-------+-------------+
| Animal | Improved water quality for    | \   | \$/AU | Appendix E  |
| waste  | recreation, reduced incidence | $34 | /year |             |
| mana   | of fish kills, improved       | .66 |       |             |
| gement | commercial shell fishing,     |     |       |             |
|        | reduced contamination of      |     |       |             |
|        | private wells                 |     |       |             |
+--------+-------------------------------+-----+-------+-------------+
|        | Value of nutrients for crops  | \   | \$/AU | Appendix E  |
|        | from animal waste             | $18 | /year |             |
|        |                               | .80 |       |             |
+--------+-------------------------------+-----+-------+-------------+
|        | Animal waste management       | \   | \$/AU |             |
|        | sub-total                     | $53 | /year |             |
|        |                               | .46 |       |             |
+--------+-------------------------------+-----+-------+-------------+
| Sheet  | Reduced loss of nutrients     | \   | \$    | Appendix E  |
| and    |                               | $11 | /acre |             |
| rill   |                               | .92 | /year |             |
| water  |                               |     |       |             |
| e      |                               |     |       |             |
| rosion |                               |     |       |             |
+--------+-------------------------------+-----+-------+-------------+
|        | Improved water quality        | \   | \$    | Appendix E  |
|        | (public works cost reduction  | $42 | /acre |             |
|        | for sediment, and recreation) | .40 | /year |             |
+--------+-------------------------------+-----+-------+-------------+
|        | Sheet and rill water erosion  | \   | \$    |             |
|        | sub-total                     | $54 | /acre |             |
|        |                               | .32 | /year |             |
+--------+-------------------------------+-----+-------+-------------+
| G      | Productivity increase         | \   | \$    | Namken and  |
| razing |                               | $17 | /acre | Flanagan    |
| land   |                               | .25 | /year | 2000        |
| produc |                               |     |       |             |
| tivity |                               |     |       |             |
+--------+-------------------------------+-----+-------+-------------+
| Irri   | Value of water saved for      | \   | \$    | Appendix E  |
| gation | competing uses                | $10 | /acre |             |
| water  |                               | .30 | /year |             |
| use    |                               |     |       |             |
+--------+-------------------------------+-----+-------+-------------+
| Air    | Reduced cost of maintaining   | \$  | \$    | Ribaudo et  |
| q      | equipment, reduced damages to | 5   | /acre | al 1989     |
| uality | nonfarm machinery, and        | .71 | /year |             |
|        | adverse health effects        |     |       |             |
+--------+-------------------------------+-----+-------+-------------+
| Fert   | Reduced fertilizer purchases  | \   | \$    | Christensen |
| ilizer | from non-animal waste sources | $17 | /acre | et al 1998, |
| use    |                               | .65 | /year | US EPA 2003 |
+--------+-------------------------------+-----+-------+-------------+
| Wi     | Use value (improved wildlife  | \$  | \$    | Feather et  |
| ldlife | viewing, and improved         | 7   | /acre | al 1999     |
| h      | pheasant hunting)             | .10 | /year |             |
| abitat |                               |     |       |             |
+--------+-------------------------------+-----+-------+-------------+
| Energy | Reduced diesel fuel usage     | \$7 | \$    | USDA-NRCS   |
| use    |                               | .81 | /acre | CEAP (not   |
|        |                               |     | /year | yet         |
|        |                               |     |       | released)   |
+--------+-------------------------------+-----+-------+-------------+
| Carbon | Additional carbon             | \$  | \$    | Appendix E  |
| s      | sequestered, based on CCX     | 0   | /acre |             |
| equest | carbon credit values          | .47 | /year |             |
| ration |                               |     |       |             |
+--------+-------------------------------+-----+-------+-------------+
| **\*   |                               |     |       |             |
| **NRCS |                               |     |       |             |
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| verage |                               |     |       |             |
| value. |                               |     |       |             |
+--------+-------------------------------+-----+-------+-------------+

Following are brief discussions of how the per-acre and per-animal unit
benefits were estimated. Detailed calculations are provided to the
reader in the appendices.

***Animal waste management***

There are a wide range of practices addressing animal waste management
which all eventually affect water quality. They range from installing
concrete or metal structures to store animal waste until suitable
conditions for proper applications; to planting vegetative filter strips
to treat wastewater runoff; to manure spreading techniques to minimize
impacts to the environment. These practices involve management,
construction, and cropping activities implemented in a comprehensive
manner to ensure that the environmental impact is minimized while not
compromising the economic viability of the farm.

Comprehensive Nutrient Management Plans (CNMPs) provide a blueprint for
producers on how to address animal waste management. For the purposes of
this analysis, the benefits attributable to animal waste management
include all of the practices, including the structural, management, and
vegetative practices as well as the upfront planning (CNMPs), that are
needed to achieve the resource management level necessary for an EQIP
contract.

The previous EQIP Benefit Cost Analysis (BCA) (USDA, NRCS, 2003)
calculated a \$30.23 benefit per animal unit (AU) per year for
implementation of CNMPs and associated practices in 1999 dollars,
attributable to water quality. This estimate was based on the
benefit-cost analysis from the EPA (US EPA, 2001[^13]). The EPA study
was not a comprehensive estimate of all benefits expected to result from
animal waste treatment. The EPA study did include estimated national
benefits in the following categories for which data and methodology was
available:

-   Improvements in water quality and suitability for recreational
    activities (\$5 million to \$145 million);

-   Reduced incidence of fish kills (up to just over \$1 million);

-   Improved commercial shell fishing (\$2 million to \$3 million); and

-   Reduced contamination of private wells (\$70 million to \$77
    million).

The previous EQIP BCA (USDA, NRCS, 2003) also estimated an annual
\$16.40 per AU benefit[^14] due to nutrient value for crops which is
updated from 2001 to 2007 dollars to 18.80 per AU. The \$30.23 water
quality benefit estimate[^15] was updated from 2001 to 2007 dollars to
produce a \$34.66 estimate. This is added to the crop nutrient benefit
estimate, resulting in \$53.46 per AU per year benefit. Note that this
latter benefit is an increase in the productivity of existing inputs
available to the producer. Thus, the benefits derived are mainly in
lower production costs. In the aggregate, output would be expected to
increase, resulting in lower prices. This aggregate impact on net
economic welfare is beyond the scope of this analysis.

***Sheet and rill water erosion***

There are several conservation practices funded by EQIP that reduce
sheet and rill water erosion on cropland. National Resource Inventory
(NRI) data and EQIP data indicate that since 1992, several million acres
of farmed cropland had erosion reductions exceeding 10 tons per acre per
year. In particular, analyses of historical EQIP data indicate erosion
reductions of 8.6 tons per acre per year. Internal analysis of the 1997
NRI data provides evidence that EQIP can maintain the avoidance of these
8.6 tons per acre per year. For the purpose of this analysis, two main
subcategories of benefits are addressed: reduction of fertilizer
nutrient losses, and improved water quality. The sum of per acre annual
benefits for the reduction of fertilizer nutrient loss at \$11.92, and
improvement of water quality at \$42.40 produced a total benefit of
\$54.32 per acre per year for sheet and rill water erosion reduction.
These are further discussed below.

> ***Reduction of Fertilizer Nutrient Loss***
>
> This analysis assumes that on average, topsoil consists of 40 pounds
> of organic matter or 23.2 pounds of carbon. With an average carbon
> nitrogen ratio of 10 to 1, each ton of soil eroded contains 2.32
> pounds of nitrogen that would need to be replaced by the producer. The
> soil also contains 0.05 percent phosphorus, or one pound per ton of
> soil. This analysis uses 2007 USDA price data of 48¢ per pound for
> phosphorus, 49¢ per pound for nitrogen and 23¢ per pound for
> potassium. The value of lost nutrients in each ton of soil eroded is
> valued at \$1.39. Multiplying \$1.39 per ton by 8.6 ton per acre per
> year gives a value for this averted loss of \$11.92 per acre per year.
>
> ***Improved water quality***
>
> Improved water quality benefits were estimated by a comparison of
> three studies as described in the previous EQIP benefit-cost analysis
> (see appendix E). For this analysis a per-ton benefit of \$4.93
> updated from year 2000 to year 2007 (USDA, NRCS, 2003) was applied to
> the NRCS historic estimate of 8.6 tons per acre per year erosion
> reduction, to arrive at \$42.40 per acre per year. This major
> component of sheet and rill water erosion benefit is environmental in
> nature and produces a substantial public good.

***Grazing land productivity***

For grazing land, the only practices included in this analysis were
those resulting in increased forage production (see appendix E). These
benefits are mainly economic in nature (accruing to the producer in
higher production efficiencies thereby lowering production costs).
Nonetheless, these impacts are considered as representative of part or
all of the possible economic benefits that ultimately accrue to
consumers as the expected increased output result in lower output
prices. These same practices also provide benefits in other
environmental areas, such as wildlife habitat and water quality. These
other benefits are accounted for in the appropriate benefit category.

Namken and Flanagan (2000) report that these practices resulted in an
average productivity increase of 1.3 animal unit months (AUMs) per acre.
The AUMs were valued at \$11.10 each, resulting in a per acre value of
\$14.43. The \$14.43 value was updated from year 2000 to year 2007,
resulting in a grazing land improvement benefit of \$17.25 per acre per
year.

***Irrigation water use***

EQIP funds are used in certain areas to install more efficient
irrigation systems, and irrigation water management plans which
prescribe measures to use irrigation water more efficiently. It is
assumed that farmers could achieve a net reduction in irrigation water
used by any or all of the following three methods: convert from
irrigation to dryland production; convert to a crop or land use
requiring smaller applications of water; and maintain the same crop, but
improve irrigation efficiency.

Presumably any water saved would be available for alternative uses such
as in agriculture, municipality water, power generation, fish habitat,
available elsewhere on the same farm, or advertised for availability
locally via irrigation rental markets. A value that could be assigned to
the saved water is the price that competing uses would be willing to
offer. Since those prices are not available, the saved water was valued
conservatively at the average price that farmers have paid to obtain the
water.

The 2003 Farm and Ranch Irrigation Survey reported 32.3 million acres
irrigated with groundwater, having acquisition costs of \$29 per acre
foot and 13.8 million acres irrigated with off-farm surface water at
\$18 per acre-foot, including supply cost and variable cost. The
weighted average value of the water is \$25.73. Updating these values
from 2003 to 2007 provides an estimated value of \$28.56 per acre-foot.
Using the 5.41 acre-inch efficiency gain per year, and assuming a
20-percent loss in storage and transmission produces an annual per-acre
benefit of \$10.30.

***Air quality***

Data on the impact of EQIP funded conservation practices to air quality
is limited. This analysis attributes any improvements in air quality to
reductions in wind erosion. It should be noted that there are practices
funded through EQIP outside of erosion control that are expected to
improve air quality, even though these benefits could not be numerically
quantified for this study. These non-quantified benefits include less
chemical drift control associated with crop production, improved dust
and odor control in animal feeding operations and reductions in the
emissions of nitrous oxide materials (NO~x~), organic compounds, and
ozone precursor and depleters through both improved animal feeding
practices and crop nutrient management.

Ribaudo et al (1989) estimated that the Conservation Reserve Program
(CRP) produced an average benefit of \$25 per acre net present value due
to reduced soil erosion by wind (wind erosion) resulting in improved air
quality. The estimates ranged from zero in the Appalachia, Corn Belt,
Delta States, and Lake States, up to \$52 in the Mountain states.

For this analysis, it was assumed that the practices reducing wind
erosion will produce the same level of benefits to air quality (same
levels of erosion control and reduction in off-site damages) as did CRP.
The \$25 per acre value from Ribaudo et al. was updated from 1988 to
2007. Therefore, the per-acre net present value is \$39.75. This figure
was converted to \$5.29 per acre per year, using a ten-year time period
and seven percent discount rate.

***Fertilizer use***

Benefits in this category were calculated by estimating expenditure
savings due to reduced fertilizer purchased by the producer. Two sources
of information were found which indicate relative reductions in nitrogen
and phosphorus applications on lands utilizing nutrient management
practices.

The first source (US EPA, 2003) gathered fertilizer input data from
farmers located within eight USDA Demonstration Projects and eight
Hydrologic Unit Projects. This study indicated that after adoption of
nutrient management, farmers reduced nitrogen application by an average
of 51 pounds per acre, and phosphorus by 26 pounds per acre. Fertilizer
application rates in this study varied across the country. The nitrogen
application reduction ranged from a low of 21 pounds to a high of 72
pounds. Phosphorus reduction rates ranged from six to 55 pounds.

The second source was a study completed by Christensen (1998) which
surveyed 890 producers in 16 states. It classified producers as low,
medium, or high adopters of nutrient management practices.

For the purposes of this analysis, a weighted average of the medium and
high adopters was used to approximate the number of producers who
adopted the NRCS nutrient management standard. The relative amounts of
nutrients applied to crops, and measurement of the impacts of moving
from the base condition (the low adopters in the ERS study) to fully
adopting the NRCS nutrient management standard (composite of the medium
and high adopters) was approximated by use of the values in the ERS
study.

A composite application rate of those who adopt nutrient management
according to NRCS standards was developed and compared to those
producers who do not adopt nutrient management practices. This
comparison showed that the producers who adopted nutrient management had
lower application rates of the following amounts: 25 pounds per acre of
nitrogen, five pounds per acre of phosphorous and 13 pounds per acre of
potash.

For the purposes of this analysis, prices of nutrients are set based on
data from the USDA National Agricultural Statistics Service (NASS)
published in 2007[^16]. Nitrogen is valued at 49¢ per pound (based on
the national average price for Urea), phosphorus at 48¢ per pound (based
on the national average price for DAP), and potash at 23¢ per pound
(based on the national average price for 0-0-62). Multiplying these
prices with the calculated reductions in application rates resulted in
\$17.65 per acre per year in savings (the sum of 25 lb times 49¢ and 5
lb times 48¢ and 13 lb times 23¢). This component of benefits is
comparable to the case of the value of nutrients for crops found in the
ERS study.

***Wildlife habitat***

EQIP provides assistance with wildlife habit development and management.
A literature review revealed that a great deal has been written about
the values of wildlife conservation (Gibilisco and Filipek, Washington
Department of Fish and Wildlife). The National Survey of Fishing,
Hunting, and Wildlife-Associated Recreation[^17] conducted by the U.S.
Fish and Wildlife Service, contains extensive data on consumer
expenditures relating to wildlife-based activities.

For this analysis, benefits are calculated based on the study "Economic
Valuation of Environmental Benefits and the Targeting of Conservation
Programs - The Case of the CRP" (Feather, et al. 1999). Benefits are
based on *use values*, or the value derived from using the resource.
Specifically, benefits are calculated for wildlife viewing and pheasant
hunting.

Although improvements in wildlife habitat benefit a number of avian
species, the demand for pheasant hunting was easiest to quantify. The
study evaluated the quantity and quality of the land cover available for
specific avian species, and then estimated the surplus resulting from
converting land to CRP. Since establishing grassland or forest cover
creates suitable habitat for birds, small and big game hunters as well
as wildlife viewers then benefit from these increased populations
(Feather, p. 10). The model also incorporated travel costs, landscape
diversity, and population density.

There are limitations with calculating benefits resulting from EQIP
based on CRP, due to differences in the two programs. For example, CRP
land is retired from production, while with EQIP the land remains in
production. The minimum contract length under CRP is ten years. With
EQIP the contract length varies depending on the conservation practice
(average contract length has been four to six years). However, with EQIP
the land use remains and normally the conservation practice continues
beyond the life of the contract.

The annual benefits for improved wildlife habitat include two
components: improved wildlife viewing (\$10.02 per acre) and improved
pheasant hunting (\$2.36 per acre). These benefit estimates were reduced
50 percent (\$6.19 per acre) to account for factors such as expected
lower per acre benefits on "working" lands versus retired lands,
different spatial proximity of EQIP lands than CRP lands, shorter
contract length, etc. Adjusting the value from 2002 to 2007, the
resulting benefit is \$7.10 per acre.

A number of practices funded by EQIP benefit wildlife populations by
reducing soil erosion and therefore improve aquatic habitat. However
these benefits are already quantified in the water quality section of
the analysis. The impacts of many other practices for wildlife are not
included such as pasture and hay land planting, fencing, and ponds and
as mentioned above, nature walking and big game hunting. In addition
*nonuse values,* such as existence values, bequest values, or option
values, are not quantified (Smith, 1996).

The benefits are based on expenditure or use data for the identified
recreational purposes and the surplus resulting from EQIP.

### 

***Energy use***

No-till and mulch-till, often referred to as reduced tillage or
conservation tillage, are practices that reduce the number of passes
over cropland with farm equipment. This results in fuel savings as well
as time savings for the producer. Using Conservation Effects Assessment
Project (CEAP) estimates of the gallons of diesel fuel saved by
implementing no-till and mulch tillage practices results in a savings of
2.99 gallons per acre.

The fuel savings formed the basis for the energy reduction benefit
estimates used in this analysis. This analysis uses constant 2007 dollar
denominated price data. The Energy Information Administration[^18]
reported the national average diesel price to be \$3.18 per gallon in
October, 2007. Deducting federal and state fuel highway taxes of \$0.24
and \$0.22 per gallon gives a net price of \$2.61 per gallon for
agricultural purposes. Taking the fuel savings of 2.99 per acre
multiplied by the fuel price of \$2.61 gives the benefit of \$7.81 per
acre per year for implementing reduced tillage practices.

Although the benefit from higher energy use efficiency would appear to
fall mainly into the private economic benefit category (as did the
increased efficiency in fertilizer and animal waste nutrient use), the
secondary environmental and economic impacts of lower energy use are
perhaps more obvious than those previously addressed. Lower energy use
translates into less possible environmental spill-over effects in their
production and use, as well as lowering US demand on imported energy
supplies. Determining the most appropriate category for EQIP's impact on
energy use illustrates the difficulty to categorize the nature of many
of these benefit categories into definitive public/private and
economic/environmental benefits. The estimate used above (as was the
case for the other economic benefits above) could best be interpreted as
a first-approximation or proxy for part of these possible social
economic impacts.

***Carbon sequestration***

The value of carbon benefits are based on the discussion of the "social
cost of carbon" contained in EPA's "Technical Support Document on
Benefits of Reducing GHG Emissions." [^19] In addition to direct
effects, wildlife habitat and range improvement practices are expected
to increase carbon sequestration. In addition, residue and tillage
practices associated with erosion control are expected to reduce
oxidation of carbon from cropland, and in some cases actually increase
carbon sequestration on those lands as well.

For the purposes of this analysis, USDA utilizes the three percent
discount rate mid-range domestic estimate of the social cost of carbon
of \$2.00 per metric ton, which yields a value per acre of carbon
sequestration of 47¢ per acre per year.

#### Discounting of the Flow of Benefits over Time

Land treatments take time to install and contain practices with
different life spans that produce variable annual benefits over time.
These factors are accounted for in this analysis using a benefit factor
to combine a 10-year benefit stream flow at a seven percent discount
factor. The table below illustrates the average practice life span
(years), annual effectiveness (percent), and the combined 10-year
benefit stream flow (factor) for each benefit category. A detailed
discussion of the expected benefits generated by producers as a result
of their participation in EQIP is provided in appendix E.

For these benefit categories, except for animal waste management, the
"approved" (or contracted) practices during FY 2007 were used to
calculate benefit categories of overall EQIP. Only the first ten years
of practice benefits are being used in this analysis and assumes no
benefits occur in the first year of installation since during that year
the contract would likely not be finalized until mid-year. Since many
practices included in each benefit category have life spans that exceed
ten years, it is likely total benefit production is being underestimated
in this analysis.

  --------------------------------- --------- -------------- ------------ --------- ------------ ---------- -------- ---------------
  []{#__RefHeading___Toc219115377                                                                                    
  .anchor}**Table 5. Distribution                                                                                    
  of benefits over time from year                                                                                    
  of installation related to                                                                                         
  selected practices by benefit                                                                                      
  category.**                                                                                                        

  Item                              Sheet and Grazing land   Irrigation   Air       Fertilizer   Wildlife   Energy   Carbon
                                    rill      productivity   water use    quality   use          habitat    use      sequestration
                                    water                                                                            
                                    erosion                                                                          

  Average Practice Life Span        5.4       11.6           15.9         4.5       5.0          12.8       1.0      4.7
  (years)                                                                                                            

  Year 1                            0%        0%             0%           0%        0%           0%         0%       0%

  Year 2                            98%       100%           100%         83%       100%         32%        100%     81%

  Year 3                            100%      100%           100%         91%       100%         54%        100%     100%

  Year 4                            100%      95%            100%         92%       100%         69%        100%     100%

  Year 5                            88%       94%            99%          83%       50%          88%        80%      88%

  Year 6                            77%       87%            98%          71%       30%          96%        60%      75%

  Year 7                            65%       85%            97%          58%       20%          94%        40%      63%

  Year 8                            54%       79%            95%          43%       10%          91%        20%      51%

  Year 9                            48%       73%            95%          36%       0%           90%        10%      45%

  Year 10                           42%       68%            94%          28%       0%           88%        0%       39%

  Combined 10-year benefit stream   5.10      5.77           6.38         4.49      3.42         4.89       4.11     4.86
  flow (7% discount factor)                                                                                          
  --------------------------------- --------- -------------- ------------ --------- ------------ ---------- -------- ---------------

It is important to note that the historical PRS data used in this
analysis includes acres of conservation practices applied, not of acres
treated. Any particular treated acre may have had more than one
conservation practice applied on it, so a given treated acre may
generate benefits in several benefit categories. Consequently, for the
approach in this analysis, adding up benefits across categories is
appropriate. However, to calculate the individual net benefits for each
benefit category, one must ignore the fact that the cost of some
practices may be counted in multiple benefit categories. Thus, neither
the costs nor net benefits for each individual benefit category can be
summed to arrive at an overall costs or net benefits. The sum of program
benefits across all benefit categories minus the "actual" total costs
produces the overall net benefit. Using this approach, 95 percent of
overall practice expenditures were accounted for. Monetary benefit
estimates were not available for "benefits from non-analyzed practices"
involving five percent of total costs. The benefits from this five
percent were not quantified at this time although their costs were
included in the analysis.

Conservation practice implementation costs were based on ProTracts data.
Most benefit units for practices were also based on ProTracts data.
However, for some management practices, benefit units were based on FY
2007 PRS data. ProTracts treats management practices as recurring
practices; treated acres may receive payments in multiple years (up to
three years). This creates the potential for counting treated acres in
multiple years. For example, the amount of acreage implemented in FY
2007 ProTracts may include acreage reported also in FY 2006 and/or FY
2005. As a result, it was decided that PRS data would be a better source
for acreage of management practices implemented.

A detailed discussion of the expected benefits generated by producers as
a result of their participation in EQIP is provided in appendix E.

## Procedure to compare total Program Costs and Benefits by Benefit Category

A benefit-cost analysis model was constructed incorporating the above
assumptions and used to compare expected costs with expected benefits.
The baseline at roughly \$1 billion funding level along with the FY 2007
EQIP parameters. This analysis was performed again with projected
funding levels as specified in the 2008 Act. The procedure is summarized
by the following steps:

1.  The total EQIP funding was divided into FA (74 percent) and TA (26
    percent). FA dollars are used to assist producers fund conservation
    practices. All FA was assumed to be allocated in each year and
    assumed to be spent within the following five years. Since EQIP was
    funded at roughly \$1 billion annually from FY 2005 to May 2008,
    both allocated and actual spending were roughly the same. All costs
    and benefits are estimated in 2007 dollars with a seven percent
    discount rate.

2.  The "mix" of conservation practices and cost-share rates from FY
    2007 EQIP was assumed to be adopted by producers in each year FY
    2008-FY2012. FA would be expended accordingly in each fiscal year,
    adjusting for the different cost-share rates for each practice. The
    list of conservation practices is continually updated by NRCS; no
    adjustments were made for increased use of energy, organic, and
    forest practices as emphasized in the 2008 Act.

3.  The total costs, EQIP and producer, are estimated given the
    distribution of expected conservation practices adopted over FY
    2008-FY 2012. The adoption of these conservation practices by EQIP
    participants is assumed to be solely attributed to their
    participation in EQIP (except for the CAFO exception discussed
    below).

4.  Benefit per-unit dollar value was multiplied by the total units
    treated to calculate the total benefit for each of the nine benefit
    categories. These estimated impacts were based on past relationships
    for each conservation practice and their environmental outcome. The
    environmental outcome for improved animal waste management was
    adjusted downward by 46 percent to account for the CAFOs meeting
    EPA's regulatory requirements.

5.  The average practice life span of each practice was estimated by the
    proportion of the maximum of benefits expected to occur during the
    practice's first ten years giving a combined 10-year benefit stream
    flow factor. This factor was multiplied by the annual benefit.

6.  Roughly five percent of the costs were associated with practices for
    which benefits could not be quantified. These benefits were excluded
    from the analysis although their costs were still considered in the
    total costs figures used in the analysis.

### Construction of the "Baseline"

The baseline assumes the FY 2007 EQIP parameters. The FY 2007 roughly
\$1 billion funding level was applied for the five-year period from FY
2008-FY 2012 for the baseline analysis. A summarization of this
extension of funding includes:

-   Animal waste management -- 2.7 million animal units would be
    treated, generating \$960 million in water quality and crop nutrient
    benefits, or a net benefit of \$117 million over total costs. This
    includes 1.1 million animal units in regulated large CAFOs (over
    1,000 AUs) which would be treated with or without EQIP funds and
    whose benefits were accounted for in the 2003 EPA CAFO regulation.

-   Sheet and rill water erosion -- 8.0 million acres would be treated,
    generating \$1.9 billion in total benefits or \$1.0 billion in net
    benefits over total costs.

-   Grazing land productivity -- 35.6 million acres would be treated,
    generating \$3.1 billion in total benefits or \$750 million in net
    benefits over total costs.

-   Irrigation water use -- 4.0 million acres would be treated,
    generating \$231 million in total benefits, or a net loss of \$1.3
    billion compared to total costs.

-   Air Quality -- wind erosion would be reduced on 8.0 million acres,
    providing air quality benefits of \$181 million, or a net loss of
    \$905 million compared to total costs. Benefits are not being
    totally accounted for in this instance as these conservation
    practices also may produce energy, wildlife, and carbon
    sequestration benefits, as well as other non-analyzed on-site and
    off-site beneficial environmental impacts.

-   Fertilizer use (non-animal waste nutrient management) -- results in
    total fertilizer savings valued at \$601 million, or \$353 million
    in net savings over total costs are generated on 11.4 million acres
    through improved nutrient management.

-   Wildlife habitat -- generate benefits of \$172 million, or a net
    loss of \$115 million compared to total costs, are generated on 5.7
    million acres of crop and grazing land.

-   Energy use -- benefits generated on energy savings total \$210
    million. The costs of these practices have been also accounted for
    in the sheet and rill water erosion and air quality benefit
    categories. The energy use benefits are additional benefits derived
    from sheet and rill water erosion reductions and air quality
    practices.

-   Carbon sequestration -- benefits total \$82 million. The costs of
    these practices have been accounted for in several of the above
    benefit categories. The carbon sequestration benefits are simply
    additional benefits related to reduced sheet and rill water erosion
    and grazing land productivity practices.

The total share of EQIP funds exceeds 100 percent due to the fact that
numerous practice costs are counted in several benefit categories as
discussed beforehand. This multiple counting over-estimates the EQIP
expenditure in any one year and produces a lower B/C ratio for EQIP as a
whole. The baseline has total benefits of \$7.09 billion with total
economic costs of \$7.05 billion resulting in net economic estimated
benefits of \$39 million.

<table style="width:100%;">
<colgroup>
<col style="width: 17%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
</colgroup>
<thead>
<tr class="header">
<th colspan="11"><span id="__RefHeading___Toc219115378"
class="anchor"></span><strong>Table 6. Calculation of benefits and costs
with a continuance of 2007 EQIP budget and program parameters by benefit
category, FY 2008–FY 2012, using a seven percent discount
rate.</strong></th>
</tr>
<tr class="odd">
<th></th>
<th colspan="10"><strong>Benefit Category</strong></th>
</tr>
<tr class="header">
<th></th>
<th><strong>Animal Waste Mng</strong></th>
<th><strong>Animal Waste Mng</strong></th>
<th><strong>Sheet and rill</strong></th>
<th><strong>Grazing land</strong></th>
<th><strong>Irrigation</strong></th>
<th><strong>Air</strong></th>
<th><strong>Fertilizer</strong></th>
<th><strong>Wildlife</strong></th>
<th><strong>Energy</strong></th>
<th><strong>Carbon</strong></th>
</tr>
<tr class="odd">
<th><strong>Fund</strong></th>
<th><strong>Small CAFOs</strong></th>
<th><strong>Large CAFOs</strong></th>
<th><strong>water erosion</strong></th>
<th><strong>Productivity</strong></th>
<th><strong>water use</strong></th>
<th><strong>quality</strong></th>
<th><strong>Use</strong></th>
<th><strong>habitat</strong></th>
<th><strong>use</strong></th>
<th><strong>sequestration</strong></th>
</tr>
<tr class="header">
<th><strong>Year</strong></th>
<th><strong>(Animal Units)</strong></th>
<th><strong>(Animal Units)</strong></th>
<th><strong>(Acres)</strong></th>
<th><strong>(Acres)</strong></th>
<th><strong>(Acres)</strong></th>
<th><strong>(Acres)</strong></th>
<th><strong>(Acres)</strong></th>
<th><strong>(Acres)</strong></th>
<th><strong>(Acres)</strong></th>
<th><strong>(Acres)</strong></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td>Analytical Parameters</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="even">
<td>Share of EQIP funds</td>
<td>0.169</td>
<td>0.047</td>
<td>0.135</td>
<td>0.355</td>
<td>0.228</td>
<td>0.094</td>
<td>0.037</td>
<td>0.043</td>
<td>0.054</td>
<td>0.114</td>
</tr>
<tr class="odd">
<td>Benefit per acre</td>
<td>53.46</td>
<td>$53.46</td>
<td>$54.32</td>
<td>$17.25</td>
<td>$10.30</td>
<td>$5.71</td>
<td>$17.65</td>
<td>$7.10</td>
<td>$7.81</td>
<td>$0.47</td>
</tr>
<tr class="even">
<td>Total costs per unit</td>
<td>52.29</td>
<td>$25.14</td>
<td>$107.00</td>
<td>$62.83</td>
<td>$360.18</td>
<td>$113.44</td>
<td>$20.64</td>
<td>$48.07</td>
<td>$46.04</td>
<td>$17.57</td>
</tr>
<tr class="odd">
<td>Cost share per unit</td>
<td>31.38</td>
<td>$15.08</td>
<td>$61.27</td>
<td>$36.27</td>
<td>$206.10</td>
<td>$42.68</td>
<td>$11.87</td>
<td>$27.92</td>
<td>$26.16</td>
<td>$9.97</td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td>EQIP Cost Share Funds: 2008</td>
<td>74.1</td>
<td>26.10</td>
<td>$98.3</td>
<td>$258.2</td>
<td>$165.5</td>
<td>$68.6</td>
<td>$27.0</td>
<td>$31.6</td>
<td>$39.0</td>
<td>$82.8</td>
</tr>
<tr class="even">
<td>($ millions) 2009</td>
<td>74.1</td>
<td>26.10</td>
<td>$98.3</td>
<td>$258.2</td>
<td>$165.5</td>
<td>$68.6</td>
<td>$27.0</td>
<td>$31.6</td>
<td>$39.0</td>
<td>$82.8</td>
</tr>
<tr class="odd">
<td>2010</td>
<td>74.1</td>
<td>26.10</td>
<td>$98.3</td>
<td>$258.2</td>
<td>$165.5</td>
<td>$68.6</td>
<td>$27.0</td>
<td>$31.6</td>
<td>$39.0</td>
<td>$82.8</td>
</tr>
<tr class="even">
<td>2011</td>
<td>74.1</td>
<td>26.10</td>
<td>$98.3</td>
<td>$258.2</td>
<td>$165.5</td>
<td>$68.6</td>
<td>$27.0</td>
<td>$31.6</td>
<td>$39.0</td>
<td>$82.8</td>
</tr>
<tr class="odd">
<td>2012</td>
<td>74.1</td>
<td>26.10</td>
<td>$98.3</td>
<td>$258.2</td>
<td>$165.5</td>
<td>$68.6</td>
<td>$27.0</td>
<td>$31.6</td>
<td>$39.0</td>
<td>$82.8</td>
</tr>
<tr class="even">
<td>Totals</td>
<td>370.5</td>
<td>$130.7</td>
<td>$491.3</td>
<td>$1,290.9</td>
<td>$827.3</td>
<td>$343.1</td>
<td>$135.0</td>
<td>$158.0</td>
<td>$194.8</td>
<td>$414.0</td>
</tr>
<tr class="odd">
<td>NPV (2007) FA Share</td>
<td>$325,087,849</td>
<td>$114,643,154</td>
<td>$431,060,576</td>
<td>$1,132,649,237</td>
<td>$725,904,269</td>
<td>$301,057,305</td>
<td>$118,454,007</td>
<td>$138,671,126</td>
<td>$170,900,565</td>
<td>$363,227,331</td>
</tr>
<tr class="even">
<td>NPV (2007) TA Share</td>
<td>$105,416,207</td>
<td>$4,888,199</td>
<td>$151,453,716</td>
<td>$397,957,840</td>
<td>$255,047,446</td>
<td>$105,776,891</td>
<td>$41,618,975</td>
<td>$48,722,288</td>
<td>$60,046,144</td>
<td>$127,620,414</td>
</tr>
<tr class="odd">
<td>NPV (2007) EQIP Costs</td>
<td>$430,504,056</td>
<td>$119,531,352</td>
<td>$582,514,292</td>
<td>$1,530,607,077</td>
<td>$980,951,715</td>
<td>$406,834,196</td>
<td>$160,072,982</td>
<td>$187,393,414</td>
<td>$230,946,709</td>
<td>$490,847,745</td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td>Acres or Animal Units Treated:</td>
<td>Animal Units</td>
<td>Animal Units</td>
<td>Acres</td>
<td>Acres</td>
<td>Acres</td>
<td>Acres</td>
<td>Acres</td>
<td>Acres</td>
<td>Acres</td>
<td>Acres</td>
</tr>
<tr class="even">
<td>2008</td>
<td>314,256</td>
<td>230,536</td>
<td>1,603,714</td>
<td>7,117,250</td>
<td>802,793</td>
<td>1,607,768</td>
<td>2,274,088</td>
<td>1,132,042</td>
<td>1,489,240</td>
<td>8,305,089</td>
</tr>
<tr class="odd">
<td>2009</td>
<td>314,256</td>
<td>230,536</td>
<td>1,603,714</td>
<td>7,117,250</td>
<td>802,793</td>
<td>1,607,768</td>
<td>2,274,088</td>
<td>1,132,042</td>
<td>1,489,240</td>
<td>8,305,089</td>
</tr>
<tr class="even">
<td>2010</td>
<td>314,256</td>
<td>230,536</td>
<td>1,603,714</td>
<td>7,117,250</td>
<td>802,793</td>
<td>1,607,768</td>
<td>2,274,088</td>
<td>1,132,042</td>
<td>1,489,240</td>
<td>8,305,089</td>
</tr>
<tr class="odd">
<td>2011</td>
<td>314,256</td>
<td>230,536</td>
<td>1,603,714</td>
<td>7,117,250</td>
<td>802,793</td>
<td>1,607,768</td>
<td>2,274,088</td>
<td>1,132,042</td>
<td>1,489,240</td>
<td>8,305,089</td>
</tr>
<tr class="even">
<td>2012</td>
<td>314,256</td>
<td>230,536</td>
<td>1,603,714</td>
<td>7,117,250</td>
<td>802,793</td>
<td>1,607,768</td>
<td>2,274,088</td>
<td>1,132,042</td>
<td>1,489,240</td>
<td>8,305,089</td>
</tr>
<tr class="odd">
<td>Totals</td>
<td>1,571,280</td>
<td>1,152,682</td>
<td>8,018,568</td>
<td>35,586,250</td>
<td>4,013,967</td>
<td>8,038,840</td>
<td>11,370,438</td>
<td>5,660,211</td>
<td>7,446,199</td>
<td>41,525,445</td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td>NPV of benefits: 2008</td>
<td>$126,264,500</td>
<td>$92,626,856</td>
<td>$444,095,609</td>
<td>$709,077,083</td>
<td>$52,734,408</td>
<td>$41,202,999</td>
<td>$137,058,327</td>
<td>$39,313,699</td>
<td>$47,838,600</td>
<td>$18,769,311</td>
</tr>
<tr class="even">
<td>(to fund year) 2009</td>
<td>$126,264,500</td>
<td>$92,626,856</td>
<td>$444,095,609</td>
<td>$709,077,083</td>
<td>$52,734,408</td>
<td>$41,202,999</td>
<td>$137,058,327</td>
<td>$39,313,699</td>
<td>$47,838,600</td>
<td>$18,769,311</td>
</tr>
<tr class="odd">
<td>2010</td>
<td>$126,264,500</td>
<td>$92,626,856</td>
<td>$444,095,609</td>
<td>$709,077,083</td>
<td>$52,734,408</td>
<td>$41,202,999</td>
<td>$137,058,327</td>
<td>$39,313,699</td>
<td>$47,838,600</td>
<td>$18,769,311</td>
</tr>
<tr class="even">
<td>2011</td>
<td>$126,264,500</td>
<td>$92,626,856</td>
<td>$444,095,609</td>
<td>$709,077,083</td>
<td>$52,734,408</td>
<td>$41,202,999</td>
<td>$137,058,327</td>
<td>$39,313,699</td>
<td>$47,838,600</td>
<td>$18,769,311</td>
</tr>
<tr class="odd">
<td>2012</td>
<td>$126,264,500</td>
<td>$92,626,856</td>
<td>$444,095,609</td>
<td>$709,077,083</td>
<td>$52,734,408</td>
<td>$41,202,999</td>
<td>$137,058,327</td>
<td>$39,313,699</td>
<td>$47,838,600</td>
<td>$18,769,311</td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td>NPV (2007) Total Benefits</td>
<td>$553,949,036</td>
<td>$406,373,587</td>
<td>$1,948,341,256</td>
<td>$3,110,870,958</td>
<td>$231,356,989</td>
<td>$180,766,261</td>
<td>$601,303,836</td>
<td>$172,477,501</td>
<td>$209,878,042</td>
<td>$82,344,930</td>
</tr>
<tr class="even">
<td>NPV (2007) Total Costs</td>
<td>$647,229,288</td>
<td>$195,960,121</td>
<td>$904,287,333</td>
<td>$2,359,781,803</td>
<td>$1,523,622,001</td>
<td>$905,933,262</td>
<td>$247,578,491</td>
<td>$287,463,157</td>
<td>$360,829,666</td>
<td>$767,733,580</td>
</tr>
<tr class="odd">
<td>Net Benefits over Total Costs</td>
<td>-$93,280,252</td>
<td>$210,413,465</td>
<td>$1,044,053,923</td>
<td>$751,089,156</td>
<td>-$1,292,265,012</td>
<td>-$725,167,001</td>
<td>$353,725,345</td>
<td>-$114,985,656</td>
<td>-$150,951,624</td>
<td>-$685,388,650</td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td colspan="11"><p>Large CAFOs (over 1,000 animal units) were separated
out since they were covered in February 2003 EPA CAFO regulation and its
accompany Benefit Cost Analysis (is consistent with 2003 EQIP BCA.).</p>
<p> Benefits may be added across columns (categories) since some
practices provide benefits in several categories.</p>
<p>Costs can not be added across columns for this would result in double
counting.</p></td>
</tr>
</tbody>
</table>

## Discussion of Policy Scenarios

Policy Scenario 1 -- EQIP Budget set at the 2008 Act Levels:

-   Description of alternative: This policy option adheres to the
    program specifications as outlined in the 2008 Act and funded at
    those specified budget levels.

-   Net beneficial effects: Additional environmental benefits are
    expected to be fairly proportional to the increase in budget outlays
    outlined in the 2008 Act adjusting for the different set of resource
    concerns to be addressed and a heightened emphasis on "historically
    underserved participants".

-   Adverse effects: No adverse effects are expected as a result of this
    policy alternative. Some trade-off between additional environmental
    benefits and attention to serving an increase in disadvantaged
    farmers and ranchers could be expected.

Results

Highlights of this policy scenario include:

-   Animal waste management -- 4 million animal units[^20] would be
    treated, generating \$1.4 billion in water quality and crop nutrient
    benefits. This is \$172 million over total costs.

-   Sheet and rill water erosion -- 12 million acres would be treated,
    generating \$2.9 billion in total benefits or \$1.5 billion in net
    benefits over total costs.

-   Grazing land productivity -- 53 million acres would be treated,
    generating \$3.5 billion in total benefits or \$1.0 billion in net
    benefits over total costs.

-   Irrigation water use -- 6 million acres would be treated, generating
    \$340 million in total benefits, or a net loss of \$1.9 billion
    compared to total costs.

-   Air Quality -- wind erosion would be reduced on 12 million acres,
    providing air quality benefits of \$266 million, or a net loss of
    \$1.3 billion compared to total costs. Benefits are not being
    totally accounted for in this instance as these conservation
    practices also may produce energy, wildlife, and carbon
    sequestration benefits, as well as other non-analyzed on-site and
    off-site beneficial environmental impacts.

-   Fertilizer use (non-animal waste nutrient management) -- results in
    total fertilizer savings valued at \$885 million, or \$521 million
    in net savings over total costs are generated on 17 million acres
    through improved nutrient management.

-   Wildlife habitat -- generate benefits of \$254 million, or a net
    loss of \$170 million compared to total costs, are generated on 8.4
    million acres of crop and grazing land.

-   Energy use -- benefits generated on energy savings total \$309
    million. The costs of these practices have been also accounted for
    in the sheet and rill water erosion and air quality benefit
    categories. The energy use benefits are additional benefits derived
    from sheet and rill water erosion reductions and air quality
    practices.

-   Carbon sequestration -- benefits total \$121 million. The costs of
    these practices have been accounted for in several of the above
    benefit categories. The carbon sequestration benefits are simply
    additional benefits related to reduced sheet and rill water erosion
    and grazing land productivity practices.

Table 7 below shows the Calculation of Benefit Cost for EQIP funded land
treatments, by benefit category for the expanded EQIP Program.

Table 8 is the summary of the cumulative 5-year EQIP benefits and costs,
FY 2008--FY 2012 calculated at a seven percent discount rate. This is a
repeat of table 1 in the Executive Summary.

Table 9 is the summary of the cumulative 5-year EQIP benefits and costs,
FY 2008--FY 2012 calculated at a three percent discount rate as the
alternative discount rate required by OMB Circular A-4.

<table style="width:100%;">
<colgroup>
<col style="width: 17%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
</colgroup>
<thead>
<tr class="header">
<th colspan="11"><span id="__RefHeading___Toc219115379"
class="anchor"></span><strong>Table 7. Calculation of benefits and costs
with expanded funding as authorized by 2008 Act by benefit category, FY
2008–FY 2012, using a seven percent discount rate.</strong></th>
</tr>
<tr class="odd">
<th></th>
<th colspan="10"><strong>Benefit Category</strong></th>
</tr>
<tr class="header">
<th></th>
<th><strong>Animal Waste Mng</strong></th>
<th><strong>Animal Waste Mng</strong></th>
<th><strong>Sheet and rill</strong></th>
<th><strong>Grazing land</strong></th>
<th><strong>Irrigation</strong></th>
<th><strong>Air</strong></th>
<th><strong>Fertilizer</strong></th>
<th><strong>Wildlife</strong></th>
<th><strong>Energy</strong></th>
<th><strong>Carbon</strong></th>
</tr>
<tr class="odd">
<th><strong>Fund</strong></th>
<th><strong>Small CAFOs</strong></th>
<th><strong>Large CAFOs</strong></th>
<th><strong>water erosion</strong></th>
<th><strong>Productivity</strong></th>
<th><strong>water use</strong></th>
<th><strong>quality</strong></th>
<th><strong>Use</strong></th>
<th><strong>habitat</strong></th>
<th><strong>use</strong></th>
<th><strong>sequestration</strong></th>
</tr>
<tr class="header">
<th><strong>Year</strong></th>
<th><strong>(Animal Units)</strong></th>
<th><strong>(Animal Units)</strong></th>
<th><strong>(Acres)</strong></th>
<th><strong>(Acres)</strong></th>
<th><strong>(Acres)</strong></th>
<th><strong>(Acres)</strong></th>
<th><strong>(Acres)</strong></th>
<th><strong>(Acres)</strong></th>
<th><strong>(Acres)</strong></th>
<th><strong>(Acres)</strong></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td>Analytical Parameters</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="even">
<td>Share of EQIP funds</td>
<td>0.169</td>
<td>0.047</td>
<td>0.135</td>
<td>0.355</td>
<td>0.228</td>
<td>0.094</td>
<td>0.037</td>
<td>0.043</td>
<td>0.054</td>
<td>0.114</td>
</tr>
<tr class="odd">
<td>Benefit per acre</td>
<td>53.46</td>
<td>53.46</td>
<td>$54.32</td>
<td>$17.25</td>
<td>$10.30</td>
<td>$5.71</td>
<td>$17.65</td>
<td>$7.10</td>
<td>$7.81</td>
<td>$0.47</td>
</tr>
<tr class="even">
<td>Total costs per unit</td>
<td>52.29</td>
<td>25.14</td>
<td>$107.00</td>
<td>$62.83</td>
<td>$360.18</td>
<td>$113.44</td>
<td>$20.64</td>
<td>$48.07</td>
<td>$46.04</td>
<td>$17.57</td>
</tr>
<tr class="odd">
<td>Cost share per unit</td>
<td>31.38</td>
<td>15.08</td>
<td>$61.27</td>
<td>$36.27</td>
<td>$206.10</td>
<td>$42.68</td>
<td>$11.87</td>
<td>$27.92</td>
<td>$26.16</td>
<td>$9.97</td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td>EQIP Cost Share Funds: 2008</td>
<td>90.5</td>
<td>31.9</td>
<td>$120.0</td>
<td>$315.3</td>
<td>$202.1</td>
<td>$83.8</td>
<td>$33.0</td>
<td>$38.6</td>
<td>$47.6</td>
<td>$101.1</td>
</tr>
<tr class="even">
<td>($ millions) 2009</td>
<td>100.8</td>
<td>35.6</td>
<td>$133.7</td>
<td>$351.3</td>
<td>$225.1</td>
<td>$93.4</td>
<td>$36.7</td>
<td>$43.0</td>
<td>$53.0</td>
<td>$112.7</td>
</tr>
<tr class="odd">
<td>2010</td>
<td>109.3</td>
<td>38.6</td>
<td>$145.0</td>
<td>$381.0</td>
<td>$244.2</td>
<td>$101.3</td>
<td>$39.8</td>
<td>$46.6</td>
<td>$57.5</td>
<td>$122.2</td>
</tr>
<tr class="even">
<td>2011</td>
<td>119.8</td>
<td>42.2</td>
<td>$158.8</td>
<td>$417.2</td>
<td>$267.4</td>
<td>$110.9</td>
<td>$43.6</td>
<td>$51.1</td>
<td>$63.0</td>
<td>$133.8</td>
</tr>
<tr class="odd">
<td>2012</td>
<td>132.0</td>
<td>46.5</td>
<td>$175.0</td>
<td>$459.8</td>
<td>$294.7</td>
<td>$122.2</td>
<td>$48.1</td>
<td>$56.3</td>
<td>$69.4</td>
<td>$147.5</td>
</tr>
<tr class="even">
<td>Totals</td>
<td>552.4</td>
<td>194.8</td>
<td>$732.4</td>
<td>$1,924.6</td>
<td>$1,233.4</td>
<td>$511.5</td>
<td>$201.3</td>
<td>$235.6</td>
<td>$290.4</td>
<td>$617.2</td>
</tr>
<tr class="odd">
<td>NPV (2008) FA Share</td>
<td>$478,657,649</td>
<td>$168,799,980</td>
<td>$634,691,339</td>
<td>$1,667,706,816</td>
<td>$1,068,817,651</td>
<td>$443,275,203</td>
<td>$174,411,060</td>
<td>$204,178,642</td>
<td>$251,633,099</td>
<td>$534,814,024</td>
</tr>
<tr class="even">
<td>NPV (2008) TA Share</td>
<td>$155,214,273</td>
<td>$7,197,358</td>
<td>$222,999,660</td>
<td>$585,951,043</td>
<td>$375,530,526</td>
<td>$155,745,341</td>
<td>$61,279,562</td>
<td>$71,738,442</td>
<td>$88,411,629</td>
<td>$187,907,630</td>
</tr>
<tr class="odd">
<td>NPV (2008) EQIP Costs</td>
<td>$633,871,922</td>
<td>$175,997,338</td>
<td>$857,690,999</td>
<td>$2,253,657,860</td>
<td>$1,444,348,177</td>
<td>$599,020,544</td>
<td>$235,690,622</td>
<td>$275,917,083</td>
<td>$340,044,728</td>
<td>$722,721,654</td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td>Acres or Animal Units Treated:</td>
<td>Animal Units</td>
<td>Animal Units</td>
<td>Acres</td>
<td>Acres</td>
<td>Acres</td>
<td>Acres</td>
<td>Acres</td>
<td>Acres</td>
<td>Acres</td>
<td>Acres</td>
</tr>
<tr class="even">
<td>2008</td>
<td>383,782</td>
<td>281,540</td>
<td>1,958,517</td>
<td>8,691,860</td>
<td>980,402</td>
<td>1,963,468</td>
<td>2,777,203</td>
<td>1,382,494</td>
<td>1,818,717</td>
<td>10,142,494</td>
</tr>
<tr class="odd">
<td>2009</td>
<td>427,597</td>
<td>313,682</td>
<td>2,182,114</td>
<td>9,684,180</td>
<td>1,092,331</td>
<td>2,187,631</td>
<td>3,094,267</td>
<td>1,540,328</td>
<td>2,026,354</td>
<td>11,300,429</td>
</tr>
<tr class="even">
<td>2010</td>
<td>463,736</td>
<td>340,194</td>
<td>2,366,541</td>
<td>10,502,664</td>
<td>1,184,653</td>
<td>2,372,524</td>
<td>3,355,787</td>
<td>1,670,513</td>
<td>2,197,616</td>
<td>12,255,514</td>
</tr>
<tr class="odd">
<td>2011</td>
<td>507,871</td>
<td>372,571</td>
<td>2,591,770</td>
<td>11,502,228</td>
<td>1,297,399</td>
<td>2,598,323</td>
<td>3,675,166</td>
<td>1,829,500</td>
<td>2,406,769</td>
<td>13,421,901</td>
</tr>
<tr class="even">
<td>2012</td>
<td>559,682</td>
<td>410,579</td>
<td>2,856,170</td>
<td>12,675,629</td>
<td>1,429,753</td>
<td>2,863,391</td>
<td>4,050,088</td>
<td>2,016,136</td>
<td>2,652,296</td>
<td>14,791,138</td>
</tr>
<tr class="odd">
<td>Totals</td>
<td>2,342,667</td>
<td>1,718,566</td>
<td>11,955,112</td>
<td>53,056,560</td>
<td>5,984,538</td>
<td>11,985,338</td>
<td>16,952,512</td>
<td>8,438,971</td>
<td>11,101,751</td>
<td>61,911,476</td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td>NPV of benefits: 2008</td>
<td>$154,199,068</td>
<td>$113,119,482</td>
<td>$542,346,652</td>
<td>$865,952,227</td>
<td>$64,401,289</td>
<td>$50,318,688</td>
<td>$167,380,905</td>
<td>$48,011,402</td>
<td>$58,422,339</td>
<td>$22,921,804</td>
</tr>
<tr class="even">
<td>(to fund year) 2009</td>
<td>$171,803,461</td>
<td>$126,033,956</td>
<td>$604,264,561</td>
<td>$964,815,106</td>
<td>$71,753,769</td>
<td>$56,063,405</td>
<td>$186,490,225</td>
<td>$53,492,704</td>
<td>$65,092,223</td>
<td>$25,538,710</td>
</tr>
<tr class="odd">
<td>2010</td>
<td>$186,323,873</td>
<td>$136,686,041</td>
<td>$655,335,538</td>
<td>$1,046,358,940</td>
<td>$77,818,224</td>
<td>$60,801,748</td>
<td>$202,251,927</td>
<td>$58,013,777</td>
<td>$70,593,660</td>
<td>$27,697,180</td>
</tr>
<tr class="even">
<td>2011</td>
<td>$204,056,766</td>
<td>$149,694,781</td>
<td>$717,705,403</td>
<td>$1,145,943,446</td>
<td>$85,224,372</td>
<td>$66,588,398</td>
<td>$221,500,731</td>
<td>$63,535,089</td>
<td>$77,312,229</td>
<td>$30,333,188</td>
</tr>
<tr class="odd">
<td>2012</td>
<td>$224,873,640</td>
<td>$164,965,912</td>
<td>$790,922,201</td>
<td>$1,262,846,997</td>
<td>$93,918,546</td>
<td>$73,381,421</td>
<td>$244,097,153</td>
<td>$70,016,628</td>
<td>$85,199,245</td>
<td>$33,427,631</td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td>NPV (2008) Total Benefits</td>
<td>$815,631,665</td>
<td>$598,342,345</td>
<td>$2,868,727,481</td>
<td>$4,580,430,139</td>
<td>$340,648,821</td>
<td>$266,159,298</td>
<td>$885,356,625</td>
<td>$253,954,971</td>
<td>$309,023,333</td>
<td>$121,244,245</td>
</tr>
<tr class="even">
<td>NPV (2008) Total Costs</td>
<td>$952,977,021</td>
<td>$288,530,659</td>
<td>$1,331,467,942</td>
<td>$3,474,530,392</td>
<td>$2,243,373,071</td>
<td>$1,333,891,399</td>
<td>$364,533,276</td>
<td>$423,259,250</td>
<td>$531,283,714</td>
<td>$1,130,406,910</td>
</tr>
<tr class="odd">
<td>Net Benefits over Total Costs</td>
<td>-$137,345,356</td>
<td>$309,811,686</td>
<td>$1,537,259,540</td>
<td>$1,105,899,747</td>
<td>-$1,902,724,250</td>
<td>-$1,067,732,101</td>
<td>$520,823,349</td>
<td>-$169,304,278</td>
<td>-$222,260,381</td>
<td>-$1,009,162,665</td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td colspan="11"><p>Large CAFOs (over 1,000 animal units) were separated
out since they were covered in February 2003 EPA CAFO regulation and its
accompany Benefit Cost Analysis (is consistent with 2003 EQIP BCA.).</p>
<p>Benefits may be added across columns (categories) since some
practices provide benefits in several categories.</p>
<p>Costs can not be added across columns for this would result in double
counting.</p></td>
</tr>
</tbody>
</table>

+------------------+-------+------+------+------+-------+-------+-----+
| []{#__RefHeadin  |       |      |      |      |       |       |     |
| g___Toc219115380 |       |      |      |      |       |       |     |
| .anchor}**Table  |       |      |      |      |       |       |     |
| 8 Summary of     |       |      |      |      |       |       |     |
| cumulative       |       |      |      |      |       |       |     |
| 5-year EQIP      |       |      |      |      |       |       |     |
| benefits and     |       |      |      |      |       |       |     |
| costs over FY    |       |      |      |      |       |       |     |
| 2008--FY 2012,   |       |      |      |      |       |       |     |
| using a seven    |       |      |      |      |       |       |     |
| percent discount |       |      |      |      |       |       |     |
| rate.**          |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| (\$ million of   |       |      |      |      |       |       |     |
| 2007 dollars)    |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| **Benefit        | **To  | **   | **   | **I  | *     | *     | **  |
| Category:**      | Not   | 2007 | 2008 | ncre | *2007 | *2008 | Uni |
|                  | Impl  | EQIP | Act  | ases | EQIP  | Act** | t** |
|                  | ement | with | Be   | with | with  |       |     |
|                  | E     | \$1  | nefi | the  | \$1   | **(   |     |
|                  | QIP** | bil  | ts** | 2008 | bi    | Acres |     |
|                  |       | lion |      | A    | llion | or**  |     |
|                  |       | /    | **&  | ct** | /     |       |     |
|                  |       | ye   | Cos  |      | y     | **A   |     |
|                  |       | ar** | ts** |      | ear** | nimal |     |
|                  |       |      |      |      |       | Uni   |     |
|                  |       | **FY |      |      | **(   | ts)** |     |
|                  |       | 2008 |      |      | Acres |       |     |
|                  |       | -**  |      |      | or**  |       |     |
|                  |       |      |      |      |       |       |     |
|                  |       | **FY |      |      | **A   |       |     |
|                  |       | 20   |      |      | nimal |       |     |
|                  |       | 12** |      |      | Uni   |       |     |
|                  |       |      |      |      | ts)** |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| > Animal waste   | \$0   | \$   | \$   | \$   | 2,72  | 4,06  | Ani |
| > management\*   |       | 554  | 816  | 262  | 4,000 | 1,000 | mal |
|                  |       |      |      |      |       |       | Un  |
|                  |       |      |      |      |       |       | its |
+------------------+-------+------+------+------+-------+-------+-----+
| > Sheet and rill | \$0   | \$1  | \$2  | \$   | 8,01  | 11,95 | Ac  |
| > water erosion  |       | ,948 | ,869 | 920  | 9,000 | 5,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| > Grazing land   | \$0   | \$3  | \$4  | \$1  | 35,58 | 53,05 | Ac  |
| > productivity   |       | ,111 | ,580 | ,470 | 6,000 | 7,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| > Irrigation     | \$0   | \$   | \$   | \$   | 4,01  | 5,98  | Ac  |
| > water use      |       | 231  | 341  | 109  | 4,000 | 5,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| > Air quality    | \$0   | \$   | \$   | \$   | 8,03  | 11,98 | Ac  |
|                  |       | 181  | 266  | 85   | 9,000 | 5,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| > Fertilizer use | \$0   | \$   | \$   | \$   | 11,37 | 16,95 | Ac  |
|                  |       | 601  | 885  | 284  | 0,000 | 3,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| > Wildlife       | \$0   | \$   | \$   | \$   | 5,66  | 8,43  | Ac  |
| > habitat        |       | 172  | 254  | 81   | 0,000 | 9,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| > Energy use     | \$0   | \$   | \$   | \$   | 7,44  | 11,10 | Ac  |
|                  |       | 210  | 309  | 99   | 6,000 | 2,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| > Carbon         | \$0   | \$   | \$   | \$   | 41,52 | 61,91 | Ac  |
| > sequestration  |       | 82   | 121  | 39   | 5,000 | 1,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| **Grand Total    | \$0   | \$7  | \$10 | \$3  |       |       |     |
| Benefits**       |       | ,091 | ,441 | ,350 |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
|                  |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| **Costs:**       |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| > Total          | \$0   | \$7  | \$10 | \$3  |       |       |     |
| > costs\*\*      |       | ,053 | ,384 | ,332 |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
|                  |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| **Net            |       |      |      |      |       |       |     |
| Benefits:**      |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| > Net benefits   | \$0   | \$39 | \$57 | \$18 |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| \*Environmental  |       |      |      |      |       |       |     |
| benefits from    |       |      |      |      |       |       |     |
| improved animal  |       |      |      |      |       |       |     |
| waste management |       |      |      |      |       |       |     |
| attributed to    |       |      |      |      |       |       |     |
| EQIP are 42      |       |      |      |      |       |       |     |
| percent below    |       |      |      |      |       |       |     |
| the total CAFO   |       |      |      |      |       |       |     |
| related benefits |       |      |      |      |       |       |     |
| to account for   |       |      |      |      |       |       |     |
| environmental    |       |      |      |      |       |       |     |
| benefits         |       |      |      |      |       |       |     |
| captured by EPA  |       |      |      |      |       |       |     |
| regulatory       |       |      |      |      |       |       |     |
| requirements on  |       |      |      |      |       |       |     |
| large CAFOs.     |       |      |      |      |       |       |     |
| Likewise, costs  |       |      |      |      |       |       |     |
| associated with  |       |      |      |      |       |       |     |
| large CAFOs      |       |      |      |      |       |       |     |
| represent about  |       |      |      |      |       |       |     |
| 23 percent of    |       |      |      |      |       |       |     |
| NRCS costs       |       |      |      |      |       |       |     |
| related to CAFOs |       |      |      |      |       |       |     |
| of all sizes     |       |      |      |      |       |       |     |
| were deducted    |       |      |      |      |       |       |     |
| from the         |       |      |      |      |       |       |     |
| analysis.        |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| \*\*Total costs  |       |      |      |      |       |       |     |
| include all      |       |      |      |      |       |       |     |
| federal costs    |       |      |      |      |       |       |     |
| plus private and |       |      |      |      |       |       |     |
| other            |       |      |      |      |       |       |     |
| non-federal      |       |      |      |      |       |       |     |
| costs which have |       |      |      |      |       |       |     |
| historically     |       |      |      |      |       |       |     |
| matched federal  |       |      |      |      |       |       |     |
| EQIP FA funding  |       |      |      |      |       |       |     |
| at an overall 50 |       |      |      |      |       |       |     |
| percent          |       |      |      |      |       |       |     |
| cost-share rate  |       |      |      |      |       |       |     |
| discounted at    |       |      |      |      |       |       |     |
| seven percent    |       |      |      |      |       |       |     |
| and also the     |       |      |      |      |       |       |     |
| CAFO adjustment  |       |      |      |      |       |       |     |
| above of 23      |       |      |      |      |       |       |     |
| percent,         |       |      |      |      |       |       |     |
| discounted at    |       |      |      |      |       |       |     |
| seven percent..  |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+

+------------------+-------+------+------+------+-------+-------+-----+
| []{#__RefHeadin  |       |      |      |      |       |       |     |
| g___Toc219115381 |       |      |      |      |       |       |     |
| .anchor}**Table  |       |      |      |      |       |       |     |
| 9. Summary of    |       |      |      |      |       |       |     |
| cumulative       |       |      |      |      |       |       |     |
| 5-year EQIP      |       |      |      |      |       |       |     |
| benefits and     |       |      |      |      |       |       |     |
| costs over FY    |       |      |      |      |       |       |     |
| 2008--FY 2012,   |       |      |      |      |       |       |     |
| using a three    |       |      |      |      |       |       |     |
| percent discount |       |      |      |      |       |       |     |
| rate.**          |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| (\$ million of   |       |      |      |      |       |       |     |
| 2007 dollars)    |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| **Benefit        | **To  | **   | **   | **I  | *     | *     | **  |
| Category:**      | Not   | 2007 | 2008 | ncre | *2007 | *2008 | Uni |
|                  | Impl  | EQIP | Act  | ases | EQIP  | Act** | t** |
|                  | ement | with | Be   | with | with  |       |     |
|                  | E     | \$1  | nefi | the  | \$1   | **(   |     |
|                  | QIP** | bil  | ts** | 2008 | bi    | Acres |     |
|                  |       | lion |      | A    | llion | or**  |     |
|                  |       | /    | **&  | ct** | /     |       |     |
|                  |       | ye   | Cos  |      | y     | **A   |     |
|                  |       | ar** | ts** |      | ear** | nimal |     |
|                  |       |      |      |      |       | Uni   |     |
|                  |       | **FY |      |      | **(   | ts)** |     |
|                  |       | 2008 |      |      | Acres |       |     |
|                  |       | -**  |      |      | or**  |       |     |
|                  |       |      |      |      |       |       |     |
|                  |       | **FY |      |      | **A   |       |     |
|                  |       | 20   |      |      | nimal |       |     |
|                  |       | 12** |      |      | Uni   |       |     |
|                  |       |      |      |      | ts)** |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| > Animal waste   | \$0   | \$   | \$1  | \$   | 2,72  | 4,06  | Ani |
| > management\*   |       | 696  | ,033 | 336  | 4,000 | 1,000 | mal |
|                  |       |      |      |      |       |       | Un  |
|                  |       |      |      |      |       |       | its |
+------------------+-------+------+------+------+-------+-------+-----+
| > Sheet and rill | \$0   | \$2  | \$3  | \$1  | 8,01  | 11,95 | Ac  |
| > water erosion  |       | ,438 | ,616 | ,177 | 9,000 | 5,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| > Grazing land   | \$0   | \$3  | \$5  | \$1  | 35,58 | 53,05 | Ac  |
| > productivity   |       | ,951 | ,858 | ,907 | 6,000 | 7,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| > Irrigation     | \$0   | \$   | \$   | \$   | 4,01  | 5,98  | Ac  |
| > water use      |       | 297  | 440  | 143  | 4,000 | 5,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| > Air quality    | \$0   | \$   | \$   | \$   | 8,03  | 11,98 | Ac  |
|                  |       | 225  | 334  | 109  | 9,000 | 5,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| > Fertilizer use | \$0   | \$   | \$1  | \$   | 11,37 | 16,95 | Ac  |
|                  |       | 716  | ,061 | 346  | 0,000 | 3,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| > Wildlife       | \$0   | \$   | \$   | \$   | 5,66  | 8,43  | Ac  |
| > habitat        |       | 227  | 336  | 109  | 0,000 | 9,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| > Energy use     | \$0   | \$   | \$   | \$   | 7,44  | 11,10 | Ac  |
|                  |       | 254  | 377  | 123  | 6,000 | 2,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| > Carbon         | \$0   | \$   | \$   | \$   | 41,52 | 61,91 | Ac  |
| > sequestration  |       | 103  | 153  | 50   | 5,000 | 1,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| **Grand Total    | \$0   | \$8  | \$13 | \$4  |       |       |     |
| Benefits**       |       | ,907 | ,208 | ,301 |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
|                  |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| **Costs:**       |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| > Total          | \$0   | \$7  | \$11 | \$3  |       |       |     |
| > costs\*\*      |       | ,512 | ,139 | ,627 |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
|                  |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| **Net            |       |      |      |      |       |       |     |
| Benefits:**      |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| > Net benefits   | \$0   | \$1  | \$2  | \    |       |       |     |
|                  |       | ,395 | ,069 | $674 |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| \*Environmental  |       |      |      |      |       |       |     |
| benefits from    |       |      |      |      |       |       |     |
| improved animal  |       |      |      |      |       |       |     |
| waste management |       |      |      |      |       |       |     |
| attributed to    |       |      |      |      |       |       |     |
| EQIP are 42      |       |      |      |      |       |       |     |
| percent below    |       |      |      |      |       |       |     |
| the total CAFO   |       |      |      |      |       |       |     |
| related benefits |       |      |      |      |       |       |     |
| to account for   |       |      |      |      |       |       |     |
| environmental    |       |      |      |      |       |       |     |
| benefits         |       |      |      |      |       |       |     |
| captured by EPA  |       |      |      |      |       |       |     |
| regulatory       |       |      |      |      |       |       |     |
| requirements on  |       |      |      |      |       |       |     |
| large CAFOs.     |       |      |      |      |       |       |     |
| Likewise, costs  |       |      |      |      |       |       |     |
| associated with  |       |      |      |      |       |       |     |
| large CAFOs      |       |      |      |      |       |       |     |
| represent about  |       |      |      |      |       |       |     |
| 23 percent of    |       |      |      |      |       |       |     |
| NRCS costs       |       |      |      |      |       |       |     |
| related to CAFOs |       |      |      |      |       |       |     |
| of all sizes     |       |      |      |      |       |       |     |
| were deducted    |       |      |      |      |       |       |     |
| from the         |       |      |      |      |       |       |     |
| analysis.        |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| \*\*Total costs  |       |      |      |      |       |       |     |
| include all      |       |      |      |      |       |       |     |
| federal costs    |       |      |      |      |       |       |     |
| plus private and |       |      |      |      |       |       |     |
| other            |       |      |      |      |       |       |     |
| non-federal      |       |      |      |      |       |       |     |
| costs which have |       |      |      |      |       |       |     |
| historically     |       |      |      |      |       |       |     |
| matched federal  |       |      |      |      |       |       |     |
| EQIP FA funding  |       |      |      |      |       |       |     |
| at an overall 50 |       |      |      |      |       |       |     |
| percent          |       |      |      |      |       |       |     |
| cost-share rate  |       |      |      |      |       |       |     |
| discounted at    |       |      |      |      |       |       |     |
| three percent    |       |      |      |      |       |       |     |
| and also the     |       |      |      |      |       |       |     |
| CAFO adjustment  |       |      |      |      |       |       |     |
| above of 23      |       |      |      |      |       |       |     |
| percent,         |       |      |      |      |       |       |     |
| discounted at    |       |      |      |      |       |       |     |
| three percent..  |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+

# References

Benson, V.W., Oliver W. Rice, Paul T. Dyke, Jimmy R. Williams, and C.
Allan Jones. (1989). Conservation Impacts on Crop Productivity for the
Life of the Soil. Journal of Soil and Water Conservation, 44:6.

Christensen, Lee, S. Daberkow, William McBride. (1998). Nutrient
Management Decisions by U.S. Corn Producers-Some Results from the 1996
Agricultural Resource Management Study. U.S. Department of Agriculture,
Economic Research Service. Washington, DC.

Claassen, Roger, LeRoy Hansen, Mark Peters, Vince Breneman, Marca
Weinberg, Andrea Cattaneo, Peter Feather, Dwight Gadsby, Daniel
Hellerstein, Jeff Hopkins, Paul Johnston, Mitch Morehart, and Mark
Smith. (2001, January). Agri-Environmental Policy at the Crossroads:
Guideposts on a Changing Landscape. U.S. Department of Agriculture,
Economic Research Service, Agricultural Economic Report No. 794.
Washington DC.

Crutchfield, Stephen R., Joseph C. Cooper, and Daniel Hellerstein.
(1997, June). Benefits of Safer Drinking Water: The Value of Nitrate
Reduction. U.S. Department of Agriculture, Economic Research Service,
Agricultural Economic Report No. 752. Washington DC.

Deaton, Angus, and John Muellbauer. (1980). Economics and consumer
Behavior. New York: Cambridge University Press.

Feather, Peter, Daniel Hellerstein, and LeRoy Hansen. (1999, April).
Economic Valuation of Environmental Benefits and the Targeting of
Conservation Programs. The Case of the CRP. U.S. Department of
Agriculture, Economic Research Service, Agriculture Information Bulletin
No. 778. Washington DC.

Gibilisco, Chuck, Gregory M. Filipek. (1998). The Economic Benefits of
Wildlife-Watching activities in Washington; Washington Department of
Fish and Wildlife.

Krupnick, Alan J. (1993). Benefit transfers and valuation of
environmental improvements. Resources, Winter No. 110. Resources for the
Future. Washington DC.

Miller, Raymond W., Duane T. Gardiner, and Joyce U. Miller. (1998).
Soils in Our Environment, 8^th^ Edition. New Jersey: Prentice-Hall.

Namken, Jerry C., and Mitch L. Flanagan. (2000). Conservation of Private
Grazing Lands Program: Benefit-Cost Analysis. Staff Report, U.S.
Department of Agriculture, Natural Resources Conservation Service.
Washington DC

Piper, Steven. (1998, April). Using Contingent Valuation and Benefit
Transfer to Evaluate Water Supply Improvement Benefits. Journal of the
American Water Resources Association,

Ribaudo, Marc O. and Daniel Hellerstein. (1992, September). Estimating
Water Quality Benefits: Theoretical and Methodological Issues. U.S.
Department of Agriculture, Economic Research Service, Technical Bulletin
Number 1808. Washington DC.

Ribaudo, Marc O., Steven Piper, Glenn D. Schaible, Linda L. Langner, and
Daniel Colacicco. (1989, Sep-Oct). CRP What economic benefits? Journal
of Soil and Water Conservation. 44(5): 421-424.

Smith, V. Kerry (1996). Estimating Economic Values for Nature: Methods
for Non-Market Valuation. Edward Elgar, Cheltenham, UK

U.S. Department of Agriculture. Soil Conservation Service. (1989). The
Second RCA Appraisal. Soil, Water, and Related Resources on Nonfederal
Land in the United States. Analysis of Condition and Trends. Washington,
DC.

U.S. Department of Agriculture. Economic Research Service . (1997,
July). Agricultural Resources and Environmental Indicators, 1996-97
(AREI). Agricultural Handbook Number 712. Washington DC. Available:
<http://www.ers.usda.gov/publications/arei/>

U.S. Department of Agriculture. Natural Resources Conservation Service.
(1998, August). Effects of Soil erosion on Soil Productivity and Soil
Quality. Soil Quality Institute, Technical Note Number 7. Auburn, AL.

U.S. Department of Agriculture. Economic Research Service. (2003,
February). Agricultural Resources and Environmental Indicators (AREI).
Agricultural Handbook Number 722. Washington DC. Available:
<http://www.ers.usda.gov/publications/arei/>.

U.S. Department of Agriculture. Natural Resources Conservation Service.
(2003, May 21). Environmental Quality Incentives Program, Benefit Cost
Analysis, Final Report. Washington, DC.

U.S. Department of Agriculture. Natural Resources Conservation Service.
(2003, June). Costs Associated with Development and Implementation of
Comprehensive Nutrient Management Plans. Washington, DC.

U.S. Department of Agriculture. Economic Research Service. (2006, July).
Agricultural Resources and Environmental Indicators, 2006 Edition
(AREI). Economic Information Bulletin 16. Washington DC. Available:
<http://www.ers.usda.gov/publications/arei/>

U.S. Department of Agriculture. Natural Resources Conservation Service.
(2007, February). National Resources Inventory, 2003 Annual NRI, Soil
Erosion and Land Use. Available:
http://www.nrcs.usda.gov/technical/NRI/.

U.S. Department of Agriculture. National Agricultural Statistics
Service. (2008, August). Land Values and Cash Rents, 2008 Summary.
Washington DC.

U.S. Environmental Protection Agency. 2001. Environmental and Economic
Benefit Analysis of Proposed Revision to the National Pollutant
Discharge Elimination System Regulation and the Effluent Guidelines for
Concentrated Animal Feeding Operations. Office of Water,
EPA-821-R-01-002.

U.S. Environmental Protection Agency. 2003 National Management Measures
to Control Nonpoint Source Pollution from Agriculture.

U.S. Environmental Protection Agency. (2007, October). National Water
Quality Inventory: Report to Congress. EPA-841-R-07-001. Office of
Water. Washington DC.

# List of Preparers (in alphabetical order)

Jay Atwood, Agricultural Economist, USDA NRCS.

Theresa Bowen, Management Analyst, USDA NRCS.

David Buland, Economist, USDA NRCS CNTSC.

Roger Claassen, Economist, USDA ERS.

Leah Duzy, Minnesota State Economist, USDA, NRCS.

John Long, Maine State Economist, USDA NRCS.

Lee Norfleet, Soil Scientist, USDA NRCS RAID.

Mark Parson, EQIP Program Manager, USDA NRCS COD.

James Rowe, Economist, USDA, NRCS, NHQ.

Felix Spinelli, Senior Economist, USDA NRCS RESSD, Team Leader.

Letita Toomer, Natural Resource Manager, USDA, NRCS, OMOD

Douglas Vik, South Dakota State Economist, USDA NRCS.

Jan Whitcomb, Wisconsin EQIP Coordinator and State Economist, USDA NRCS.

With valuable assistance from the developers of the 2008 EQIP
Environmental Assessment.

# Appendix A. How NRCS Conducts Its Business.

From 1985 to the present, conservation titles in Farm Bill legislation
have had an important role in food and agricultural policy. From soil
erosion prevention, to wetland restoration, to water quality
improvements, to wildlife and energy conservation efforts, the intent of
NRCS conservation activities has been to improve the quality of the
environment for future generations.

In essence, the NRCS mission is to ensure the protection and restoration
of our natural environment. The NRCS vision of "Productive Lands-
Healthy Environment," mission statement of "Helping People Help the
Land," and a recent campaign, "Conservation: Our Purpose and Our
Passion" truly exemplify how conservation technical and financial
assistance translates into environmental improvements and protection.

In order to accomplish conservation goals on private and other
non-federal lands, NRCS is authorized through Farm Bill legislation to
use a broad range of programs to encourage the voluntary conservation of
natural resources. Accordingly, Congress and NRCS have recognized the
importance of providing technical and financial assistance through
conservation programs delivered at the state and local level. National
Farm Bill legislation states that assistance is to be provided to the
areas with the most pressing environmental resource concerns.

State and local conservationists play a pivotal role in accomplishing
the NRCS mission of protecting and restoring natural resources. In each
state, the state technical committee, which is comprised of
representatives from Federal, state, local, and Indian Tribal
governments as well as representatives of organizations knowledgeable
about conservation and agricultural production issues and other
interested individuals, advise and make recommendations to the NRCS
State Conservationist on the implementation of NRCS-administered
conservation programs. This includes the prioritization of natural
resource concerns and other issues related to how and where financial
assistance funds will be used to address environmental resource concerns
in the individual states and territories. Local NRCS conservationist
planners then prepare conservation plans in consultation with private
landowners. Conservation plans are designed to address environmental
resource concerns on private, non-Federal, or Native American Government
lands. NRCS conservationists help individuals and communities take a
comprehensive approach to planning the proper use and protection of
natural resources on these lands through a nine-step planning process
described in the NRCS National Planning Procedures Handbook (hereby
incorporated by reference).

As part of this conservation planning effort, individual environmental
reviews called Environmental Evaluations (EEs) are completed which
inform the conservation planning effort and assist the agency's
compliance with NRCS regulations that implement the National
Environmental Policy Act (NEPA). The EEs are a concurrent part of the
planning process in which the potential long-term and short-term impacts
of an action on people, their physical surroundings, and natural
resource concerns are evaluated and alternative actions explored. The
EEs and conservation plans are developed to assist the landowner in
making decisions and implementing the conservation practices identified
in the conservation plan. The EEs produced for each landowner also
consider the on-site economic costs and benefits of the conservation
plan. NRCS field staff are trained to knowledgably discuss the full
economic costs and benefits of conservation systems with the landowners.

NRCS provides financial assistance (FA) and technical assistance (TA)
EQIP funds to implement practices that meet NRCS conservation practice
standards and specifications as documented in the agency's Field Office
Technical Guides (E-FOTG) and the National Handbook of Conservation
Practices (NHCP). These conservation practices are developed through a
multi-disciplinary science-based process in order to minimize the risk
of failure. NRCS practice standards are established at a national level,
and set the minimum level of acceptable quality for planning, designing,
installing, operating, and maintaining conservation practices. At a
minimum, each conservation practice standard includes the definition and
purposes of the practice, conditions in which the conservation practice
applies, and the criteria supporting each purpose. When a conservation
practice standard is developed or revised, NRCS publishes a notice in
the Federal Register of the availability of the standard for review and
comment for a period of not less than 30 days from the date of
publication. Standards from the NHCP and interim standards are used and
implemented by States, as needed, and may be modified to include
additional requirements to meet State or local needs. Because of wide
variations in site conditions such as soils, climate, and topography,
States can revise these national standards and develop specifications to
add special provisions or provide additional details in the conservation
practice standards. State laws and local ordinances or regulations may
also dictate more stringent criteria; in no case, however, can states
use standards that are lower than national standards.

NRCS conservation practices are normally implemented as part of a
conservation system that consists of one or more conservation practices.
This is done not only to address the identified natural resource
concerns, but also to avoid or minimize potential adverse ancillary
impacts identified through the NRCS conservation process. When NRCS
provides financial assistance for a single practice, it is because
adverse ancillary impacts are not anticipated, or because the landowner
is progressively implementing a plan.

## Financial Assistance moving from cost-share rates to payment rates:

EQIP, as part of the 2002 Act, paid a percentage of the actual costs of
implementing conservation practices as documented by producer receipts
(historically referred to as a cost share). For the first time, the 2002
EQIP also paid incentive payments for management practices -- most of
whose benefits are difficult to measure. This change plus the burden on
NRCS staff and producers in collecting the bills necessary to administer
cost-share payments convinced NRCS to move, in fiscal year (FY) 2008, to
a fixed rate, or payment schedule, for FA. This system bases FA on the
establishment of payment schedules to set fixed rates for typical
practice scenarios, as determined by each State. Moving to such a rate
allows producers to know the exact amount of FA that they can expect to
receive for implementing a given conservation practice(s) at the time of
application and contracting.

The 2008 Act formalizes the payment schedule approach and places it into
Statute. As defined by Congress, EQIP payments include financial and
technical assistance provided to producers for performing conservation
practice(s). EQIP payments include compensation for planning, design,
equipment, materials, labor, management, maintenance, training, and
income forgone by the producer. The 2008 Act requires that payments made
to producers may not exceed 75 percent of the costs or 100 percent of
the income foregone by the producer. Incentive payments are no longer
part of EQIP. Through a special rule in the 2008 Act, the Secretary of
Agriculture may afford greater significance practices that promote
conservation improvements in the following areas: residue management,
nutrient management, air quality management, invasive species
management, pollinator habitat, animal carcass management technology,
and/or pest management. By affording greater significance, the Secretary
may adjust the amount and rate of payment for practices that address
these areas. The new payment system is based on typical costs incurred
and income forgone, meeting World Trade Organization (WTO) obligations.

While the structure for payments has changed significantly, states still
have the latitude to adjust the payment rates between program years. The
upper limit in the statute remains 75 percent and 90 percent for
historically underserved producers that include limited resource,
beginning, and socially disadvantaged farmers and ranchers.

Since payment rates are fixed, there is the potential for making a
payment to some producers for more than the actual cost of the practice.
This is considered a minor issue by USDA when balanced with the
administrative costs of collecting producer receipts and enforcement.
The rule does include a provision stating that: "The payments to a
participant under the program will be reduced proportionately below the
rate established by the State Conservationist or designated
conservationist, or the payment limit as set in paragraph (c) of this
section, to the extent that total financial contributions for a
conservation practice from other leveraged sources exceed 100 percent of
the costs incurred for implementing or performing the conservation
practice." It is expected that this flexibility will be rarely used as
historically, there has been very few EQIP contracts associated with
other funding sources.

The 2008 Act also includes a provision for payments dedicated to limited
resource, beginning, or socially disadvantaged farmers and ranchers.
Congress requires that NRCS shall increase payments to limited resource,
beginning, and/or socially disadvantaged farmers or ranchers. These
three groups form a new designation referred to as "historically
underserved producers." The increased payments may not exceed 90 percent
of the costs for a conservation practice or be no less than 25 percent
above the otherwise applicable payment rate. Also, an advanced payment
may be provided to historically underserved producers up to an amount
not more than 30 percent of the applicable payment rate for purchasing
materials or services. Lastly, up to ten percent of funding in any state
must be allocated to either beginning farmers and ranchers or socially
disadvantaged farmers and ranchers or any combination of the two adding
up to ten percent.

Under the 2008 Act, assistance for the application of conservation
practices is limited by the payment rate percentages described above,
and by the total aggregate amount that can be paid to any one producer.
Congress mandated that NRCS financial and technical assistance may not
exceed the aggregate of \$300,000 during any six-year period (with
limited waiver authority to \$450,000). The 2002 Act had allowed for the
aggregate amount to not exceed \$450,000 during any six-year period.

  ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  []{#__RefHeading___Toc219115382                                                                                                                                                                       
  .anchor}**Table 10. EQIP                                                                                                                                                                              
  enrollment backlog by state, FY                                                                                                                                                                       
  2007.**                                                                                                                                                                                               
  --------------------------------- ------------------------ --------------------------- --------------------------- ----------------------- ------------------------------ --------------------------- ---------------------------
  **[State]{.underline}**           **[FIPS]{.underline}**   **Number of                 **Cost share                **Total treated         **Unfunded                     **Estimated unfunded        **Percent Backlog of
                                                             [contracts]{.underline}**   [obligated]{.underline}**   [acres]{.underline}**   [applications]{.underline}**   [application                applications FY 2007
                                                                                                                                                                            dollars]{.underline}**      [contracts]{.underline}**

  ALABAMA                           01                       1,274                       \$12,984,170                102,228                 1,261                          \$12,871,884                99%

  ALASKA                            02                       37                          \$4,568,731                 2,197,302               47                             \$5,803,523                 127%

  ARIZONA                           04                       217                         \$20,309,444                796,032                 177                            \$16,565,768                82%

  ARKANSAS                          05                       1,263                       \$18,843,963                188,049                 605                            \$9,026,600                 48%

  CALIFORNIA                        06                       1,192                       \$48,098,767                457,367                 1,365                          \$55,079,538                115%

  COLORADO                          08                       1,184                       \$28,540,270                544,326                 714                            \$17,210,941                60%

  CONNECTICUT                       09                       60                          \$4,431,657                 2,392                   14                             \$1,034,053                 23%

  DELAWARE                          10                       161                         \$5,850,099                 30,355                  210                            \$7,630,564                 130%

  FLORIDA                           12                       617                         \$20,137,719                152,268                 565                            \$18,440,538                92%

  GEORGIA                           13                       1,178                       \$16,406,237                111,684                 1,226                          \$17,089,251                104%

  HAWAII                            15                       82                          \$4,797,947                 14,185                  49                             \$2,867,066                 60%

  IDAHO                             16                       500                         \$15,055,858                238,169                 451                            \$13,580,386                90%

  ILLINOIS                          17                       1,643                       \$13,362,652                186,304                 856                            \$6,961,916                 52%

  INDIANA                           18                       739                         \$11,455,788                124,610                 212                            \$3,286,369                 29%

  IOWA                              19                       1,501                       \$21,351,879                126,316                 1,471                          \$20,925,122                98%

  KANSAS                            20                       1,635                       \$24,001,982                583,175                 536                            \$7,868,539                 33%

  KENTUCKY                          21                       956                         \$10,825,096                64,712                  319                            \$3,612,139                 33%

  LOUISIANA                         22                       1,129                       \$14,349,844                141,302                 495                            \$6,291,559                 44%

  MAINE                             23                       281                         \$6,398,365                 36,675                  473                            \$10,770,201                168%

  MARYLAND                          24                       405                         \$6,365,194                 37,316                  13                             \$204,315                   3%

  MASSACHUSETTS                     25                       107                         \$3,699,604                 4,194                   159                            \$5,497,543                 149%

  MICHIGAN                          26                       440                         \$15,888,153                103,316                 288                            \$10,399,519                65%

  MINNESOTA                         27                       1,528                       \$26,289,610                353,611                 248                            \$4,266,900                 16%

  MISSISSIPPI                       28                       2,367                       \$15,867,936                145,170                 2,163                          \$14,500,363                91%

  MISSOURI                          29                       1,393                       \$20,420,022                178,636                 2,813                          \$41,235,851                202%

  MONTANA                           30                       771                         \$23,712,638                938,787                 1,811                          \$55,698,555                235%

  NEBRASKA                          31                       1,712                       \$26,167,340                593,110                 1,531                          \$23,400,814                89%

  NEVADA                            32                       95                          \$5,713,196                 35,143                  141                            \$8,479,585                 148%

  NEW HAMPSHIRE                     33                       139                         \$3,662,896                 10,634                  168                            \$4,427,097                 121%

  NEW JERSEY                        34                       90                          \$3,749,978                 9,918                   283                            \$11,791,597                314%

  NEW MEXICO                        35                       518                         \$18,399,283                1,271,017               690                            \$24,508,697                133%

  NEW YORK                          36                       535                         \$11,227,830                65,256                  284                            \$5,960,194                 53%

  NORTH CAROLINA                    37                       680                         \$15,777,154                59,302                  452                            \$10,487,168                66%

  NORTH DAKOTA                      38                       712                         \$18,080,872                624,814                 1,062                          \$26,968,938                149%

  OHIO                              39                       1,242                       \$12,125,786                128,053                 1,313                          \$12,818,963                106%

  OKLAHOMA                          40                       1,643                       \$23,369,055                587,286                 3,772                          \$53,650,703                230%

  OREGON                            41                       580                         \$17,342,417                265,934                 759                            \$22,694,646                131%

  PENNSYLVANIA                      42                       430                         \$10,782,891                39,931                  1,208                          \$30,292,400                281%

  RHODE ISLAND                      44                       37                          \$2,296,397                 2,838                   33                             \$2,048,138                 89%

  SOUTH CAROLINA                    45                       411                         \$6,756,832                 61,663                  785                            \$12,905,384                191%

  SOUTH DAKOTA                      46                       369                         \$16,996,536                728,231                 729                            \$33,578,520                198%

  TENNESSEE                         47                       991                         \$10,633,789                69,850                  1,366                          \$14,702,176                138%

  TEXAS                             48                       5,099                       \$72,109,823                2,661,741               3,078                          \$43,537,479                60%

  UTAH                              49                       360                         \$18,428,662                196,864                 1,312                          \$67,162,238                364%

  VERMONT                           50                       38                          \$4,429,044                 12,042                  185                            \$21,562,449                487%

  VIRGINIA                          51                       480                         \$11,664,192                53,804                  191                            \$4,641,376                 40%

  WASHINGTON                        53                       470                         \$16,083,409                255,772                 455                            \$15,570,109                97%

  WEST VIRGINIA                     54                       519                         \$7,917,474                 47,847                  707                            \$10,785,462                136%

  WISCONSIN                         55                       1,094                       \$17,461,890                181,950                 374                            \$5,969,605                 34%

  WYOMING                           56                       508                         \$13,686,500                1,270,160               949                            \$25,567,892                187%

  PACIFIC BASIN                     71                       36                          \$1,430,661                 343                     2                              \$79,481                    6%

  PUERTO RICO                       72                       [252]{.underline}           [\$3,877,983]{.underline}   [12,249]{.underline}    [165]{.underline}              [\$2,539,155]{.underline}   65%

  **Totals**                                                 **41,700**                  **\$784,185,517**           **17,104,234**          **40,535**                     **\$864,849,270**           **97%**

  Source: NRCS Program Contracting                                                                                                                                                                      
  System (ProTracts) 09/30/2007                                                                                                                                                                         
  ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

  --------------------------------- ------------------------------ -------------------- ------------------------ -------------------- ------------------------- -------------------- -------------------------------
  []{#__RefHeading___Toc219115383                                                                                                                                                    
  .anchor}**Table 11. EQIP                                                                                                                                                           
  cost-share rates by benefit                                                                                                                                                        
  category.**                                                                                                                                                                        

  **Sheet and rill [water           **Grazing land                 **Irrigation [water  **[Air                   **[Fertilizer        **Wildlife                **[Energy            **Carbon
  erosion]{.underline}**            [productivity]{.underline}**   use]{.underline}**   quality]{.underline}**   use]{.underline}**   [habitat]{.underline}**   use]{.underline}**   [sequestration]{.underline}**

  59%                               59%                            59%                  40%                      59%                  59%                       59%                  59%
  --------------------------------- ------------------------------ -------------------- ------------------------ -------------------- ------------------------- -------------------- -------------------------------

  ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  []{#__RefHeading___Toc219115384                                                                                                                                                                                                                                                              
  .anchor}**Table 12. EQIP                                                                                                                                                                                                                                                                     
  practices contracted and                                                                                                                                                                                                                                                                     
  installed, FY 2007.**                                                                                                                                                                                                                                                                        
  --------------------------------- ---------------- ------------------------ ------------ ------------------------- ----------------------------- ------------------------- ------------------------- -- ----------------------------- ------------------------- ------------------------- -- -------------------------
                                                                                                                                                   **Approved**                                                                         **Implemented**                                        

                                                                                                                     **Number**                    **Number**                **Cost**                     **Number**                    **Number**                **Cost**                     **Total**

  **[Practice Code and                                                                     **[Units]{.underline}**   **[Contracts]{.underline}**   **[Units]{.underline}**   **[Share]{.underline}**      **[Contracts]{.underline}**   **[Units]{.underline}**   **[Share]{.underline}**      **[Cost]{.underline}**
  Name]{.underline}**                                                                                                                                                                                                                                                                          

  431                               Above Ground,                                          Ft.                       8                             12,601                    \$94,185                     5                             11,000                    \$60,301                     \$101,449
                                    Multi-Outlet                                                                                                                                                                                                                                               
                                    Pipeline                                                                                                                                                                                                                                                   

  472                               Access Control                                         Ac.                       1327                          656,789                   \$7,404,641                  1,157                         347,594                   \$3,070,705                  \$5,408,456

  560                               Access Road                                            Ft.                       713                           1,783,790                 \$5,383,290                  869                           1,296,858                 \$4,791,014                  \$7,799,639

  311                               Alley Cropping                                         Ac.                       29                            180                       \$38,801                     61                            278                       \$16,972                     \$33,944

  591                               Amendments for                                         AU                        67                            200,754                   \$1,756,181                  275                           696,716                   \$603,713                    \$1,066,257
                                    the\                                                                                                                                                                                                                                                       
                                    Treatment of                                                                                                                                                                                                                                               
                                    Agricultural                                                                                                                                                                                                                                               
                                    Waste                                                                                                                                                                                                                                                      

  365                               Anaerobic                                              No.                       2                             2                         \$632,830                    1                             1                         \$100,000                    \$172,414
                                    Digester,                                                                                                                                                                                                                                                  
                                    Ambient                                                                                                                                                                                                                                                    
                                    Temperature                                                                                                                                                                                                                                                

  366                               Anaerobic                                              No.                       3                             3                         \$1,025,000                  2                             2                         \$105,000                    \$175,073
                                    Digester,                                                                                                                                                                                                                                                  
                                    Controlled                                                                                                                                                                                                                                                 
                                    Temperature                                                                                                                                                                                                                                                

  316                               Animal Mortality                                       No.                       210                           216                       \$2,285,889                  184                           181                       \$1,563,069                  \$2,934,994
                                    Facility                                                                                                                                                                                                                                                   

  575                               Animal Trails                                          Ft.                       368                           263,771                   \$1,891,614                  422                           241,898                   \$2,072,515                  \$3,056,921
                                    and Walkways                                                                                                                                                                                                                                               

  450                               Anionic                                                Ac.                       2                             702                       \$5,223                      6                             640                       \$1,819                      \$2,717
                                    Polyacrylamide                                                                                                                                                                                                                                             

  397                               Aquaculture                                            Ac.                       9                             1,276                     \$14,655                     96                            9,671                     \$96,689                     \$148,753
                                    Ponds                                                                                                                                                                                                                                                      

  370                               Atmospheric                                            Ac.                       135                           41,535                    \$2,534,508                  855                           178,619                   \$3,569,394                  \$6,225,248
                                    Resource Quality                                                                                                                                                                                                                                           
                                    Mngt                                                                                                                                                                                                                                                       

  314                               Brush Management                                       Ac.                       3925                          748,690                   \$34,319,778                 7,279                         857,019                   \$27,224,536                 \$50,373,823

  322                               Channel Bank                                           Ac.                       21                            93                        \$33,024                     13                            190                       \$26,835                     \$43,749
                                    Vegetation                                                                                                                                                                                                                                                 

  584                               Channel                                                Ft.                       10                            3,862                     \$116,473                    26                            13,330                    \$151,750                    \$252,048
                                    Stabilization                                                                                                                                                                                                                                              

  326                               Clearing and                                           Ft.                       4                             3,518                     \$49,776                     5                             4,040                     \$63,189                     \$108,947
                                    Snagging                                                                                                                                                                                                                                                   

  360                               Closure of Waste                                       No.                       161                           171                       \$2,591,781                  200                           203                       \$3,679,148                  \$6,152,128
                                    Impoundments                                                                                                                                                                                                                                               

  317                               Composting                                             No.                       363                           352                       \$6,271,685                  330                           306                       \$5,246,915                  \$8,904,689
                                    Facility                                                                                                                                                                                                                                                   

  327                               Conservation                                           Ac.                       296                           5,584                     \$454,155                    395                           5,362                     \$391,528                    \$647,379
                                    Cover                                                                                                                                                                                                                                                      

  328                               Conservation                                           Ac.                       729                           75,810                    \$6,417,986                  2,638                         198,226                   \$8,800,039                  \$15,666,136
                                    Crop Rotation                                                                                                                                                                                                                                              

  332                               Contour Buffer                                         Ac.                       6                             331                       \$3,741                      20                            437                       \$11,358                     \$20,292
                                    Strips                                                                                                                                                                                                                                                     

  330                               Contour Farming                                        Ac.                       40                            781                       \$102,637                    130                           3,194                     \$48,907                     \$93,455

  331                               Contour Orchard                                        Ac.                       24                            121                       \$14,413                     86                            256                       \$11,463                     \$22,559
                                    and Other Fruit                                                                                                                                                                                                                                            
                                    Area                                                                                                                                                                                                                                                       

  340                               Cover Crop                                             Ac.                       1000                          240,739                   \$5,615,646                  2,885                         262,257                   \$4,489,614                  \$7,780,885

  342                               Critical Area                                          Ac.                       2992                          23,716                    \$2,535,610                  2,976                         20,827                    \$2,121,320                  \$3,589,576
                                    Planting                                                                                                                                                                                                                                                   

  589A                              Cross Wind                                             Ac.                       4                             1,792                     \$25,284                     19                            5,030                     \$25,148                     \$37,534
                                    Ridges                                                                                                                                                                                                                                                     

  589C                              Cross Wind Trap                                        Ac.                       1                             2                         \$70                         1                             2                         \$2                          \$3
                                    Strips                                                                                                                                                                                                                                                     

  402                                                Dam                                   No. & Ac-Ft               10                            1,709                     \$237,870                    9                             9                         \$55,539                     \$111,078

  348                                                Dam, Diversion                        No.                       9                             266                       \$58,627                     14                            24                        \$34,302                     \$54,756

  324                                                Deep Tillage                          Ac.                       69                            16,275                    \$297,118                    158                           18,562                    \$360,101                    \$587,491

  356                                                Dike                                  Ft.                       134                           1,035,118                 \$1,349,061                  126                           795,010                   \$870,373                    \$1,360,915

  362                                                Diversion                             Ft.                       635                           843,844                   \$1,290,596                  694                           779,897                   \$1,486,021                  \$2,429,707

  554                                                Drainage Water                        Ac.                       71                            6,590                     \$584,674                    74                            1,558                     \$175,194                    \$267,358
                                                     Management                                                                                                                                                                                                                                

  647                                                Early Successional                    Ac.                       144                           1,315                     \$179,009                    277                           1,152                     \$56,000                     \$92,951
                                                     Habitat\                                                                                                                                                                                                                                  
                                                     Development/Management                                                                                                                                                                                                                    

  592                                                Feed Management                       No. & Aus                 26                            7,376                     \$96,055                     120                           34,365                    \$157,927                    \$243,510

  382                                                Fence                                 Ft.                       9333                          52,511,081                \$58,838,721                 13,578                        40,030,843                \$39,924,783                 \$68,633,449

  386                                                Field Border                          Ft.                       453                           2,553,054                 \$587,792                    731                           2,574,057                 \$532,400                    \$1,003,866

  393                                                Filter Strip                          Ac.                       325                           1,029                     \$73,592                     523                           2,558                     \$336,860                    \$565,327

  394                                                Firebreak                             Ft.                       404                           4,022,299                 \$452,964                    350                           2,143,285                 \$581,223                    \$998,414

  396                                                Fish Passage                          Mi.                       3                             3                         \$73,800                     3                             3                         \$14,193                     \$24,899

  511                                                Forage Harvest                        Ac.                       131                           9,209                     \$848,612                    219                           9,474                     \$245,605                    \$442,735
                                                     Management                                                                                                                                                                                                                                

  384                                                Forest Slash Treatment                Ac.                       103                           3,600                     \$525,269                    88                            1,410                     \$191,389                    \$305,180

  666                                                Forest Stand Improvement              Ac.                       1054                          44,045                    \$6,051,250                  1,783                         43,666                    \$5,202,234                  \$8,943,170

  655                                                Forest Trails and                     Ac.                       125                           12,295                    \$491,040                    153                           4,400                     \$337,767                    \$521,963
                                                     Landings                                                                                                                                                                                                                                  

  383                                                Fuel Break                            Ac.                       19                            901                       \$113,840                    16                            111                       \$51,556                     \$84,905

  410                                                Grade Stabilization                   No.                       1822                          3,127                     \$11,909,957                 2,604                         3,869                     \$10,989,387                 \$18,338,988
                                                     Structure                                                                                                                                                                                                                                 

  412                                                Grassed Waterway                      Ac.                       1379                          46,226                    \$4,274,353                  1,742                         2,795                     \$4,069,231                  \$6,811,974

  548                                                Grazing Land Mechanical               Ac.                       38                            4,964                     \$73,250                     59                            10,625                    \$157,585                    \$268,411
                                                     Trmnt                                                                                                                                                                                                                                     

  561                                                Heavy Use Area                        Ac.                       3201                          219,562                   \$20,226,967                 3,671                         556,773                   \$17,906,206                 \$29,532,179
                                                     Protection                                                                                                                                                                                                                                

  422                                                Hedgerow Planting                     Ft.                       59                            106,843                   \$100,889                    60                            96,160                    \$104,306                    \$187,546

  603                                                Herbaceous Wind Barriers              Ft.                       12                            1,515,655                 \$88,381                     32                            257,350                   \$46,332                     \$82,150

  423                                                Hillside Ditch                        Ft.                       21                            112,974                   \$31,399                     35                            75,494                    \$18,389                     \$36,777

  320                                                Irrigation Canal or                   Ft.                       3                             3,653                     \$40,050                     4                             3,451                     \$21,094                     \$36,419
                                                     Lateral                                                                                                                                                                                                                                   

  388                                                Irrigation Field Ditch                Ft.                       15                            44,211                    \$42,040                     23                            33,484                    \$45,790                     \$71,116

  464                                                Irrigation Land Leveling              Ac.                       846                           234,135                   \$13,298,606                 1,207                         74,442                    \$10,144,420                 \$18,189,835

  552                                                Irrigation Regulating                 No.                       154                           2,769                     \$1,471,228                  101                           105                       \$681,752                    \$1,226,614
                                                     Reservoir                                                                                                                                                                                                                                 

  436                                                Irrigation Storage                    No. & Ac-Ft               51                            5,555                     \$2,609,504                  31                            26,853                    \$1,319,147                  \$2,416,843
                                                     Reservoir                                                                                                                                                                                                                                 

  441                                                Irrigation System,                    No. & Ac.                 832                           32,977                    \$21,884,040                 1,118                         58,109                    \$24,162,811                 \$42,770,249
                                                     Microirrigation                                                                                                                                                                                                                           

  442                                                Irrigation System,                    No. & Ac.                 2654                          398,609                   \$59,124,810                 3,483                         379,328                   \$57,417,025                 \$100,556,251
                                                     Sprinkler                                                                                                                                                                                                                                 

  443                                                Irrigation System,                    No. & Ac.                 203                           10,939                    \$2,660,520                  130                           11,797                    \$1,177,316                  \$2,011,778
                                                     Surface and Subsurface                                                                                                                                                                                                                    

  447                                                Irrigation System,                    No.                       73                            8,113                     \$1,906,298                  115                           122                       \$1,639,522                  \$2,826,971
                                                     Tailwater Recovery                                                                                                                                                                                                                        

  428B                                               Irrigation Water                      Ft.                       1                             2,000                     \$31,500                     7                             50,722                    \$91,557                     \$132,691
                                                     Conveyance,\                                                                                                                                                                                                                              
                                                     Ditch & Canal Lining,                                                                                                                                                                                                                     
                                                     Flexible                                                                                                                                                                                                                                  

  428A                                               Irrigation Water                      Ft.                       147                           343,795                   \$4,624,505                  311                           523,699                   \$4,389,561                  \$7,396,229
                                                     Conveyance,\                                                                                                                                                                                                                              
                                                     Ditch and Canal Lining,                                                                                                                                                                                                                   
                                                     Plain Concrete                                                                                                                                                                                                                            

  430AA                                              Irrigation Water                      Ft.                       4                             4,015                     \$15,973                     4                             4,006                     \$15,988                     \$25,068
                                                     Conveyance,\                                                                                                                                                                                                                              
                                                     Pipeline, Aluminum                                                                                                                                                                                                                        
                                                     Tubing                                                                                                                                                                                                                                    

  430DD                                              Irrigation Water                      Ft.                       1955                          4,180,904                 \$27,670,553                 2,533                         4,279,412                 \$25,291,751                 \$43,304,889
                                                     Conveyance,\                                                                                                                                                                                                                              
                                                     Pipeline, High-Pressure,                                                                                                                                                                                                                  
                                                     Underground, Plastic                                                                                                                                                                                                                      

  430EE                                              Irrigation Water                      Ft.                       1043                          2,133,213                 \$11,321,089                 1,393                         2,408,800                 \$11,142,168                 \$19,283,317
                                                     Conveyance,\                                                                                                                                                                                                                              
                                                     Pipeline, Low-Pressure,                                                                                                                                                                                                                   
                                                     Underground, Plastic                                                                                                                                                                                                                      

  430CC                                              Irrigation Water                      Ft.                       12                            41,601                    \$822,480                    16                            29,463                    \$287,878                    \$489,059
                                                     Conveyance,\                                                                                                                                                                                                                              
                                                     Pipeline, Nonreinforced                                                                                                                                                                                                                   
                                                     Concrete                                                                                                                                                                                                                                  

  430FF                                              Irrigation Water                      Ft.                       94                            6,562                     \$89,149                     90                            6,420                     \$69,074                     \$117,518
                                                     Conveyance, Pipeline,                                                                                                                                                                                                                     
                                                     Steel                                                                                                                                                                                                                                     

  449                                                Irrigation Water                      Ac.                       2379                          376,160                   \$8,560,012                  4,230                         517,799                   \$5,979,637                  \$10,236,481
                                                     Management                                                                                                                                                                                                                                

  460                                                Land Clearing                         Ac.                       59                            361                       \$103,531                    72                            396                       \$154,655                    \$275,722

  466                                                Land Smoothing                        Ac.                       96                            6,935                     \$858,620                    139                           4,732                     \$436,996                    \$767,826

  468                                                Lined Waterway or Outlet              Ft.                       153                           34,801                    \$1,007,354                  158                           24,194                    \$615,288                    \$1,003,246

  634                                                Manure Transfer                       No.                       685                           27,208                    \$10,574,209                 954                           1,451                     \$8,675,422                  \$14,867,799

  353                                                Monitoring Well                       No.                       5                             6                         \$9,000                                                    64,128                    \$539,666                    \$910,216

  484                                                Mulching                              Ac.                       513                           11,470                    \$1,211,848                  466                           3,674,205                 \$25,679,474                 \$44,649,667

  590                                                Nutrient Management                   Ac.                       7052                          1,557,369                 \$26,999,841                 22,388                        3,197                     \$630,326                    \$967,356

  500                                                Obstruction Removal                   Ac.                       186                           33,100                    \$798,368                    185                           33,071                    \$181,565                    \$263,898

  582                                                Open Channel                          Ft.                       6                             16,457                    \$211,063                    12                            472,374                   \$18,604,641                 \$33,716,117

  512                                                Pasture and Hay Planting              Ac.                       6874                          379,234                   \$24,860,533                 9,431                         2,346,470                 \$18,900,590                 \$31,776,506

  595                                                Pest Management                       Ac.                       4724                          1,596,034                 \$17,579,684                 15,707                        8,718                     \$250,657                    \$437,610

  516                                                Pipeline                              Ft.                       6728                          23,920,358                \$33,026,949                 8,163                         19,915,281                \$22,966,897                 \$38,428,202

  378                                                Pond                                  No.                       2639                          2,890                     \$10,903,583                 2,456                         5,045                     \$7,172,834                  \$12,420,420

  521C                                               Pond Sealing or Lining,               No.                       36                            37                        \$492,428                    18                            103,152                   \$263,980                    \$446,292
                                                     Bentonite Sealant                                                                                                                                                                                                                         

  521D                                               Pond Sealing or Lining,               No.                       40                            40                        \$681,704                    9                             15,074                    \$68,668                     \$122,947
                                                     Compacted Clay Treatment                                                                                                                                                                                                                  

  521A                                               Pond Sealing or Lining,               No.                       45                            46                        \$1,102,961                  36                            104,486                   \$780,691                    \$1,313,495
                                                     Flexible Membrane                                                                                                                                                                                                                         

  521B                                               Pond Sealing or Lining,               No.                       31                            39                        \$294,508                    19                            19                        \$121,066                    \$203,228
                                                     Soil Dispersant                                                                                                                                                                                                                           

  462                                                Precision Land Forming                Ac.                       31                            4,966                     \$318,135                    29                            29,495                    \$252,802                    \$472,707

  338                                                Prescribed Burning                    Ac.                       752                           175,900                   \$1,899,870                  737                           98,468                    \$835,209                    \$1,522,208

  409                                                Prescribed Forestry                   Ac.                       1209                          62,114                    \$620,330                    625                           25,422                    \$280,649                    \$461,893

  528                                                Prescribed Grazing                    Ac.                       4307                          2,951,074                 \$21,718,888                 9,278                         6,188,773                 \$18,076,458                 \$31,704,328

  533                                                Pumping Plant                         No.                       2109                          2,258                     \$9,837,127                  1,915                         1,980                     \$6,958,306                  \$12,080,317

  550                                                Range Planting                        Ac.                       954                           100,257                   \$4,416,661                  1,221                         98,954                    \$3,307,074                  \$5,901,376

  568                                                Recreation Trail and                  Ft.                       1                             1,200                     \$58,626                     1                             138                       \$3,171                      \$5,766
                                                     Walkway                                                                                                                                                                                                                                   

  345                                                Residue and Tillage                   Ac.                       708                           338,825                   \$10,221,393                 2,794                         719,175                   \$9,061,664                  \$16,507,545
                                                     Management, Mulch Till                                                                                                                                                                                                                    

  329                                                Residue and Tillage                   Ac.                       2358                          867,998                   \$28,732,866                 10,112                        1,870,495                 \$31,313,939                 \$54,553,168
                                                     Management,\                                                                                                                                                                                                                              
                                                     No-Till/Strip                                                                                                                                                                                                                             
                                                     Till/Direct Seed                                                                                                                                                                                                                          

  346                                                Residue and Tillage                   Ac.                       7                             3,078                     \$96,269                     37                            3,475                     \$31,027                     \$58,197
                                                     Management, Ridge Till                                                                                                                                                                                                                    

  344                                                Residue Management,                   Ac.                       39                            20,296                    \$385,488                    262                           74,442                    \$553,138                    \$1,003,399
                                                     Seasonal                                                                                                                                                                                                                                  

  643                                                Restoration and                       Ac.                       202                           5,088                     \$648,885                    194                           8,525                     \$479,023                    \$896,162
                                                     Management of\                                                                                                                                                                                                                            
                                                     Rare and Declining                                                                                                                                                                                                                        
                                                     Habitats                                                                                                                                                                                                                                  

  391                                                Riparian Forest Buffer                Ac.                       124                           669                       \$279,120                    248                           1,038                     \$181,164                    \$302,607

  390                                                Riparian Herbaceous                   Ac.                       26                            233                       \$15,780                     49                            203                       \$20,680                     \$30,331
                                                     Cover                                                                                                                                                                                                                                     

  558                                                Roof Runoff Structure                 No.                       500                           2,006                     \$1,008,841                  504                           537                       \$937,682                    \$1,490,251

  557                                                Row Arrangement                       Ac.                       24                            1,035                     \$18,035                     9                             109                       \$1,783                      \$3,524

  570                                                Runoff Management System              No.                       1                             1                         \$20,000                     3                             4                         \$19,716                     \$29,093

  610                                                Salinity and Sodic Soil               Ac.                       55                            5,247                     \$456,463                    105                           6,370                     \$175,295                    \$270,879
                                                     Management                                                                                                                                                                                                                                

  350                                                Sediment Basin                        No.                       206                           8,808                     \$2,494,189                  248                           296                       \$2,640,325                  \$4,573,762

  646                                                Shallow Water                         Ac.                       36                            5,490                     \$132,475                    119                           8,815                     \$78,519                     \$149,055
                                                     Development and                                                                                                                                                                                                                           
                                                     Management                                                                                                                                                                                                                                

  381                                                Silvopasture                          Ac.                       11                            474                       \$56,000                     3                             143                       \$14,790                     \$28,123
                                                     Establishment                                                                                                                                                                                                                             

  632                                                Solid/Liquid Waste                    No.                       65                            73                        \$1,488,557                  26                            24                        \$928,385                    \$1,503,345
                                                     Separation Facility                                                                                                                                                                                                                       

  572                                                Spoil Spreading                       Ac.                       3                             8                         \$6,650                      7                             17,665                    \$18,200                     \$31,477

  574                                                Spring Development                    No.                       663                           803                       \$1,358,174                  778                           893                       \$1,242,449                  \$2,009,855

  578                                                Stream Crossing                       No.                       602                           2,594                     \$2,076,831                  400                           1,793                     \$993,394                    \$1,605,057

  395                                                Stream Habitat                        Ac.                       21                            2,475                     \$238,406                    31                            2,778                     \$312,739                    \$523,174
                                                     Improvement and                                                                                                                                                                                                                           
                                                     Management                                                                                                                                                                                                                                

  580                                                Streambank and Shoreline              Ft.                       310                           242,281                   \$6,668,102                  422                           313,002                   \$4,921,149                  \$8,267,298
                                                     Protection                                                                                                                                                                                                                                

  585                                                Stripcropping                         Ac.                       28                            1,529                     \$91,824                     52                            3,384                     \$55,611                     \$92,005

  587                                                Structure for Water                   No.                       1719                          37,148                    \$8,945,175                  2,579                         5,104                     \$7,459,099                  \$12,488,693
                                                     Control                                                                                                                                                                                                                                   

  606                                                Subsurface Drain                      Ft.                       568                           1,583,216                 \$2,677,007                  570                           1,182,526                 \$1,695,433                  \$2,974,233

  607                                                Surface Drainage, Field               Ft.                       6                             10,940                    \$21,508                     10                            24,662                    \$29,236                     \$49,225
                                                     Ditch                                                                                                                                                                                                                                     

  608                                                Surface Drainage, Main                Ft.                       4                             126,399                   \$203,045                    7                             20,761                    \$102,609                    \$179,991
                                                     or Lateral                                                                                                                                                                                                                                

  609                                                Surface Roughening                    Ac.                       1                             98                        \$735                        11                            2,669                     \$25,604                     \$45,721

  600                                                Terrace                               Ft.                       1478                          14,204,934                \$11,677,565                 2,155                         9,803,395                 \$8,343,265                  \$15,551,793

  612                                                Tree/Shrub Establishment              Ac.                       1574                          61,755                    \$4,792,488                  2,017                         57,299                    \$3,392,563                  \$6,060,336

  660                                                Tree/Shrub Pruning                    Ac.                       215                           15,507                    \$834,463                    187                           4,205                     \$306,189                    \$519,968

  490                                                Tree/Shrub Site                       Ac.                       1126                          48,471                    \$5,436,526                  1,233                         45,193                    \$2,936,700                  \$5,400,647
                                                     Preparation                                                                                                                                                                                                                               

  620                                                Underground Outlet                    Ft.                       1580                          2,796,529                 \$6,604,013                  1,952                         2,264,887                 \$5,292,254                  \$9,663,273

  645                                                Upland Wildlife Habitat               Ac.                       905                           136,864                   \$1,648,031                  1,095                         53,613                    \$955,005                    \$1,709,964
                                                     Management                                                                                                                                                                                                                                

  635                                                Vegetated Treatment Area              Ac.                       131                           4,767                     \$365,693                    85                            71                        \$236,238                    \$354,468

  601                                                Vegetative Barriers                   Ft.                       15                            11,839                    \$42,751                     20                            15,723                    \$61,805                     \$123,214

  630                                                Vertical Drain                        No.                       4                             8                         \$19,443                     13                            42                        \$22,808                     \$44,595

  367                                                Waste Facility Cover                  No.                       34                            37                        \$1,002,114                  12                            10                        \$272,869                    \$436,319

  313                                                Waste Storage Facility                No.                       1570                          1,553                     \$62,301,080                 1,941                         1,871                     \$64,540,336                 \$108,417,152

  629                                                Waste Treatment                       No.                       29                            34                        \$938,087                    9                             8                         \$372,374                    \$625,096

  359                                                Waste Treatment Lagoon                No.                       71                            80                        \$1,004,871                  184                           186                       \$1,116,831                  \$1,903,701

  633                                                Waste Utilization                     Ac.                       429                           118,341                   \$4,699,518                  1,604                         251,601                   \$3,915,450                  \$7,069,907

  638                                                Water and Sediment                    No.                       786                           3,763                     \$4,653,608                  1,228                         4,203                     \$4,261,157                  \$7,528,824
                                                     Control Basin                                                                                                                                                                                                                             

  636                                                Water Harvesting                      No.                       20                            27                        \$126,714                    27                            31                        \$205,259                    \$327,770
                                                     Catchment                                                                                                                                                                                                                                 

  642                                                Water Well                            No.                       2663                          2,780                     \$12,397,807                 2,591                         2,500                     \$9,330,102                  \$15,868,016

  614                                                Watering Facility                     No.                       7870                          17,519                    \$21,196,491                 10,547                        17,172                    \$15,090,165                 \$25,248,274

  640                                                Waterspreading                        Ac.                       1                             184                       \$19,145                     5                             1,049                     \$12,120                     \$19,694

  351                                                Well Decommissioning                  No.                       315                           1,219                     \$338,504                    388                           479                       \$305,329                    \$532,180

  355                                                Well Water Testing                    No.                       8                             9                         \$525                        3                             5                         \$580                        \$799

  658                                                Wetland Creation                      Ac.                       6                             6                         \$15,473                     3                             6                         \$4,720                      \$8,096

  659                                                Wetland Enhancement                   Ac.                       14                            184                       \$138,650                    13                            859                       \$28,708                     \$45,975

  657                                                Wetland Restoration                   Ac.                       23                            208                       \$131,105                    30                            507                       \$183,092                    \$288,704

  644                                                Wetland Wildlife Habitat              Ac.                       41                            1,121                     \$78,808                     51                            589                       \$37,210                     \$67,697
                                                     Management                                                                                                                                                                                                                                

  380                                                Windbreak/Shelterbelt                 Ft.                       801                           2,147,482                 \$1,818,656                  1,096                         2,366,782                 \$1,482,712                  \$2,518,411
                                                     Establishment                                                                                                                                                                                                                             

  650                                                Windbreak/Shelterbelt                 Ft.                       [88]{.underline}              312,856                   [\$274,622]{.underline}      [148]{.underline}             415,968                   [\$250,585]{.underline}      [\$439,317]{.underline}
                                                     Renovation                                                                                                                                                                                                                                

                                                     **Totals**                                                      **111,814**                                             **\$727,130,701**            **94,973**                                              **\$618,130,500**            **\$1,068,999,600**
  ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

+----------+-------------------+------------------+-------------------+
| []{#__R  |                   |                  |                   |
| efHeadin |                   |                  |                   |
| g___Toc2 |                   |                  |                   |
| 19115385 |                   |                  |                   |
| .anchor  |                   |                  |                   |
| }**Table |                   |                  |                   |
| 13.      |                   |                  |                   |
| Hi       |                   |                  |                   |
| storical |                   |                  |                   |
| and      |                   |                  |                   |
| p        |                   |                  |                   |
| rojected |                   |                  |                   |
| EQIP     |                   |                  |                   |
| t        |                   |                  |                   |
| echnical |                   |                  |                   |
| and      |                   |                  |                   |
| f        |                   |                  |                   |
| inancial |                   |                  |                   |
| ass      |                   |                  |                   |
| istance, |                   |                  |                   |
| FY       |                   |                  |                   |
| 1996--F  |                   |                  |                   |
| Y2012.** |                   |                  |                   |
+----------+-------------------+------------------+-------------------+
| (t       |                   |                  |                   |
| housands |                   |                  |                   |
| of       |                   |                  |                   |
| dollars) |                   |                  |                   |
+----------+-------------------+------------------+-------------------+
| *        | **Technical**     | **Financial**    | **Total\          |
| *[Fiscal |                   |                  | TA & FA**         |
| yea      | **[Assistance     | **[Assistance    |                   |
| r]{.unde | (T                | (FA              |                   |
| rline}** | A)]{.underline}** | )]{.underline}** |                   |
+----------+-------------------+------------------+-------------------+
| 1996     | \$10,500          | \$125,500        | \$136,000         |
+----------+-------------------+------------------+-------------------+
| 1997     | \$20,000          | \$180,000        | \$200,000         |
+----------+-------------------+------------------+-------------------+
| 1998     | \$38,000          | \$162,000        | \$200,000         |
+----------+-------------------+------------------+-------------------+
| 1999     | \$33,060          | \$140,940        | \$174,000         |
+----------+-------------------+------------------+-------------------+
| 2000     | \$33,060          | \$140,940        | \$174,000         |
+----------+-------------------+------------------+-------------------+
| 2001     | \$37,989          | \$161,954        | \$199,943         |
+----------+-------------------+------------------+-------------------+
| 2002     | \$35,530          | \$151,470        | \$187,000         |
+----------+-------------------+------------------+-------------------+
| 2003     | \$176,159         | \$532,891        | \$709,050         |
+----------+-------------------+------------------+-------------------+
| 2004     | \$230,933         | \$755,091        | \$986,024         |
+----------+-------------------+------------------+-------------------+
| 2005     | \$263,005         | \$813,113        | \$1,076,118       |
+----------+-------------------+------------------+-------------------+
| 2006     | \$262,616         | \$793,502        | \$1,056,118       |
+----------+-------------------+------------------+-------------------+
| 2007     | \$261,990         | \$812,023        | \$1,074,013       |
+----------+-------------------+------------------+-------------------+
| 2008     | \$318,000         | \$882,000        | \$1,200,000       |
+----------+-------------------+------------------+-------------------+
| 2009     | \$354,305         | \$982,695        | \$1,337,000       |
+----------+-------------------+------------------+-------------------+
| 2010     | \$384,250         | \$1,065,750      | \$1,450,000       |
+----------+-------------------+------------------+-------------------+
| 2011     | \$420,820         | \$1,167,180      | \$1,588,000       |
+----------+-------------------+------------------+-------------------+
| 2012     | [\$463            | [\$1,286,        | [\$1,750          |
|          | ,750]{.underline} | 250]{.underline} | ,000]{.underline} |
+----------+-------------------+------------------+-------------------+
| **Totals | **\$3,343,967**   | **\$10,153,299** | **\$13,597,266**  |
| 199      |                   |                  |                   |
| 6-2012** |                   |                  |                   |
+----------+-------------------+------------------+-------------------+

# Appendix B. Concentrated Animal Feeding Operations and EPA Regulations

In February 2003, EPA revised the effluent limitations and permitting
regulations for Concentrated Animal Feeding Operations (CAFOs). The 2003
rule added poultry operations with dry manure handling systems to the
definition of CAFO, eliminated the exemption for operations that
discharge only in a large 25-year, 24-hour storm event, and added
requirements for land application areas under the control of a CAFO (68
FR 7176). The 2003 CAFO rule required any large CAFO with a potential to
discharge manure, litter, or process wastewater to waters of the United
States to apply for a National Pollutant Discharge Elimination System
(NPDES) permit.

On February 28, 2005, the Second Circuit issued a decision in
Waterkeeper Alliance et al. v. EPA regarding challenges to the 2003
rule. Among its decisions, the court vacated the 2003 rule requirement
that all CAFOs must apply for permits or demonstrate that they do not
have the potential to discharge. The court also vacated the rule
provisions that allow permitting authorities to issue permits to CAFOs
without including the terms of the CAFOs' nutrient management plans
(NMP's) in the permits. The court also required that permitting
authorities review NMP's and provide an opportunity for public review
and comment.

In response to the Waterkeeper decision, EPA published a proposed rule
in June 30, 2006. EPA proposed to require only owners or operators of
those CAFOs that discharge or propose to discharge to seek authorization
under an NPDES permit. Second, EPA proposed to require CAFOs seeking
authorization to discharge under individual permits to submit their
NMP's with their permit applications or, under general permits, with
their notices of intent. Permitting authorities would be required to
review the NMP and provide the public with an opportunity for meaningful
public review and comment. Permitting authorities would also be required
to incorporate terms of the NMP as NPDES permit conditions. The proposed
rule also addressed the remand of issues for further clarification and
analysis. These issues concern clarifications regarding the
applicability of water quality-based effluent limitations (WQBELs); new
source performance standards for swine, poultry, and veal CAFOs; and
"best conventional technology" effluent limitations guidelines for fecal
coliform.

On November 20, 2008, EPA revised the National Pollutant Discharge
Elimination System (NPDES) permitting requirements and Effluent
Limitations Guidelines and Standards (ELGs) for CAFOs[^21] to allow
these operators to voluntarily certify that they do not discharge or
propose to discharge and as such have no duty to apply for a permit. The
proposal would establish clear criteria that a CAFO must meet in order
to be eligible for certification. The certification option would not
change the requirement proposed in 2006 that CAFOs that discharge or
propose to discharge would be required to seek permit coverage. In the
event of an unforeseen accidental discharge from a properly certified
CAFO, the CAFO would not be liable for violation of the duty to apply
for a permit, but the certification would no longer be valid.

EPA developed a framework for identifying the terms of the NMP that must
be enforceable requirements of a CAFOs NPDES permit. The proposed
framework includes three alternative approaches for specifying terms of
the NMP with respect to rates of application, which are needed to
satisfy the requirement that the NMP include "protocols to land apply
manure, litter or process wastewater...that ensure appropriate
agricultural utilization of the nutrients" (40 CFR 122.42(e)(1)(viii).
The proposed framework would include supplemental annual reporting
requirements for permitted CAFOs to accompany these proposed alternative
approaches.

The existing regulation defines facilities with 1,000 animal units[^22]
(AU) or more as CAFOs. The regulation also states that facilities with
300-1,000 AU are CAFOs if they meet certain conditions.[^23] With this
in mind, the original EQIP regulations did not allow cost sharing on
CAFOs greater than 1,000 AU since the animal waste from these facilities
would be covered by the EPA regulations. Therefore, EQIP cost sharing
would have little additional environmental benefits.

The original EQIP statute was specifically changed to allow cost sharing
of large CAFOs to help them meet regulations. SEC.1240. PURPOSES states,

"The purposes of the environmental quality incentives program
established by this chapter are to promote agricultural production and
environmental quality as compatible goals and to optimize environmental
benefits, by---

> \(1\) assisting producers in complying with local, State, and national
> regulatory requirements ...
>
> \(2\) avoiding, to the maximum extent practicable, the need for
> resource and regulatory programs ...
>
> \(3\) providing flexible assistance to producers to install maintain
> conservation practices that sustain food and fiber production while---
>
> \(A\) enhancing soil, water, and related natural resources, including
> grazing land, forestland, wetland, and wildlife; and
>
> \(B\) conserving energy;
>
> \(4\) assisting producers to make beneficial, cost effective changes
> to production systems (including conservation practices related to
> organic production), grazing management, fuels management, forest
> management, nutrient management associated with livestock, pest or
> irrigation management, or other practices on agricultural and forested
> land; and
>
> \(5\) consolidating and streamlining conservation planning and
> regulatory compliance processes to reduce administrative burdens on
> producers and the cost of achieving environmental goals."

The economic analysis shown here identifies the economic and
environmental impacts of the conservation practices installed with the
FA and TA provided by EQIP funds to livestock producers, including
CAFOs. The analysis includes measures being installed on a voluntary
basis, those being installed to avoid the need for new regulations, and
those assisting producers in complying with regulatory requirements. The
increased livestock percentage of program costs, and the increased cost
limitation was added precisely to help large livestock producers comply
with these EPA regulations; therefore we feel it is important to
identify the impact of the EQIP regulation on compliance with other
rulemakings.

On the other hand, the costs and benefits of regulating CAFOs has
already been analyzed and attributed to EPA regulations. Although we
have provided an analysis of the relationship between these programs,
this analysis separates the costs and benefits of the EPA regulations on
large CAFOs and the costs and benefits of EQIP spending to assist
producers in complying with the EPA regulations so as not to
double-count any costs and/or benefits. These adjustments are found in
appendix D (on costs) and appendix F (on benefits). If one were to
assume that the benefits generated through EQIP funding on all animal
waste discharge activities be assigned to the EPA CAFO regulations, the
net benefits of EQIP would obviously be lower than under alternative
assumptions (table 14). In the case of costs, the EQIP FA and TA
incurred in assisting producers to comply with EPA regulatory
requirements associated with large CAFOs can be seen as transfer
payments to producers in meeting an "unfunded" mandate by EPA acting
much like a "shock absorber" for producers to acquire needed capital and
technical expertise to meet EPA requirements. However, they represent
real adjustment costs that would have been incurred by the producer
through their own private sources or by NRCS in this case. Given this
situation, we believe it is appropriate to reduce NRCS costs incurred in
providing such assistance. EQIP conservation practices for large
(regulated) CAFOs (over 1,000 AUs) and small CAFOs (under 1,000 AUs)
were analyzed separately. Costs and benefits associated with the larger
CAFOs are adjusted out of the summary EQIP cost and benefit tables 1, 8,
9 and 14. Detailed costs and benefits of working with both large and
small CAFOs are included in separate columns in tables 6 and 7.
Construction costs of building waste management structures have large
economies of scale.

+------------------+-------+------+------+------+-------+-------+-----+
| []{#__RefHeadin  |       |      |      |      |       |       |     |
| g___Toc219115386 |       |      |      |      |       |       |     |
| .anchor}Table    |       |      |      |      |       |       |     |
| 14**. Summary of |       |      |      |      |       |       |     |
| cumulative       |       |      |      |      |       |       |     |
| 5-year EQIP      |       |      |      |      |       |       |     |
| benefits and     |       |      |      |      |       |       |     |
| costs over FY    |       |      |      |      |       |       |     |
| 2008--FY 2012,   |       |      |      |      |       |       |     |
| using a seven    |       |      |      |      |       |       |     |
| percent discount |       |      |      |      |       |       |     |
| rate.**          |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| (\$ million of   |       |      |      |      |       |       |     |
| 2007 dollars)    |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| **Benefit        | **To  | **   | **   | **I  | *     | *     | **  |
| Category:**      | Not   | 2007 | 2008 | ncre | *2007 | *2008 | Uni |
|                  | Impl  | EQIP | Act  | ases | EQIP  | Act** | t** |
|                  | ement | with | Be   | with | with  |       |     |
|                  | E     | \$1  | nefi | the  | \$1   | **(   |     |
|                  | QIP** | bil  | ts** | 2008 | bi    | Acres |     |
|                  |       | lion |      | A    | llion | or**  |     |
|                  |       | /    | **&  | ct** | /     |       |     |
|                  |       | ye   | Cos  |      | y     | **A   |     |
|                  |       | ar** | ts** |      | ear** | nimal |     |
|                  |       |      |      |      |       | Uni   |     |
|                  |       | **FY |      |      | **(   | ts)** |     |
|                  |       | 2008 |      |      | Acres |       |     |
|                  |       | -**  |      |      | or**  |       |     |
|                  |       |      |      |      |       |       |     |
|                  |       | **FY |      |      | **A   |       |     |
|                  |       | 20   |      |      | nimal |       |     |
|                  |       | 12** |      |      | Uni   |       |     |
|                  |       |      |      |      | ts)** |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| > Animal waste   | \$0   | \$   | \$   | \$   | 2,72  | 4,06  | Ani |
| > management\*   |       | 554  | 816  | 262  | 4,000 | 1,000 | mal |
|                  |       |      |      |      |       |       | Un  |
|                  |       |      |      |      |       |       | its |
+------------------+-------+------+------+------+-------+-------+-----+
| > Sheet and rill | \$0   | \$1  | \$2  | \$   | 8,01  | 11,95 | Ac  |
| > water erosion  |       | ,948 | ,869 | 920  | 9,000 | 5,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| > Grazing land   | \$0   | \$3  | \$4  | \$1  | 35,58 | 53,05 | Ac  |
| > productivity   |       | ,111 | ,580 | ,470 | 6,000 | 7,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| > Irrigation     | \$0   | \$   | \$   | \$   | 4,01  | 5,98  | Ac  |
| > water use      |       | 231  | 341  | 109  | 4,000 | 5,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| > Air quality    | \$0   | \$   | \$   | \$   | 8,03  | 11,98 | Ac  |
|                  |       | 181  | 266  | 85   | 9,000 | 5,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| > Fertilizer use | \$0   | \$   | \$   | \$   | 11,37 | 16,95 | Ac  |
|                  |       | 601  | 885  | 284  | 0,000 | 3,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| > Wildlife       | \$0   | \$   | \$   | \$   | 5,66  | 8,43  | Ac  |
| > habitat        |       | 172  | 254  | 81   | 0,000 | 9,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| > Energy use     | \$0   | \$   | \$   | \$   | 7,44  | 11,10 | Ac  |
|                  |       | 210  | 309  | 99   | 6,000 | 2,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| > Carbon         | \$0   | \$   | \$   | \$   | 41,52 | 61,91 | Ac  |
| > sequestration  |       | 82   | 121  | 39   | 5,000 | 1,000 | res |
+------------------+-------+------+------+------+-------+-------+-----+
| **Grand Total    | \$0   | \$7  | \$10 | \$3  |       |       |     |
| Benefits**       |       | ,091 | ,441 | ,350 |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
|                  |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| **Costs:**       |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| > Total          | \$0   | \$7  | \$10 | \$3  |       |       |     |
| > costs\*\*      |       | ,053 | ,384 | ,332 |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
|                  |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| **Net            |       |      |      |      |       |       |     |
| Benefits:**      |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| > Net benefits   | \$0   | \$39 | \$57 | \$18 |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| \*Environmental  |       |      |      |      |       |       |     |
| benefits from    |       |      |      |      |       |       |     |
| improved animal  |       |      |      |      |       |       |     |
| waste management |       |      |      |      |       |       |     |
| attributed to    |       |      |      |      |       |       |     |
| EQIP are 42      |       |      |      |      |       |       |     |
| percent below    |       |      |      |      |       |       |     |
| the total CAFO   |       |      |      |      |       |       |     |
| related benefits |       |      |      |      |       |       |     |
| to account for   |       |      |      |      |       |       |     |
| environmental    |       |      |      |      |       |       |     |
| benefits         |       |      |      |      |       |       |     |
| captured by EPA  |       |      |      |      |       |       |     |
| regulatory       |       |      |      |      |       |       |     |
| requirements on  |       |      |      |      |       |       |     |
| large CAFOs.     |       |      |      |      |       |       |     |
| Likewise, costs  |       |      |      |      |       |       |     |
| associated with  |       |      |      |      |       |       |     |
| large CAFOs      |       |      |      |      |       |       |     |
| represent about  |       |      |      |      |       |       |     |
| 23 percent of    |       |      |      |      |       |       |     |
| NRCS costs       |       |      |      |      |       |       |     |
| related to CAFOs |       |      |      |      |       |       |     |
| of all sizes     |       |      |      |      |       |       |     |
| were deducted    |       |      |      |      |       |       |     |
| from the         |       |      |      |      |       |       |     |
| analysis.        |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+
| \*\*Total costs  |       |      |      |      |       |       |     |
| include all      |       |      |      |      |       |       |     |
| federal costs    |       |      |      |      |       |       |     |
| plus private and |       |      |      |      |       |       |     |
| other            |       |      |      |      |       |       |     |
| non-federal      |       |      |      |      |       |       |     |
| costs which have |       |      |      |      |       |       |     |
| historically     |       |      |      |      |       |       |     |
| matched federal  |       |      |      |      |       |       |     |
| EQIP FA funding  |       |      |      |      |       |       |     |
| at an overall 50 |       |      |      |      |       |       |     |
| percent          |       |      |      |      |       |       |     |
| cost-share rate  |       |      |      |      |       |       |     |
| discounted at    |       |      |      |      |       |       |     |
| seven percent    |       |      |      |      |       |       |     |
| and also the     |       |      |      |      |       |       |     |
| CAFO adjustment  |       |      |      |      |       |       |     |
| above of 23      |       |      |      |      |       |       |     |
| percent,         |       |      |      |      |       |       |     |
| discounted at    |       |      |      |      |       |       |     |
| seven percent..  |       |      |      |      |       |       |     |
+------------------+-------+------+------+------+-------+-------+-----+

# Appendix C. Relationship of EQIP to Other Farm Bill Conservation Programs

In addition to EQIP, there are several other conservation laws that help
to conserve, enhance, protect, and improve private and non-federal
lands. A brief overview of the relevant Federal programs is provided
below. Other programs described below could be used in adjacent tracts
and therefore can lead to overlapping cumulative effects for
environmental resources with varying geographical ranges. Further, other
cumulative effects might result from corridor conservation projects that
may affect more than the site in which the conservation project may be
applied.

It is important to note that land enrolled in other conservation
programs is eligible for EQIP provided:

-   EQIP does not pay for the same practice on the same land as any
    other USDA conservation program.

-   Land enrolled in CRP and Conservation Reserve Enhancement Program
    (CREP) may only be offered for enrollment during the last year of
    the contract and no EQIP practice shall be applied on that land
    until after the CRP contract has expired or has been terminated.

-   The EQIP practices do not defeat the purpose of either EQIP or the
    other conservation program.

## Conservation Reserve Program CRP) / Conservation Reserve Enhancement Program (CREP)

The CRP and CREP are programs designed to establish vegetative cover on
environmentally sensitive lands. These programs have also been
characterized as land idling programs, designed to idle existing
cropland for varying amounts of time. The intent of the programs is to
retire marginally productive lands that also contribute significant
amounts of pollutants to surface waters when used for agricultural
production or provide significant wildlife benefits if idled with
appropriate vegetative cover, or both.

The impact of these programs is to reduce the amount of low productivity
land used to produce crops in the United States, provide a source of
steady reliable income to owners of the enrolled cropland, reduce
agricultural non-point source pollution, and provide habitat for
wildlife species.

Land enrolled in CRP/CREP is eligible for EQIP provided the practices
contracted through EQIP are applied after the CRP/CREP contract expires.
There is very little CRP acreage with EQIP contracts on them, and this
is not expected to change with the implementation of the new Farm Bill.

## Wetlands Reserve Program (WRP) 

This program offers incentives to landowners to enhance and restore
degraded wetlands in exchange for retiring marginal land from
agricultural production. A limited amount of adjacent land can be
included as a buffer.

The program offers landowners three options including a permanent
easement, a 30-year easement, and a restoration cost-share agreement
only. The financial assistance offered to landowners varies with each of
the options. A permanent easement offers 100 percent of the value of an
easement (development rights are not included in the valuation of the
easements) and 100 percent of the restoration costs. A 30-year easement
offers 75 percent of the value of the same easement along with 75
percent of the restoration costs. A cost-share agreement only provides
75 percent of the costs of restoration. There is no easement involved
with this option; however, the cost-share agreement is normally for a
period of ten years.

Impacts of the program include an immediate payment to the successfully
enrolled landowner, a reduction in the production of agricultural
commodities, improved wildlife habitat, especially for those species
specifically associated with wetland environments, and other wetland
functions and value. Since the WRP participants is already participating
in an NRCS program on part of their land, they are likely to participant
with EQIP, WHIP (see below), or another program on their remaining
working lands.

## Wildlife Habitat Incentives Program (WHIP) 

The purpose of the WHIP program is to create high quality wildlife
habitats. Special priority is given to projects that support wildlife
species of Federal, State, local, or tribal importance.

Privately owned agricultural lands, non-industrial private forest lands
(NIPF) and tribal lands are eligible. This program is not primarily a
land idling program, since very little cropland is enrolled in WHIP.
However, WHIP may be used to enhance wildlife habitat on working forest
and range lands. The major impact of the program is the creation of
habitat for species of importance in each State. The majority of
projects have been involved with improving upland wildlife habitats.

## Farm and Ranch Lands Protection Program (FRPP)

The intent of the Farm and Ranch Land Protection Program is to help
farmers keep their land in agricultural use and protect associated
conservation values. The program achieves this aim by purchasing
conservation easements that essentially buy up development rights from
the landowners. The landowners also agree to implement a conservation
plan for any highly erodible land contained in the easement area. EQIP
could potentially be used by landowners enrolled in FRPP to help address
specific practice needs.

Eligible lands are currently part of a farm or ranch that is large
enough to be a viable agricultural enterprise, include prime, unique, or
other productive soil, and be under threat of development for
non-agricultural uses.

This program not only retains farm and ranch lands in agricultural uses,
but also maintains green space in areas subject to development
pressures.

## Conservation Security Program (CSP) 

The Conservation Security Program (CSP) was a voluntary program that
provided financial and technical assistance to promote the conservation
and improvement of soil, water, air, energy, plant and animal life, and
other conservation purposes on Tribal and private working lands. Working
lands include cropland, grassland, prairie land, improved pasture, and
range land, as well as forested land that is an incidental part of an
agriculture operation. The Farm Security and Rural Investment Act of
2002 (2002 Act) (P.L. 107-171) amended the Food Security Act of 1985 to
authorize the program. The program was intended to reward landowners for
their efforts on behalf of land stewardship. Payments were made to
holders of agricultural lands at varying levels depending on the level
of conservation applied to the land. The Conservation Security Program
also made technical and financial assistance available to help producers
reach and maintain these high levels of conservation. This technical and
financial assistance was similar to the EQIP cost sharing, using the
same 75 percent maximum cost-share limits. The 2008 Act terminated the
2002 Conservation Security Program by prohibiting any new Conservation
Security Program contracts after FY 2008, and providing enough funds to
complete the current contracts.

## Conservation Stewardship Program (CStP) 

The Conservation Stewardship Program (CStP), a new program established
in the 2008 Act, is designed to encourage agricultural producers to
address resource concerns in a comprehensive manner by improving,
maintaining and managing existing conservation activities and
undertaking additional conservation activities. Privately owned and
tribal agricultural lands and associated forested lands, including
non-industrial private forest lands, are eligible for enrollment in
CStP. Participants enter into contracts for a period of five years
during which they agree to continue existing conservation activities to
address at least one resource concern and to install or adopt other
conservation activities to meet or exceed stewardship thresholds for at
least one additional resource concern. In return, payments are provided
for installing and adopting these additional conservation activities.

EQIP will be used by some producers to enable them to move to greater
levels of resource protection, and allow the producers to qualify for
enrollment in CStP at a later period. In both Federal program
implementation and on-farm assistance, the current EQIP rules are
setting standards that will probably be adopted as the CStP
implementation rules are finalized. The expectation of obtaining
longer-term payments for maintaining conservation practices may increase
the number of EQIP applications through the life of this Farm Bill. The
interaction of these two programs will benefit each and succeed in
obtaining more conservation on the ground.

Participation in CStP then provides incentives for the producers to
continue the conservation activities that were started under EQIP and to
address additional resource concerns.

## Grassland Reserve Program (GRP)

The Grassland Reserve Program is targeted toward protecting grassland
and shrub land under threat of conversion to other uses. Landowners may
enroll in a permanent or 30-year (or the maximum allowed under State law
if different) easement or the landowner may enroll in a rental agreement
for 10, 15, 20, or 30 years. With a permanent easement, the landowner is
offered the appraised value of the land, less the grazing value.
Thirty-year easements, or the maximum allowed under State law, receive
30 percent of the appraised value. The rental agreements receive up to
75 percent of the grazing value in an annual payment for the length of
the contract. Eligible lands may be in any current land use, if the land
was historically grassland, and capable of being restored to a grassland
use. Grasslands may be grazed when enrolled in the program.

While the Grassland Reserve Program can fund any needed conservation
practices under its existing authority, the funding for the program may
be somewhat limited. The easements to maintain lands in a grassland use
may be relatively costly, and use the bulk of the funds available to the
program. EQIP could provide assistance with installing any needed
conservation practices and help the Grassland Reserve Program achieve
its goals.

## State and Private Forestry Programs (U.S. Forest Service)

The U.S. Forest Service, through its State and Private Forestry (S&PF)
mission area provides expert advice, technology, and financial
assistance to help landowners and resource managers sustain the Nation's
forests and protect communities and the environment from wild land
fires.

Through grants and cooperative agreements, State forestry agencies and
other partners deliver the majority of this landowner assistance through
three State and Private Forestry "umbrella" program areas that receive
annual federal appropriations: Forest Health Management; Cooperative
Fire Protection; and Cooperative Forestry. Forest Health Management
assistance includes conducting suppression, prevention, and management
activities on native and non-native insect and disease forest pests and
invasive plants.

Cooperative Fire Protection programs focus on the urgent need to reduce
the threat of wild land fires in wild land-urban interface areas.
Assistance is provided to complete community wildfire protection plans
and to implement high priority hazard mitigation projects identified in
those plans, which often includes non-industrial private forest (NIPF)
lands.

Cooperative Forestry programs provide TA and FA to complete a long-term
multi-resource forest stewardship plan. Assistance is provided to forest
landowners for conservation easements and other mechanisms to conserve
private forests. From 2003 to 2006, the Forest Land Enhancement Program
(enacted with 2002 Act) provided cost-share assistance to private
landowners for forestry and agro-forestry practices, however new funding
for the program ended in FY 2006.

Cooperative Forestry Programs include the Forest Stewardship Program
(FSP) and the Forest Legacy program. The FSP provides technical and
financial assistance to States to encourage the long-term stewardship of
NIPF lands. Long-term multi-resource forest stewardship plans provide
landowners with the information they need to achieve their unique
objectives while sustaining a variety of environmental goods and
services including clean air and water, biodiversity, and wildlife
habitat. Forest stewardship plans enable landowners to keep their
forests in a healthy condition to reduce the risk of wildfire and
pest/disease infestations. Forest stewardship plans also contribute to
the future supply of forest products from private lands and thus, the
health of our rural economies. Some of the assistance in these programs
may appear, instead, in the form of TA and FA associated with EQIP in
the future in areas where forestry resource concerns are identified as
important resource concerns in EQIP ranking and funding decisions. This
assistance may displace or supplement current FSP activities.

The Forest Legacy Program helps protect environmentally important Forest
areas that are threatened by conversion to non-forest uses. The Program
uses conservation easements and other mechanisms to conserve private
forests and operates on a \"willing seller and willing buyer\" basis.
Eminent domain or adverse condemnation is not authorized.

## Summary of EQIP Interaction with Other Programs

Because EQIP is a working lands program, very little interaction between
it and USDA's land-idling programs, like CRP/CREP and WRP is expected. A
substantial amount of interaction can be expected with NRCS programs
intended to support agricultural activities on the land. These programs
include: the easement programs of FRPP and GRP and enhancement programs
like WHIP and CStP. However, there are limitations on CStP participants
to use EQIP funding to enable them to address that program's priority
resource concerns in order to become eligible for CStP in the same year.
Instead, applicants who do not meet the requirements of CStP can use
EQIP funds to increase their stewardship levels and improve their
likelihood of CStP enrollment in future CStP programs. Thus, it is
expected that for the most part, EQIP will have little or no direct
overlap with most of the other conservation programs contained in the
Farm Bill. Any over-lap of EQIP with other programs will likely take the
following forms: assistance to producers who enroll in the GRP and FRPP
to address their conservation needs, and EQIP-assistance to producers to
address resource concerns in order to become eligible for participation
in CStP in future enrollments. Some displacement or additional levels of
activity could occur related to forestry efforts of the Forest
Stewardship Program.

# Appendix D. Development of Expected Costs by Benefit Category

## Sheet and Rill Water Erosion

Table 15 lists the practices that were classified as affecting sheet and
rill water erosion when applied either by themselves or in combination
with each other. A few of these practices used to prevent soil eroded
from a land area from leaving the area are not reported in acreage
units, therefore assumptions (table 15 footnotes) were used to convert
the units of treatment (generally linear feet, as in feet of terraces)
to acres treated. It was assumed that on average, two practices were
applied per acre.

Table 15 indicates that based on FY 2007 EQIP contracts, these practices
received 13.5 percent of EQIP cost-share funds and had an average cost
share of \$61 per acre while the average total costs was \$107 per acre
(excluding the cost of government provided technical assistance). Note
that these costs are not an "annual" cost, but rather a "contract" cost
and reflect the total costs of applying the practice as contracted over
a five-year period. The majority of practices are measured on an acreage
basis, which makes it an easy conversion to calculate acreage protected.
However, since it is common to install multiple related practices, it
was assumed that the average treated acre would use 1.5 of the listed
practices. A few practices with units other than acres are being
considered associated practices. Installation costs are included in the
analysis; however, the assumption is that these practices are installed
as part of the conservation system.

## Grazing Land Productivity

Table 16 shows a list of EQIP practices classified as having an impact
on grazing land productivity, which would be expected to be implemented
on 26.4 million acres if the FY 2007 acreage total persisted over FY
2008- FY 2012. Since it is rare that only single grazing related
practices are installed, it was assumed that the average treated acre
would use 1.5 of the listed practices. Average cost share and total
costs were just over \$36 and just under \$63 per acre, respectively.
The share of these practices in overall EQIP funding was 35.5 percent.
Note that as in the case of the USLE reduction, some practices were in
non-acre units and are being included as associated practices. These
practices are assumed as a benefit to grazing productivity; however,
only costs are included in the analysis. For grazing land, only
practices included were those resulting in increased forage production.
Practices expected to provide benefits in other environmental areas
(such as wildlife habitat and water quality) are partly accounted for in
the other benefit categories.

## **Irrigation Water U**se

Table 17 shows the practices assigned to the benefit category of
irrigation water savings. Irrigation practices account for 22.81 percent
of the total funds. The program is projected to treat 3.7 million acres
with a cost share of approximately \$206 per acre and total costs of
roughly \$360 per acre. Table 17 shows that a large set of practices
reported in units rather than by acres, but it can be assumed that these
practices were "associated" with the per-acre practices. Therefore,
their costs were added to the sum of costs across treated acres.
Analysis of NRCS agency Performance Resource System (PRS) data indicated
that historical EQIP irrigation practices had resulted in reduced water
applications of 5.41 acre-inches per acre.

  --------------------------------- --------------------------------- ----------------- ------------------------- ------------------------- ----------------------------- ----------------------------- -- ------------------------------ ------------------------------ ---------------------- ---------------------- ----------------------------- ----------------------------- -- --- --------------------------------- --------------------------------- ---------------------- ---------------------- ---------------------- ---------------------- --------------------------- --------------------------- -- --
                                    []{#__RefHeading___Toc219115387                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                    .anchor}**Table 15. Historical                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
                                    EQIP data on practices affecting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
                                    sheet and rill water erosion.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                            **[Approved                                                                                                                                                                **[Implemented Contracts\*\*                                                                                                                                                                                                                                                                  
                                                                                                                                            Contracts\*]{.underline}**                                                                                                                                                 (excludes contract units not                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                       cost shared)]{.underline}**                                                                                                                                                                                                                                                                   

                                    **[Practice Code and                                **[Units]{.underline}**                             **[Contracts]{.underline}**                                    **[Units--No.]{.underline}**                                  **[Cost                                       **[Contracts]{.underline}**                                        **[Units^A^--No.]{.underline}**                                     **[Cost                                       **[Total                                      **Acres^B^                                                 
                                    Name]{.underline}**                                                                                                                                                                                                                  Share]{.underline}**                                                                                                                                                                 Share]{.underline}**                          Costs]{.underline}**                          [Protected]{.underline}**                                  

                                    329                               Residue and       Ac.                                                 11,790                                                         4,339,988                                                     \$143,664,330                                 10,023                                                             5,081,368                                                           \$156,569,693                                 \$272,765,839                                 5,081,368                                                  
                                                                      Tillage                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                      Management,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                      No-Till/Strip                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                      Till/Direct Seed                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

                                    345                               Residue and       Ac.                                                 3,540                                                          1,694,125                                                     \$51,106,966                                  3,009                                                              2,636,524                                                           \$45,308,322                                  \$82,537,727                                  2,636,524                                                  
                                                                      Tillage                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                      Management, Mulch                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                      Till                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

                                    328                               Conservation Crop Ac.                                                 3,645                                                          379,049                                                       \$32,089,928                                  3,099                                                              991,132                                                             \$44,000,197                                  \$78,330,679                                  991,132                                                    
                                                                      Rotation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

                                    340                               Cover Crop        Ac.                                                 5,000                                                          1,203,697                                                     \$28,078,232                                  4,250                                                              1,311,286                                                           \$22,448,068                                  \$38,904,427                                  1,311,286                                                  

                                    412                               Grassed Waterway  Ac.                                                 6,895                                                          231,128                                                       \$21,371,765                                  5,861                                                              13,973                                                              \$20,346,154                                  \$34,059,870                                  13,973                                                     

                                    342                               Critical Area     Ac.                                                 14,960                                                         118,578                                                       \$12,678,050                                  12,717                                                             104,135                                                             \$10,606,600                                  \$17,947,879                                  104,135                                                    
                                                                      Planting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

                                    327                               Conservation      Ac.                                                 1,480                                                          27,921                                                        \$2,270,775                                   1,258                                                              26,812                                                              \$1,957,642                                   \$3,236,896                                   26,812                                                     
                                                                      Cover                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

                                    344                               Residue           Ac.                                                 195                                                            101,479                                                       \$1,927,440                                   166                                                                1,226,248                                                           \$2,765,688                                   \$5,016,995                                   1,226,248                                                  
                                                                      Management,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                      Seasonal                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

                                    635                               Vegetated         Ac.                                                 655                                                            23,835                                                        \$1,828,467                                   557                                                                357                                                                 \$1,181,192                                   \$1,772,342                                   357                                                        
                                                                      Treatment Area                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

                                    330                               Contour Farming   Ac.                                                 200                                                            3,905                                                         \$513,183                                     170                                                                15,971                                                              \$244,533                                     \$467,273                                     15,971                                                     

                                    346                               Residue and       Ac.                                                 35                                                             15,392                                                        \$481,345                                     30                                                                 38,660                                                              \$155,137                                     \$290,987                                     38,660                                                     
                                                                      Tillage                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                      Management, Ridge                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                      Till                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

                                    586                               Stripcropping     Ac.                                                 140                                                            7,644                                                         \$459,118                                     119                                                                16,919                                                              \$278,053                                     \$460,024                                     16,919                                                     

                                    393                               Filter Strip      Ac.                                                 1,625                                                          5,146                                                         \$367,958                                     1,381                                                              12,792                                                              \$1,684,301                                   \$2,826,635                                   12,792                                                     

                                    311                               Alley Cropping    Ac.                                                 145                                                            898                                                           \$194,005                                     123                                                                1,392                                                               \$84,861                                      \$169,722                                     1,392                                                      

                                    331                               Contour Orchard   Ac.                                                 120                                                            604                                                           \$72,067                                      102                                                                1,280                                                               \$57,317                                      \$112,797                                     1,280                                                      
                                                                      and Other Fruit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                      Area                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

                                    450                               Anionic           Ac.                                                 10                                                             3,510                                                         \$26,115                                      9                                                                  3,199                                                               \$9,095                                       \$13,585                                      3,199                                                      
                                                                      Polyacrylamide                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

                                    332                               Contour Buffer    Ac.                                                 30                                                             1,655                                                         \$18,705                                      26                                                                 2,186                                                               \$56,792                                      \$101,460                                     2,186                                                      
                                                                      Strips                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

                                    Associated Practices^C^                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

                                    410                               Grade             No.                                                 9,110                                                          15,634                                                        \$59,549,785                                  7,744                                                              19,345                                                              \$54,946,934                                  \$91,694,940                                                                                             
                                                                      Stabilization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                      Structure                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                    600                               Terrace           Ft.                                                 7,390                                                          71,024,672                                                    \$58,387,824                                  6,282                                                              49,016,976                                                          \$41,716,324                                  \$77,758,967                                                                                             

                                    587                               Structure for     No.                                                 8,595                                                          185,741                                                       \$44,725,873                                  7,307                                                              25,519                                                              \$37,295,495                                  \$62,443,464                                                                                             
                                                                      Water Control                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

                                    638                               Water and         No.                                                 3,930                                                          18,816                                                        \$23,268,042                                  3,341                                                              21,013                                                              \$21,305,784                                  \$37,644,118                                                                                             
                                                                      Sediment Control                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
                                                                      Basin                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

                                    468                               Lined Waterway or Ft.                                                 765                                                            174,004                                                       \$5,036,771                                   650                                                                120,972                                                             \$3,076,440                                   \$5,016,232                                                                                              
                                                                      Outlet                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

                                    386                               Field Border      Ft.                                                 2,265                                                          12,765,270                                                    \$2,938,960                                   1,925                                                              12,870,285                                                          \$2,661,998                                   \$5,019,332                                                                                              

                                    601                               Vegetative        Ft.                                                 75                                                             59,195                                                        \$213,753                                     64                                                                 78,615                                                              \$309,025                                     \$616,069                                                                                                
                                                                      Barriers                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

                                                                      **Totals**                                                            **82,595**                                                                                                                   **\$491,269,454**                                                                                                                                                                    **\$469,065,643**                             **\$819,208,260**                             **7,656,154**                                              

                                    Average per acre (based on                                                                                                                                                                                                                                                                                                                                                                                                \$61.00                                       \$107.00                                                                                                 
                                    implemented)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

                                    Total Program Cost Share                                                                                                                                                                                                             \$3,635,653,504                                                                                                                                                                                                                                                                                                                             

                                    Sheet and Rill Water Erosion                                                                                                                                                                                                         13.5%                                                                                                                                                                                                                                                                                                                                       
                                    Reducing Practice Share of Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
                                    EQIP Funding                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

                                    \*Baseline for Approved Contracts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                    based on FY 2007 contract data                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
                                    multiplied by five years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

                                    \*\*Baseline for Implemented                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
                                    Contracts based on FY 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
                                    payment data multiplied by five                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                    years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

                                    ^A^Units for                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
                                    structural/vegetative practices                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                    based on ProTracts. Recurring                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                    management items are based on PRS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                    data. Note: A divisor of 1.25 is                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
                                    used for PRS data to account for                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
                                    some duplication of reporting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

                                    ^B^Total acres protected is sum                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                    of individual practice acres,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                    divided by 1.5, to reflect that                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                    EQIP plans typically use more                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                    than one of the listed practices                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
                                    is generally included in the                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
                                    treatment plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

                                    ^C^Practices not in \"Acre\"                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
                                    units were not converted but                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
                                    assumed to be associated                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
                                    practices. The assumption that                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
                                    they were part of the systems                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                    installed on treated acres, hence                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                    their costs are included.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

  []{#__RefHeading___Toc219115388                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
  .anchor}**Table 16. Historical                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
  EQIP data on practices affecting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
  grazing land productivity.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

                                                                                                                                                                          **[Approved                                                                                                                                                                **[Implemented Contracts\*\*                                                                                                                                                                                                                                    
                                                                                                                                                                          Contracts\*]{.underline}**                                                                                                                                                 (excludes contract units not                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                     cost shared)]{.underline}**                                                                                                                                                                                                                                     

  **[Practice Code and                                                                                            **[Units]{.underline}**                                 **[Contracts]{.underline}**                                     **[Units--No.]{.underline}**                          **[Cost                                              **[Contracts]{.underline}**                                            **[Units^A^--No.]{.underline}**                          **[Cost                                       **[Total                                           **Acres^B^                     
  Name]{.underline}**                                                                                                                                                                                                                                                                           Share]{.underline}**                                                                                                                                                                 Share]{.underline}**                          Costs]{.underline}**                               [Protected]{.underline}**      

  314                                                                 Brush Management                            Ac.                                                     19,625                                                          3,743,449                                             \$171,598,892                                        16,683                                                                 4,285,098                                                \$136,122,681                                 \$251,869,116                                      4,285,098                      

  512                                                                 Pasture and Hay                             Ac.                                                     34,370                                                          1,896,169                                             \$124,302,665                                        29,218                                                                 2,361,871                                                \$93,023,206                                  \$168,580,585                                      2,361,871                      
                                                                      Planting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

  528                                                                 Prescribed                                  Ac.                                                     21,535                                                          14,755,369                                            \$108,594,439                                        18,307                                                                 29,109,964                                               \$90,382,288                                  \$158,521,639                                      29,109,964                     
                                                                      Grazing                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

  561                                                                 Heavy Use Area                              Ac.                                                     16,005                                                          1,097,809                                             \$101,134,833                                        13,606                                                                 2,783,864                                                \$89,531,030                                  \$147,660,896                                      2,783,864                      
                                                                      Protection                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

  550                                                                 Range Planting                              Ac.                                                     4,770                                                           501,287                                               \$22,083,307                                         4,055                                                                  494,769                                                  \$16,535,369                                  \$29,506,878                                       494,769                        

  511                                                                 Forage Harvest                              Ac.                                                     655                                                             46,046                                                \$4,243,062                                          557                                                                    488,640                                                  \$1,228,027                                   \$2,213,674                                        488,640                        
                                                                      Management                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

  460                                                                 Land Clearing                               Ac.                                                     295                                                             1,803                                                 \$517,657                                            251                                                                    1,978                                                    \$773,276                                     \$1,378,610                                        1,978                          

  548                                                                 Grazing Land                                Ac.                                                     190                                                             24,820                                                \$366,248                                            162                                                                    53,127                                                   \$787,927                                     \$1,342,057                                        53,127                         
                                                                      Mechanical                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
                                                                      Treatment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

  381                                                                 Silvopasture                                Ac.                                                     55                                                              2,369                                                 \$280,000                                            47                                                                     713                                                      \$73,950                                      \$140,616                                          713                            
                                                                      Establishment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

  640                                                                 Waterspreading                              Ac.                                                     5                                                               919                                                   \$95,725                                             4                                                                      5,243                                                    \$60,599                                      \$98,471                                           5,243                          

  Associated Practices^C^                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

  382                                                                 Fence                                       Ft.                                                     46,665                                                          262,555,406                                           \$294,193,606                                        39,670                                                                 200,154,214                                              \$199,623,916                                 \$343,167,246                                                                     

  516                                                                 Pipeline                                    Ft.                                                     33,640                                                          119,601,788                                           \$165,134,746                                        28,597                                                                 99,576,405                                               \$114,834,483                                 \$192,141,008                                                                     

  614                                                                 Watering Facility                           No.                                                     39,350                                                          87,593                                                \$105,982,454                                        33,451                                                                 85,860                                                   \$75,450,827                                  \$126,241,371                                                                     

  642                                                                 Water Well                                  No.                                                     13,315                                                          13,900                                                \$61,989,036                                         11,319                                                                 12,501                                                   \$46,650,512                                  \$79,340,080                                                                      

  378                                                                 Pond                                        No.                                                     13,195                                                          14,450                                                \$54,517,913                                         11,217                                                                 25,224                                                   \$35,864,169                                  \$62,102,099                                                                      

  533                                                                 Pumping Plant                               No.                                                     10,545                                                          11,292                                                \$49,185,633                                         8,964                                                                  9,898                                                    \$34,791,531                                  \$60,401,584                                                                      

  578                                                                 Stream Crossing                             No.                                                     3,010                                                           12,971                                                \$10,384,156                                         2,559                                                                  8,965                                                    \$4,966,968                                   \$8,025,286                                                                       

  575                                                                 Animal Trails and                           Ft.                                                     1,840                                                           1,318,857                                             \$9,458,071                                          1,564                                                                  1,209,489                                                \$10,362,573                                  \$15,284,604                                                                      
                                                                      Walkways                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

  574                                                                 Spring                                      No.                                                     3,315                                                           4,013                                                 \$6,790,870                                          2,818                                                                  4,465                                                    \$6,212,243                                   \$10,049,273                                                                      
                                                                      Development                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

                                                                      **Totals**                                                                                          **262,380**                                                                                                           **\$1,290,853,313**                                                                                                                                                                  **\$957,275,575**                             **\$1,658,065,093**                                **26,390,177**                 

  Average per acre (based on                                                                                                                                                                                                                                                                                                                                                                                                                                                         \$36.30                                       \$62.80                                                                           
  implemented)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

  Total Program Cost Share                                                                                                                                                                                                                                                                      \$3,635,653,504                                                                                                                                                                                                                                                                                                      

  Grazing Land Productivity                                                                                                                                                                                                                                                                     35.5%                                                                                                                                                                                                                                                                                                                
  Practice Share of Total EQIP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
  Funding                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

  \*Baseline for Approved Contracts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
  based on FY 2007 contract data                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
  multiplied by five years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

  \*\*Baseline for Implemented                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
  Contracts based on FY 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
  payment data multiplied by five                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
  years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

  ^A^Units for                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
  structural/vegetative practices                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
  based on ProTracts. Recurring                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
  management items are based on PRS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
  data. Note: A divisor of 1.25 is                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
  used for PRS data to account for                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
  some duplication of reporting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

  ^B^Total acres protected is sum                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
  of individual practice acres,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
  divided by 1.5, to reflect that                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
  EQIP plans typically use more                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
  than one of the listed practices                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
  is generally included in the                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
  treatment plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

  ^C^Practices not in \"Acre\"                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
  units were not converted but                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
  assumed to be associated                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
  practices. The assumption that                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
  they were part of the systems                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
  installed on treated acres, hence                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
  their costs are included.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
  --------------------------------- --------------------------------- ----------------- ------------------------- ------------------------- ----------------------------- ----------------------------- -- ------------------------------ ------------------------------ ---------------------- ---------------------- ----------------------------- ----------------------------- -- --- --------------------------------- --------------------------------- ---------------------- ---------------------- ---------------------- ---------------------- --------------------------- --------------------------- -- --

  --------------------------------- ----------------- ------------------------- -- ----------------------------- ------------------------------ ---------------------- ----------------------------- --------------------------------- ---------------------- ---------------------- ---------------------------
  []{#__RefHeading___Toc219115389                                                                                                                                                                                                                                                    
  .anchor}Table 17. Historical EQIP                                                                                                                                                                                                                                                  
  practices affecting irrigation                                                                                                                                                                                                                                                     
  water use.                                                                                                                                                                                                                                                                         

                                                                                   **[Approved                                                                         **[Implemented Contracts\*\*                                                                                  
                                                                                   Contracts\*]{.underline}**                                                          (excludes contract units not                                                                                  
                                                                                                                                                                       cost shared)]{.underline}**                                                                                   

  **[Practice Code and                                **[Units]{.underline}**      **[Contracts]{.underline}**   **[Units--No.]{.underline}**   **[Cost                **[Contracts]{.underline}**   **[Units^A^--No.]{.underline}**   **[Cost                **[Total               **Acres^B^
  Name]{.underline}**                                                                                                                           Share]{.underline}**                                                                   Share]{.underline}**   Costs]{.underline}**   [Protected]{.underline}**

  442                               Irrigation        No. and Ac.                  13,270                        1,993,044                      \$295,624,050          11,281                        1,896,641                         \$287,085,126          \$502,781,256          1,896,641
                                    System, Sprinkler                                                                                                                                                                                                                                

  441                               Irrigation        No. and Ac.                  4,160                         164,883                        \$109,420,199          3,536                         290,547                           \$120,814,054          \$213,851,243          290,547
                                    System,                                                                                                                                                                                                                                          
                                    Microirrigation                                                                                                                                                                                                                                  

  464                               Irrigation Land   Ac.                          4,230                         1,170,674                      \$66,493,032           3,596                         372,210                           \$50,722,098           \$90,949,173           372,210
                                    Leveling                                                                                                                                                                                                                                         

  449                               Irrigation Water  Ac.                          11,895                        1,880,800                      \$42,800,058           10,112                        2,634,760                         \$29,898,184           \$51,182,406           2,634,760
                                    Management                                                                                                                                                                                                                                       

  449                               Irrigation        No. and Ac.                  1,015                         54,696                         \$13,302,601           863                           58,986                            \$5,886,579            \$10,058,890           58,986
                                    System, Surface                                                                                                                                                                                                                                  
                                    and Subsurface                                                                                                                                                                                                                                   

  466                               Land Smoothing    Ac.                          480                           34,676                         \$4,293,100            408                           23,661                            \$2,184,981            \$3,839,130            23,661

  554                               Drainage Water    Ac.                          355                           32,948                         \$2,923,370            302                           7,792                             \$875,969              \$1,336,788            7,792
                                    Management                                                                                                                                                                                                                                       

  610                               Salinity and      Ac.                          275                           26,236                         \$2,282,313            234                           49,228                            \$876,475              \$1,354,397            49,228
                                    Sodic Soil                                                                                                                                                                                                                                       
                                    Management                                                                                                                                                                                                                                       

  462                               Precision Land    Ac.                          155                           24,832                         \$1,590,674            132                           147,476                           \$1,264,010            \$2,363,536            147,476
                                    Forming                                                                                                                                                                                                                                          

  Associated Practices^C^                                                                                                                                                                                                                                                            

  430DD                             Irrigation Water  Ft.                          9,775                         20,904,521                     \$138,352,765          8,310                         21,397,058                        \$126,458,756          \$216,524,447          
                                    Conveyance,                                                                                                                                                                                                                                      
                                    Pipeline,                                                                                                                                                                                                                                        
                                    High-Pressure,                                                                                                                                                                                                                                   
                                    Underground,                                                                                                                                                                                                                                     
                                    Plastic                                                                                                                                                                                                                                          

  430EE                             Irrigation Water  Ft.                          5,215                         10,666,067                     \$56,605,446           4,433                         12,043,998                        \$55,710,839           \$96,416,583           
                                    Conveyance,                                                                                                                                                                                                                                      
                                    Pipeline,                                                                                                                                                                                                                                        
                                    Low-Pressure,                                                                                                                                                                                                                                    
                                    Underground,                                                                                                                                                                                                                                     
                                    Plastic                                                                                                                                                                                                                                          

  620                               Underground       Ft.                          7,900                         13,982,644                     \$33,020,066           6,716                         11,324,436                        \$26,461,272           \$48,316,365           
                                    Outlet                                                                                                                                                                                                                                           

  428A                              Irrigation Water  Ft.                          735                           1,718,977                      \$23,122,523           625                           2,618,496                         \$21,947,804           \$36,981,145           
                                    Conveyance, Ditch                                                                                                                                                                                                                                
                                    and Canal                                                                                                                                                                                                                                        
                                    Lining,  Plain                                                                                                                                                                                                                                   
                                    Concrete                                                                                                                                                                                                                                         

  436                               Irrigation        No. and Ac-Ft                255                           27,775                         \$13,047,520           217                           134,263                           \$6,595,735            \$12,084,216           
                                    Storage Reservoir                                                                                                                                                                                                                                

  447                               Irrigation        No.                          365                           40,565                         \$9,531,488            310                           609                               \$8,197,610            \$14,134,856           
                                    System, Tailwater                                                                                                                                                                                                                                
                                    Recovery                                                                                                                                                                                                                                         

  552                               Irrigation        No.                          770                           13,845                         \$7,356,142            655                           525                               \$3,408,760            \$6,133,068            
                                    Regulating                                                                                                                                                                                                                                       
                                    Reservoir                                                                                                                                                                                                                                        

  430CC                             Irrigation Water  Ft.                          60                            208,005                        \$4,112,400            51                            147,315                           \$1,439,390            \$2,445,294            
                                    Conveyance,                                                                                                                                                                                                                                      
                                    Pipeline,                                                                                                                                                                                                                                        
                                    Nonreinforced                                                                                                                                                                                                                                    
                                    Concrete                                                                                                                                                                                                                                         

  608                               Surface Drainage, Ft.                          20                            631,994                        \$1,015,223            17                            103,804                           \$513,046              \$899,955              
                                    Main or Lateral                                                                                                                                                                                                                                  

  636                               Water Harvesting  No.                          100                           135                            \$633,569              85                            155                               \$1,026,295            \$1,638,850            
                                    Catchment                                                                                                                                                                                                                                        

  431                               Above Ground,     Ft.                          40                            63,005                         \$470,927              34                            55,000                            \$301,505              \$507,245              
                                    Multi-Outlet                                                                                                                                                                                                                                     
                                    Pipeline                                                                                                                                                                                                                                         

  430FF                             Irrigation Water  Ft.                          470                           32,809                         \$445,746              400                           32,099                            \$345,372              \$587,588              
                                    Conveyance,                                                                                                                                                                                                                                      
                                    Pipeline, Steel                                                                                                                                                                                                                                  

  388                               Irrigation Field  Ft.                          75                            221,054                        \$210,201              64                            167,421                           \$228,950              \$355,582              
                                    Ditch                                                                                                                                                                                                                                            

  320                               Irrigation Canal  Ft.                          15                            18,267                         \$200,250              13                            17,255                            \$105,469              \$182,096              
                                    or Lateral                                                                                                                                                                                                                                       

  428B                              Irrigation Water  Ft.                          5                             10,000                         \$157,500              4                             253,610                           \$457,785              \$663,457              
                                    Conveyance, Ditch                                                                                                                                                                                                                                
                                    and Canal Lining,                                                                                                                                                                                                                                
                                    Flexible Membrane                                                                                                                                                                                                                                

  607                               Surface Drainage, Ft.                          30                            54,700                         \$107,538              26                            123,309                           \$146,182              \$246,125              
                                    Field Ditch                                                                                                                                                                                                                                      

  630                               Vertical Drain    No.                          20                            40                             \$97,215               17                            210                               \$114,041              \$222,974              

  430AA                             Irrigation Water  Ft.                          20                            20,075                         \$79,863               17                            20,030                            \$79,938               \$125,340              
                                    Conveyance,                                                                                                                                                                                                                                      
                                    Pipeline,                                                                                                                                                                                                                                        
                                    Aluminum Tubing                                                                                                                                                                                                                                  

                                    **Totals**                                                                                                  **\$827,295,777**                                                                      **\$753,146,224**      **\$1,316,182,006**    **3,654,200**

  Average per acre (based on                                                                                                                                                                                                           \$206.10               \$360.20               
  implemented)                                                                                                                                                                                                                                                                       

  Total Program Cost Share                                                                                                                      \$3,635,653,504                                                                                                                      

  Irrigation Water Use Efficiency                                                                                                               22.8%                                                                                                                                
  Practice Share of Total EQIP                                                                                                                                                                                                                                                       
  Funding                                                                                                                                                                                                                                                                            

  \*Baseline for Approved Contracts                                                                                                                                                                                                                                                  
  based on FY 2007 contract data                                                                                                                                                                                                                                                     
  multiplied by five years.                                                                                                                                                                                                                                                          

  \*\*Baseline for Implemented                                                                                                                                                                                                                                                       
  Contracts based on FY 2007                                                                                                                                                                                                                                                         
  payment data multiplied by five                                                                                                                                                                                                                                                    
  years.                                                                                                                                                                                                                                                                             

  ^A^Units for                                                                                                                                                                                                                                                                       
  structural/vegetative practices                                                                                                                                                                                                                                                    
  based on ProTracts. Recurring                                                                                                                                                                                                                                                      
  management items are based on PRS                                                                                                                                                                                                                                                  
  data. Note: A divisor of 1.25 is                                                                                                                                                                                                                                                   
  used for PRS data to account for                                                                                                                                                                                                                                                   
  some duplication of reporting.                                                                                                                                                                                                                                                     

  ^B^Total acres protected is sum                                                                                                                                                                                                                                                    
  of individual practice acres,                                                                                                                                                                                                                                                      
  divided by 1.5, to reflect that                                                                                                                                                                                                                                                    
  EQIP plans typically use more                                                                                                                                                                                                                                                      
  than one of the listed practices                                                                                                                                                                                                                                                   
  is generally included in the                                                                                                                                                                                                                                                       
  treatment plan.                                                                                                                                                                                                                                                                    

  ^C^Practices not in \"Acre\"                                                                                                                                                                                                                                                       
  units were not converted but                                                                                                                                                                                                                                                       
  assumed to be associated                                                                                                                                                                                                                                                           
  practices. The assumption that                                                                                                                                                                                                                                                     
  they were part of the systems                                                                                                                                                                                                                                                      
  installed on treated acres, hence                                                                                                                                                                                                                                                  
  their costs are included.                                                                                                                                                                                                                                                          
  --------------------------------- ----------------- ------------------------- -- ----------------------------- ------------------------------ ---------------------- ----------------------------- --------------------------------- ---------------------- ---------------------- ---------------------------

## Air Quality

The EQIP rule states that a national priority is the "reduction of
emissions, such as particulate matter, NO~x~, volatile organic
compounds, and ozone precursors and depleters that contribute to air
quality impairment violations of National Ambient Air Quality Standards"
(Part 1466.4). However, data on the link between agricultural practices
and air quality that would be sufficient to support a national level
benefit assessment are limited. In this analysis, we only consider those
benefits arising from erosion control and the resulting improvement in
air quality. Other practices funded through EQIP are expected to
contribute to air quality improvements, even though the benefits could
not be numerically quantified for this study. These other non-quantified
beneficial effects include dust control in animal feeding operations and
reductions in the emissions of NO~x~, organic compound, and ozone
precursor and depleters through both improved animal feeding practices
and crop nutrient management. In addition, the wildlife habitat and
range improvement practices are expected to increase carbon
sequestration while the residue and tillage practices associated with
erosion control are expected to reduce oxidation of carbon from
cropland, and in some cases, actually increase carbon sequestration on
those lands.

Table 18 shows the practices assigned to the benefit category of
reducing wind erosion and improving air quality. These practices
historically accounted for 9.4 percent of EQIP cost-share funds and had
an average total cost of just over \$113 per acre, with nearly \$43 of
cost share. Reduced tillage is a practice that greatly reduces wind
erosion; however, the beneficial effects vary greatly across the United
States, and are greatest in the dryer regions. To reflect the fact that
some acreage of reduced tillage practices occur in areas where wind
erosion is not a problem only the reduced tillage practices in the
Pacific, Southern and Northern Plains and Mountain regions were assumed
to provide air quality benefits. The proportion of national reduced
tillage acres (Crop Residue Management Survey) occurring in these (43
percent) was calculated and used as a factor to reduce treated acreage
in table 18. This level of funding is expected to provide treatment to
an estimated 5.3 million acres over the FY 2008 -- FY 2012 period.

## Fertilizer Use

For improved nutrient management, table 12 included only one practice:
"590 -- Nutrient Management." Treated acres are estimated to total 10.7
million. Analysis of EQIP historical data showed that 72 percent of this
practice's acres were for nutrient management not associated with land
application of animal waste (i.e., 4.75 million acres). The average cost
share for this practice was nearly \$11 per acre while the total cost
was just over \$18 per acre.

## Wildlife Habitat

Almost twenty practices were identified as directly benefiting wildlife
habitat improvement on 4.3 million acres (table 19). As in the case of
irrigation, a subset of practices whose units could not be converted to
acres was associated with the per-acre practices. Their costs were
included in the computations. Table 19 shows that 4.3 percent of EQIP
funds were spent on these practices that benefit wildlife habitat. The
average cost share was nearly \$28 per acre while the total costs were
just over \$48 per acre.

  --------------------------------- ----------------------- ------------------------- ----------------------------- --- ------------------------------ ---------------------- ----------------------------- ---- --------------------------------- ----------------------- ---------------------- ---------------------- ---------------------------
  []{#__RefHeading___Toc219115390                                                                                                                                                                                                                                                                                        
  .anchor}**Table 18. Historical                                                                                                                                                                                                                                                                                         
  EQIP data on practices affecting                                                                                                                                                                                                                                                                                       
  air quality.**                                                                                                                                                                                                                                                                                                         

                                                                                      **[Approved                                                                             **[Implemented Contracts\*\*                                                                                                               
                                                                                      Contracts\*]{.underline}**                                                              (excludes contract units not                                                                                                               
                                                                                                                                                                              cost shared)]{.underline}**                                                                                                                

  **[Practice Code and                                      **[Units]{.underline}**   **[Contracts]{.underline}**       **[Units--No.]{.underline}**   **[Cost                **[Contracts]{.underline}**        **[Units^A^--No.]{.underline}**   **Wind Area^B^          **[Cost                **[Total               **Acres^C^
  Name]{.underline}**                                                                                                                                  Share]{.underline}**                                                                        [Prop.]{.underline}**   Share]{.underline}**   Costs]{.underline}**   [Protected]{.underline}**

  329                               Residue and Tillage     Ac.                       11,790                            4,339,988                      \$143,664,330          10,023                             5,081,368                         0.43                    \$67,324,968           \$272,765,839          2,184,988
                                    Management,                                                                                                                                                                                                                                                                          
                                    No-Till/Strip                                                                                                                                                                                                                                                                        
                                    Till/Direct Seed                                                                                                                                                                                                                                                                     

  345                               Residue and Tillage     Ac.                       3,540                             1,694,125                      \$51,106,966           3,009                              2,636,524                         0.43                    \$19,482,578           \$82,537,727           1,133,705
                                    Management, Mulch Till                                                                                                                                                                                                                                                               

  328                               Conservation Crop       Ac.                       3,645                             379,049                        \$32,089,928           3,099                              991,132                                                   \$44,000,197           \$78,330,679           991,132
                                    Rotation                                                                                                                                                                                                                                                                             

  340                               Cover Crop              Ac.                       5,000                             1,203,697                      \$28,078,232           4,250                              1,311,286                                                 \$22,448,068           \$38,904,427           1,311,286

  612                               Tree/Shrub              Ac.                       7,870                             308,775                        \$23,962,440           6,690                              286,497                                                   \$16,962,813           \$30,301,679           286,497
                                    Establishment                                                                                                                                                                                                                                                                        

  550                               Range Planting          Ac.                       4,770                             501,287                        \$22,083,307           4,055                              494,769                                                   \$16,535,369           \$29,506,878           494,769

  342                               Critical Area Planting  Ac.                       14,960                            118,578                        \$12,678,050           12,717                             104,135                                                   \$10,606,600           \$17,947,879           104,135

  370                               Atmospheric Resource    Ac.                       675                               207,673                        \$12,672,538           574                                893,097                                                   \$17,846,972           \$31,126,242           893,097
                                    Quality Management                                                                                                                                                                                                                                                                   

  327                               Conservation Cover      Ac.                       1,480                             27,921                         \$2,270,775            1,258                              26,812                                                    \$1,957,642            \$3,236,896            26,812

  344                               Residue Management,     Ac.                       195                               101,479                        \$1,927,440            166                                1,226,248                         0.43                    \$1,189,246            \$5,016,995            527,287
                                    Seasonal                                                                                                                                                                                                                                                                             

  346                               Residue and Tillage     Ac.                       35                                15,392                         \$481,345              30                                 38,660                            0.43                    \$66,709               \$290,987              16,624
                                    Management, Ridge Till                                                                                                                                                                                                                                                               

  586                               Stripcropping           Ac.                       140                               7,644                          \$459,118              119                                16,919                                                    \$278,053              \$460,024              16,919

  589A                              Cross Wind Ridges       Ac.                       20                                8,960                          \$126,418              17                                 25,148                                                    \$125,738              \$187,668              25,148

  557                               Row Arrangement         Ac.                       120                               5,177                          \$90,177               102                                545                                                       \$8,913                \$17,619               545

  609                               Surface Roughening      Ac.                       5                                 490                            \$3,675                4                                  13,343                                                    \$128,020              \$228,607              13,343

  589C                              Cross Wind Trap Strips  Ac.                       5                                 11                             \$352                  4                                  10                                                        \$10                   \$14                   10

  Associated Practices^D^                                                                                                                                                                                                                                                                                                

  380                               Windbreak/Shelterbelt   Ft.                       4,005                             10,737,412                     \$9,093,279            3,405                              11,833,908                                                \$7,413,559            \$12,592,056           
                                    Establishment                                                                                                                                                                                                                                                                        

  650                               Windbreak/Shelterbelt   Ft.                       440                               1,564,278                      \$1,373,109            374                                2,079,838                                                 \$1,252,926            \$2,196,586            
                                    Renovation                                                                                                                                                                                                                                                                           

  422                               Hedgerow Planting       Ft.                       295                               534,213                        \$504,447              251                                480,802                                                   \$521,528              \$937,729              

  603                               Herbaceous Wind         Ft.                       60                                7,578,274                      \$441,904              51                                 1,286,750                                                 \$231,660              \$410,752              
                                    Barriers                                                                                                                                                                                                                                                                             

  380                               Windbreak/Shelterbelt   Ft.                       4,005                             10,737,412                     \$9,093,279            3,405                              11,833,908                                                \$7,413,559            \$12,592,056           
                                    Establishment                                                                                                                                                                                                                                                                        

                                    Totals                                            59,110                                                           \$343,107,828                                                                                                       \$228,381,568          \$606,997,285          5,350,863

  Average per acre (based on                                                                                                                                                                                                                                               \$42.70                \$113.50               
  implemented)                                                                                                                                                                                                                                                                                                           

  Total Program Cost Share                                                                                                                             \$3,635,653,504                                                                                                                                                   

  Air Quality Practice Share of                                                                                                                        9.4%                                                                                                                                                              
  Total EQIP Funding                                                                                                                                                                                                                                                                                                     

  \*Baseline for Approved Contracts                                                                                                                                                                                                                                                                                      
  based on FY 2007 contract data                                                                                                                                                                                                                                                                                         
  multiplied by five years.                                                                                                                                                                                                                                                                                              

  \*\*Baseline for Implemented                                                                                                                                                                                                                                                                                           
  Contracts based on FY 2007                                                                                                                                                                                                                                                                                             
  payment data multiplied by five                                                                                                                                                                                                                                                                                        
  years.                                                                                                                                                                                                                                                                                                                 

  ^A^Units for                                                                                                                                                                                                                                                                                                           
  structural/vegetative practices                                                                                                                                                                                                                                                                                        
  based on ProTracts. Recurring                                                                                                                                                                                                                                                                                          
  management items are based on PRS                                                                                                                                                                                                                                                                                      
  data. Note: A divisor of 1.25 is                                                                                                                                                                                                                                                                                       
  used for PRS data to account for                                                                                                                                                                                                                                                                                       
  some duplication of reporting.                                                                                                                                                                                                                                                                                         

  ^B^The proportion of national                                                                                                                                                                                                                                                                                          
  conservation tilled acreage                                                                                                                                                                                                                                                                                            
  occurring in the Mountain,                                                                                                                                                                                                                                                                                             
  N.Plains, Pacific, and S.Plains                                                                                                                                                                                                                                                                                        
  where wind erosion is a concern.                                                                                                                                                                                                                                                                                       

  ^C^Total acres protected is sum                                                                                                                                                                                                                                                                                        
  of individual practice acres,                                                                                                                                                                                                                                                                                          
  divided by 1.5, to reflect that                                                                                                                                                                                                                                                                                        
  EQIP plans typically use more                                                                                                                                                                                                                                                                                          
  than one of the listed practices                                                                                                                                                                                                                                                                                       
  is generally included in the                                                                                                                                                                                                                                                                                           
  treatment plan.                                                                                                                                                                                                                                                                                                        

  ^D^Practices not in \"Acre\"                                                                                                                                                                                                                                                                                           
  units were not converted but                                                                                                                                                                                                                                                                                           
  assumed to be associated                                                                                                                                                                                                                                                                                               
  practices. The assumption that                                                                                                                                                                                                                                                                                         
  they were part of the systems                                                                                                                                                                                                                                                                                          
  installed on treated acres, hence                                                                                                                                                                                                                                                                                      
  their costs are included.                                                                                                                                                                                                                                                                                              
  --------------------------------- ----------------------- ------------------------- ----------------------------- --- ------------------------------ ---------------------- ----------------------------- ---- --------------------------------- ----------------------- ---------------------- ---------------------- ---------------------------

  --------------------------------- ------------------------ ------------------------- ----------------------------- --- ------------------------------ ---------------------- ----------------------------- -- --------------------------------- -- ---------------------- ---------------------- --------------------------- --
  []{#__RefHeading___Toc219115391                                                                                                                                                                                                                                                                                              
  .anchor}**Table 19. Historical                                                                                                                                                                                                                                                                                               
  EQIP practices affecting wildlife                                                                                                                                                                                                                                                                                            
  habitat.**                                                                                                                                                                                                                                                                                                                   

                                                                                       **[Approved                                                                             **[Implemented Contracts\*\*                                                                                                                    
                                                                                       Contracts\*]{.underline}**                                                              (excludes contract units not                                                                                                                    
                                                                                                                                                                               cost shared)]{.underline}**                                                                                                                     

  **[Practice Code and                                       **[Units]{.underline}**   **[Contracts]{.underline}**       **[Units--No.]{.underline}**   **[Cost                **[Contracts]{.underline}**      **[Units^A^--No.]{.underline}**      **[Cost                **[Total               **Acres^B^                  
  Name]{.underline}**                                                                                                                                   Share]{.underline}**                                                                         Share]{.underline}**   Costs]{.underline}**   [Protected]{.underline}**   

  666                               Forest Stand Improvement Ac.                       5,270                             220,224                        \$30,256,252           4,480                            218,328                              \$26,011,170           \$44,715,851           218,328                     

  612                               Tree/Shrub Establishment Ac.                       7,870                             308,775                        \$23,962,440           6,690                            286,497                              \$16,962,813           \$30,301,679           286,497                     

  412                               Grassed Waterway         Ac.                       6,895                             231,128                        \$21,371,765           5,861                            13,973                               \$20,346,154           \$34,059,870           13,973                      

  338                               Prescribed Burning       Ac.                       3,760                             879,502                        \$9,499,352            3,196                            492,340                              \$4,176,046            \$7,611,039            492,340                     

  645                               Upland Wildlife Habitat  Ac.                       4,525                             684,319                        \$8,240,157            3,847                            4,922,528                            \$4,775,025            \$8,549,820            4,922,528                   
                                    Management                                                                                                                                                                                                                                                                                 

  643                               Restoration and          Ac.                       1,010                             25,441                         \$3,244,425            859                              42,627                               \$2,395,114            \$4,480,808            42,627                      
                                    Management of Rare and                                                                                                                                                                                                                                                                     
                                    Declining Habitats                                                                                                                                                                                                                                                                         

  409                               Prescribed Forestry      Ac.                       6,045                             310,568                        \$3,101,649            5,139                            127,108                              \$1,403,243            \$2,309,467            127,108                     

  327                               Conservation Cover       Ac.                       1,480                             27,921                         \$2,270,775            1,258                            26,812                               \$1,957,642            \$3,236,896            26,812                      

  391                               Riparian Forest Buffer   Ac.                       620                               3,347                          \$1,395,598            527                              5,189                                \$905,821              \$1,513,034            5,189                       

  395                               Stream Habitat           Ac.                       105                               12,374                         \$1,192,030            89                               13,889                               \$1,563,696            \$2,615,870            13,889                      
                                    Improvement and                                                                                                                                                                                                                                                                            
                                    Management                                                                                                                                                                                                                                                                                 

  647                               Early Successional       Ac.                       720                               6,573                          \$895,044              612                              5,760                                \$280,000              \$464,756              5,760                       
                                    Habitat                                                                                                                                                                                                                                                                                    
                                    Development/Management                                                                                                                                                                                                                                                                     

  659                               Wetland Enhancement      Ac.                       70                                921                            \$693,249              60                               4,295                                \$143,541              \$229,876              4,295                       

  646                               Shallow Water            Ac.                       180                               27,449                         \$662,374              153                              44,076                               \$392,597              \$745,275              44,076                      
                                    Development and                                                                                                                                                                                                                                                                            
                                    Management                                                                                                                                                                                                                                                                                 

  657                               Wetland Restoration      Ac.                       115                               1,040                          \$655,524              98                               2,533                                \$915,462              \$1,443,522            2,533                       

  644                               Wetland Wildlife Habitat Ac.                       205                               5,607                          \$394,038              174                              352,028                              \$186,049              \$338,485              352,028                     
                                    Management                                                                                                                                                                                                                                                                                 

  322                               Channel Bank Vegetation  Ac.                       105                               466                            \$165,118              89                               950                                  \$134,174              \$218,743              950                         

  390                               Riparian Herbaceous      Ac.                       130                               1,166                          \$78,900               111                              1,015                                \$103,401              \$151,656              1,015                       
                                    Cover                                                                                                                                                                                                                                                                                      

  658                               Wetland Creation         Ac.                       30                                31                             \$77,365               26                               28                                   \$23,598               \$40,478               28                          

  666                               Forest Stand Improvement Ac.                       5,270                             220,224                        \$30,256,252           4,480                            218,328                              \$26,011,170           \$44,715,851           218,328                     

  Associated Practices^C^                                                                                                                                                                                                                                                                                                      

  580                               Streambank and Shoreline Ft.                       1,550                             1,211,403                      \$33,340,508           1,318                            1,565,008                            \$24,605,744           \$41,336,491                                       
                                    Protection                                                                                                                                                                                                                                                                                 

  380                               Windbreak/Shelterbelt    Ft.                       4,005                             10,737,412                     \$9,093,279            3,405                            11,833,908                           \$7,413,559            \$12,592,056                                       
                                    Establishment                                                                                                                                                                                                                                                                              

  386                               Field Border             Ft.                       2,265                             12,765,270                     \$2,938,960            1,925                            12,870,285                           \$2,661,998            \$5,019,332                                        

  394                               Firebreak                Ft.                       2,020                             20,111,496                     \$2,264,820            1,717                            10,716,425                           \$2,906,117            \$4,992,070                                        

  650                               Windbreak/Shelterbelt    Ft.                       440                               1,564,278                      \$1,373,109            374                              2,079,838                            \$1,252,926            \$2,196,586                                        
                                    Renovation                                                                                                                                                                                                                                                                                 

  422                               Hedgerow Planting        Ft.                       295                               534,213                        \$504,447              251                              480,802                              \$521,528              \$937,729                                          

  396                               Fish Passage             Mi.                       15                                15                             \$369,000              13                               15                                   \$70,963               \$124,496                                          

                                    Totals                                             49,725                                                           \$158,040,174                                                                                \$122,108,378          \$210,225,886          4,373,313                   

  Average per acre (based on                                                                                                                                                                                                                         \$27.90                \$48.10                                            
  implemented)                                                                                                                                                                                                                                                                                                                 

  Total Program Cost Share                                                                                                                              \$3,635,653,504                                                                                                                                                        

  Air Quality Practice Share of                                                                                                                         4.3%                                                                                                                                                                   
  Total EQIP Funding                                                                                                                                                                                                                                                                                                           

  \*Baseline for Approved Contracts                                                                                                                                                                                                                                                                                            
  based on FY 2007 contract data                                                                                                                                                                                                                                                                                               
  multiplied by five years.                                                                                                                                                                                                                                                                                                    

  \*\*Baseline for Implemented                                                                                                                                                                                                                                                                                                 
  Contracts based on FY 2007                                                                                                                                                                                                                                                                                                   
  payment data multiplied by five                                                                                                                                                                                                                                                                                              
  years.                                                                                                                                                                                                                                                                                                                       

  ^A^Units for                                                                                                                                                                                                                                                                                                                 
  structural/vegetative practices                                                                                                                                                                                                                                                                                              
  based on ProTracts. Recurring                                                                                                                                                                                                                                                                                                
  management items are based on PRS                                                                                                                                                                                                                                                                                            
  data. Note: A divisor of 1.25 is                                                                                                                                                                                                                                                                                             
  used for PRS data to account for                                                                                                                                                                                                                                                                                             
  some duplication of reporting.                                                                                                                                                                                                                                                                                               

  ^B^Total acres protected is sum                                                                                                                                                                                                                                                                                              
  of individual practice acres,                                                                                                                                                                                                                                                                                                
  divided by 1.5, to reflect that                                                                                                                                                                                                                                                                                              
  EQIP plans typically use more                                                                                                                                                                                                                                                                                                
  than one of the listed practices                                                                                                                                                                                                                                                                                             
  is generally included in the                                                                                                                                                                                                                                                                                                 
  treatment plan.                                                                                                                                                                                                                                                                                                              

  ^C^Practices not in \"Acre\"                                                                                                                                                                                                                                                                                                 
  units were not converted but                                                                                                                                                                                                                                                                                                 
  assumed to be associated                                                                                                                                                                                                                                                                                                     
  practices. The assumption that                                                                                                                                                                                                                                                                                               
  they were part of the systems                                                                                                                                                                                                                                                                                                
  installed on treated acres, hence                                                                                                                                                                                                                                                                                            
  their costs are included.                                                                                                                                                                                                                                                                                                    
  --------------------------------- ------------------------ ------------------------- ----------------------------- --- ------------------------------ ---------------------- ----------------------------- -- --------------------------------- -- ---------------------- ---------------------- --------------------------- --

## Energy Use

Two main conservation practices were identified as significantly
affecting energy use (table 20). The two practices, Residue Management -
No-till/Strip till and Residue Management - Mulch till, are exclusive
and cannot be applied on the same acreage simultaneously. Thus, no
reduction in acreage due to practice duplication need to performed here
as was the case in the other benefit categories in this analysis.

Table 20 indicates that based on FY 2007 EQIP contracts, energy reducing
practices received 5.4 percent of EQIP cost-share funds and had an
average cost share of just over \$26 per acre while the average total
costs was \$46 per acre (excluding the cost of government provided TA).
A total of 7.7 million acres is estimated to be applied over the next
five years based on the NRCS Performance Reporting System (PRS) data.
PRS data was used to estimate the total impact of no-till and mulch till
residue use resulting from EQIP contracts, not just practices receiving
cost share. Thus, the total acres protected include all no-till and
mulch till residue management activities that are part of EQIP. All
these practices are also included in either the sheet and rill water or
wind erosion (air quality) benefit category, so their costs are
previously accounted for.

## Carbon Sequestration

Table 21 lists practices that were classified as affecting the
sequestration of carbon. The practices listed are all exclusive to each
other, meaning that they cannot be applied simultaneously on the same
acreage. As a result, no adjustment for the possibility of multiple
practices being implemented on the same acreage was needed in this case
as well as the previous case above.

Table 21 indicates that based on FY 2007 EQIP contracts, these practices
received 11.4 percent of EQIP cost-share funds and had an average cost
share of \$10 per acre while the average total costs was nearly \$18 per
acre (excluding the cost of government provided technical assistance).
Note that these costs are not an "annual" cost, but rather a "contract"
cost and reflect the total costs of applying the practice as contracted
over a five-year period. All these practices are also included in an
earlier benefit category, so their costs are previously accounted for.

## Animal Waste Management

For animal waste management related practices, the publication *Costs
Associated with Development and Implementation of Comprehensive Nutrient
Management Plans* (USDA, NRCS, 2003), was used to estimate costs for
development and implementation of CNMPs nationwide. Development costs
refer to the technical expertise required to write a CNMP;
implementation costs relate to the actual costs of constructing and
installing the conservation practices called for in the CNMP. Both of
these costs are accounted for in the analysis.

  --------------------------------- ------------------- ------------------------- ----------------------------- ------------------------------ ---------------------- ----------------------------- --------------------------------- ---------------------- ---------------------- ---------------------------
  []{#__RefHeading___Toc219115392                                                                                                                                                                                                                                                   
  .anchor}**Table 20. Historical                                                                                                                                                                                                                                                    
  EQIP data on practices affecting                                                                                                                                                                                                                                                  
  energy use.**                                                                                                                                                                                                                                                                     

                                                                                  **[Approved                                                                         **[Implemented Contracts\*\*                                                                                  
                                                                                  Contracts\*]{.underline}**                                                          (excludes contract units not                                                                                  
                                                                                                                                                                      cost shared)]{.underline}**                                                                                   

  **[Practice Code and                                  **[Units]{.underline}**   **[Contracts]{.underline}**   **[Units--No.]{.underline}**   **[Cost                **[Contracts]{.underline}**   **[Units^A^--No.]{.underline}**   **[Cost                **[Total               **Acres^B^
  Name]{.underline}**                                                                                                                          Share]{.underline}**                                                                   Share]{.underline}**   Costs]{.underline}**   [Protected]{.underline}**

  329                               Residue and Tillage Ac.                       11,790                        4,339,988                      \$143,664,330          10,023                        5,081,368                         \$156,569,693          \$272,765,839          5,081,368
                                    Management,                                                                                                                                                                                                                                     
                                    No-Till/Strip                                                                                                                                                                                                                                   
                                    Till/Direct Seed                                                                                                                                                                                                                                

  345                               Residue and Tillage Ac.                       3,540                         1,694,125                      \$51,106,966           3,009                         2,636,524                         \$45,308,322           \$82,537,727           2,636,524
                                    Management, Mulch                                                                                                                                                                                                                               
                                    Till                                                                                                                                                                                                                                            

                                    Totals                                                                                                     \$194,771,297                                                                          \$201,878,015          \$355,303,566          7,717,892

  Average per acre (based on                                                                                                                                                                                                          \$26.20                \$46.00                
  implemented)                                                                                                                                                                                                                                                                      

  Total Program Cost Share                                                                                                                     \$3,635,653,504                                                                                                                      

  Energy Savings Practice Share of                                                                                                             5.4%                                                                                                                                 
  Total EQIP Funding                                                                                                                                                                                                                                                                

  \*Baseline for Approved Contracts                                                                                                                                                                                                                                                 
  based on FY 2007 contract data                                                                                                                                                                                                                                                    
  multiplied by five years.                                                                                                                                                                                                                                                         

  \*\*Baseline for Implemented                                                                                                                                                                                                                                                      
  Contracts based on FY 2007                                                                                                                                                                                                                                                        
  payment data multiplied by five                                                                                                                                                                                                                                                   
  years.                                                                                                                                                                                                                                                                            

  ^A^Units for                                                                                                                                                                                                                                                                      
  structural/vegetative practices                                                                                                                                                                                                                                                   
  based on ProTracts. Recurring                                                                                                                                                                                                                                                     
  management items are based on PRS                                                                                                                                                                                                                                                 
  data. Note: A divisor of 1.25 is                                                                                                                                                                                                                                                  
  used for PRS data to account for                                                                                                                                                                                                                                                  
  some duplication of reporting.                                                                                                                                                                                                                                                    

  ^B^Total acres protected is sum                                                                                                                                                                                                                                                   
  of individual practice acres,                                                                                                                                                                                                                                                     
  divided by 1.5, to reflect that                                                                                                                                                                                                                                                   
  EQIP plans typically use more                                                                                                                                                                                                                                                     
  than one of the listed practices                                                                                                                                                                                                                                                  
  is generally included in the                                                                                                                                                                                                                                                      
  treatment plan.                                                                                                                                                                                                                                                                   
  --------------------------------- ------------------- ------------------------- ----------------------------- ------------------------------ ---------------------- ----------------------------- --------------------------------- ---------------------- ---------------------- ---------------------------

##### 

  --------------------------------- ------------------- ------------------------- -- ----------------------------- ------------------------------ ---------------------- ----------------------------- --------------------------------- ---------------------- ---------------------- ---------------------------
  []{#__RefHeading___Toc219115393                                                                                                                                                                                                                                                      
  .anchor}**Table 21. Historical                                                                                                                                                                                                                                                       
  EQIP data on practices affecting                                                                                                                                                                                                                                                     
  carbon sequestration.**                                                                                                                                                                                                                                                              

                                                                                     **[Approved                                                                         **[Implemented Contracts\*\*                                                                                  
                                                                                     Contracts\*]{.underline}**                                                          (excludes contract units not                                                                                  
                                                                                                                                                                         cost shared)]{.underline}**                                                                                   

  **[Practice Code and                                  **[Units]{.underline}**      **[Contracts]{.underline}**   **[Units--No.]{.underline}**   **[Cost                **[Contracts]{.underline}**   **[Units^A^--No.]{.underline}**   **[Cost                **[Total               **Acres^B^
  Name]{.underline}**                                                                                                                             Share]{.underline}**                                                                   Share]{.underline}**   Costs]{.underline}**   [Protected]{.underline}**

  329                               Residue and Tillage Ac.                          11,790                        4,339,988                      \$143,664,330          10,023                        5,081,368                         \$156,569,693          \$272,765,839          5,081,368
                                    Management,                                                                                                                                                                                                                                        
                                    No-Till/Strip                                                                                                                                                                                                                                      
                                    Till/Direct Seed                                                                                                                                                                                                                                   

  512                               Pasture and Hay     Ac.                          34,370                        1,896,169                      \$124,302,665          29,218                        2,361,871                         \$93,023,206           \$168,580,585          2,361,871
                                    Planting                                                                                                                                                                                                                                           

  528                               Prescribed Grazing  Ac.                          21,535                        14,755,369                     \$108,594,439          18,307                        29,109,964                        \$90,382,288           \$158,521,639          29,109,964

  550                               Range Planting      Ac.                          4,770                         501,287                        \$22,083,307           4,055                         494,769                           \$16,535,369           \$29,506,878           494,769

  342                               Critical Area       Ac.                          14,960                        118,578                        \$12,678,050           12,717                        104,135                           \$10,606,600           \$17,947,879           104,135
                                    Planting                                                                                                                                                                                                                                           

  327                               Conservation Cover  Ac.                          1,480                         27,921                         \$2,270,775            1,258                         26,812                            \$1,957,642            \$3,236,896            26,812

  393                               Filter Strip        Ac.                          1,625                         5,146                          \$367,958              1,381                         12,792                            \$1,684,301            \$2,826,635            12,792

                                    Totals                                                                                                        \$413,961,524                                                                          \$370,759,099          \$653,386,351          37,191,709

  Average per acre (based on                                                                                                                                                                                                             \$10.00                \$17.60                
  implemented)                                                                                                                                                                                                                                                                         

  Total Program Cost Share                                                                                                                        \$3,635,653,504                                                                                                                      

  Carbon Sequestration Practice                                                                                                                   11.4%                                                                                                                                
  Share of Total EQIP Funding                                                                                                                                                                                                                                                          

  \*Baseline for Approved Contracts                                                                                                                                                                                                                                                    
  based on FY 2007 contract data                                                                                                                                                                                                                                                       
  multiplied by five years.                                                                                                                                                                                                                                                            

  \*\*Baseline for Implemented                                                                                                                                                                                                                                                         
  Contracts based on FY 2007                                                                                                                                                                                                                                                           
  payment data multiplied by five                                                                                                                                                                                                                                                      
  years.                                                                                                                                                                                                                                                                               

  ^A^Units for                                                                                                                                                                                                                                                                         
  structural/vegetative practices                                                                                                                                                                                                                                                      
  based on ProTracts. Recurring                                                                                                                                                                                                                                                        
  management items are based on PRS                                                                                                                                                                                                                                                    
  data. Note: A divisor of 1.25 is                                                                                                                                                                                                                                                     
  used for PRS data to account for                                                                                                                                                                                                                                                     
  some duplication of reporting.                                                                                                                                                                                                                                                       

  ^B^Total acres protected is sum                                                                                                                                                                                                                                                      
  of individual practice acres,                                                                                                                                                                                                                                                        
  divided by 1.5, to reflect that                                                                                                                                                                                                                                                      
  EQIP plans typically use more                                                                                                                                                                                                                                                        
  than one of the listed practices                                                                                                                                                                                                                                                     
  is generally included in the                                                                                                                                                                                                                                                         
  treatment plan.                                                                                                                                                                                                                                                                      
  --------------------------------- ------------------- ------------------------- -- ----------------------------- ------------------------------ ---------------------- ----------------------------- --------------------------------- ---------------------- ---------------------- ---------------------------

CNMPs are written plans which provide a blueprint for producers on how
to address animal waste management. There are a wide range of practices
addressing animal waste management. They range from installing concrete
or metal structures to store animal waste until suitable conditions for
proper applications; to planting vegetative filter strips to treat
wastewater runoff; to manure spreading techniques to minimize impacts to
the environment. These practices involve management, construction, and
cropping activities implemented in a comprehensive manner to ensure that
the environmental impact is minimized while not compromising the
economic viability of the farm.

Table 22 shows the Historical EQIP data on practices used with CAFOs.
This includes the estimated EQIP FA and producer costs of CNMP related
practices based on 2007 costs in a similar calculation to the cost
calculations of other practices. The CAFO related share of total costs
is 17.9% of total EQIP costs. If Practice 590, Nutrient Management is
including 590, the percentage goes to 21.6% of total 2007 EQIP costs.
This table is included for comparison with the other practice costs, but
is not directly used in the analysis.

**Future CNMP Workload under the new EQIP**

It was unclear in 2003 when the last EQIP BCA was conducted, how many
CNMPs would be written under the then new EQIP due to a number of
factors. Uncertainty about pending regulations played a large part.
Several scenarios were analyzed that had been developed in the EPA BCA
(see US EPA 2001). One scenario was chosen to represent what would occur
during the analysis period of 2002 to 2007. The following section
attempts to estimate the remaining existing workload based on past work
accomplished under EQIP and other sources of funding, current (2007)
workload, as well as changes in the livestock industry since that time.

In estimating the future number of CNMPs to be written during the
2008-2012 timeframe, there were a number of factors to consider,
including

-   changes in the number of livestock farms needing a CNMP due to the
    changing structure of the livestock industry,

-   the number and size of farms that have already had a CNMP written,
    and

-   the new funding level.

Table 23 shows the number of livestock farms that would need a CNMP (as
calculated in the previous EQIP BCA report).

  --------------------------------- ------------------ ------------------------- ----------------------------- ------------------------------ ---------------------- ----------------------------- --------------------------------- ---------------------- ---------------------- ---------------------------
  []{#__RefHeading___Toc219115394                                                                                                                                                                                                                                                  
  .anchor}**Table 22. Historical                                                                                                                                                                                                                                                   
  EQIP data on practices used with                                                                                                                                                                                                                                                 
  CAFOs.**                                                                                                                                                                                                                                                                         

                                                                                 **[Approved                                                                         **[Implemented Contracts\*\*                                                                                  
                                                                                 Contracts\*]{.underline}**                                                          (excludes contract units not                                                                                  
                                                                                                                                                                     cost shared)]{.underline}**                                                                                   

  **[Practice Code and                                 **[Units]{.underline}**   **[Contracts]{.underline}**   **[Units--No.]{.underline}**   **[Cost                **[Contracts]{.underline}**   **[Units^A^--No.]{.underline}**   **[Cost                **[Total               **Acres^B^
  Name]{.underline}**                                                                                                                         Share]{.underline}**                                                                   Share]{.underline}**   Costs]{.underline}**   [Protected]{.underline}**

  590                               Nutrient           Ac.                       35,260                        7,786,847                      \$134,999,205          29,974                        10,814,392                        \$128,397,369          \$223,248,337          10,814,392
                                    Management                                                                                                                                                                                                                                     

                                                                                                                                                                                                                                                                                   

  Associated Practices^C^                                                                                                                                                                                                                                                          

  592                               Feed Management                              130                           36,878                         \$480,275              111                           171,824                           \$789,636              \$1,217,549            

  591                               Amendments for the AU                        335                           1,003,770                      \$8,780,905            285                           3,483,582                         \$3,018,563            \$5,331,284            
                                    Treatment of                                                                                                                                                                                                                                   
                                    Agricultural Waste                                                                                                                                                                                                                             

  365                               Anaerobic          No.                       10                            10                             \$3,164,150            9                             5                                 \$500,000              \$862,069              
                                    Digester, Ambient                                                                                                                                                                                                                              
                                    Temperature                                                                                                                                                                                                                                    

  366                               Anaerobic          No.                       15                            15                             \$5,125,000            13                            10                                \$525,000              \$875,365              
                                    Digester,                                                                                                                                                                                                                                      
                                    Controlled                                                                                                                                                                                                                                     
                                    Temperature                                                                                                                                                                                                                                    

  316                               Animal Mortality   No.                       1,050                         1,080                          \$11,429,445           893                           905                               \$7,815,344            \$14,674,970           
                                    Facility                                                                                                                                                                                                                                       

  360                               Closure of Waste   No.                       805                           855                            \$12,958,906           684                           1,015                             \$18,395,742           \$30,760,638           
                                    Impoundments                                                                                                                                                                                                                                   

  317                               Composting         No.                       1,815                         1,760                          \$31,358,426           1,543                         1,532                             \$26,234,575           \$44,523,444           
                                    Facility                                                                                                                                                                                                                                       

  356                               Dike               Ft.                       670                           5,175,592                      \$6,745,307            570                           3,975,050                         \$4,351,865            \$6,804,573            

  362                               Diversion          Ft.                       3,175                         4,219,220                      \$6,452,978            2,699                         3,899,483                         \$7,430,104            \$12,148,534           

  634                               Manure Transfer    No.                       3,425                         136,041                        \$52,871,043           2,912                         7,257                             \$43,377,108           \$74,338,994           

  558                               Roof Runoff        No.                       2,500                         10,030                         \$5,044,206            2,125                         2,686                             \$4,688,411            \$7,451,256            
                                    Structure                                                                                                                                                                                                                                      

  350                               Sediment Basin     No.                       1,030                         44,040                         \$12,470,946           876                           1,478                             \$13,201,623           \$22,868,812           

  632                               Solid/Liquid Waste No.                       325                           365                            \$7,442,783            276                           120                               \$4,641,923            \$7,516,725            
                                    Separation                                                                                                                                                                                                                                     
                                    Facility                                                                                                                                                                                                                                       

  367                               Waste Facility     No.                       170                           184                            \$5,010,568            145                           50                                \$1,364,343            \$2,181,594            
                                    Cover                                                                                                                                                                                                                                          

  313                               Waste Storage      No.                       7,850                         7,766                          \$311,505,398          6,673                         9,357                             \$322,701,682          \$542,085,758          
                                    Facility                                                                                                                                                                                                                                       

  629                               Waste Treatment    No.                       145                           170                            \$4,690,436            123                           40                                \$1,861,870            \$3,125,482            

  359                               Waste Treatment    No.                       355                           400                            \$5,024,357            302                           932                               \$5,584,157            \$9,518,506            
                                    Lagoon                                                                                                                                                                                                                                         

  633                               Waste Utilization  Ac.                       2,145                         591,706                        \$23,497,588           1,823                         1,258,003                         \$19,577,250           \$35,349,537           

  570                               Runoff Management  No.                       5                             5                              \$100,000              4                             18                                \$98,579               \$145,464              
                                    System                                                                                                                                                                                                                                         

  Totals                                                                                                                                      \$649,151,923                                                                          \$614,555,141          \$1,045,028,890        

  Total FA EQIP Costs including                                                                                                               \$784,151,128                                                                                                                        
  Nutrient Management.                                                                                                                                                                                                                                                             

  Average per acre (based on                                                                                                                                                                                                         \$85.20                \$144.90               
  implemented)                                                                                                                                                                                                                                                                     

  \*Baseline for Approved Contracts                                                                                                                                                                                                                                                
  based on FY 2007 contract data                                                                                                                                                                                                                                                   
  multiplied by five years.                                                                                                                                                                                                                                                        

  \*\*Baseline for Implemented                                                                                                                                                                                                                                                     
  Contracts based on FY 2007                                                                                                                                                                                                                                                       
  payment data multiplied by five                                                                                                                                                                                                                                                  
  years.                                                                                                                                                                                                                                                                           

  ^A^Units for                                                                                                                                                                                                                                                                     
  structural/vegetative practices                                                                                                                                                                                                                                                  
  based on ProTracts. Recurring                                                                                                                                                                                                                                                    
  management items are based on PRS                                                                                                                                                                                                                                                
  data. Note: A divisor of 1.25 is                                                                                                                                                                                                                                                 
  used for PRS data to account for                                                                                                                                                                                                                                                 
  some duplication of reporting.                                                                                                                                                                                                                                                   

  ^B^Total acres protected is sum                                                                                                                                                                                                                                                  
  of individual practice acres,                                                                                                                                                                                                                                                    
  divided by 1.5, to reflect that                                                                                                                                                                                                                                                  
  EQIP plans typically use more                                                                                                                                                                                                                                                    
  than one of the listed practices                                                                                                                                                                                                                                                 
  is generally included in the                                                                                                                                                                                                                                                     
  treatment plan.                                                                                                                                                                                                                                                                  

  ^C^Practices not in \"Acre\"                                                                                                                                                                                                                                                     
  units were not converted but                                                                                                                                                                                                                                                     
  assumed to be associated                                                                                                                                                                                                                                                         
  practices. The assumption that                                                                                                                                                                                                                                                   
  they were part of the systems                                                                                                                                                                                                                                                    
  installed on treated acres, hence                                                                                                                                                                                                                                                
  their costs are included.                                                                                                                                                                                                                                                        
  --------------------------------- ------------------ ------------------------- ----------------------------- ------------------------------ ---------------------- ----------------------------- --------------------------------- ---------------------- ---------------------- ---------------------------

+------------------------+----------------------+----------------------+
| []{#__Ref              |                      |                      |
| Heading___Toc219115395 |                      |                      |
| .anchor}**Table 23.    |                      |                      |
| Previous estimates of  |                      |                      |
| farms needing CNMPs    |                      |                      |
| (2003).**              |                      |                      |
+------------------------+----------------------+----------------------+
| **Size Class (AUs)**   | **No. of farms       | **No. of farms       |
|                        | needing**            | needing**            |
|                        |                      |                      |
|                        | **CNMPs (EPA)**      | **CNMPs (USDA)**     |
+------------------------+----------------------+----------------------+
| \> 1000                | 12,850               | 11,398               |
+------------------------+----------------------+----------------------+
| 500 to 1000            | \-\--                | 15,614               |
+------------------------+----------------------+----------------------+
| 300 to 500             | \-\--                | 17,354               |
+------------------------+----------------------+----------------------+
| 300 to 1000            | 28,150               | \-\--                |
+------------------------+----------------------+----------------------+
| \< 300                 | [                    | [                    |
|                        | 334,740]{.underline} | 212,835]{.underline} |
+------------------------+----------------------+----------------------+
| **Totals**             | **375,740**          | **257,201**          |
+------------------------+----------------------+----------------------+

These estimates were based on data from the 1997 Census of Agriculture.
Data from the 2002 Census of Agriculture was not yet available at the
time. For this current analysis, in order to update the number of
livestock farms to more current figures, data from the 2002 Census of
Agriculture was compared to the 1997 census, and percentage changes in
that time period were analyzed. Although AU data was not available from
the 2002 Census of Agriculture, data on the number of farms with
livestock was available.

For the purposes of this current analysis, four data items were
extracted from the 2002 Census of Agriculture; cattle and calves
inventory, hogs and pigs inventory, layers 20 weeks old and older
inventory, and broilers and other meat-type chickens sold. Table 24
compares the 2002 and 1997 inventories.

+-------------------------------+-----------+-----------+------------+
| []                            |           |           |            |
| {#__RefHeading___Toc219115396 |           |           |            |
| .anchor}**Table 24. Percent   |           |           |            |
| change in numbers of farms by |           |           |            |
| livestock type from 1997 and  |           |           |            |
| 2002.**                       |           |           |            |
+-------------------------------+-----------+-----------+------------+
| **Item**                      | **2002**  | **1997**  | **Percent  |
|                               |           |           | Change**   |
|                               | **(No. of | **(No. of |            |
|                               | farms)**  | farms)**  | **1997 to  |
|                               |           |           | 2002**     |
+-------------------------------+-----------+-----------+------------+
| Cattle and calves inventory   | 1,018,359 | 1,188,659 | -14%       |
+-------------------------------+-----------+-----------+------------+
| Hogs and pigs inventory       | 78,895    | 124,889   | -37%       |
+-------------------------------+-----------+-----------+------------+
| Layers 20 weeks old and older | 98,315    | 91,625    | 7%         |
| inventory                     |           |           |            |
+-------------------------------+-----------+-----------+------------+
| Broilers and other meat-type  | [3        | [2        | 15%        |
| chickens sold                 | 2,006]{.u | 7,737]{.u |            |
|                               | nderline} | nderline} |            |
+-------------------------------+-----------+-----------+------------+
| **Total\***                   | **1,      | **1,      | -14%       |
|                               | 227,575** | 432,910** |            |
+-------------------------------+-----------+-----------+------------+
| \*Note: The total will        |           |           |            |
| contain double-counting due   |           |           |            |
| to farms that have more than  |           |           |            |
| one type of livestock.        |           |           |            |
+-------------------------------+-----------+-----------+------------+

From the 2002 Census of Agriculture, the 1997 total of 1.4 million farms
above equates roughly with the 1.3 million previous USDA estimate of
farms with any livestock. The difference can most likely be attributed
to overlap of farms that have several different types of livestock. This
data was used as a proxy to estimate the changes in the livestock
industry from 1997 to 2002.

From 1997 to 2002, the total number of farms decreased by 14 percent.
The decline is due largely to the decrease in farms with cattle and
calves, and swine while the number of poultry farms increased.

Table 25 shows the percentage decline in the number of farms by type of
livestock compared to the EPA estimates of the total number of AFOs by
livestock type. The percentage of total AFOs was estimated by the
percentage in the 2003 estimate to arrive at roughly 324,400 farms.

What table 25 fails to show is the consolidation in the industry toward
larger farms. According to the 2002 Census of Agriculture, the number of
cattle and calves and swine decreased only slightly from 1997 to 2002.
According to more recent data from NASS, from 2002 to 2007 the number of
cattle and calves reversed this trend and increased by two percent, and
the number of swine increased by 13 percent.

  --------------------------------- ----------------------- ---------------- -----------------------
  []{#__RefHeading___Toc219115397                                            
  .anchor}**Table 25. Percent                                                
  changes applied to previous EPA                                            
  estimates of CNMP farms from 1997                                          
  to 2002.**                                                                 

  **Sector**                        **Total AFOs\***        **Percent Change **2002 Estimate Using
                                                            Number of Farms  Percent Change**
                                                            1997 to          
                                                            2002\*\***       

  Beef operations, including both   106,930                 -14%             91,960
  cattle and veal operations.                                                

  Dairy operations, including both  118,130                 -14%             101,592
  milk and heifer operations.                                                

  Hog operations, including both    117,860                 -37%             74,252
  \"farrow to finish\" and \"grower                                          
  to finish\" operations.                                                    

  Poultry operations, including     [123,750]{.underline}   9%               [135,112]{.underline}
  broilers, layers (both wet and                                             
  dry operations) and turkeys.                                               

  Sum Total                         466,670                                  402,915

                                                                             

  Total AFOs                        375,740                                  324,408

  \*Source: Environmental and                                                
  Economic Benefit Analysis of                                               
  Proposed Revisions to the                                                  
  National Pollutant Discharge                                               
  Elimination System Regulation and                                          
  the Effluent Guidelines for                                                
  Concentrated Animal Feeding                                                
  Operations.                                                                

  \*\*Source: Calculated from 2002                                           
  Census of Agriculture.                                                     
  --------------------------------- ----------------------- ---------------- -----------------------

Table 26 shows the number of CNMPs that have been completed from 2005 to
2007 by NRCS, under EQIP and other sources of funding.

  --------------------------------- --------------------- --------------------- ---------------------
  []{#__RefHeading___Toc219115398                                               
  .anchor}**Table 26. CNMPs                                                     
  completed by NRCS.**                                                          

  **Fiscal Year**                   **EQIP**              **Non-EQIP**          **All Sources**

  FY2005                            2,382                 3,607                 5,989

  FY2006                            2,798                 3,251                 6,049

  FY2007                            [2,539]{.underline}   [2,666]{.underline}   [5,205]{.underline}

  **Total**                         **7,719**             **9,524**             **17,243**

                                                                                

  **Yearly Average**                **2,573**             **3,175**             **5,748**

  Source: NRCS PRS (Progress                                                    
  Reporting System) data, as of                                                 
  June 2008                                                                     
  --------------------------------- --------------------- --------------------- ---------------------

These data show that roughly 2,570 CNMPs were written under EQIP each
year (2003-2004 data was not available). The total number of CNMPs
written average about 5,750 per year. If the rate was constant, it could
be assumed that roughly 28,750 CNMPs (5 years times 5,750) were written
from 2003 to 2007), roughly just under half with EQIP.

While there is data on the number of CNMPs written, it's unclear how
many AUs have been treated under these CNMPs. It could be that the CNMPs
written to date have been for the larger farms, as they are under
greater scrutiny from state and local governments, and had greater
financial means to cover their share of the development and installation
costs than smaller farms. If that was the case, it could follow that the
remaining CNMPs to be written and implemented may start to trend toward
the smaller farms and therefore fewer AUs per CNMP. However, the strong
trend toward consolidation toward larger farms may counterbalance this
assumption, because there are many new large farms to treat.

Based on the competing factors discussed, the analysis team assumed that
the annual number of CNMPs to be written and implemented will stay
roughly the same as is being done currently. An informal query was made
of some NRCS state offices with high CNMP workload to determine their
projected future CNMP workload, and these states determined that it
would at minimum stay the same if not increase in future years. Also,
completed CNMPs often need revision due to changes in ownership, herd
size, and management techniques.

If there were roughly 300,000 farms needing CNMPs in 2002, and if about
28,750 CNMPs have been written (under EQIP and other sources of funding)
during FY 2002 to FY 2007, it is evident that there is still a large
number of livestock farms that need CNMPs now and in the future. For
example even if the FY 2002-FY 2007 rate remained the same during FY
2008 -- FY 2012, livestock operations having CNMPs would only double to
about 60,000 operations out of a total 300,000 operations or roughly 20
percent. Eighty percent would still need CNMPs by the end of FY 2012.

A major question is "What percentage of the CNMPs assisted by EQIP was
adopted by large CAFOs covered by EPA regulatory requirements?" Data
suggest that large CAFOs represented less than four percent of all
livestock operations (table 23) while maintaining about 55 percent of
the total animal units on all livestock operations. These roughly 13,000
large CAFOs would have strong incentive to comply with EPA CAFO
requirements and move towards compliance with or one could assume that
all of them would comply with EPA CAFO requirements by the end of FY
2012. NRCS data indicate that NRCS assistance to large CAFOs represented
about 26 percent of all NRCS costs related to CAFOs of all sizes.
Accordingly, this analysis reduces NRCS costs of providing CNMP
assistance to CAFOs by 26 percent.

**Verifying CNMP Practice Cost Data**

When updating costs of practices as varied as agricultural waste related
measures from over four years ago, there is a risk of the cost indexes
not capturing all cost changes accurately. Therefore, the costs
resulting from indexing 2003 figures were double-checked with more
recent cost data from the NRCS contracts database Protracts.

Costs from Protracts were comparable to the updated 2003 costs.
Therefore, the analysis used the update of both costs and benefits from
the 2003 EQIP BCA. This only impacts the CNMP specific cost benefit
analysis; the total EQIP program costs are used in the overall EQIP
benefit cost analysis in the summary tables.

Table 27 shows the updating of costs per AU from the 2003 EQIP BCA
analysis with its 2002 price base. Additional development of costs is
included in the following benefits calculation section. Please read that
section for more details.

+----------------------------+----------+--------------+--------------+
| []{#_                      |          |              |              |
| _RefHeading___Toc219115399 |          |              |              |
| .anchor}**Table 27.        |          |              |              |
| Parameters for the         |          |              |              |
| benefits and costs of      |          |              |              |
| CNMPs**                    |          |              |              |
+----------------------------+----------+--------------+--------------+
| **[Economic                | **[Total | **For        | **For        |
| parameters]{.underline}**  | s]{.unde | small**      | large**      |
|                            | rline}** |              |              |
|                            |          | **CAFOs**    | **CAFOs**    |
|                            |          |              |              |
|                            |          | **[(under    | **[(over     |
|                            |          | 1000         | 1000         |
|                            |          | AUs)]{.      | AUs)]{.      |
|                            |          | underline}** | underline}** |
+----------------------------+----------+--------------+--------------+
| > Benefits adjustment (GDP | 1.15     | 1.15         | 1.15         |
| > deflator) 2002 to 2007   |          |              |              |
+----------------------------+----------+--------------+--------------+
| > Cost adjustment (ENR)    | 1.23     | 1.23         | 1.23         |
| > 2002 to 2007             |          |              |              |
+----------------------------+----------+--------------+--------------+
| > Inflation                | 0.00     | 0.00         | 0.00         |
+----------------------------+----------+--------------+--------------+
|                            |          |              |              |
+----------------------------+----------+--------------+--------------+
| **[Workload                |          |              |              |
| assumptions]{.underline}** |          |              |              |
+----------------------------+----------+--------------+--------------+
| > CNMPs per year           | 2600     | 2,485        | 115.22       |
+----------------------------+----------+--------------+--------------+
| > AUs per CNMP             | 210      | 126          | 2,001        |
+----------------------------+----------+--------------+--------------+
| > Number of AUs Treated    | 544,792  | 314,256      | 230,536      |
| > per year                 |          |              |              |
+----------------------------+----------+--------------+--------------+
|                            |          |              |              |
+----------------------------+----------+--------------+--------------+
| **[Benefits                | 2007     |              |              |
| parameters]{.underline}**  | Values   |              |              |
+----------------------------+----------+--------------+--------------+
| > WQ Benefit per AU        | \$34.66  | \$34.66      | \$34.66      |
+----------------------------+----------+--------------+--------------+
| > Nutrient Value for crop  | \$18.80  | \$18.80      | \$18.80      |
| > benefit per AU           |          |              |              |
+----------------------------+----------+--------------+--------------+
| > Total Benefit per AU     | \$53.46  | \$53.46      | \$53.46      |
| > 2008                     |          |              |              |
+----------------------------+----------+--------------+--------------+
|                            |          |              |              |
+----------------------------+----------+--------------+--------------+
| **[Cost                    |          |              |              |
| parameters]{.underline}**  |          |              |              |
+----------------------------+----------+--------------+--------------+
| > Implementation Cost per  | \$33.17  | \$42.51      | \$20.44      |
| > AU per year 2002         |          |              |              |
+----------------------------+----------+--------------+--------------+
| > Implementation Cost per  | \$40.80  | \$52.29      | \$25.14      |
| > AU per year 2008         |          |              |              |
+----------------------------+----------+--------------+--------------+
| > CNMP Development         | 149      | 149          | 149          |
| > (Hr/farm)                |          |              |              |
+----------------------------+----------+--------------+--------------+
| > TA Cost per Hour 2003    | \$55.00  | \$55.00      | \$55.00      |
+----------------------------+----------+--------------+--------------+
| > TA Cost per Hour 2007    | \$65.00  | \$64.90      | \$64.90      |
+----------------------------+----------+--------------+--------------+
| > CNMP TA cost per farm    | \$9,670  | \$9,670      | \$9,670      |
+----------------------------+----------+--------------+--------------+
| > CNMP TA cost per AU      | \$46.00  | \$76.46      | \$4.83       |
+----------------------------+----------+--------------+--------------+
|                            |          |              |              |
+----------------------------+----------+--------------+--------------+
| **[Percent excluding large |          |              |              |
| CAFOS on original 2003     |          |              |              |
| analysis]{.underline}**    |          |              |              |
+----------------------------+----------+--------------+--------------+
| > Costs                    | 73.9%    |              |              |
+----------------------------+----------+--------------+--------------+
| > Benefits                 | 54.2%    |              |              |
+----------------------------+----------+--------------+--------------+

# Appendix E: Development of Expected Benefits by Benefit Category

## Sheet and Rill Water Erosion

Table 28 shows the life and expected benefit stream over time for each
practice affecting sheet and rill water erosion, and the cost-share
weighted averages over the group of practices. The average practice life
for these practices was found to be 5.4 years, with nearly full benefits
occurring in years two through six, followed by a gradual taper to 40
percent of benefits in year ten.

Determining the estimated benefit for practices affecting sheet and rill
water erosion reductions required interpretation of available
literature. Studies by Feather et al. (1999) and Claassen et al. (2001)
were used to develop water induced erosion control benefit estimates for
this assessment. Benefits are broken into two types: on-site and
off-site. The studies cited above were based primarily on the erosion
control benefits obtained from the CRP and Conservation Compliance (CC).
The CRP removed land from agricultural production for a period of ten
years and protected it with a vegetative conservation cover while the CC
required that farmers receiving government benefits reduce the soil
erosion rates on Highly Erodible Land that they were continuing to crop,
though not necessarily to the erosion loss tolerance (T) level. Note
that these benefit studies included only a partial estimate of the
variety of possible program benefits; therefore this analysis remains an
underestimate of the total benefits available from erosion reduction.
Each program enrolled different land with different inherent
erodibility. In the early CRP years, erosion reduction was the primary
goal, while in later years more weight was given to wildlife and other
environmental considerations.

### Off-site Benefit Estimates:

Feather et al. (1999) were concerned with optimal targeting for CRP
enrollments for generation of environmental benefits. They followed a
three-step methodology:

-   CRP acreage creates physical effects;

-   Physical effects translate into biological effects; and

-   Biological results affect consumer welfare.

Feather's et al. benefits were mostly accounted for by the following
three components, all calculated for a 10-year program, NPV at four
percent discount rate:

-   Public works cost reduction for sediment based on a 45 million acre
    CRP with soil erosion reductions of 750 million tons per year,
    \$3.029 billion;

-   Air quality, \$548 million; and

-   Recreation, \$8.676 billion, estimated partially based on CRP
    enrollments of 45 million and 34 million acres, depending upon the
    type of recreation benefit derived.

<table>
<colgroup>
<col style="width: 6%" />
<col style="width: 26%" />
<col style="width: 10%" />
<col style="width: 7%" />
<col style="width: 5%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 5%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="14"><h5
id="table-28.-distribution-of-benefits-over-time-for-practices-affecting-sheet-and-rill-water-erosion.">Table
28. Distribution of benefits over time for practices affecting sheet and
rill water erosion.</h5></td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td></td>
<td></td>
<td colspan="10"><p><strong>Proportion of Full Annual Benefits Occurring
by Year</strong></p>
<p><strong><u>(year 1 is funding and contract
year)</u></strong></p></td>
</tr>
<tr class="odd">
<td colspan="2"><strong>Practice Code and Name</strong></td>
<td><p><strong>Historical</strong></p>
<p><strong>Cost Share</strong></p></td>
<td><strong>Practice Life (yrs)</strong></td>
<td><strong>1</strong></td>
<td><strong>2</strong></td>
<td><strong>3</strong></td>
<td><strong>4</strong></td>
<td><strong>5</strong></td>
<td><strong>6</strong></td>
<td><strong>7</strong></td>
<td><strong>8</strong></td>
<td><strong>9</strong></td>
<td><strong>10</strong></td>
</tr>
<tr class="even">
<td>329</td>
<td>Residue and Tillage Management, No-Till/Strip Till/Direct Seed</td>
<td>$156,569,693</td>
<td>1</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.8</td>
<td>0.6</td>
<td>0.4</td>
<td>0.2</td>
<td>0.1</td>
<td>0.0</td>
</tr>
<tr class="odd">
<td>410</td>
<td>Grade Stabilization Structure</td>
<td>$54,946,934</td>
<td>15</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="even">
<td>329B</td>
<td>Residue and Tillage Management, Mulch Till</td>
<td>$45,308,322</td>
<td>1</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.8</td>
<td>0.6</td>
<td>0.4</td>
<td>0.2</td>
<td>0.1</td>
<td>0.0</td>
</tr>
<tr class="odd">
<td>328</td>
<td>Conservation Crop Rotation</td>
<td>$44,000,197</td>
<td>1</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.8</td>
<td>0.6</td>
<td>0.4</td>
<td>0.2</td>
<td>0.1</td>
<td>0.0</td>
</tr>
<tr class="even">
<td>600</td>
<td>Terrace</td>
<td>$41,716,324</td>
<td>10</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td>587</td>
<td>Structure for Water Control</td>
<td>$37,295,495</td>
<td>10</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="even">
<td>340</td>
<td>Cover Crop</td>
<td>$22,448,068</td>
<td>1</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.8</td>
<td>0.6</td>
<td>0.4</td>
<td>0.2</td>
<td>0.1</td>
<td>0.0</td>
</tr>
<tr class="odd">
<td>638</td>
<td>Water and Sediment Control Basin</td>
<td>$21,305,784</td>
<td>10</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="even">
<td>412</td>
<td>Grassed Waterway</td>
<td>$20,346,154</td>
<td>10</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td>342</td>
<td>Critical Area Planting</td>
<td>$10,606,600</td>
<td>10</td>
<td>0.0</td>
<td>0.5</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="even">
<td>468</td>
<td>Lined Waterway or Outlet</td>
<td>$3,076,440</td>
<td>10</td>
<td>0.0</td>
<td>0.5</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td>344</td>
<td>Residue Management, Seasonal</td>
<td>$2,765,688</td>
<td>1</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.8</td>
<td>0.6</td>
<td>0.4</td>
<td>0.2</td>
<td>0.1</td>
<td>0.0</td>
</tr>
<tr class="even">
<td>386</td>
<td>Field Border</td>
<td>$2,661,998</td>
<td>10</td>
<td>0.0</td>
<td>0.5</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td>327</td>
<td>Conservation Cover</td>
<td>$1,957,642</td>
<td>10</td>
<td>0.0</td>
<td>0.5</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="even">
<td>393</td>
<td>Filter Strip</td>
<td>$1,684,301</td>
<td>10</td>
<td>0.0</td>
<td>0.5</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td>601</td>
<td>Vegetated Treatment Area</td>
<td>$1,181,192</td>
<td>10</td>
<td>0.0</td>
<td>0.0</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="even">
<td>601</td>
<td>Vegetative Barriers</td>
<td>$309,025</td>
<td>10</td>
<td>0.0</td>
<td>0.5</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td>586</td>
<td>Stripcropping</td>
<td>$278,053</td>
<td>5</td>
<td>0.0</td>
<td>0.5</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.8</td>
<td>0.6</td>
<td>0.4</td>
<td>0.2</td>
</tr>
<tr class="even">
<td>330</td>
<td>Contour Farming</td>
<td>$244,533</td>
<td>1</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.8</td>
<td>0.6</td>
<td>0.4</td>
<td>0.2</td>
<td>0.1</td>
<td>0.0</td>
</tr>
<tr class="odd">
<td>329C</td>
<td>Residue and Tillage Management, Ridge Till</td>
<td>$155,137</td>
<td>1</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.8</td>
<td>0.6</td>
<td>0.4</td>
<td>0.2</td>
<td>0.1</td>
<td>0.0</td>
</tr>
<tr class="even">
<td>311</td>
<td>Alley Cropping</td>
<td>$84,861</td>
<td>15</td>
<td>0.0</td>
<td>0.4</td>
<td>0.8</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td>331</td>
<td>Contour Orchard and Other Fruit Area</td>
<td>$57,317</td>
<td>10</td>
<td>0.0</td>
<td>0.5</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="even">
<td>332</td>
<td>Contour Buffer Strips</td>
<td>$56,792</td>
<td>10</td>
<td>0.0</td>
<td>0.5</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td>716</td>
<td>Anionic Polyacrylamide</td>
<td>$9,095</td>
<td>1</td>
<td>0.0</td>
<td>1.0</td>
<td>0.5</td>
<td>0.0</td>
<td>0.0</td>
<td>0.0</td>
<td>0.0</td>
<td>0.0</td>
<td>0.0</td>
<td>0.0</td>
</tr>
<tr class="even">
<td></td>
<td>Totals</td>
<td>$469,065,643</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td colspan="2">Average, weighted by Cost Share</td>
<td></td>
<td>5.4</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.9</td>
<td>0.8</td>
<td>0.7</td>
<td>0.5</td>
<td>0.5</td>
<td>0.4</td>
</tr>
</tbody>
</table>

Of those three categories of benefits, the first and the third were
added together (\$3.029 billion plus \$8.676 billion equals \$11.705
billion). Air quality benefits of soil erosion reduction were accounted
for in a different benefit category and are handled in a different
manner, so are not counted here. The \$11.705 billion benefit NPV was
then converted to an equivalent 10-year stream of benefits with a seven
percent discount factor resulting in a lump-sum benefit amount of
\$1.558 billion. This estimate was then divided by its corresponding
tonnage (750 million) and acreage (45 million) to arrive at an annual
per-ton and per acre value of \$2.08 and \$34.74 (2002 values),
respectively. Using a GDP index of 1.15 to put these into current 2007
values raises their values to \$2.38 and \$39.83, respectively (table
29).

+-------------------------------+-----------+-----------+------------+
| []                            |           |           |            |
| {#__RefHeading___Toc219115401 |           |           |            |
| .anchor}**Table 29. Estimate  |           |           |            |
| of per-ton benefits from      |           |           |            |
| reduced sheet and rill water  |           |           |            |
| erosion (in 2007 dollars).**  |           |           |            |
+-------------------------------+-----------+-----------+------------+
| **Item**                      | **Annual  | *         | **Annual** |
|                               | Erosion   | *Annual** |            |
|                               | Rate      |           | **Benefits |
|                               | Reduction | *         | (          |
|                               | (ton      | *Benefits | \$/acre)** |
|                               | s/acre)** | (         |            |
|                               |           | \$/ton)** |            |
+-------------------------------+-----------+-----------+------------+
| Offsite benefits:             |           |           |            |
+-------------------------------+-----------+-----------+------------+
| CRP, early program years      | 16.7      | \$2.38    | \$39.83    |
+-------------------------------+-----------+-----------+------------+
| CRP, program average          | 12.3      | \$3.94    | \$48.51    |
+-------------------------------+-----------+-----------+------------+
| Conservation Compliance       | 3.5       | \$4.96    | \$17.38    |
+-------------------------------+-----------+-----------+------------+
|                               |           |           |            |
+-------------------------------+-----------+-----------+------------+
| Used for this EQIP analysis\* | 8.6       | \$4.93    | \$42.40    |
+-------------------------------+-----------+-----------+------------+
|                               |           |           |            |
+-------------------------------+-----------+-----------+------------+
| On-site benefits:             |           |           |            |
+-------------------------------+-----------+-----------+------------+
| Nutrients saved               | 8.6       | \$1.39    | \$11.92    |
+-------------------------------+-----------+-----------+------------+
|                               |           |           |            |
+-------------------------------+-----------+-----------+------------+
| **Total Annual Per-Acre       | **8.6**   | *         | *          |
| Benefits\*\***                |           | *\$6.42** | *\$54.32** |
+-------------------------------+-----------+-----------+------------+
| \*Historical EQIP data for    |           |           |            |
| 2001 showed a reduction from  |           |           |            |
| 11.5 to 2.9 tons per acre per |           |           |            |
| year on 371 thousand acres,   |           |           |            |
|                               |           |           |            |
| where one state was excluded  |           |           |            |
| because its reduction was     |           |           |            |
| clearly a data error, with a  |           |           |            |
| rate of 50 times the average  |           |           |            |
|                               |           |           |            |
| of other states.              |           |           |            |
+-------------------------------+-----------+-----------+------------+
| \*\*This total reflects the   |           |           |            |
| total tons per acre of soil   |           |           |            |
| erosion from which both       |           |           |            |
| off-site and on-site benefits |           |           |            |
| are                           |           |           |            |
|                               |           |           |            |
| calculated.                   |           |           |            |
+-------------------------------+-----------+-----------+------------+

In a study of alternative ways of providing incentives to farmers for
environmental improvements, Claassen et al. (2001) estimated benefits
for both the CRP and for Conservation Compliance. For CRP, they found
406 million tons of erosion reduction annually, but cautioned that this
estimate was likely an underestimate for several reasons. If the
mid-point of the range of 30 to 36 million acres enrolled since program
inception is used (33 million acres), the per-acre reduction becomes
12.3 tons per acre. The estimate of erosion reduction in the Feather
study was higher since it was based on original program estimates when
erosion reduction was given a high enrollment priority. Claassen
reported benefits of \$694 million per year for reduced soil erosion and
\$704 million per year for improved wildlife habitat. The total of
\$1.398 billion of annual benefits is equivalent to \$3.44 per ton of
rate reduction, or \$42.31 per acre (2002 values). Again, using a GDP
index factor of 1.15, places these estimates in current 2007 values of
\$3.94 and \$48.51, respectively (table 29).

Claassen et al. (2001) also estimated a partial estimate of the economic
benefits due to Conservation Compliance. The estimate was said to be
partial, not only because of under counting of benefits, but also due to
a likely underestimate of the acres treated (due to Conservation
Compliance requirements). The estimated soil erosion reduction on HEL
lands was 323 million tons per year. These lands totaled 91 million
acres, according to with the number of approved CC plans. This reduction
and acreage produces an erosion rate reduction of 3.5 tons per acre per
year. The estimate of annual non-market benefits for that soil erosion
reduction was \$1.400 billion, or \$4.33 per ton and \$15.16 per acre
(2001 values). Indexing this to current 2007 values (using a GDP factor
of 1.20) produces the reported values of \$4.96 and \$17.38 in table 29.

The off-site benefits for soil erosion reduction used in this analysis
are generated by an assumed 8.6 ton per acre per year assumption
multiplied by an assumed value per ton of soil of \$4.96 (top part of
table 29).

On-site Benefit Estimates: For on-site productivity losses, this study
only includes the value of the lost nitrogen and phosphorus fertilizer
carried away with the topsoil. In the future, consideration of the
maintenance of long-tem soil productivity should be included, perhaps
with the assistance of improved data and estimates from CEAP.

The value of fertilizer nutrients loss associated with erosion was also
taken from the RCA study cited above. Some additional general
assumptions based on data from Miller et al. (1998) were made. On
average topsoil consists of two percent organic matter, or 1.16 percent
carbon. That organic matter would have, on average, a carbon nitrogen
ratio of 10 to 1. Consequently, each ton of soil that is eroded contains
2.32 pounds of nitrogen that the farmer would need to replace. The soil
also contains 0.05 percent phosphorus, or 1 pound per ton of soil. Using
NASS -- Current Prices Paid for DAP and Urea, phosphorus and nitrogen
prices for 2007 are 48¢ and 49¢ per pound. The value of lost nutrients
in each ton of soil erosion is valued at \$1.39 per year.

Analyses of historical EQIP data indicate sheet and rill water erosion
reductions of 8.6 tons per acre per year can be attributed to the
program. One justification for such a high estimate and its resultant
large benefit/cost ratio is that it is assumed that EQIP funds would be
targeted to situations where the largest erosion reductions would occur.
Analysis of National Resource Inventory (NRI) data and EQIP data
indicate that in the period since 1992, several million acres of farmed
cropland have had sheet and rill water erosion reductions exceeding ten
tons per acre per year. Analysis of the 1997 NRI in appendix 2 of the
2003 EQIP Benefit-Cost Analysis shows that the new program can easily
maintain that 8.6 tons per acre though the life of the 2008 Act.

With the data from the two studies and other assumptions summarized
here, the per-acre benefit estimate for sheet and rill water erosion
reductions consists of \$1.92 from reduced loss of nutrients. Along with
the \$42.40 from improved water quality, the total value of benefits
from adopting the conservation practices as specified in EQIP are
estimated at \$54.32 per acre per year (bottom of table 29).

## Grazing Land Productivity

Table 30 shows the life and expected benefit stream over time for each
practice affecting grazing land productivity, and the cost-share
weighted averages over the group of practices. The interpretation of the
stream of benefits values is the proportion of full benefits occurring
in the year indicated. It was assumed that no benefits would occur in
the first year, since during that year the contract would likely not be
finalized until mid-year and implementation would start at some time
after that. The average practice life for the grazing improvement
practices was found to be 11.6 years, with nearly full benefits
occurring in years two through seven, followed by a gradual taper to 70
percent of benefits in year ten. For this analysis, the benefits
occurring in years beyond the first ten years were ignored.

Namken and Flanagan report that practices such as these resulted in an
average productivity increase of 1.3 Animal Unit Months (AUMs) per acre,
and that the AUMs were valued at \$11.10 each, resulting in per acre
value of \$14.43. The \$14.43 value was updated from year 2000 to year
2007 using a GDP index factor of 1.2 resulting in a grazing land
improvement benefit of \$17.25 per acre. It is probable that many of
these practices were implemented in situations where the primary and or
secondary purposes were something other than improved forage production,
such as for wildlife habitat or water quality enhancement; however,
those benefits could not be accounted for.

<table>
<colgroup>
<col style="width: 5%" />
<col style="width: 34%" />
<col style="width: 11%" />
<col style="width: 7%" />
<col style="width: 3%" />
<col style="width: 3%" />
<col style="width: 3%" />
<col style="width: 3%" />
<col style="width: 3%" />
<col style="width: 3%" />
<col style="width: 3%" />
<col style="width: 3%" />
<col style="width: 5%" />
<col style="width: 5%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="14"><span id="__RefHeading___Toc219115402"
class="anchor"></span><strong>Table 30. Distribution of benefits over
time for practices affecting grazing land productivity.</strong></td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td></td>
<td></td>
<td colspan="10"><p><strong>Proportion of Full Annual Benefits Occurring
by Year</strong></p>
<p><strong><u>(year 1 is funding and contract
year)</u></strong></p></td>
</tr>
<tr class="odd">
<td colspan="2"><strong>Practice Code and Name</strong></td>
<td><p><strong>Historical</strong></p>
<p><strong>Cost Share</strong></p></td>
<td><strong>Practice Life (yrs)</strong></td>
<td><strong>1</strong></td>
<td><strong>2</strong></td>
<td><strong>3</strong></td>
<td><strong>4</strong></td>
<td><strong>5</strong></td>
<td><strong>6</strong></td>
<td><strong>7</strong></td>
<td><strong>8</strong></td>
<td><strong>9</strong></td>
<td><strong>10</strong></td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td>382</td>
<td>Fence</td>
<td>$199,623,916</td>
<td>20</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="even">
<td>314</td>
<td>Brush Management</td>
<td>$136,122,681</td>
<td>10</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.9</td>
<td>0.9</td>
<td>0.8</td>
<td>0.8</td>
<td>0.7</td>
<td>0.6</td>
<td>0.5</td>
</tr>
<tr class="odd">
<td>516</td>
<td>Pipeline</td>
<td>$114,834,483</td>
<td>10</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="even">
<td>512</td>
<td>Pasture and Hay Planting</td>
<td>$93,023,206</td>
<td>10</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.9</td>
<td>0.9</td>
<td>0.8</td>
<td>0.8</td>
<td>0.7</td>
<td>0.6</td>
<td>0.5</td>
</tr>
<tr class="odd">
<td>528</td>
<td>Prescribed Grazing</td>
<td>$90,382,288</td>
<td>5</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.8</td>
<td>0.6</td>
<td>0.4</td>
<td>0.2</td>
<td>0.1</td>
<td>0.0</td>
</tr>
<tr class="even">
<td>561</td>
<td>Heavy Use Area Protection</td>
<td>$89,531,030</td>
<td>10</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.9</td>
<td>0.9</td>
<td>0.8</td>
<td>0.8</td>
<td>0.7</td>
<td>0.6</td>
<td>0.5</td>
</tr>
<tr class="odd">
<td>614</td>
<td>Watering Facility</td>
<td>$75,450,827</td>
<td>10</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.9</td>
<td>0.9</td>
<td>0.8</td>
<td>0.8</td>
<td>0.7</td>
<td>0.6</td>
<td>0.5</td>
</tr>
<tr class="even">
<td>642</td>
<td>Water Well</td>
<td>$46,650,512</td>
<td>10</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td>378</td>
<td>Pond</td>
<td>$35,864,169</td>
<td>10</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="even">
<td>533</td>
<td>Pumping Plant</td>
<td>$34,791,531</td>
<td>10</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td>550</td>
<td>Range Planting</td>
<td>$16,535,369</td>
<td>10</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.9</td>
<td>0.9</td>
<td>0.8</td>
<td>0.8</td>
<td>0.7</td>
<td>0.6</td>
<td>0.5</td>
</tr>
<tr class="even">
<td>575</td>
<td>Animal Trails and Walkways</td>
<td>$10,362,573</td>
<td>10</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.9</td>
<td>0.9</td>
<td>0.8</td>
<td>0.8</td>
<td>0.7</td>
<td>0.6</td>
<td>0.5</td>
</tr>
<tr class="odd">
<td>574</td>
<td>Spring Development</td>
<td>$6,212,243</td>
<td>10</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.9</td>
<td>0.9</td>
<td>0.8</td>
<td>0.8</td>
<td>0.7</td>
<td>0.6</td>
<td>0.5</td>
</tr>
<tr class="even">
<td>578</td>
<td>Stream Crossing</td>
<td>$4,966,968</td>
<td>10</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.9</td>
<td>0.9</td>
<td>0.8</td>
<td>0.8</td>
<td>0.7</td>
<td>0.6</td>
<td>0.5</td>
</tr>
<tr class="odd">
<td>511</td>
<td>Forage Harvest Management</td>
<td>$1,228,027</td>
<td>5</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.8</td>
<td>0.6</td>
<td>0.4</td>
<td>0.2</td>
<td>0.1</td>
<td>0.0</td>
</tr>
<tr class="even">
<td>548</td>
<td>Grazing Land Mechanical Treatment</td>
<td>$787,927</td>
<td>5</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.8</td>
<td>0.6</td>
<td>0.4</td>
<td>0.2</td>
<td>0.1</td>
</tr>
<tr class="odd">
<td>460</td>
<td>Land Clearing</td>
<td>$773,276</td>
<td>10</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.9</td>
<td>0.9</td>
<td>0.8</td>
<td>0.8</td>
<td>0.7</td>
<td>0.6</td>
<td>0.5</td>
</tr>
<tr class="even">
<td>381</td>
<td>Silvopasture Establishment</td>
<td>$73,950</td>
<td>10</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.9</td>
<td>0.9</td>
<td>0.8</td>
<td>0.8</td>
<td>0.7</td>
<td>0.6</td>
<td>0.5</td>
</tr>
<tr class="odd">
<td>640</td>
<td>Waterspreading</td>
<td>$60,599</td>
<td>10</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.9</td>
<td>0.9</td>
<td>0.8</td>
<td>0.8</td>
<td>0.7</td>
<td>0.6</td>
<td>0.5</td>
</tr>
<tr class="even">
<td colspan="2">Totals</td>
<td>$957,275,575</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td colspan="2">Average, weighted by Cost Share</td>
<td></td>
<td>11.6</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.9</td>
<td>0.9</td>
<td>0.9</td>
<td>0.8</td>
<td>0.7</td>
<td>0.7</td>
</tr>
</tbody>
</table>

## Irrigation Water Use

Table 31 shows the life and expected benefit stream over time for each
practice affecting irrigation water use, and the cost-share weighted
averages over the group of practices. The average practice life for the
irrigation efficiency improvement practices was found to be 16.1 years,
with full benefits occurring in years two through ten. For this
analysis, the benefits occurring in years beyond the first ten years
were ignored.

Presumably, any water saved as a result of the reduced water
applications on any individual farm would be available for alternative
beneficial uses such as use by farmers in other locations,
municipalities, utility generation, wildlife habitat enhancement; or
available elsewhere on the same farm or advertised for availability
locally via irrigation rental markets***.*** Therefore, a possible value
that could be assigned to the saved water is the price that competing
uses would be willing to offer. Since those prices are not available,
the saved water was valued conservatively at the average that the
farmers have paid or expended to obtain the water. It is assumed that
the farmers could achieve a net reduction in irrigation water used by
any or all of the following three methods:

-   Convert from irrigation to dryland production;

-   Convert to a crop or land use requiring reduced applications of
    water; or

-   Maintain the same crop, but improve irrigation application
    efficiency.

The 2003 Farm and Ranch Irrigation Survey reported 32.3 million acres
irrigated with groundwater having acquisition cost of \$29/acre foot and
13.8 million acres irrigated with off-farm surface water at \$18/acre
foot, including supply cost and variable cost. The weighted average
value of the water is then \$25.73. Using a GDP index factor of 1.11 to
update the weighted average value of water from 2003 to 2007 results in
an estimated value of \$28.56 per acre foot. Given the 5.41 acre-inch
efficiency gain per year and assuming a 20-percent loss in storage and
transmission, results in an annual per-acre benefit of \$10.30.

The new stature add insurance that on the water savings.

"\`(h) Water Conservation or Irrigation Efficiency Practice-

> \`(1) AVAILABILITY OF PAYMENTS- The Secretary may provide payments
> under this subsection to a producer for a water conservation or
> irrigation practice.
>
> \`(2) PRIORITY- In providing payments to a producer for a water
> conservation or irrigation practice, the Secretary shall give priority
> to applications in which\--
>
> \`(A) consistent with the law of the State in which the eligible land
> of the producer is located, there is a reduction in water use in the
> operation of the producer; or
>
> \`(B) the producer agrees not to use any associated water savings to
> bring new land, other than incidental land needed for efficient
> operations, under irrigated production, unless the producer is
> participating in a watershed-wide project that will effectively
> conserve water, as determined by the Secretary.

<table>
<colgroup>
<col style="width: 5%" />
<col style="width: 33%" />
<col style="width: 11%" />
<col style="width: 8%" />
<col style="width: 3%" />
<col style="width: 3%" />
<col style="width: 3%" />
<col style="width: 3%" />
<col style="width: 3%" />
<col style="width: 3%" />
<col style="width: 3%" />
<col style="width: 3%" />
<col style="width: 4%" />
<col style="width: 4%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="14"><span id="__RefHeading___Toc219115403"
class="anchor"></span><strong>Table 31. Distribution of benefits over
time for practices affecting irrigation water use.</strong></td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td></td>
<td></td>
<td colspan="10"><p><strong>Proportion of Full Annual Benefits Occurring
by Year</strong></p>
<p><strong><u>(year 1 is funding and contract
year)</u></strong></p></td>
</tr>
<tr class="odd">
<td colspan="2"><strong>Practice Code and Name</strong></td>
<td><p><strong>Historical</strong></p>
<p><strong>Cost Share</strong></p></td>
<td><strong>Practice Life (yrs)</strong></td>
<td><strong>1</strong></td>
<td><strong>2</strong></td>
<td><strong>3</strong></td>
<td><strong>4</strong></td>
<td><strong>5</strong></td>
<td><strong>6</strong></td>
<td><strong>7</strong></td>
<td><strong>8</strong></td>
<td><strong>9</strong></td>
<td><strong>10</strong></td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td>442</td>
<td>Irrigation System, Sprinkler</td>
<td>$295,624,050</td>
<td>15</td>
<td>0</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
</tr>
<tr class="even">
<td>430DD</td>
<td>Irrigation Water Conveyance, Pipeline, High-Pressure, Underground,
Plastic</td>
<td>$138,352,765</td>
<td>25</td>
<td>0</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
</tr>
<tr class="odd">
<td>441</td>
<td>Irrigation System, Microirrigation</td>
<td>$109,420,199</td>
<td>10</td>
<td>0</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
</tr>
<tr class="even">
<td>464</td>
<td>Irrigation Land Leveling</td>
<td>$66,493,032</td>
<td>15</td>
<td>0</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
</tr>
<tr class="odd">
<td>430EE</td>
<td>Irrigation Water Conveyance, Pipeline, Low-Pressure, Underground,
Plastic</td>
<td>$56,605,446</td>
<td>25</td>
<td>0</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
</tr>
<tr class="even">
<td>449</td>
<td>Irrigation Water Management</td>
<td>$42,800,058</td>
<td>1</td>
<td>0</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>0.8</td>
<td>0.6</td>
<td>0.4</td>
<td>0.2</td>
<td>0.1</td>
<td>0</td>
</tr>
<tr class="odd">
<td>620</td>
<td>Underground Outlet</td>
<td>$33,020,066</td>
<td>15</td>
<td>0</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
</tr>
<tr class="even">
<td>428A</td>
<td>Irrigation Water Conveyance, Ditch and Canal Lining,  Plain
Concrete</td>
<td>$23,122,523</td>
<td>15</td>
<td>0</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
</tr>
<tr class="odd">
<td>443</td>
<td>Irrigation System, Surface and Subsurface</td>
<td>$13,302,601</td>
<td>15</td>
<td>0</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
</tr>
<tr class="even">
<td>436</td>
<td>Irrigation Storage Reservoir</td>
<td>$13,047,520</td>
<td>15</td>
<td>0</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
</tr>
<tr class="odd">
<td>447</td>
<td>Irrigation System, Tailwater Recovery</td>
<td>$9,531,488</td>
<td>20</td>
<td>0</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
</tr>
<tr class="even">
<td>552</td>
<td>Irrigation Regulating Reservoir</td>
<td>$7,356,142</td>
<td>15</td>
<td>0</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
</tr>
<tr class="odd">
<td>466</td>
<td>Land Smoothing</td>
<td>$4,293,100</td>
<td>10</td>
<td>0</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
</tr>
<tr class="even">
<td>430CC</td>
<td>Irrigation Water Conveyance, Pipeline, Nonreinforced Concrete</td>
<td>$4,112,400</td>
<td>15</td>
<td>0</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
</tr>
<tr class="odd">
<td>554</td>
<td>Drainage Water Management</td>
<td>$2,923,370</td>
<td>1</td>
<td>0</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>0.8</td>
<td>0.6</td>
<td>0.4</td>
<td>0.2</td>
<td>0.1</td>
<td>0</td>
</tr>
<tr class="even">
<td>610</td>
<td>Salinity and Sodic Soil Management</td>
<td>$2,282,313</td>
<td>5</td>
<td>0</td>
<td>0.4</td>
<td>0.8</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>0.8</td>
<td>0.4</td>
<td>0.2</td>
<td>1</td>
</tr>
<tr class="odd">
<td>462</td>
<td>Precision Land Forming</td>
<td>$1,590,674</td>
<td>10</td>
<td>0</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
</tr>
<tr class="even">
<td>636</td>
<td>Water Harvesting Catchment</td>
<td>$633,569</td>
<td>15</td>
<td>0</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
</tr>
<tr class="odd">
<td>431</td>
<td>Above Ground, Multi-Outlet Pipeline</td>
<td>$470,927</td>
<td>15</td>
<td>0</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
</tr>
<tr class="even">
<td>430FF</td>
<td>Irrigation Water Conveyance, Pipeline, Steel</td>
<td>$445,746</td>
<td>25</td>
<td>0</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
</tr>
<tr class="odd">
<td>388</td>
<td>Irrigation Field Ditch</td>
<td>$210,201</td>
<td>15</td>
<td>0</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
</tr>
<tr class="even">
<td>320</td>
<td>Irrigation Canal or Lateral</td>
<td>$200,250</td>
<td>15</td>
<td>0</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
</tr>
<tr class="odd">
<td>428B</td>
<td>Irrigation Water Conveyance, Ditch and Canal Lining, Flexible
Membrane</td>
<td>$157,500</td>
<td>20</td>
<td>0</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
</tr>
<tr class="even">
<td>428B</td>
<td>Irrigation Water Conveyance, Ditch and Canal Lining, Flexible
Membrane</td>
<td>$157,500</td>
<td>15</td>
<td>0</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
</tr>
<tr class="odd">
<td>607</td>
<td>Surface Drainage, Field Ditch</td>
<td>$107,538</td>
<td>15</td>
<td>0</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
</tr>
<tr class="even">
<td>630</td>
<td>Vertical Drain</td>
<td>$97,215</td>
<td>15</td>
<td>0</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
</tr>
<tr class="odd">
<td>430AA</td>
<td>Irrigation Water Conveyance, Pipeline, Aluminum Tubing </td>
<td>$79,863</td>
<td>20</td>
<td>0</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
</tr>
<tr class="even">
<td colspan="2">Totals</td>
<td>$826,438,054</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td colspan="2">Average, weighted by Cost Share</td>
<td></td>
<td>15.9</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.9</td>
<td>0.9</td>
</tr>
</tbody>
</table>

## Air Quality

Table 32 shows the life and expected benefit stream over time for each
practice affecting air quality, and the cost-share weighted averages
over the group of practices. The average practice life for the wind
erosion control practices was found to be 4.5 years, with nearly full
benefits occurring in years three through six, followed by a gradual
taper to 30 percent of benefits in year ten.

The key element in the air quality benefits analysis is the estimate by
Ribaudo et al. (1989) that the CRP program provided a U.S. average of
\$25 per acre in NPV of benefits due to reduced soil erosion (improved
air quality). The estimates ranged from \$0 in the Appalachia, Corn
Belt, Delta States, and Lake States, up to \$52 in the Mountain states.
The Ribaudo study included the effects of "particulate-related costs
imposed on those who live or work downwind from blowing soil; such costs
include increased cleaning and maintenance for businesses and
households, damages to nonfarm machinery, and adverse health effects"
(Ribaudo et al., p. 422). For the EQIP program assessment, it was
assumed that where applied, the practices listed in table 32 provide the
same level of benefits to air quality (same levels of erosion control
and reduction in offsite damages) as did the CRP. The \$25 per acre
value from Ribaudo et al. is updated with data from the GDP index for
the years of 1988 to 2002 for the 2003 EQIP BCA, assuming a 10-year
horizon at a seven percent discount rate, which resulted in \$4.98 per
acre. This was updated from 2002 to 2007 to the 2007 value of \$5.71 per
acre.

## Fertilizer Use

The benefit estimate from adopting practices that affect non-animal
waste nutrient use was based solely on fertilizer savings as described
below.

Since most producers do not use proper nutrient management techniques
and tend to over apply fertilizers, on-farm benefits associated with
nutrient management are the result of cost savings through the reduction
of purchased mineral fertilizer inputs. Improvements in crop yields will
normally not occur in normal years, since fertilizer usage already
exceeds the minimum needed for the expected yield. Benefits associated
with the proper utilization of nutrients on farms using commercial
mineral fertilizers alone will tend to be smaller than those realized
from the farms that apply both animal manure and commercial fertilizers.
Since the purchase of mineral fertilizers directly impacts a given
producer's bottom line in a manner that is obvious to the producer, they
tend to apply mineral fertilizers more in line with soil test
recommendations. This is not to say that over application of nutrients
does not occur, just that the magnitude of each occurrence is less than
that associated with the application of animal wastes.

<table style="width:100%;">
<colgroup>
<col style="width: 4%" />
<col style="width: 34%" />
<col style="width: 9%" />
<col style="width: 8%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 0%" />
<col style="width: 4%" />
<col style="width: 0%" />
<col style="width: 4%" />
<col style="width: 0%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 4%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="17"><span id="__RefHeading___Toc219115404"
class="anchor"></span><strong>Table 32. Distribution of benefits over
time for practices affecting air quality.</strong></td>
</tr>
<tr class="even">
<td colspan="2"></td>
<td></td>
<td></td>
<td colspan="13"><p><strong>Proportion of Full Annual Benefits Occurring
by Year</strong></p>
<p><strong><u>(year 1 is funding and contract
year)</u></strong></p></td>
</tr>
<tr class="odd">
<td colspan="2"><strong>Practice Code and Name</strong></td>
<td><p><strong>Historical</strong></p>
<p><strong>Cost Share</strong></p></td>
<td><strong>Practice Life (yrs)</strong></td>
<td><strong>1</strong></td>
<td><strong>2</strong></td>
<td><strong>3</strong></td>
<td><strong>4</strong></td>
<td><strong>5</strong></td>
<td colspan="2"><strong>6</strong></td>
<td colspan="2"><strong>7</strong></td>
<td colspan="2"><strong>8</strong></td>
<td><strong>9</strong></td>
<td><strong>10</strong></td>
</tr>
<tr class="even">
<td>329</td>
<td>Residue and Tillage Management, No-Till/Strip Till/Direct Seed</td>
<td>$67,324,968</td>
<td>1</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.8</td>
<td colspan="2">0.6</td>
<td colspan="2">0.4</td>
<td colspan="2">0.2</td>
<td>0.1</td>
<td>0.0</td>
</tr>
<tr class="odd">
<td>328</td>
<td>Conservation Crop Rotation</td>
<td>$44,000,197</td>
<td>1</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.8</td>
<td colspan="2">0.6</td>
<td colspan="2">0.4</td>
<td colspan="2">0.2</td>
<td>0.1</td>
<td>0.0</td>
</tr>
<tr class="even">
<td>340</td>
<td>Cover Crop</td>
<td>$22,448,068</td>
<td>1</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.8</td>
<td colspan="2">0.6</td>
<td colspan="2">0.4</td>
<td colspan="2">0.2</td>
<td>0.1</td>
<td>0.0</td>
</tr>
<tr class="odd">
<td>345</td>
<td>Residue and Tillage Management, Mulch Till</td>
<td>$19,482,578</td>
<td>1</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.8</td>
<td colspan="2">0.6</td>
<td colspan="2">0.4</td>
<td colspan="2">0.2</td>
<td>0.1</td>
<td>0.0</td>
</tr>
<tr class="even">
<td>705</td>
<td>Atmospheric Resource Quality Management</td>
<td>$17,846,972</td>
<td>10</td>
<td>0.0</td>
<td>0.5</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td colspan="2">1.0</td>
<td colspan="2">1.0</td>
<td colspan="2">1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td>612</td>
<td>Tree/Shrub Establishment</td>
<td>$16,962,813</td>
<td>15</td>
<td>0.0</td>
<td>0.1</td>
<td>0.2</td>
<td>0.4</td>
<td>0.8</td>
<td colspan="2">1.0</td>
<td colspan="2">1.0</td>
<td colspan="2">1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="even">
<td>550</td>
<td>Range Planting</td>
<td>$16,535,369</td>
<td>10</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.9</td>
<td>0.9</td>
<td colspan="2">0.8</td>
<td colspan="2">0.8</td>
<td colspan="2">0.7</td>
<td>0.6</td>
<td>0.5</td>
</tr>
<tr class="odd">
<td>342</td>
<td>Critical Area Planting</td>
<td>$10,606,600</td>
<td>10</td>
<td>0.0</td>
<td>0.5</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td colspan="2">1.0</td>
<td colspan="2">1.0</td>
<td colspan="2">1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="even">
<td>380</td>
<td>Windbreak/Shelterbelt Establishment</td>
<td>$7,413,559</td>
<td>15</td>
<td>0.0</td>
<td>0.1</td>
<td>0.2</td>
<td>0.4</td>
<td>0.8</td>
<td colspan="2">1.0</td>
<td colspan="2">1.0</td>
<td colspan="2">1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td>327</td>
<td>Conservation Cover</td>
<td>$1,957,642</td>
<td>10</td>
<td>0.0</td>
<td>0.5</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td colspan="2">1.0</td>
<td colspan="2">1.0</td>
<td colspan="2">1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="even">
<td>650</td>
<td>Windbreak/Shelterbelt Renovation</td>
<td>$1,252,926</td>
<td>15</td>
<td>0.0</td>
<td>0.1</td>
<td>0.2</td>
<td>0.4</td>
<td>0.8</td>
<td colspan="2">1.0</td>
<td colspan="2">1.0</td>
<td colspan="2">1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td>344</td>
<td>Residue Management, Seasonal</td>
<td>$1,189,246</td>
<td>1</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.8</td>
<td colspan="2">0.6</td>
<td colspan="2">0.4</td>
<td colspan="2">0.2</td>
<td>0.1</td>
<td>0.0</td>
</tr>
<tr class="even">
<td>422</td>
<td>Hedgerow Planting</td>
<td>$521,528</td>
<td>15</td>
<td>0.0</td>
<td>0.1</td>
<td>0.2</td>
<td>0.4</td>
<td>0.8</td>
<td colspan="2">1.0</td>
<td colspan="2">1.0</td>
<td colspan="2">1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td>586</td>
<td>Stripcropping</td>
<td>$278,053</td>
<td>5</td>
<td>0.0</td>
<td>0.5</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td colspan="2">1.0</td>
<td colspan="2">0.8</td>
<td colspan="2">0.6</td>
<td>0.4</td>
<td>0.2</td>
</tr>
<tr class="even">
<td>603</td>
<td>Herbaceous Wind Barriers</td>
<td>$231,660</td>
<td>5</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td colspan="2">1.0</td>
<td colspan="2">0.0</td>
<td colspan="2">0.0</td>
<td>0.0</td>
<td>0.0</td>
</tr>
<tr class="odd">
<td>609</td>
<td>Surface Roughening</td>
<td>$128,020</td>
<td>1</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.8</td>
<td colspan="2">0.6</td>
<td colspan="2">0.4</td>
<td colspan="2">0.2</td>
<td>0.1</td>
<td>0.0</td>
</tr>
<tr class="even">
<td>589A</td>
<td>Cross Wind Ridges</td>
<td>$125,738</td>
<td>5</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td colspan="2">1.0</td>
<td colspan="2">0.0</td>
<td colspan="2">0.0</td>
<td>0.0</td>
<td>0.0</td>
</tr>
<tr class="odd">
<td>346</td>
<td>Residue and Tillage Management, Ridge Till</td>
<td>$66,709</td>
<td>1</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.8</td>
<td colspan="2">0.6</td>
<td colspan="2">0.4</td>
<td colspan="2">0.2</td>
<td>0.1</td>
<td>0.0</td>
</tr>
<tr class="even">
<td>557</td>
<td>Row Arrangement</td>
<td>$8,913</td>
<td>15</td>
<td>0.0</td>
<td>0.1</td>
<td>0.2</td>
<td>0.4</td>
<td>0.8</td>
<td colspan="2">1.0</td>
<td colspan="2">1.0</td>
<td colspan="2">1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td>589C</td>
<td>Cross Wind Trap Strips</td>
<td>$10</td>
<td>5</td>
<td>0.0</td>
<td>1.0</td>
<td>0.0</td>
<td>0.0</td>
<td>0.0</td>
<td colspan="2">0.0</td>
<td colspan="2">0.0</td>
<td colspan="2">0.0</td>
<td>0.0</td>
<td>0.0</td>
</tr>
<tr class="even">
<td colspan="2">Totals</td>
<td>$228,381,568</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td colspan="2">Average, weighted by Cost Share</td>
<td></td>
<td>4.5</td>
<td>0.0</td>
<td>0.8</td>
<td>0.9</td>
<td>0.9</td>
<td colspan="2">0.8</td>
<td colspan="2">0.7</td>
<td colspan="2">0.6</td>
<td>0.4</td>
<td>0.4</td>
<td>0.3</td>
</tr>
</tbody>
</table>

Available information documenting reductions in nutrient use associated
with the adoption of nutrient management practice in accordance with
NRCS standards is somewhat limited. Some individual states have
interviewed producers to obtain this information, however the sample
size is relatively small, and not necessarily geographically
distributed. Two sources of information were found which indicate
relative reductions in nitrogen and phosphorus applications on lands
utilizing nutrient management "practices".

The first is "National Management Measures to Control Nutrient Source
Pollution from Agriculture, published by the US Environmental Protection
Agency. The report gathered fertilizer input data from farmers located
within eight USDA Demonstration and eight Hydrologic Unit Projects from
1991-1995. It was not clear how many farms were surveyed in all of the
samples. This study indicated that after adoption of nutrient
management, farmers reduced nitrogen application by an average of 51
pounds per acre, and phosphorus by 26 pounds. Fertilizer application
rates in this study varied across the country. The nitrogen application
reduction ranged from a low of 21 pounds to a high of 72 pounds.
Phosphorus reduction rates ranged from six to fifty-five pounds.

A second study conducted by Christensen (1998) surveyed 890 producers in
16 states. The study did not specifically state that the adoption of
nutrient management practices was a result of implementation of a plan
developed with technical guidance provided in the NRCS nutrient
management practice standard. Instead, the study classified producers as
low, medium, and high adopters of nutrient management technologies. The
factors the study considered in classifying producers in relation to
nutrient management activities were:

-   Nitrogen test using either soil or plant tissue in 1995 or 1996,

-   Nitrogen inhibitor used in 1996,

-   No nitrogen products were applied by broadcasting, or if nitrogen
    was broadcast, the product was incorporated into the soil for the
    1996 crop,

-   All nitrogen was applied at or after planting in 1996,

-   Some aspect of precision agriculture was adopted before or during
    1996,

-   A legume was grown in rotation with corn sometime during the two
    years prior to 1996, and

-   Either a negative or slightly positive nitrogen mass balance based
    on expected yield.

Producers in the high category adopted four or more of the listed
nutrient management attributes. Medium category farmers used two or
three of the components, and low category producers used either one
attribute or none at all.

The NRCS Nutrient Management Standard (conservation practice 590)
encompasses all of the previously mentioned attributes. However, most of
them only apply under certain geographic and environmental situations,
and are not universally required on all 590 plans. The only one of the
seven attributes that is required by the NRCS nutrient management
standard, (590), is item seven regarding nitrogen mass balances based on
expected crop yield. Most producers do not meet NRCS standards for
nutrient management. Frequently, producers will apply extra nitrogen as
a form of cheap "insurance" to give crops an extra boost.

For the purposes of this analysis, a weighted average of the medium and
high producers was used to approximate the producers who adopt the NRCS
nutrient management standard. The relative amounts of nutrients applied
to crops, and measurement of the impacts of moving from the base
condition (the low adopters in the ERS study) to fully adopting the NRCS
nutrient management standard (composite of the medium and high adopters)
can be approximated by use of the values in the ERS study).

+--------------------------+------------+----------------+-------------+
| > []{#__R                |            |                |             |
| efHeading___Toc219115405 |            |                |             |
| > .anchor}**Table 33.    |            |                |             |
| > Average nutrient       |            |                |             |
| > applications on corn   |            |                |             |
| > by class of nutrient   |            |                |             |
| > management adopters.** |            |                |             |
+--------------------------+------------+----------------+-------------+
| **Item**                 | **Low      | **Medium       | > **High    |
|                          | Adopters** | Adopters**     | >           |
|                          |            |                |  Adopters** |
+--------------------------+------------+----------------+-------------+
| Nitrogen (lbs.)          | 155        | 132            | > 120       |
+--------------------------+------------+----------------+-------------+
| Phosphorus (lbs.)        | 58         | 54             | > 46        |
+--------------------------+------------+----------------+-------------+
| Potash (lbs.)            | 84         | 69             | > 82        |
+--------------------------+------------+----------------+-------------+
| Percent of Total         | 19         | 70             | > 12        |
| Producers                |            |                |             |
+--------------------------+------------+----------------+-------------+

Developing a composite application rate of those who adopt nutrient
management according to NRCS standards (following the assumptions in the
previous paragraph) compared to those producers who do not follow NRCS
conservation practice 590 results in the following application rates:

+-------------------+----------+---------------+---------------------+
| []{#__RefHeadi    |          |               |                     |
| ng___Toc219115406 |          |               |                     |
| .anchor}**Table   |          |               |                     |
| 34. Average       |          |               |                     |
| estimated         |          |               |                     |
| nutrient          |          |               |                     |
| application with  |          |               |                     |
| adoption of NRCS  |          |               |                     |
| conservation      |          |               |                     |
| practice 590.**   |          |               |                     |
+-------------------+----------+---------------+---------------------+
| **Item**          | **Non    | **Adopted     | > **Net Reduction   |
|                   | Ad       | NRCS**        | > Due to**          |
|                   | opters** |               | >                   |
|                   |          | **590         | > **Adoption of     |
|                   |          | Standard**    | > NRCS 590**        |
+-------------------+----------+---------------+---------------------+
| Nitrogen (lbs.)   | 155      | 130           | > 25                |
+-------------------+----------+---------------+---------------------+
| Phosphorus (lbs.) | 58       | 53            | > 5                 |
+-------------------+----------+---------------+---------------------+
| Potash (lbs.)     | 84       | 71            | > 13                |
+-------------------+----------+---------------+---------------------+

Prices for nutrients applied to cropland can vary based on the form in
which the nutrients are applied. Anhydrous ammonia, for example, is less
expensive than other forms of nitrogen. Nitrogen is the nutrient that
exhibits the greatest price variation between commonly applied forms of
the input. For the purposes of this analysis, prices of nutrients are
set based on data from the National Agricultural Statistics Service for
2007[^24]. The prices per unit are derived from the national average
cost per ton of various commercial product prices based on the
percentage of nutrient contained in a ton. Only mineral fertilizers that
were applied as a single nutrient were used to determine nutrient price
values. For the purposes of this analysis, nitrogen is valued at 49¢ per
pound (based on the national average price for Urea), phosphorus at 48¢
per pound (based on the national average price for DAP), and potash at
22.6¢ per pound (based on the national average price for 0-0-62).

The estimated benefits per acre in cost savings are shown in table 35.

  --------------------------------- --------------- ------------------- ----------------------
  []{#__RefHeading___Toc219115407                                       
  .anchor}**Table 35. Reduced corn                                      
  fertilizer input costs per acre                                       
  with adoption of nutrient                                             
  management according to NRCS                                          
  standards.**                                                          

  **Item**                          **Input         **Price Per Unit of **Cost Savings (\$)**
                                    Reduction       Input (\$)**        
                                    (lbs.)**                            

  Nitrogen                          25              \$0.49              \$12.31

  Phosphorus                        5               \$0.48              \$2.40

  Potash                            13              \$0.23              [\$2.94]{.underline}

  **Value of averted losses:**                                          **\$17.65**
  --------------------------------- --------------- ------------------- ----------------------

## Wildlife Habitat

The indirect beneficial impact on wildlife habitat realized by producers
participating in EQIP is a good example of the multiple environmental
benefits realized by many conservation programs (table 36 defines the
average life of the practices and the benefit stream over time,
similarly to those of the previously discussed benefit categories). As
stated in legislation describing EQIP purposes, benefits need to include
positive impacts to wildlife. Generally, EQIP focuses on erosion and
water quality environmental concerns in areas where significant natural
resource problems exist. However, these issues have an indirect impact
on wildlife as the conservation practices often provide important
habitat[^25]. The program also provides opportunities for direct
assistance with wildlife habit management and wetland habitat
management. Fish and wildlife benefits accrue based on the types of
practices installed with EQIP. The primary practices are conservation
buffer practices, fencing, ponds, upland wildlife habitat management and
wetland restoration and management.

A review of available literature indicates that a great deal has been
written about the values of wildlife conservation (Gibilisco and
Filipek, Washington Department of Fish and Wildlife). The National
Survey of Fishing, Hunting, and Wildlife Associated Recreation[^26]
conducted by the U.S. Fish and Wildlife Service, contains extensive data
on expenditures relating to the availability of wildlife-based
activities.

For the purpose of this analysis, benefits are calculated based on
results from an ERS study described in Feather, et al. Benefits are
based on *use values*, or the value derived from directly using the
resource. Specifically, benefits are calculated for wildlife viewing and
pheasant hunting. Although improvements in wildlife habitat benefit a
number of avian species, the demand for pheasant hunting was easier to
quantify based on existing recreational data. The ERS model evaluates
the quantity and quality of the cover available for specific avian
species, and then estimates the surplus resulting from converting land
to CRP. Since establishing grassland or forest cover creates suitable
habitat for birds, small game, and big game, hunters and wildlife
viewers then benefit from these increased populations (Feather, p. 10)
The model also incorporates travel costs, landscape diversity, and
population density.

However, there are limitations associated with calculating benefits for
EQIP based on the CRP, as summarized in the following matrix:

  ------------------------ ----------------------------------------------
  **CRP**                  **EQIP**

  Land retired from        Land remains in agricultural production
  production               

  Minimum contract length  Average contract length based on historical
  of ten years             participation is four to six years

  Emphasis on marginal     Emphasis on productive land with treatment
  land                     needs
  ------------------------ ----------------------------------------------

Practices beneficial to wildlife, primarily those that improve cover,
are listed in table 36 based on the projected number of acres in future
program implementation years. The annual benefits for improved wildlife
habitat are based on ERS studies of the CRP program. They involve two
components: improved wildlife viewing (\$10.02) per acre and improved
pheasant hunting (\$2.36) per acre. These benefit estimates were reduced
50 percent (\$6.19 per acre) to account for factors such as expected
lower per-acre benefits on "working" lands versus retired lands,
different spatial proximity of EQIP lands than CRP lands, shorter
contract length, etc. Using a GDP index factor of 1.15 to adjust the
value from 2002 to 2007, the resulting benefit is \$7.10 per acre.

A number of practices benefit wildlife populations by reducing soil
erosion and improving aquatic habitat, however these benefits are
already quantified in the water quality section of the analysis. Impacts
of many other practices that may be managed for wildlife are not
included. These include pasture and hay land planting, fencing, ponds.
Other recreational activities are not covered such as nature walking, or
big game hunting. In addition, *nonuse values* are not quantified, or
were values given to the existence of an environmental resource even
though it is not currently used, such as existence value bequest value,
or option value (Smith, 1996).

The net economic benefit an individual receives from consuming a market
good is defined as the excess, over and above the market price, that an
individual would pay to consume the good. This net benefit is referred
to as \"consumer surplus\" (Deaton and Muellbauer, 1980). For purposes
of this analysis, benefits accruing to wildlife purposes are calculated
for three specifically defined uses. Although the resulting benefits are
high, they are based on actual expenditure or use data for the
identified recreational purposes, and the surplus resulting from EQIP.
There are significant benefits for other uses that are not quantified,
small, and big game hunting, for example. Benefits that are more
difficult to quantify are also not included. The benefits are
non-monetary and include values given to existence of resources not
currently used.

<table>
<colgroup>
<col style="width: 4%" />
<col style="width: 31%" />
<col style="width: 9%" />
<col style="width: 6%" />
<col style="width: 7%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 5%" />
<col style="width: 5%" />
<col style="width: 5%" />
<col style="width: 5%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="14"><span id="__RefHeading___Toc219115408"
class="anchor"></span><strong>Table 36. Distribution of benefits over
time for practices affecting wildlife habitat.</strong></td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td colspan="2"></td>
<td colspan="10"><strong><u>Proportion of Full Annual Benefits Occurring
by Year (year 1 is funding and contract year)</u></strong></td>
</tr>
<tr class="odd">
<td colspan="2"><strong>Practice Code and Name</strong></td>
<td><p><strong>Historical</strong></p>
<p><strong>Cost Share</strong></p></td>
<td><strong>Practice Life (yrs)</strong></td>
<td><strong>1</strong></td>
<td><strong>2</strong></td>
<td><strong>3</strong></td>
<td><strong>4</strong></td>
<td><strong>5</strong></td>
<td><strong>6</strong></td>
<td><strong>7</strong></td>
<td><strong>8</strong></td>
<td><strong>9</strong></td>
<td><strong>10</strong></td>
</tr>
<tr class="even">
<td>580</td>
<td>Streambank and Shoreline Protection</td>
<td>$33,340,508</td>
<td>20</td>
<td>0.0</td>
<td>0.4</td>
<td>0.8</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td>666</td>
<td>Forest Stand Improvement</td>
<td>$30,256,252</td>
<td>10</td>
<td>0.0</td>
<td>0.1</td>
<td>0.2</td>
<td>0.4</td>
<td>0.8</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="even">
<td>490</td>
<td>Tree/Shrub Site Preparation</td>
<td>$27,182,628</td>
<td>15</td>
<td>0.0</td>
<td>0.1</td>
<td>0.2</td>
<td>0.4</td>
<td>0.8</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td>612</td>
<td>Tree/Shrub Establishment</td>
<td>$23,962,440</td>
<td>15</td>
<td>0.0</td>
<td>0.1</td>
<td>0.2</td>
<td>0.4</td>
<td>0.8</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="even">
<td>412</td>
<td>Grassed Waterway</td>
<td>$21,371,765</td>
<td>10</td>
<td>0.0</td>
<td>0.8</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td>338</td>
<td>Prescribed Burning</td>
<td>$9,499,352</td>
<td>5</td>
<td>0.0</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.8</td>
<td>0.6</td>
<td>0.4</td>
<td>0.2</td>
<td>0.0</td>
</tr>
<tr class="even">
<td>380</td>
<td>Windbreak/Shelterbelt Establishment</td>
<td>$9,093,279</td>
<td>15</td>
<td>0.0</td>
<td>0.1</td>
<td>0.2</td>
<td>0.4</td>
<td>0.8</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td>645</td>
<td>Upland Wildlife Habitat Management</td>
<td>$8,240,157</td>
<td>1</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.8</td>
<td>0.6</td>
<td>0.4</td>
<td>0.2</td>
<td>0.1</td>
<td>0.0</td>
</tr>
<tr class="even">
<td>643</td>
<td>Restoration and Management of Rare and Declining Habitats</td>
<td>$3,244,425</td>
<td>15</td>
<td>0.0</td>
<td>0.4</td>
<td>0.8</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td>409</td>
<td>Prescribed Forestry</td>
<td>$3,101,649</td>
<td>1</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.8</td>
<td>0.6</td>
<td>0.4</td>
<td>0.2</td>
<td>0.1</td>
<td>0.0</td>
</tr>
<tr class="even">
<td>386</td>
<td>Field Border</td>
<td>$2,938,960</td>
<td>10</td>
<td>0.0</td>
<td>0.4</td>
<td>0.8</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td>327</td>
<td>Conservation Cover</td>
<td>$2,270,775</td>
<td>10</td>
<td>0.0</td>
<td>0.1</td>
<td>0.2</td>
<td>0.4</td>
<td>0.8</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="even">
<td>394</td>
<td>Firebreak</td>
<td>$2,264,820</td>
<td>10</td>
<td>0.0</td>
<td>0.8</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td>391</td>
<td>Riparian Forest Buffer</td>
<td>$1,395,598</td>
<td>15</td>
<td>0.0</td>
<td>0.4</td>
<td>0.8</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="even">
<td>650</td>
<td>Windbreak/Shelterbelt Renovation</td>
<td>$1,373,109</td>
<td>15</td>
<td>0.0</td>
<td>0.4</td>
<td>0.8</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td>395</td>
<td>Stream Habitat Improvement and Management</td>
<td>$1,192,030</td>
<td>1</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.8</td>
<td>0.6</td>
<td>0.4</td>
<td>0.2</td>
<td>0.1</td>
<td>0.0</td>
</tr>
<tr class="even">
<td>647</td>
<td>Early Successional Habitat Development/Management</td>
<td>$895,044</td>
<td>15</td>
<td>0.0</td>
<td>0.1</td>
<td>0.2</td>
<td>0.4</td>
<td>0.8</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td>659</td>
<td>Wetland Enhancement</td>
<td>$693,249</td>
<td>15</td>
<td>0.0</td>
<td>0.4</td>
<td>0.8</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="even">
<td>646</td>
<td>Shallow Water Development and Management</td>
<td>$662,374</td>
<td>15</td>
<td>0.0</td>
<td>0.1</td>
<td>0.2</td>
<td>0.4</td>
<td>0.8</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td>657</td>
<td>Wetland Restoration</td>
<td>$655,524</td>
<td>15</td>
<td>0.0</td>
<td>0.4</td>
<td>0.8</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="even">
<td>422</td>
<td>Hedgerow Planting</td>
<td>$504,447</td>
<td>15</td>
<td>0.0</td>
<td>0.4</td>
<td>0.8</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td>644</td>
<td>Wetland Wildlife Habitat Management</td>
<td>$394,038</td>
<td>1</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.8</td>
<td>0.6</td>
<td>0.4</td>
<td>0.2</td>
<td>0.1</td>
<td>0.0</td>
</tr>
<tr class="even">
<td>396</td>
<td>Fish Passage</td>
<td>$369,000</td>
<td>10</td>
<td>0.0</td>
<td>0.8</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td>322</td>
<td>Channel Bank Vegetation</td>
<td>$165,118</td>
<td>10</td>
<td>0.0</td>
<td>0.1</td>
<td>0.2</td>
<td>0.4</td>
<td>0.8</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="even">
<td>658</td>
<td>Wetland Creation</td>
<td>$77,365</td>
<td>15</td>
<td>0.0</td>
<td>0.1</td>
<td>0.2</td>
<td>0.4</td>
<td>0.8</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td colspan="2">Total</td>
<td>$185,143,903</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="even">
<td colspan="2">Average, weighted by Cost Share</td>
<td> </td>
<td>12.8</td>
<td>0.0</td>
<td>0.3</td>
<td>0.5</td>
<td>0.7</td>
<td>0.9</td>
<td>1.0</td>
<td>0.9</td>
<td>0.9</td>
<td>0.9</td>
<td>0.9</td>
</tr>
</tbody>
</table>

## Energy Use 

Table 37 shows the life and expected benefit stream over time for each
practice affecting energy use in this study, and the cost-share weighted
averages over the group of practices. The list contains two annual
management practices with a life expectancy of one year. As a result,
the average practice life for these energy reducing practices results in
1 with full benefits occurring in years two, three and four followed by
a gradual tapering to zero benefits in year ten.

Benefits for energy reducing practices are based on preliminary results
of CEAP (Conservation Effects Assessment Project). Using CEAP estimates
of gallons of diesel fuel saved by implementing no-till and mulch
tillage residue management practices in lieu of conventional tillage
systems results in a savings of 2.99 gallons per acre. The Energy
Information Administration reports the national average diesel price is
\$3.08 per gallon in October, 2007. By deducting federal and state fuel
highway taxes of \$0.24 and \$0.22 per gallon results in a price of
\$2.61 per gallon for agricultural purposes. The result is a net benefit
of \$7.81 per acre for implementing energy reducing tillage practices.

<table>
<colgroup>
<col style="width: 4%" />
<col style="width: 26%" />
<col style="width: 11%" />
<col style="width: 8%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 4%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="14"><span id="__RefHeading___Toc219115409"
class="anchor"></span><strong>Table 37. Distribution of benefits over
time for practices affecting energy use.</strong></td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td></td>
<td></td>
<td colspan="10"><p><strong>Proportion of Full Annual Benefits Occurring
by Year</strong></p>
<p><strong><u>(year 1 is funding and contract
year)</u></strong></p></td>
</tr>
<tr class="odd">
<td colspan="2"><strong>Practice Code and Name</strong></td>
<td><strong>Historical Cost Share</strong></td>
<td><strong>Practice Life (yrs)</strong></td>
<td><strong>1</strong></td>
<td><strong>2</strong></td>
<td><strong>3</strong></td>
<td><strong>4</strong></td>
<td><strong>5</strong></td>
<td><strong>6</strong></td>
<td><strong>7</strong></td>
<td><strong>8</strong></td>
<td><strong>9</strong></td>
<td><strong>10</strong></td>
</tr>
<tr class="even">
<td>329</td>
<td>Residue and Tillage Management, No-Till / Strip Till / Direct
Seed</td>
<td>$143,664,330</td>
<td>1</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.8</td>
<td>0.6</td>
<td>0.4</td>
<td>0.2</td>
<td>0.1</td>
<td>0.0</td>
</tr>
<tr class="odd">
<td>345</td>
<td>Residue and Tillage Management, Mulch Till</td>
<td>$51,106,966</td>
<td>1</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.8</td>
<td>0.6</td>
<td>0.4</td>
<td>0.2</td>
<td>0.1</td>
<td>0.0</td>
</tr>
<tr class="even">
<td></td>
<td>Totals</td>
<td>$94,771,297</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td colspan="2">Average, weighted by Cost Share</td>
<td></td>
<td>1.0</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.8</td>
<td>0.6</td>
<td>0.4</td>
<td>0.2</td>
<td>0.1</td>
<td>0.0</td>
</tr>
</tbody>
</table>

## Carbon Sequestration

Table 38 shows the life and expected benefit stream over time for each
practice affecting carbon sequestration, and the cost-share weighted
averages over the group of practices. The average practice life for the
carbon sequestration practices was found to be five years, with nearly
full benefits occurring in years three through six, followed by a
gradual taper to 40 percent of benefits in year ten.

Carbon sequestration benefits are based on the Chicago Climate Exchange
(CCX) standardized rules for issuing Carbon Financial Instrument
contracts. The Chicago Climate Exchange has adopted location based
carbon credit offsets available to agricultural producers implementing
conservation tillage, grass plantings, grazing management and forestry
practices. The assumption is that even though a producer may not elect
to offer carbon credit benefits on the CCS, the practice benefits would
be available to do so. Using FY 2007 EQIP practice implementation as the
baseline, a weighted carbon sequestration rate of 0.233 metric ton per
acre was estimated for the mixture of practices listed in table 38. As
of July 16, 2008, the value of a carbon credit was \$4.00 per metric
ton. EPA comments recommended using an European market price, around
\$25 per ton. OMB comments recommended that USDA use 'the U.S. value of
the social cost of carbon used in several other rulemakings, which is
\$2/ton. USDA is using \$2.00/ton. As a result, the value per acre of
carbon sequestration is 47¢ per acre.

<table style="width:100%;">
<colgroup>
<col style="width: 6%" />
<col style="width: 27%" />
<col style="width: 11%" />
<col style="width: 11%" />
<col style="width: 3%" />
<col style="width: 3%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 4%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="14"><span id="__RefHeading___Toc219115410"
class="anchor"></span><strong>Table 38. Distribution of benefits over
time for practices affecting carbon sequestration.</strong></td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td></td>
<td></td>
<td colspan="10"><p><strong>Proportion of Full Annual Benefits Occurring
by Year</strong></p>
<p><strong><u>(year 1 is funding and contract
year)</u></strong></p></td>
</tr>
<tr class="odd">
<td colspan="2"><strong>Practice Code and Name</strong></td>
<td><strong>Historical Cost Share</strong></td>
<td><strong>Practice Life (yrs)</strong></td>
<td><strong>1</strong></td>
<td><strong>2</strong></td>
<td><strong>3</strong></td>
<td><strong>4</strong></td>
<td><strong>5</strong></td>
<td><strong>6</strong></td>
<td><strong>7</strong></td>
<td><strong>8</strong></td>
<td><strong>9</strong></td>
<td><strong>10</strong></td>
</tr>
<tr class="even">
<td>329</td>
<td><p>Residue and Tillage Management,</p>
<p>No-Till/Strip Till/Direct Seed</p></td>
<td>$143,664,330</td>
<td>1</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.8</td>
<td>0.6</td>
<td>0.4</td>
<td>0.2</td>
<td>0.1</td>
<td>0.0</td>
</tr>
<tr class="odd">
<td>327</td>
<td>Conservation Cover</td>
<td>$2,270,775</td>
<td>1</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.8</td>
<td>0.6</td>
<td>0.4</td>
<td>0.2</td>
<td>0.1</td>
<td>0.0</td>
</tr>
<tr class="even">
<td>342</td>
<td>Critical Area Planting</td>
<td>$12,678,050</td>
<td>10</td>
<td>0.0</td>
<td>0.5</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td>393</td>
<td>Filter Strip</td>
<td>$367,958</td>
<td>10</td>
<td>0.0</td>
<td>0.5</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="even">
<td>512</td>
<td>Pasture and Hay Planting</td>
<td>$124,302,665</td>
<td>10</td>
<td>0.0</td>
<td>0.5</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td>550</td>
<td>Range Planting</td>
<td>$22,083,307</td>
<td>15</td>
<td>0.0</td>
<td>0.5</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="even">
<td>528</td>
<td>Prescribed Grazing</td>
<td>$108,594,439</td>
<td>1</td>
<td>0.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.8</td>
<td>0.6</td>
<td>0.4</td>
<td>0.2</td>
<td>0.1</td>
<td>0.0</td>
</tr>
<tr class="odd">
<td></td>
<td>Totals</td>
<td>$413,961,524</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="even">
<td colspan="2">Average, weighted by Cost Share</td>
<td></td>
<td>5</td>
<td>0.0</td>
<td>0.8</td>
<td>1.0</td>
<td>1.0</td>
<td>0.9</td>
<td>0.8</td>
<td>0.6</td>
<td>0.5</td>
<td>0.4</td>
<td>0.4</td>
</tr>
</tbody>
</table>

## Animal Waste Management

About 12 percent of the grand total of benefits estimated for EQIP is
derived from producers adopting practices reducing non-point source
(NPS) water pollution. These benefits are a direct update of the CNMP
related benefits in the 2003 EQIP Benefit Cost Analysis accompanying the
earlier EQIP Rule, which was in turn based on the benefits analysis for
the 2002 EPA CAFO Rule.

There are a wide range of practices addressing animal waste management
which all eventually affect water quality. They range from installing
concrete or metal structures to store animal waste until suitable
conditions for proper applications; to planting vegetative filter strips
to treat wastewater runoff; to manure spreading techniques to minimize
impacts to the environment. These practices involve management,
construction, and cropping activities implemented in a comprehensive
manner to ensure that the environmental impact is minimized while not
compromising the economic viability of the farm.

CNMPs provide a blueprint for producers on how to address animal waste
management. For the purposes of this analysis, the benefits attributable
to animal waste management include all of the practices, including the
structural, management, and vegetative practices as well as the upfront
planning that is needed to achieve the resource management level
necessary for an EQIP contract.

The previous EQIP BCA (USDA, NRCS, 2003) calculated a \$30.23 benefit
per AU per year for implementation of CNMPs and associated practices in
1999 dollars, attributable to water quality. This estimate was based on
the benefit-cost analysis from the EPA (US EPA, 2001[^27]). The EPA
study was not a comprehensive estimate of all benefits expected to
result from animal waste treatment. The EPA study did include estimated
national benefits in the following categories for which data and
methodology was available:

-   Improvements in water quality and suitability for recreational
    activities (\$5 million to \$145 million);

-   Reduced incidence of fish kills (up to just over \$1 million);

-   Improved commercial shell fishing (\$2 million to \$3 million); and

-   Reduced contamination of private wells (\$70 million to \$77
    million).

The previous EQIP BCA (USDA, NRCS, 2003) also estimated an annual
\$16.40 per AU benefit[^28] due to nutrient value for crops which is
updated from 2001 to 2007 dollars to \$18.80 per AU. The \$30.23 water
quality benefit estimate[^29] was updated from 2001 to 2007 dollars to
produce a \$34.66 estimate. This is added to the crop nutrient benefit
estimate, resulting in \$53.46 per AU per year benefit. Note that this
latter benefit is an increase in the productivity of existing inputs
available to the producer. Thus, the benefits derived are mainly in
lower production costs. In the aggregate, output would be expected to
increase, resulting in lower prices. This aggregate impact on net
economic welfare is beyond the scope of this analysis. Also, it would be
expected that the formerly used inputs would make their supplies
available for use by other sectors or in later time periods. The \$18.80
per animal unit per year economic benefit derived from improved crop
nutrient management could be considered to be part of these overall
output and input market effects.

Table 39, Estimated Benefits and Costs Analysis of CNMPs expands the
calculation. With the 2007 baseline extended through 2012, the cost and
number of animal units treated per year remains constant, treating
545,000 animal units per year, or 2.7 million animal units over the
baseline five year period. With the expanded funding in the new Farm
Bill, the number of animals treated increases proportional with the
added funding, treating four million animal units over the life of the
new farm bill.

The number of animal units treated per year is multiplied by the \$53.46
benefit per animal unit to calculate the economic benefits of these CAFO
related practices for each year, both for the baseline and for the Rule.
These annual benefits are discounted at seven percent to obtain the net
present value of benefits of \$960 million for the baseline and \$1.414
billion for the new Rule.

The implementation costs of building the CNMP systems include both EQIP
financial assistance (FA) costs and producer costs. The EQIP FA costs
include 60 percent of the total implementation costs (estimated 60
percent cost share rate). Development costs for CNMPs, considered
technical assistance, are provided 100 percent by NRCS. The total costs
include all NRCS TA and FA costs, plus private costs.

The CAFO related costs and benefits are included in tables 6 and 7. The
benefits are also used in tables 1, 8, 9, and 14.

+-------------------------------+--------------------+-----------------+
| []                            |                    |                 |
| {#__RefHeading___Toc219115411 |                    |                 |
| .anchor}**Table 39. Estimated |                    |                 |
| benefits and costs analysis   |                    |                 |
| of CNMPS, using a seven       |                    |                 |
| percent discount rate.**      |                    |                 |
+-------------------------------+--------------------+-----------------+
| **Item**                      | **Baseline         | **New 2008**    |
|                               | Scenario**         |                 |
|                               |                    | **Farm Bill**   |
|                               | **(Continuation of |                 |
|                               | 2002 Farm Bill)**  |                 |
+-------------------------------+--------------------+-----------------+
| Number of AUs treated per     |                    |                 |
| year                          |                    |                 |
+-------------------------------+--------------------+-----------------+
| 2008                          | 544,792            | 665,321         |
+-------------------------------+--------------------+-----------------+
| 2009                          | 544,792            | 741,279         |
+-------------------------------+--------------------+-----------------+
| 2010                          | 544,792            | 803,930         |
+-------------------------------+--------------------+-----------------+
| 2011                          | 544,792            | 880,442         |
+-------------------------------+--------------------+-----------------+
| 2012                          | 544,792            | 970,260         |
+-------------------------------+--------------------+-----------------+
|                               | 2,723,962          | 4,061,233       |
+-------------------------------+--------------------+-----------------+
| NPV of ten year stream of     |                    |                 |
| benefits in year:             |                    |                 |
+-------------------------------+--------------------+-----------------+
| 2008                          | \$ 218,891,356     | \$ 267,318,550  |
+-------------------------------+--------------------+-----------------+
| 2009                          | \$ 218,891,356     | \$ 297,837,418  |
+-------------------------------+--------------------+-----------------+
| 2010                          | \$ 218,891,356     | \$ 323,009,914  |
+-------------------------------+--------------------+-----------------+
| 2011                          | \$ 218,891,356     | \$ 353,751,548  |
+-------------------------------+--------------------+-----------------+
| 2012                          | \$ 218,891,356     | \$ 389,839,552  |
+-------------------------------+--------------------+-----------------+
| NPV of five years benefits in | \$ 960,322,622     | \$              |
| 2007                          |                    | 1,413,974,010   |
+-------------------------------+--------------------+-----------------+
|                               |                    |                 |
+-------------------------------+--------------------+-----------------+
| NPV of ten year stream of     |                    |                 |
| implementation costs in year: |                    |                 |
+-------------------------------+--------------------+-----------------+
| 2008                          | \$ 167,050,311     | \$ 204,008,269  |
+-------------------------------+--------------------+-----------------+
| 2009                          | \$ 167,050,311     | \$ 227,299,213  |
+-------------------------------+--------------------+-----------------+
| 2010                          | \$ 167,050,311     | \$ 246,509,992  |
+-------------------------------+--------------------+-----------------+
| 2011                          | \$ 167,050,311     | \$ 269,970,943  |
+-------------------------------+--------------------+-----------------+
| 2012                          | \$ 167,050,311     | \$ 297,512,060  |
+-------------------------------+--------------------+-----------------+
| NPV of five years costs in    | \$ 732,885,003     | \$              |
| 2008                          |                    | 1,079,096,048   |
+-------------------------------+--------------------+-----------------+
|                               |                    |                 |
+-------------------------------+--------------------+-----------------+
| NPV of development costs in   |                    |                 |
| year:                         |                    |                 |
+-------------------------------+--------------------+-----------------+
| 2008                          | \$ 25,142,260      | \$ 30,704,696   |
+-------------------------------+--------------------+-----------------+
| 2009                          | \$ 25,142,260      | \$ 34,210,148   |
+-------------------------------+--------------------+-----------------+
| 2010                          | \$ 25,142,260      | \$ 37,101,507   |
+-------------------------------+--------------------+-----------------+
| 2011                          | \$ 25,142,260      | \$ 40,632,547   |
+-------------------------------+--------------------+-----------------+
| 2012                          | \$ 25,142,260      | \$ 44,777,681   |
+-------------------------------+--------------------+-----------------+
| NPV of five years costs in    | \$ 110,304,406     | \$ 162,411,631  |
| 2008                          |                    |                 |
+-------------------------------+--------------------+-----------------+
|                               |                    |                 |
+-------------------------------+--------------------+-----------------+
| NPV of Total Benefits         | \$ 960,322,622     | \$              |
|                               |                    | 1,413,974,010   |
+-------------------------------+--------------------+-----------------+
| NPV of Total Costs            | \$ 843,189,410     | \$              |
|                               |                    | 1,241,507,679   |
| > Both Development (TA) and   |                    |                 |
| > Implementation (FA &        |                    |                 |
| > Producer)                   |                    |                 |
+-------------------------------+--------------------+-----------------+
|                               |                    |                 |
+-------------------------------+--------------------+-----------------+
| Net Benefits over Total Costs | \$ 117,133,213     | \$ 172,466,330  |
+-------------------------------+--------------------+-----------------+
|                               |                    |                 |
+-------------------------------+--------------------+-----------------+

# Appendix F: Producer Demographics and Its Possible Linkages to EQIP

## Introduction

The 2008 Act introduces the group, "socially disadvantaged farmer or
rancher" (SDFRs) and merges it with two existing population groups
("beginning farmers and ranchers (BFRs) and "limited resource farmers
and ranchers," (LRFRs). All three groups form a new designation of
participants referred to as "historically underserved producers."
Definitions for BFRs and LRFRs are as defined in EQIP's final rule
published on May 30, 2003; however, the definition for SDFRs has been
added in accordance with the 2008 Act. This action sought to expand EQIP
participation to be more inclusive of farmers and ranchers who have been
subjected to racial or ethnic prejudices because of their identity as a
member of a group, without regard to their individual qualities. This
definition originates from Section 2501(g) of the Food Agricultural
Conservation and Trade Act of 1990, which defines "socially
disadvantaged."

A farmer or rancher meeting the definition of "historically underserved
producer" may be awarded the applicable payment rate and additional rate
that is not less than 25 percent above the applicable rate, provided
this increase does not exceed 90 percent of the incurred costs
associated with the conservation practice.

The State Conservationist will also allocate ten percent of the funds to
assist SDFRs, as determined by the State Conservationist, with advice
from the State Technical Committee. The stature allocates five percent
to assist BFRs; and five percent to assist SDFRs. In instituting the
statutory change, NRCS contemplated three ways to allocate funds to meet
the 2008 Act's requirements: (1) issuing the allocations at the national
level to defined geographic areas, where such groups are prevalent; (2)
issuing the allocations to each state; or (3) establishing a national
target that conforms to the statutory language, but providing states
flexibility to designate money to each specified group based on
potential demand in the State.

Under Option 3, NRCS pools the money and establishes a ten percent
target for each State, enabling State Conservationists to designate
money to the specified groups based on potential. For example, a State
may provide seven percent of the funds to beginning farmers and ranchers
and three percent to socially disadvantaged farmers and ranchers. NRCS
has chosen the latter option to ensure that nationwide these groups will
benefit from the EQIP assistance. Similar to EQIP's national livestock
target, overall State-level percentages will be tracked at the national
level to ensure national goals are met. It has also chosen the option in
an effort to provide flexibility to the states, since some states may
have difficulty reaching the designated percentages for the particular
groups, due to variations in the states' populations of these groups.
Similar to the EQIP's national livestock target, states' percentages
will be tracked at the national level to ensure that the 2008 Act's
national goals are met.

The effects of allocating the funds at the state level, with the targets
being monitored at the national level will be threefold: (1) funds will
be provided to applicants who may be in the greatest need for additional
assistance; (2) priority resource concerns may be better addressed; and
(3) NRCS will assure that the national targets for these groups are met.

In the event a "historically underserved producer" chooses to develop or
implement practice, the State Conservationist may issue advance payments
up to 30 percent of the anticipated amount of the costs incurred for the
purpose of purchasing materials or services to implement a conservation
practice.

## Potential impact of lower cost-share rate by "historically underserved producers" on their numbers in EQIP and possible impact on the environmental performance of EQIP

The risks to the overall program's ability to generate the same level of
environmental benefits as would occur without them (in order to increase
the number of "historically underserved producers") could be
substantial. The actual results would depend on several factors,
including: the initial conditions of the resource concerns of the
"historically underserved producers" operations relative to their
"non-historically underserved producers" and the initial mix of
"historically underserved producers" to "non-historically underserved
producers" and their relative size of operations. Consider a situation
where the initial number of "historically underserved producers" consist
of five percent of total applications and the size of all their EQIP
contracts is \$10,000 (also assume that the initial EQIP funding level
is \$1 billion, leaving \$100 million designated for "historically
underserved producers").

Assuming that "historically underserved producers" respond to the
lowering of the cost share expected of them (from \$2,500 to \$1,000 or
a 60 percent drop) with a 0.6 "price elasticity", one could expect to
see a 36 percent increase in participation by "historically underserved
producers". This increase would, indeed, increase participation by
"historically underserved producers" and they would be expected to
represent about seven percent of EQIP participants (table 40). This
assumes that all of the additional applicants qualify and receive the
additional 15 percent cost-share amounts. In the aggregate, total
spending would increase by almost \$29 million (about 20 percent of
which would be devoted to TA to service the additional participants and
about 80 percent in additional FA). This does not assume that TA per
contract would be higher for "historically underserved producers" than
"non-historically underserved producers".

The \$29 million increase in spending devoted to "historically
underserved producers" would need to be weighed against the net change
in environmental gains (comparing what the \$29 million would have
obtained without the "historically underserved producer" provision
against pursuing a strategy to increase participation by this group).
This almost \$29 million increase would represent an increase in
spending on these participants of almost 60 percent, but only take away
less than three percent of the current spending levels for
"non-historically underserved producers".

+---------------------------+-------------+-------------+-------------+
| []{#__                    |             |             |             |
| RefHeading___Toc219115412 |             |             |             |
| .anchor}**Table 40.       |             |             |             |
| Possible impacts of the   |             |             |             |
| increased cost-share rate |             |             |             |
| for "historically         |             |             |             |
| underserved producers" in |             |             |             |
| EQIP.**                   |             |             |             |
+---------------------------+-------------+-------------+-------------+
| **Item**                  | **With      | **With      | **Change**  |
|                           | normal**    | 90%**       |             |
|                           |             |             |             |
|                           | **75% cost  | **cost      |             |
|                           | share**     | share**     |             |
+---------------------------+-------------+-------------+-------------+
|                           |             |             |             |
+---------------------------+-------------+-------------+-------------+
| Number of "Historically   | 5,000       | 6,800       | \$1,800     |
| underserved producers"    |             |             |             |
+---------------------------+-------------+-------------+-------------+
| Farmer Costs Per Contract | \$2,500     | \$1,000     | -\$1,500    |
+---------------------------+-------------+-------------+-------------+
| Total Farmer Costs        | \           | \$6,800,000 | \$5,700,000 |
|                           | $12,500,000 |             |             |
+---------------------------+-------------+-------------+-------------+
| NRCS Costs -- TA          | \$2,800     | \$2,800     | 0           |
+---------------------------+-------------+-------------+-------------+
| FA                        | \$7,500     | \$9,000     | \$1,500     |
+---------------------------+-------------+-------------+-------------+
| Total NRCS Costs Per      | \$10,300    | \$11,800    | \$1,500     |
| Contract                  |             |             |             |
+---------------------------+-------------+-------------+-------------+
| Total NRCS Costs          |             |             |             |
+---------------------------+-------------+-------------+-------------+
| TA 1/                     | \           | \           | \$5,040,000 |
|                           | $14,000,000 | $19,040,000 |             |
+---------------------------+-------------+-------------+-------------+
| FA                        | \           | \           | \           |
|                           | $37,500,000 | $61,200,000 | $23,700,000 |
+---------------------------+-------------+-------------+-------------+
| **Total NRCS Costs**      | **\$5       | **\$8       | **\$2       |
|                           | 1,500,000** | 0,240,000** | 8,740,000** |
+---------------------------+-------------+-------------+-------------+

## Socially disadvantaged farmer or rancher

Socially disadvantaged farmers or ranchers is defined as farmers or
ranchers whom have been subjected to racial or ethnic prejudices because
of their identity as a member of a group without regard to their
individual qualities.

In the implementation of 1996 Farm Bill, there was a loose definition of
socially disadvantaged and limited resource farmer. In October, 2002, to
implement the 2002 Act, USDA developed an interagency definition for
Limited Resource Farmer and Rancher based on income characteristics
alone. This had the unintended effect of excluding the other socially
disadvantaged farmers and ranchers from lower cost-share rates available
to the other traditionally underserved farmers and ranchers. In the 2008
Act, Congress rectified this by restoring the socially disadvantaged
farmer group in the rule, and provided them a lower cost-share rate. The
term socially disadvantaged farmers or ranchers also includes Indian
Tribes, Alaska Natives, and Pacific Islanders.

Based on the 2002 Census of Agriculture, the overall number of socially
disadvantaged farmers[^30] increased to 112,195 farmers/ranchers, and
represents 5.1 percent of US farmers and ranchers. Socially
disadvantaged farmers/ranchers operate almost 80 million acres, which is
8.4 percent of U.S. farm land, an 8 million acre increase from 1997 to
2002.

These numbers indicate that socially disadvantaged farmers control
increasing amounts of natural resources. These individuals probably have
a need for low-cost, technically sound, approaches to natural resource
conservation. Many of these individuals may need expanded technical and
financial assistance to build sustainable operations.

Sometimes, but not always, Limited Resource Farmers and Ranchers (LRFRs)
are also members of socially disadvantaged groups, such as American
Indians, African Americans, Asians, and Hispanics. LRFR is a designation
based on economic status, while socially disadvantaged affiliation is
determined by an individual's self-designation, and on definitions found
in Federal civil rights law.

In figure 1, the existence of socially disadvantaged farmers does not
necessarily mean that they are also LRFRs. This map assessed LRFR status
through the manipulation of census data[^31]. Additional maps for
Black/African American, Hispanic, and Native American farmers are
available in the Environmental Assessment for the 2008 EQIP program
rule.

![](media/image4.jpeg){width="6.0in" height="4.858333333333333in"}

[]{#__RefHeading___Toc219115318 .anchor}Figure 1. Location of socially
disadvantaged operators and limited resource farmers.

There is an overlap between the number of LRFRs and minorities in NRCS's
Eastern region (parts of FL, LA, SC, PA, NY, and the Appalachian
states), Central region (parts of TX, OK, MO, WI, and MN) and the
Western region (parts of NM, AZ, WY, CA, OR, and WA). TX, OK, and CA
seem to have the largest coincidence of LRFRs and socially disadvantaged
farmers.

The largest correlation between LRFR and Black farmers is in a portion
of Southern states in NRCS's Eastern and Central region. Estimates vary,
but over 95 percent of the Black farmers operate their farms in the
Southern part of the U.S. This map shows parts of TX, OK, KY, TN, MS,
SC, and FL have the largest intersection of LRFR and Black farmers.
Figure 2 indicates the number of Black/African American farmers over the
last several agricultural censuses have increased to 29,090 farmers, an
increase of 7.9 percent from 1997 to 2002.

**Hispanic farmers** are the largest group of socially disadvantaged
farm operators at 50,592, and are also the fastest growing group. This
group increased 33 percent from 1997 to 2002. Historically, 80 percent
of Hispanics were concentrated in eight states, the border/coastal
states from Texas to Washington, plus Colorado and Florida. Only 19
percent of US counties had any Hispanic farm operators in the 1982
Census of Agriculture. In the last 25 years, Hispanic farmers have
spread to every part of the country. Analysis of Hispanic Farmer data
shows that Hispanic Operators are underserved by USDA and require
additional outreach. However once they initially start using USDA
services, they have the same level of service as other customers. The
issue is getting them in the door that first time.[^32]

Although not as spectacular an increase as Hispanic farmers, **Native
American farm operators** have increased in numbers to 15,494 in 2002,
about a 17 percent increase from 1997. The map information for Alaska
was garnered from the Census data and appears to severely under
represent the number of Native American and Alaska Natives in
agriculture. One needs to exercise extreme caution when viewing these
numbers for Alaska, since approximately half of the federally recognized
tribes reside in Alaska.

Figure 2 shows numerical trends for socially disadvantaged farmers. From
1997 to 2002, there was a 33 percent increase in the numbers of Hispanic
farmers; 17 percent increase in American Indian (AKA Native American)
farmers; 8 percent increase in Black/African American farmers; and a
slight decrease in Asian American farmers. Figure 3 shows the land in
farms by socially disadvantaged group.

The figures 2 and 3 shows that although African American and Hispanic
farmers had the largest percentile increase in farm land at
approximately 29 percent and 19 percent, respectively, American Indian
farmers control the most acreage at 51.7 million acres. Asian American
farmers control the least number of acres and also experienced a 34
percent decrease from 1997 to 2002. However, this may be due to Hawaiian
farmers being counted separately from Asian American farmers in the 2002
Census of Agriculture.

![](media/image5.wmf)

[]{#__RefHeading___Toc219115319 .anchor}Figure 2. Number of principal
operators \-- African American, Hispanic, Asian American and American
Indian in 1992, 1997, and 2002.

![](media/image6.wmf){width="5.565972222222222in"
height="3.4340277777777777in"}

[]{#__RefHeading___Toc219115320 .anchor}Figure 3. Land in farms by
socially disadvantaged group.

### Past Participation in NRCS Conservation Activities and Programs

NRCS provides data on minority farmer participation in parity reports
available at

<http://ias.sc.egov.usda.gov/prsreport2007/>. The data collection varies
by year. Data from 2002 -- 2008 is presented in table 43, FY 2002 to FY
2008 NRCS parity reports on customers served through EQIP. Table 41
shows the percentage of minorities in FY 2007 who have been reported by
NRCS staff to have participated in various programs and also in
Conservation Technical Assistance activities.

  -------------------------------------- --------------- -------------- --------------
  []{#__RefHeading___Toc219115413                                       
  .anchor}**Table 41. Participation by                                  
  minorities in conservation technical                                  
  assistance and programs for FY                                        
  2007\*.**                                                             

  **Conservation Activity**              **Total\*\***   **Number of    **Percentage
                                                         Minorities**   of
                                                                        Minorities**

  Agriculture Management Assistance      315             4              1.3%

  Conservation Reserve Program           49,883          408            0.8%

  Conservation Security Program          332             19             5.7%

  Conservation Technical Assistance      73,159          1,899          2.6%

  Conservation Technical Assistance,     33,061          1,629          4.9%
  Grazing Lands Technology Initiative                                   

  Emergency Conservation Program (56)    84              1              1.2%

  Emergency Conservation Program (86)    178             2              1.1%

  Emergency Watershed Program            273             6              2.2%

  Environmental Quality Incentives       61,463          3,237          5.3%
  Program                                                               

  Environmental Quality Incentives       2,423           81             3.3%
  Program, Ground and Surface Water                                     
  Conservation                                                          

  Environmental Quality Incentives       190             6              3.2%
  Program, Klamath Basin                                                

  Farm and Ranch Lands Protection        9               \-             0.0%
  Program                                                               

  Flood Prevention Operations            92              \-             0.0%

  Forestry Incentives Program            9               \-             0.0%

  Grazing Lands Reserve Program          9               \-             0.0%

  Small Watershed Operations             113             \-             0.0%

  Wetland Reserve Program                1,137           24             2.1%

  Wildlife Habitat Protection Program    3,913           84             2.1%

  **Total Customers\*\*\***              **168,941**     **5,239**      **3.1%**

  \*Data calculated through the NRCS                                    
  Performance Results System (PRS).                                     

  \*\*The numbers listed under the                                      
  column labeled "Total" are less than                                  
  the totals of the columns because many                                
  customers were participants with                                      
  multiple programs.                                                    

  \*\*\*33,570 customers or 20 percent                                  
  of all customers have no demographic                                  
  information available in the PRS                                      
  dataset. NRCS customers are not                                       
  required to specify race or ethnicity                                 
  when applying for programs or                                         
  technical assistance.                                                 
  -------------------------------------- --------------- -------------- --------------

The percentage in the last column can be compared with the 5.1 percent
of minorities who are principal U.S. farm operators. EQIP has a
representation of socially disadvantaged farmers at seven percent, which
may reflect the success of the agency's outreach efforts and the
increased cost-share rate (up to 90 percent) that is available to LRFRs
through EQIP. Although all other NRCS programs have a lower percentage
of socially disadvantaged farmers who participate, CTA has a similar
percentage of participants (4.2 percent), which, although lower
percentagewise, is comparable to the number of socially disadvantaged
farmers.

The easement programs, CRP, GRP, and the WRP, have low socially
disadvantaged participation rates. Low participation may be due to many
factors including low program knowledge, lack of non-working land, and
ineffective outreach efforts. The reasons for these low rates need to be
investigated and improved upon. The WHIP program has higher percentage
of socially disadvantaged participants, but is still under the census
figure of 5.1 percent.

Table 42 shows a summary for all programs of the number of applicants,
the percentage accepted, and the money received. Most socially
disadvantaged sub-populations have high acceptance rates based on the
number of applicants; in fact, most percentage rates are higher than
White non-Hispanic males (45 percent) and females (46 percent). One
major difference, however, is the amount of money received by different
sub-groups. The White non-Hispanic males and females received about
\$1.1 billion compared to \$53 million received by all other groups
combined. The dollar amount socially disadvantaged participants received
represents about 4 percent of all program dollars. This percent is low,
considering that 8.4 percent of all United States farm land is operated
by socially disadvantaged farmers. However, based on the high percentage
of minorities accepted in the program, it seems that people who apply
for program dollars are treated fairly. The challenge seems to be to get
more minorities to apply.

NRCS maintains a parity report that consolidates the number of
occurrences of assistance that NRCS or partners conduct in the fiscal
year for underrepresented groups and compares that to how our service
compares with White non-Hispanics. This allows NRCS to report by fiscal
year the number of customers by group representation assisted. Report
selection criteria include location, program, time period, customer by
group representation.

This report can be used to determine broad distribution trends in
services provided to customers by the conservation partnership. For
example, to interpret the parity data in the National row in the above
report. The 2002 Census of Agriculture shows that there are 2,019,314
White non-Hispanic nationally, of which 15,111 have been served by the
conservation partnership or approximately 1 percent of all White
non-Hispanic served nationally. To determine parity between groups,
compare Black Hispanic to White non-Hispanic (the baseline population).
According to Census of Agriculture data there are 886 Black Hispanic
nationally, of which 23 have been served by the partnership in 2005,
representing approximately three percent of this group. To determine
parity, we compare the White non-Hispanic to the other categories, in
this example, the Black Hispanic. The three percent served Black
Hispanic minus the one percent White non-Hispanic equals plus two
disparity. This tells us that we served a higher percentage of Black
Hispanic than White non-Hispanic. If the number had been a negative two,
it would reflect a lower percentage of Black Hispanic served than White,
non-Hispanic. Note: the Disparity cell is conditionally colored, where
as if you are under or over represented by ten percent the cell is light
colored, if range is greater than is ten percent or more it is a
brighter color (table 43).

.

+-----------------------------+----------+-------------+--------------+
| []{#                        |          |             |              |
| __RefHeading___Toc219115414 |          |             |              |
| .anchor}Table 42. National  |          |             |              |
| program participation       |          |             |              |
| summary, FY 2004\*.         |          |             |              |
+-----------------------------+----------+-------------+--------------+
| **Group Representation**    | **App    | **          | **           |
|                             | licant** | Recipient** | Percentage** |
|                             |          |             |              |
|                             | **(Nu    | **          | **Accepted** |
|                             | mbers)** | (Dollars)** |              |
+-----------------------------+----------+-------------+--------------+
| American Indian/Alaska      | 144      | \$1,955,091 | 55%          |
| Native Female Non-Hispanic  |          |             |              |
+-----------------------------+----------+-------------+--------------+
| American Indian/Alaska      | 6        | \$49,240    | 16%          |
| Native Female Hispanic      |          |             |              |
+-----------------------------+----------+-------------+--------------+
| American Indian/Alaska      | 50       | \$704,358   | 60%          |
| Native Male Hispanic        |          |             |              |
+-----------------------------+----------+-------------+--------------+
| American Indian/Alaska      | 989      | \           | 64%          |
| Native Male Non-Hispanic    |          | $17,971,407 |              |
+-----------------------------+----------+-------------+--------------+
| Asian Female Non-Hispanic   | 39       | \$699,392   | 59%          |
+-----------------------------+----------+-------------+--------------+
| Asian Male Hispanic         | 12       | \$70,859    | 50%          |
+-----------------------------+----------+-------------+--------------+
| Asian Male Non-Hispanic     | 322      | \$6,219,424 | 56%          |
+-----------------------------+----------+-------------+--------------+
| Black or African American   | 3        | \$6,176     | 67%          |
| Female Hispanic             |          |             |              |
+-----------------------------+----------+-------------+--------------+
| Black or African American   | 176      | \$670,033   | 41%          |
| Female Non-Hispanic         |          |             |              |
+-----------------------------+----------+-------------+--------------+
| Black or African American   | 14       | \$49,268    | 29%          |
| Male Hispanic               |          |             |              |
+-----------------------------+----------+-------------+--------------+
| Black or African American   | 1,205    | \$5,999,140 | 47%          |
| Male Non-Hispanic           |          |             |              |
+-----------------------------+----------+-------------+--------------+
| Hawaiian Native/Pacific     | 2        | \$397,838   | 100%         |
| Islander Female Hispanic    |          |             |              |
+-----------------------------+----------+-------------+--------------+
| Hawaiian Native/Pacific     | 24       | \$310,372   | 67%          |
| Islander Female             |          |             |              |
| Non-Hispanic                |          |             |              |
+-----------------------------+----------+-------------+--------------+
| Hawaiian Native/Pacific     | 7        | \$256,061   | 100%         |
| Islander Male Hispanic      |          |             |              |
+-----------------------------+----------+-------------+--------------+
| Hawaiian Native/Pacific     | 149      | \$2,414,532 | 68%          |
| Islander Male Non-Hispanic  |          |             |              |
+-----------------------------+----------+-------------+--------------+
| White Female Hispanic       | 211      | \$4,859,603 | 55%          |
+-----------------------------+----------+-------------+--------------+
| White Male Hispanic         | 1,125    | \           | 56%          |
|                             |          | $10,820,623 |              |
+-----------------------------+----------+-------------+--------------+
| White Female Non-Hispanic   | 12,213   | \$          | 46%          |
|                             |          | 100,506,207 |              |
+-----------------------------+----------+-------------+--------------+
| White Male Non-Hispanic     | 101,057  | \$          | 45%          |
|                             |          | 999,265,154 |              |
+-----------------------------+----------+-------------+--------------+
| \*Source: Data gathered     |          |             |              |
| from NRCS PRS.              |          |             |              |
+-----------------------------+----------+-------------+--------------+

  --------------------------------- -------------- ------------ ---------------- ------------ ---------------- ------------ ---------------- ----------------- ----------------- ------------ ---------------- --------------- ---------------- --- ---------- ------------
  []{#__RefHeading___Toc219115415                                                                                                                                                                                                                              
  .anchor}**Table 43. FY 2002 to FY                                                                                                                                                                                                                            
  2008 NRCS parity reports on                                                                                                                                                                                                                                  
  customers served through EQIP.**                                                                                                                                                                                                                             

                                    **National     **White      **White          **Black      **Black          **American   **American       **Asian           **Asian           **Hawaiian   **Hawaiian       **Multiple      **Multiple Races     **No       **Total
                                    Totals**       Hispanic**   Non-Hispanic**   Hispanic**   Non-Hispanic**   Indian       Indian           Hispanic**        Non-Hispanic**    Hispanic**   Non-Hispanic**   Races           Non-Hispanic**       infor-     Individual
                                                                                                               Hispanic**   Non-Hispanic**                                                                     Hispanic**                           mation**   Customer**

                                    2002 Ag        45,933       2,019,314        886          28,182           1,600        13,865           587               7,699             141          842              478             7,175                0          2,126,702
                                    .Census                                                                                                                                                                                                                    

  2008                              Service        988 (2%)     41,299 (2%)      50 (6%)      790 (3%)         45 (3%)      456 (3%)         2 (0%)            215 (3%)          4 (3%)       120 (14%)        0 (0%)          74 (1%)              8,661 (0%) 52,704 (2%)

  9 months                          Disparity      0            N/A              4            1                1            1                -2                1                 1            12               -2              -1                   -2         

  2007                              Service        1,960 (4%)   130,132 (6%)     57 (6%)      1,397 (5%)       101 (6%)     824 (6%)         5 (1%)            445 (6%)          11 (8%)      256 (30%)        3 (1%)          180 (3%)             33,570     168,941 (8%)
                                                                                                                                                                                                                                                    (0%)       

                                    Disparity      -2           N/A              0            -1               0            0                -5                0                 2            24               -5              -3                   -6         

  2006                              Service        654 (1%)     28,016 (1%)      27 (3%)      446 (2%)         37 (2%)      379 (3%)         6 (1%)            112 (1%)          6 (4%)       49 (6%)          0 (0%)          68 (1%)              8,648 (0%) 38,448 (2%)

                                    Disparity      0            N/A              2            1                1            2                0                 0                 3            5                -1              0                    -1         1

  2005                              Service        385 (1%)     12,773 (1%)      23 (3%)      190 (1%)         23 (1%)      221 (2%)         4 (1%)            55 (1%)           3 (2%)       22 (3%)          2 (0%)          42 (1%)              14,385     28,128 (1%)
                                                                                                                                                                                                                                                    (0%)       

                                    Disparity      0            N/A              2            0                0            1                0                 0                 1            2                -1              0                    -1         0

  2004                              Mid-year                                                                                                                                                                                                                   
                                    change in                                                                                                                                                                                                                  
                                    baseline and                                                                                                                                                                                                               
                                    definitions.                                                                                                                                                                                                               

                                                   **White      **White          **Black      **Black          **American   **American       **Asian/Pacific   **Asian/Pacific   **Other      **Other          **Totals**                                      
                                                   Hispanic**   Non-Hispanic**   Hispanic**   Non-Hispanic**   Indian       Indian           Islander          Islander          Hispanic**   Non-Hispanic**                                                   
                                                                                                               Hispanic**   Non-Hispanic**   Hispanic**        Non-Hispanic**                                                                                  

                                    1997 Ag.       18,456       1,844,326        266          18,169           322          10,307           242               8,432             8,074        1,653            **1,910,247**                                   
                                    Census                                                                                                                                                                                                                     

  2003                              Service        1,027 (6%)   55,793 (3%)      5 (2%)       1,014 (6%)       10 (3%)      1,095 (11%)      7 (3%)            343 (4%)          840 (10%)    155 (9%)         **60,289 (3%)**                                 

                                    Disparity      3            N/A              -1           3                0            8                0                 1                 7            6                **0**                                           

  2002                              Service        1,097 (6%)   48,346 (3%)      8 (3%)       978 (5%)         13 (4%)      920 (9%)         13 (5%)           290 (3%)          627 (8%)     105 (6%)         **52,397 (3%)**                                 

                                    Disparity      3            N/A              0            2                1            6                2                 0                 5            3                **0**                                           
  --------------------------------- -------------- ------------ ---------------- ------------ ---------------- ------------ ---------------- ----------------- ----------------- ------------ ---------------- --------------- ---------------- --- ---------- ------------

### NRCS Responses

Over the last several decades, the NRCS has recognized that there are
increasing numbers of socially disadvantaged, beginning, female, and
limited resource farmers and ranchers. Several measures have been taken
to address this change in the agricultural customer base. Some of these
measures include:

-   Development of a separate Outreach Division in Washington D.C.,
    along with outreach coordinators serving the states.

-   Development of a NRCS outreach training course that is scheduled for
    release in 2008.

-   Funding EQIP so that socially disadvantaged, limited resource and
    beginning farmers and ranchers receive cost-share rates up to 90
    percent.

-   Total EQIP funding set aside amounts for socially disadvantaged and
    limited resource farmers or ranchers.

-   Developing informational materials in English and Spanish.

-   Civil Rights reviews have added "Outreach" reviews when appraising
    state activities.

-   Recognition of growing numbers of "new" or "beginning" farmers, who
    may require more basic forms of technical assistance.

-   High acceptance percentage of socially disadvantaged farmers who
    apply for programs.

### Methods to Increase Participation

NRCS maintains a wide array of technical practices to address
conservation problems. These practices have been developed over time by
working with private land owners on a wide variety of lands. As such,
these practices often assume a depth of experience and knowledge that
many socially disadvantaged, beginning or limited resource farmers and
ranchers may not have. The NRCS must be willing and able to develop
explanatory materials and methods that do not assume a great deal of
experience on the part of the customer.

In a similar way, NRCS planners must be able to explain the uses and
variations of particular practices in ways that are appropriate to
different experience and knowledge levels. Many new socially
disadvantaged farmers may not have the experience, knowledge, or
equipment to implement practices that more seasoned farmers might take
for granted.

The NRCS is already addressing the degree to which technical standards
for certain practices (fencing, for example) may be altered to allow
people of different cultural backgrounds and limited economic means to
participate in conservation cost-share programs. Technical adequacy will
not be compromised, but there should be a greater willingness to amend
or expand technical standards to include less-costly options.

  ----------------------------------- -----------------------------------
  []{#__RefHeading___Toc219115416     
  .anchor}**Table 44. Farm bill       
  response to the trends of socially  
  disadvantaged farmers.**            

  **Trends**                          **Farm Bill Response**

  American Indian farmers control     Continue to provide financial and
  more than 50 million acres          technical assistance to tribes for
  throughout the U.S.                 adoption of conservation and for
                                      establishing Conservation Districts
                                      on tribal lands.

  Hispanic farmers have the highest   Informational materials in English
  number of socially disadvantaged    needs to include visual
  farmers at just over 50,000 farmers representations and Spanish needs
  and their numbers are increasing at to accompany English on
  a rapid rate.                       informational material in heavily
                                      populated Hispanic areas.

  The number of socially              Provide 90 percent cost-share rates
  disadvantaged farm operators is     for socially disadvantaged farmers,
  increasing                          LRFRs and/or beginning farmers;
                                      ensure the use of demonstrations

  Socially disadvantaged operators    Provide 90 percent cost-share rates
  may also fall under the category of for limited resource farmers and
  limited resource farmers and        ranchers; ensure the use of
  ranchers                            demonstrations; EQIP also provides
                                      a total of 10 percent of total
                                      funding as a set side amount for
                                      beginning and socially
                                      disadvantaged farmers and ranchers

  Socially disadvantaged operators    Continue to develop low cost
  are farming smaller acres and       conservation practices for small
  planting non-traditional crops      and medium size farmers

  Many Asian American operators grow  Develop special provisions and
  vegetables for internal             incentives for Asian vegetable
  distribution to U.S. Asian          growers to reward reduced
  communities and for export to Asian agrichemical inputs.
  communities abroad.                 

  Set-aside programs (CRP, GRP, and   Analysis combined with increased
  WRP) have extremely low             outreach efforts in those programs
  participation rates for socially    need to occur
  disadvantaged farmers               
  ----------------------------------- -----------------------------------

## Beginning Farmer or Rancher

### Definition

The Beginning Farmer or Rancher definition as stated in the final rule
is an individual or entity who:

(A) Has not operated a farm or ranch, or who has operated a farm or
    ranch for not more than 10 consecutive years. This requirement
    applies to all members of an entity, and will materially and
    substantially participate in the operation of the farm or ranch.

(B) In the case of a contract with an individual, individually or with
    the immediate family, material and substantial participation
    requires that the individual provide substantial day-to-day labor
    and management of the farm or ranch, consistent with the practices
    in the county or State where the farm is located.

(C) In the case of a contract with an entity or joint operation, all
    members must materially and substantially participate in the
    operation of the farm or ranch. Material and substantial
    participation requires that each of the members provide some amount
    of the management, or labor and management necessary for day-to-day
    activities, such that if each of the members did not provide these
    inputs, operation of the farm or ranch would be seriously impaired.

In the 1997 Census of Agricultural, there were 482, 997 farm operators
with less than ten years on the present farm, 30 percent of all farm
operators. They tend to have smaller farms, concentrating more into
minor crops and livestock than grain and soybeans. Only 34 percent of
these consider farming as their principle occupation, compared with 57
percent of farmers with over ten years on the farm. Most beginning
farmers also work a full-time job besides managing the farm. They are
less likely to be receiving any Government payments. Higher proportions
of Hispanic and female operators will qualify as beginning farmers.

Beginning farmers and ranchers have a problem of low cash reserves and
low equity positions that prevent their expenditures on conservation
practices. Many have the education and technology available to practice
good conservation, but their current loan payments are so large that
they do not have the available cash. Because of their ages, they are
more likely to have dependant children and higher household expenses.
Providing qualified beginning farmers and ranchers with the higher cost
share should help to promote good conservation by these producers.

The 'all members of the entity' subsection (ii) disallows younger
farmers being brought up within well-establish extended family farms,
whether in partnerships or family corporations. This is consistent with
long-term 'beginning farmer' program rules in other USDA programs. It is
likely that the extended family farms have enough resources to meet
their necessary cost share for these conservation practices. These
multi-generation family farms usually provide better conservation on
their lands because of their extended planning horizon.

### Trends

There are unique challenges of farmers and ranchers who are just
beginning their agricultural businesses. These "beginning farmers and
ranchers" are given special recognition in the Farm Bill, in order to
encourage the expansion in the number of farms and ranches across the
nation, a number which has been declining for several years[^33].

Figure 4 illustrates the general locations of beginning farmers across
the U.S. As the map shows, the majority of beginning farmers and
ranchers are grouped in the West and South. Some of the percentages
depicted on the maps may be a result of a combination of low initial
populations and expanding suburban areas, particularly in the western
U.S. In general, however, this figure gives a good general idea of the
location of beginning farmers and ranchers.

![](media/image7.jpeg){width="6.5777777777777775in"
height="5.635416666666667in"}

[]{#__RefHeading___Toc219115321 .anchor}Figure 4. Percentages of
beginning farmers and ranchers nationally.

### 

### Data

The 2002 Census of Agriculture reported roughly 2,112,000 principal
operators of farms and ranches across the United States. The 2002 Census
of Agriculture also captured information on how long principal operators
have been on their current farms or ranches. Of the more than two
million principal operators reported in the 2002 Census of Agriculture,
593,139 were listed as being on their present farm or ranch for less
than 10 years. The number of principal operators is used in this
analysis, rather than total number of operators, to more accurately
reflect the actual number of beginning agricultural operations, rather
than the number of persons involved.

There is a lack of historical data on the trend in numbers of beginning
farmers and ranchers nationally. Based on the 2002 Census of
Agriculture, however, a general picture of beginning farmers and
ranchers can be formed. Table 45 shows the self-identified racial
distribution of principal operators as beginning farmers and ranchers
nationally.

  ---------------------------------------- -------------- ----------------
  []{#__RefHeading___Toc219115417                         
  .anchor}**Table 45. Racial                              
  characteristics of principal operator                   
  who is a beginning farmer or                            
  rancher\*.**                                            

  **Race**                                 **Number**     **Percentage**

  White                                    572,486        97%

  Black or African American                8,560          1%

  American Indian or Alaska Native         5,978          1%

  Native Hawaiian or other Pacific         411            \<1%
  Islander                                                

  Asian                                    3,048          \<1%

  MTORR\*\*                                2,656          \<1%

  \*All data taken from 2002 Census of                    
  Agriculture, table 52.                                  

  \*\*MTORR -- More Than One Race                         
  Reported.                                               
  ---------------------------------------- -------------- ----------------

Additionally, 18,619 individual beginning farmer or rancher principal
operators (roughly 3 percent of all beginning farmer or rancher
principal operators) identified themselves as being of Spanish,
Hispanic, or Latino origin, according to the 2002 Census of Agriculture.
This is an increase of about 33 percent from the levels reported in the
1997 Census of Agriculture. This indicates an upward trend in the number
of Hispanics who are beginning farmers and ranchers, even though the
numbers remain relatively low nationwide.

It should be noted that individuals of any race may self-identify as
being of Spanish, Hispanic, or Latino origin, which is an ethnic and
cultural designation. In other words, most Hispanics in the 2002 Census
of Agriculture identify their "race" as "white" (93 percent), but also
consider themselves to be of "Hispanic" ethnicity. Being of
Hispanic/Spanish/Latino origin does not automatically make an individual
"white", "black", or any other race.

The 2002 Census of Agriculture also identifies 90,523 beginning farmer
or rancher principal operators as female. This is roughly 15 percent of
all beginning farm and ranch principal operators. This number is up from
68,244 in 1997, also indicative of an upward trend in numbers of female
beginning farmers and ranchers.

The majority of all principal operators who are beginning farmers and
ranchers have operations of less than 50 acres in size (See Graph 11,
below). This may indicate that most beginning farmers and ranchers do
not rely solely on their agricultural operations for a living, but
instead farm or ranch part time. The 2002 Census of Agriculture shows
that of all agricultural operations less than 10 acres in size
(179,346), 42 percent (75,354) were operated by beginning farmers or
ranchers. These are relatively small operations that would probably not
be a sole source of income for their operators. Some may even be
retirees or hobby farmers who use agriculture to supplement their
incomes.

The number and percentage of beginning farmers and ranchers drops as
operation size increases. For agricultural operations over 1,000 acres
in size, roughly 13 percent of all principal operator were on their
current operations less than ten years. This inverse proportional
relationship between operation size and number of beginning principal
operators may indicate lower initial capital for investment, lower
reliance on the operation as a sole source of income (as with retirees
or hobby farmers), or a focus on niche market production, such as
organically grown produce or livestock, which might be done successfully
on smaller acreages.

![](media/image8.wmf){width="6.622916666666667in"
height="4.290972222222222in"}

> Source: All data taken from 2002 Census of Agriculture, table 55

[]{#__RefHeading___Toc219115322 .anchor}Figure 5. Distribution of farms
by size with beginning farmer and rancher principal operators.

As noted earlier, the Farm Bill provided specific consideration for
beginning farmers and ranchers. The NRCS has responded to this part of
the Farm Bill through a number of means, including technical assistance
for natural resource planning, the Environmental Quality Incentives
Program (EQIP), the various reserve (CRP, WRP, etc.) programs, and a
variety of individual state level efforts.

The NRCS has recognized that many beginning farmers and ranchers may not
be familiar with many of the federal, state, and local financial and
technical assistance programs. Many NRCS state and field offices have
launched out reach and educational efforts targeted at new, beginning,
and small farmers and ranchers, in an effort to provide service to these
groups.

The NRCS has done a good job of addressing the needs of beginning
farmers and ranchers under EQIP, which is the primary source of agency
financial assistance for on-farm conservation planning. Table 46, below,
shows the number of EQIP applications, contract approval rates, and
dollars committed, for FY 2003-FY 2005.

  --------------------------------- ---------------- -------------- ------------ -------------------
  []{#__RefHeading___Toc219115418                                                
  .anchor}**Table 46. Beginning                                                  
  farmer and rancher activity under                                              
  EQIP, FY 2003--FY 2005.**                                                      

  **Year**                          **Number of      **Contracts    **Percent    **Total Contract**
                                    Applications**   Approved**     Approved**   

  FY 2003                           2973             2301           77%          \$43,483,148

  FY 2004                           2879             2274           79%          \$47,336,750

  FY 2005                           6665             4135           62%          \$92,193,219
  --------------------------------- ---------------- -------------- ------------ -------------------

Although the percentage of total contracts approved for FY 2005 fell,
the actual number of contracts almost doubled, and the dollars committed
in those contracts went up 49 percent, a dramatic increase over earlier
years. The NRCS is providing a sound basis for the support of new and
beginning agricultural operations and operators

Table 47 below shows the number, size of contracts, and amount of cost
share for FY 2006.

+-----------------------+--------------+---------------+--------------+
| []{#__RefH            |              |               |              |
| eading___Toc219115419 |              |               |              |
| .anchor}**Table 47.   |              |               |              |
| FY 2006 beginning and |              |               |              |
| limited resource      |              |               |              |
| farmer summary.**     |              |               |              |
+-----------------------+--------------+---------------+--------------+
|                       | **All**      | **Limited**   | *            |
|                       |              |               | *Beginning** |
|                       | **Ap         | **Resource**  |              |
|                       | plications** |               | **Farmer**   |
+-----------------------+--------------+---------------+--------------+
| Contracts Approved    | 39,030       | 1,398         | 3,377        |
+-----------------------+--------------+---------------+--------------+
|                       |              | 3.6%          | 8.7%         |
+-----------------------+--------------+---------------+--------------+
|                       |              |               |              |
+-----------------------+--------------+---------------+--------------+
| Average Size of       | \$18,680     | \$38,794      | \$26,986     |
| Contracts             |              |               |              |
+-----------------------+--------------+---------------+--------------+
|                       |              | 207.7%        | 144.5%       |
+-----------------------+--------------+---------------+--------------+
|                       |              |               |              |
+-----------------------+--------------+---------------+--------------+
| Cost Share Approved   | \            | \$54,233,362  | \$91,132,769 |
|                       | $729,063,179 |               |              |
+-----------------------+--------------+---------------+--------------+
|                       |              | 7.4%          | 12.5%        |
+-----------------------+--------------+---------------+--------------+
|                       |              |               |              |
+-----------------------+--------------+---------------+--------------+
| Treated Acres         | 20,710,205   | 323,262       | 1,011,588    |
+-----------------------+--------------+---------------+--------------+
|                       |              | 1.6%          | 4.9%         |
+-----------------------+--------------+---------------+--------------+

## Limited Resource Farmers or Ranchers (LRFRs)

### Definition

\(a\) An individual, directly or indirectly, with gross farm sales not
more than \$100,000 in each of the previous two years (to be increased
starting in FY 2004 to adjust for inflation using Prices Paid by Farmer
Index as completed by NASS), and

\(b\) Has a total household income at or below the National poverty
level for a family of four, or less than 50 percent of county median
household income in each of the previous two years (to be determined
annually and indexed for inflation using Commerce Department Data).

This definition was created to make it more usable in the field offices.
It allows easier certification and verification with personal and farm
income tax records, the same verification forms already needed for the
\$2,500,000 Income Limitation rules. Higher percentages of Black, Native
American and female farm operators will qualify as Limited Resource
Farmers.

Applicants would have to have a household income at or below a
qualifying level, which in turn would be based on the higher of two
thresholds. The qualifying household income level would be the greater
of (1) the national poverty level income, as defined by the Census
Bureau for a household of 4 persons, or (2) 50 percent of the estimated
county median household income for the most recent year as reported by
the Census Bureau. Each of those measures is indexed to overall
inflation; the poverty threshold is adjusted each year by the Commerce
Department and the county median moves with inflation. Each base is also
easily available with the annual national poverty rate and the county
median income updated every January.

Using a dual household income threshold assures that households with
incomes below the poverty line remain eligible for limited resource
farmer status, while also extending the status to relatively poor
households in higher income counties, where higher costs of living may
limit the financial resources available to those households for farming.
Use of the county median measure alone could exclude deserving
households in very poor counties.

The level would be determined annually for each county based on two
objective factors, as discussed above. The level would be the greater of
the poverty level for a household of 4 and 50 percent of the median
county income level.

A limited resource farmer would be limited to gross farm sales less than
\$100,000, (increased, beginning in FY 2004, by an inflation percentage
applicable to the fiscal year in which a benefit is being requested).

The definition is designed to account for strong regional variations in
income, ensure that neediest farmers and ranchers are not excluded, and
screen out wealthier farmers and ranchers with temporarily realized
income or cash flow. The definition describes those producers with low
income and sales and takes into account regional variations in both type
and scale of operation.

The requirement of meeting this income limit in both preceding years was
added to weed out those producers who might intentionally qualify as
LRFR by moving sales or expenses from one year to another. This is based
on the existing RMA definition. An alternative that would accomplish the
same purpose for USDA would be to use the same three-year average as the
proposed Income Limitation rule. For EQIP applicants, this three-year
average is already calculated during the \$2,500,000 income limitation
certification process.

### Self-verification

USDA has created a simple tool on its web site, the [Online Limited
Resource Farmer and Rancher Self Determination
Tool](http://www.lrftool.sc.egov.usda.gov/tool.asp) for farmers and
field staff to check eligibility. USDA did not update the gross sales
requirement since November, 2006 through October, 2008; nor the
underlying county income or poverty rates since January, 2006. Thus the
gross sales limitation is \$116,000 on the website in July, 2008,
instead of \$151,200 based on the Producer Prices Paid index in June,
2008. This intentional delay has extended the use of EQIP funds by
limiting the number of eligible limited resource farmers.

The definition has the great advantages of clarity and brevity. It would
not have to be amended on a regular basis. The data needed each year are
readily available from the Census Bureau, National Agricultural
Statistics Service, and applicants' own tax forms. Applicants
self-certifying as Limited Resource Farmers will be required to produce
their last two year's income tax forms to verify their standing upon
USDA request such as the annual 5 percent spot checks.

The only national/regional dataset that can be used to estimate the
number of farmers within this definition for a given year is the
Agricultural Resource Management Survey (ARMS). The ARMS survey is an
annual survey, conducted with different farms each year. There is no
panel data available that can estimate income and expenses for the same
farm over multiple years. Thus, USDA has no estimate of how many farmers
are excluded by the phase "in each of the previous two years." The
Limited Resource Farm and Other Farm Typology Groupings (see table 49)
has estimates of the number of Limited Resource Farms using this
definition, but only based on the year 2000.

### Outreach

Based on 2000 US Population Census and 2002 Census of Agriculture data,
Limited Resource Farmers and Ranchers (LRFRs) and minority farmers are
increasing in number throughout the U.S. According to Census of
Agriculture data, the number of farms in the United States with annual
sales of less than \$100,000 has increased from 1,565,839 in 1997 to
1,832,127 in 2002, an increase of roughly 17 percent. Limited Resource
Farmers tend to concentrate with beef cattle and non-grain field crops
like tobacco, cotton, peanuts, and hay. An earlier definition of "Total
operator household income is under \$20,000; total farm assets are under
\$150,000; and gross sales are under \$100,000" has been used by ERS and
in USDA policy documents during Congressional development of the Farm
Bill[^34]. Estimated numbers using the ERS definition consist of 7.8
percent of all farms, with only 0.8 percent of total sales. Limited
Resource Farmers control 1.2 percent of farmland, often the poorer
farmland with greater per-acre conservation needs.

Over the last several decades, the NRCS has recognized that there are
increasing numbers of Limited Resource Farmers and Ranchers. As a
result, several measures have been taken to address this change in the
agricultural customer base.

Limited Resource Farmers and Ranchers, by definition, have limited
capital, and therefore tend to acquire lands that are lower in price,
and/or lower in production potential. Because of the lower production
potential, there may be greater potential for unintended natural
resource problems to arise when trying to develop these lands for
agricultural purposes. Areas with poor soil quality, for example, may be
subject to increased fertilizer application, which may result in
increased levels of nutrient runoff. Similarly, farming on sloping lands
may result in increased runoff and soil erosion. However, these are only
logical inferences since we do not have data that directly correlates
LRFRs with increased environmental degradation. Accordingly, the funding
provided under EQIP provides LRFRs the capability to install
conservation practices that improve, enhance, restore, and protect
natural resources.

Many Limited Resource Farmers and Ranchers are not full-time farmers.
Small farm size and lack of capital to invest in necessary equipment
often make it necessary for these individuals to work off the farm for
wages in other economic sectors to make a living. For part-time farmers
of this kind, the NRCS can offer vital technical and planning assistance
at low or no cost. For these operators, the services and programs
offered by the NRCS are of great value.

The NRCS administers several programs that assist Limited Resource
Farmers and Ranchers to conserve natural resources on the Nation's
private lands. As evident in table 48 below, the funding levels in EQIP
increased substantially in FY 2006. As part of the FY 2005 funds,
\$6,000,000 was specifically targeted to Small and Limited Resource
Farmers in eleven southern states and Puerto Rico. Expanding funding
levels to allow financial as well as technical assistance enhances the
ability of the NRCS to assist Limited Resource Farmers and Ranchers.

  ------------------------------------------------------------------------------------------------------- -------------- ---------------- -------------- --------------
  []{#__RefHeading___Toc219115420 .anchor}**Table 48. EQIP funding for limited resource farmers and                                                      
  ranchers.**                                                                                                                                            

  **Program**                                                                                             **FY 2003**    **FY 2004**      **FY 2005**    **FY 2006**

  Environmental Quality Incentives Program funding amount                                                 \$31,794,286   \$18,313,110\*   \$29,910,036   \$54,233,362

  Percent of LRFR applicants approved                                                                     73%            50%              62%            66%

  \*See                                                                                                                                                  
  <http://www.usda.gov/wps/portal/!ut/p/_s.7_0_A/7_0_10B?contentidonly=true&contentid=2005/05/0176.xml>                                                  
  ------------------------------------------------------------------------------------------------------- -------------- ---------------- -------------- --------------

![](media/image9.jpeg){width="6.382638888888889in"
height="4.9319444444444445in"}

[]{#__RefHeading___Toc219115323 .anchor}Figure 6. Number and
distribution of limited resource farmers and ranchers.

+------------+------+------+------+------+-------+-------+-----+------+
| [          |      |      |      |      |       |       |     |      |
| ]{#__RefHe |      |      |      |      |       |       |     |      |
| ading___To |      |      |      |      |       |       |     |      |
| c219115421 |      |      |      |      |       |       |     |      |
| .anch      |      |      |      |      |       |       |     |      |
| or}**Table |      |      |      |      |       |       |     |      |
| 49.        |      |      |      |      |       |       |     |      |
| Limited    |      |      |      |      |       |       |     |      |
| resource   |      |      |      |      |       |       |     |      |
| farms and  |      |      |      |      |       |       |     |      |
| other farm |      |      |      |      |       |       |     |      |
| typology   |      |      |      |      |       |       |     |      |
| gr         |      |      |      |      |       |       |     |      |
| oupings.** |      |      |      |      |       |       |     |      |
+------------+------+------+------+------+-------+-------+-----+------+
| Defined as |      |      |      |      |       |       |     |      |
| Gross      |      |      |      |      |       |       |     |      |
| Sales Less |      |      |      |      |       |       |     |      |
| Than       |      |      |      |      |       |       |     |      |
| \$100,000  |      |      |      |      |       |       |     |      |
| and        |      |      |      |      |       |       |     |      |
| Poverty    |      |      |      |      |       |       |     |      |
| Level      |      |      |      |      |       |       |     |      |
| Income or  |      |      |      |      |       |       |     |      |
| Household  |      |      |      |      |       |       |     |      |
| \< 50%     |      |      |      |      |       |       |     |      |
|            |      |      |      |      |       |       |     |      |
| County     |      |      |      |      |       |       |     |      |
| Median for |      |      |      |      |       |       |     |      |
| a single   |      |      |      |      |       |       |     |      |
| year, by   |      |      |      |      |       |       |     |      |
| farm       |      |      |      |      |       |       |     |      |
| typology   |      |      |      |      |       |       |     |      |
| grouping,  |      |      |      |      |       |       |     |      |
| 2000       |      |      |      |      |       |       |     |      |
+------------+------+------+------+------+-------+-------+-----+------+
|            |      | **   |      |      |       |       |     |      |
|            |      | Farm |      |      |       |       |     |      |
|            |      | typo |      |      |       |       |     |      |
|            |      | logy |      |      |       |       |     |      |
|            |      | gr   |      |      |       |       |     |      |
|            |      | oupi |      |      |       |       |     |      |
|            |      | ng** |      |      |       |       |     |      |
+------------+------+------+------+------+-------+-------+-----+------+
| **\`**     | **   | **L  | **   | **R  | *     | *     | **L | **   |
|            | 48** | imit | Reti | esid | *Farm | *Farm | arg | Very |
|            |      | ed** | reme | enti | ing** | ing** | e** | lar  |
|            | *    |      | nt** | al** |       |       |     | ge** |
|            | *Sta | *    |      |      | **oc  | **oc  |     |      |
|            | te** | *res |      | **   | cupat | cupat |     |      |
|            |      | ourc |      | /lif | ion** | ion** |     |      |
|            | *    | es** |      | esty |       |       |     |      |
|            | *tot |      |      | le** | *     | **    |     |      |
|            | al** | **(  |      |      | */low | /high |     |      |
|            |      | 2000 |      |      | er-sa | er-sa |     |      |
|            |      | onl  |      |      | les** | les** |     |      |
|            |      | y)** |      |      |       |       |     |      |
+------------+------+------+------+------+-------+-------+-----+------+
| Acres      | 896  | 91   | 40   | 144  | 1     | 1     | 13  | \    |
| operated   | ,026 | ,077 | ,274 | ,724 | 45,33 | 81,46 | 2,7 | *160 |
|            | ,489 | ,254 | ,836 | ,031 | 7,011 | 0,605 | 62, | ,390 |
|            |      |      |      |      |       |       | 450 | ,303 |
+------------+------+------+------+------+-------+-------+-----+------+
| Average    | 422  | 254  | 148  | 167  | 457   | 1,056 | 1,  | \*2  |
| Acreage    |      |      |      |      |       |       | 694 | ,922 |
| operated   |      |      |      |      |       |       |     |      |
+------------+------+------+------+------+-------+-------+-----+------+
| Number of  | 2    | 359  | 271  | 867  | 31    | 17    | 78, | 54   |
| farms      | ,121 | ,228 | ,375 | ,772 | 8,021 | 1,824 | 382 | ,886 |
|            | ,489 |      |      |      |       |       |     |      |
+------------+------+------+------+------+-------+-------+-----+------+
| Percent of | 100  | 16.9 | 12.8 | 40.9 | 15    | 8.1   | 3.7 | 2.6  |
| farms      |      |      |      |      |       |       |     |      |
+------------+------+------+------+------+-------+-------+-----+------+
| Cash       | 15.3 | 12.1 | 5.3  | 10.4 | 20.9  | 39.5  | 3   | 20.6 |
| Grains and |      |      |      |      |       |       | 8.9 |      |
| Soybean    |      |      |      |      |       |       |     |      |
+------------+------+------+------+------+-------+-------+-----+------+
| Other      | 19.1 | 16.8 | 32.1 | 20.4 | 14.7  | 11.2  | 1   | 10.8 |
| Field      |      |      |      |      |       |       | 0.5 |      |
| Crops      |      |      |      |      |       |       |     |      |
+------------+------+------+------+------+-------+-------+-----+------+
| High Value | 7    | 7.2  | \*   | 4.4  | 8.8   | 8.9   | 7.2 | 13.5 |
| Crops      |      |      | 10.2 |      |       |       |     |      |
+------------+------+------+------+------+-------+-------+-----+------+
| Beef       | 37.7 | 42.7 | 37.4 | 42.7 | 40.4  | 16.6  | 1   | 12.5 |
| Cattle     |      |      |      |      |       |       | 3.3 |      |
+------------+------+------+------+------+-------+-------+-----+------+
| Hogs,      | 6.1  | 4.9  | na   | \    | 5.4   | 20.9  | 2   | 40.3 |
| Poultry    |      |      |      | *1.6 |       |       | 6.7 |      |
| and Dairy  |      |      |      |      |       |       |     |      |
+------------+------+------+------+------+-------+-------+-----+------+
| General    | 14.8 | 16.3 | 14.2 | 20.4 | 9.8   | 3     | 3.4 | 2.3  |
| Livestock  |      |      |      |      |       |       |     |      |
+------------+------+------+------+------+-------+-------+-----+------+
| Northeast  | 7    | 10.1 | na   | 6.6  | 5.2   | 7.9   | 7.2 | 5.3  |
+------------+------+------+------+------+-------+-------+-----+------+
| Lake       | 9.7  | 10.3 | na   | 9.2  | 9.1   | 15.3  | 1   | 10.4 |
| States     |      |      |      |      |       |       | 2.5 |      |
+------------+------+------+------+------+-------+-------+-----+------+
| Corn Belt  | 19.8 | 17.4 | 17.3 | 19.2 | 20.7  | 27.2  | 2   | 17.8 |
|            |      |      |      |      |       |       | 7.3 |      |
+------------+------+------+------+------+-------+-------+-----+------+
| Northern   | 8.3  | 6    | na   | 6.4  | 11.7  | 17    | 1   | 12.3 |
| Plains     |      |      |      |      |       |       | 7.5 |      |
+------------+------+------+------+------+-------+-------+-----+------+
| Appalachia | 14.3 | 14   | 22.7 | 15.7 | 10.9  | 6.8   | 6.7 | 7.1  |
+------------+------+------+------+------+-------+-------+-----+------+
| Southeast  | 7.7  | 8    | 9.3  | 8.3  | 6.8   | 4.9   | 3.3 | 7.6  |
+------------+------+------+------+------+-------+-------+-----+------+
| Delta      | 5.6  | 7.9  | na   | 5.9  | 3.6   | 4.1   | 5.8 | 8.4  |
+------------+------+------+------+------+-------+-------+-----+------+
| Southern   | 14.5 | 16   | 16.6 | 16.2 | 14.3  | 5.3   | 5.8 | 7    |
| Plains     |      |      |      |      |       |       |     |      |
+------------+------+------+------+------+-------+-------+-----+------+
| Mountain   | 5.9  | \    | \    | 6.3  | 6.4   | 6.6   | 6.7 | 7.8  |
|            |      | *4.4 | *4.5 |      |       |       |     |      |
+------------+------+------+------+------+-------+-------+-----+------+
| Pacific    | 7.3  | 5.8  | \    | 6.1  | 11.2  | 4.8   | 7.1 | 16.4 |
|            |      |      | *8.8 |      |       |       |     |      |
+------------+------+------+------+------+-------+-------+-----+------+
|            |      |      |      |      |       |       |     |      |
+------------+------+------+------+------+-------+-------+-----+------+
| Average    | 509  | 368  | 356  | 324  | 54    | 82    | 1,2 | 2    |
| Value of   | ,505 | ,825 | ,983 | ,136 | 9,929 | 3,207 | 48, | ,843 |
| Farm       |      |      |      |      |       |       | 424 | ,577 |
| Assets     |      |      |      |      |       |       |     |      |
+------------+------+------+------+------+-------+-------+-----+------+
| Average    | 62   | 5    | 49   | 82   | 6     | 4     | 81, | 175  |
| household  | ,220 | ,061 | ,777 | ,629 | 6,793 | 4,987 | 219 | ,489 |
| income     |      |      |      |      |       |       |     |      |
+------------+------+------+------+------+-------+-------+-----+------+
| Source:    |      |      |      |      |       |       |     |      |
| 2000 USDA  |      |      |      |      |       |       |     |      |
| Ag         |      |      |      |      |       |       |     |      |
| ricultural |      |      |      |      |       |       |     |      |
| Resource   |      |      |      |      |       |       |     |      |
| Management |      |      |      |      |       |       |     |      |
| Survey,    |      |      |      |      |       |       |     |      |
| ca         |      |      |      |      |       |       |     |      |
| lculations |      |      |      |      |       |       |     |      |
| by ERS,    |      |      |      |      |       |       |     |      |
| 10/2002.   |      |      |      |      |       |       |     |      |
+------------+------+------+------+------+-------+-------+-----+------+
| Based on   |      |      |      |      |       |       |     |      |
| 9,863      |      |      |      |      |       |       |     |      |
| obs        |      |      |      |      |       |       |     |      |
| ervations. |      |      |      |      |       |       |     |      |
| All 48     |      |      |      |      |       |       |     |      |
| contiguous |      |      |      |      |       |       |     |      |
| States     |      |      |      |      |       |       |     |      |
| were       |      |      |      |      |       |       |     |      |
| included   |      |      |      |      |       |       |     |      |
| in the     |      |      |      |      |       |       |     |      |
| sample.    |      |      |      |      |       |       |     |      |
| \*Items    |      |      |      |      |       |       |     |      |
| has low    |      |      |      |      |       |       |     |      |
| s          |      |      |      |      |       |       |     |      |
| tatistical |      |      |      |      |       |       |     |      |
| re         |      |      |      |      |       |       |     |      |
| liability. |      |      |      |      |       |       |     |      |
+------------+------+------+------+------+-------+-------+-----+------+

[^1]: According to the 2002 CAFO definition (EPA), an animal unit (AU)
    is one slaughter or feeder cattle, 0.7 mature dairy cows, 2.5 swine
    (other than feeder pigs), 30 laying hens or broilers (if liquid
    system), or 100 laying hens or broilers (if continuous overflow
    watering). <http://www.epa.gov/npdes/pubs/cafo_econ_analysis_p1.pdf>

[^2]: The "1/" above signifies that this benefit category could be
    construed as having elements of both environmental and private
    benefit impacts. More information on these distinctions is provided
    in the document.

[^3]: Additional time and resources would be necessary to modify the
    present model to incorporate such shifts in program emphasis.

[^4]: Executive Order 12866 of September 30, 1993\--Regulatory Planning
    and Review, available at:
    <http://www.epa.gov/fedrgstr/eo/eo12866.htm>

[^5]: Unfunded Mandates Reform Act of 1995, P.L.104-4,
    <http://www.regulation.org/pl104-4.html>

[^6]: Federal Crop Insurance Reform Act of 1994, P.L.103-354,
    <http://www.reeusda.gov/1700/legis/agreorg.htm>

[^7]: OMB Circular A-4, Regulatory Analysis,
    <http://www.whitehouse.gov/omb/memoranda/m03-21.html>

[^8]: ProTracts refers to the NRCS internal Programs and Contracting
    software/database system.

[^9]: PRS refers to the NRCS internal Performance Results
    software/database System, available at:
    <http://ias.sc.egov.usda.gov/PRSHOME/>

[^10]: Appendix A, table 12 gives a summary of practices approved for FY
    2007 EQIP and payments made during FY 2007. The practices listed in
    this table are then broken into the different benefit categories and
    are shown in the appropriate discussions to follow. This separation
    of practices in more than one benefit category makes the same
    practice cost appear under multiple categories. Later, care is taken
    to account for such multiple counting of costs while accounting for
    the multiple benefits that may emanate from these practices.

[^11]: The adoption of the conservation practices by EQIP participants
    is assumed to be solely attributable to their participation in EQIP.
    Thus, most benefits reported in this analysis accrue to EQIP and are
    compared to total costs (which include NRCS TA and FA as well as
    cost-share outlays by participants). This simplifying assumption was
    necessary to avoid many thorny questions beyond the scope of this
    analysis, including the question of what practices would have been
    adopted as a result of purely private actions or those motivated to
    comply with a range of environmental regulations. This later issue
    related to EPA CAFO regulatory requirements is addressed in this
    analysis.

[^12]: Detailed references are included in Appendix E: Development of
    Expected Benefits by Benefit Category.

[^13]: Based on work underlying the EPA Environmental and Economic
    Benefit Analysis of Final Revisions to the National Pollutant
    Discharge Elimination System Regulation and the Effluent Guidelines
    for Concentrated Animal Feeding Operations 2002 available at:
    <http://cfpub.epa.gov/npdes/afo/cafodocs.cfm>

[^14]: Table 21, 2003 EQIP BCA (USDA, NRCS, 2003)

[^15]: Table 18, 2003 EQIP BCA (USDA, NRCS, 2003)

[^16]: USDA National Agricultural Statistics Service, Agricultural
    Prices available at:
    [http://www.nass.usda.gov/QuickStats]{.underline}

[^17]: 2006 National Survey of Fishing, Hunting, and Wildlife-Associated
    Recreation available at:
    <http://www.census.gov/prod/2008pubs/fhw06-errata.pdf>

[^18]: Energy Information Administration, Office Energy Statistics from
    the U.S. Government, Gasoline and Diesel Fuel Update. Available at:
    [http://tonto.eia.doe.gov/oog/info/gdu/gasdiesel.asp#](http://tonto.eia.doe.gov/oog/info/gdu/gasdiesel.asp)

[^19]: Available at: [www.regulations.gov](http://www.regulations.gov/).
    Please search on the full title of the document.

[^20]: Of the 4 million units, 1.7 million animal units are in regulated
    large CAFOs.

[^21]: Revised National Pollutant Discharge Elimination System Permit
    Regulation and Effluent Limitations Guidelines for Concentrated
    Animal Feeding Operations in Response to the Waterkeeper Decision,
    Federal Register, V73, No. 225, Page 70418. Available at
    <http://www.epa.gov/npdes/regulations/cafo_final_rule_preamble2008.pdf>.

[^22]: According to the 2002 NPDES definition (EPA) an animal unit (AU)
    is one slaughter or feeder cattle, 0.7 mature dairy cows, 2.5 swine
    (other than feeder pigs), 30 laying hens or broilers (if liquid
    system), or 100 laying hens or broilers (if continuous overflow
    watering).

[^23]: The term AU is a measurement established in the 1970 regulations
    that attempted to equalize the characteristics of the wastes among
    different animal types; there are significant differences between
    the legally defined EPA definition and the USDA definition. The
    analysis underlying this report translates between the two
    definitions as needed.

[^24]: USDA National Agricultural Statistics Service, Agricultural
    Prices, available at: <http://www.nass.usda.gov/QuickStats>

[^25]: Gray, Randall; "Equipping Your Partners" Bird Conservation, Issue
    11, 1999.

[^26]: 2006 National Survey of Fishing, Hunting, and Wildlife-Associated
    Recreation, available at:
    <http://www.census.gov/prod/2008pubs/fhw06-errata.pdf>

[^27]: Based on work underlying the EPA Environmental and Economic
    Benefit Analysis of Final Revisions to the National Pollutant
    Discharge Elimination System Regulation and the Effluent Guidelines
    for Concentrated Animal Feeding Operations 2002 , available at:
    <http://cfpub.epa.gov/npdes/afo/cafodocs.cfm>

[^28]: Table 21, 2003 EQIP BCA (USDA, NRCS, 2003)

[^29]: Table 18, 2003 EQIP BCA (USDA, NRCS, 2003)

[^30]: In this section, minority refers to racial and ethnic status and
    not gender. Female farm operators were included in the socially
    disadvantaged farmer category in the 1996 EQIP program, but not
    thereafter.

[^31]: For the method used to calculate LRFRs, go to
    <ftp://ftp-fc.sc.egov.usda.gov/ENTSC/> , click on sst, Limited
    Resource Farmers, and M8961_metadata.doc

[^32]: Referenced to Natural Resources Conservation Service (NRCS)
    Support for Hispanics in Agriculture,
    <http://www.economics.nrcs.usda.gov/technical/hispanics>

[^33]: US Census of Agriculture,
    http://www.nass.usda.gov/census/census02/volume1/us/index1.html

[^34]: Economic Research Service. 2001. Structural and Financial
    Characteristics of U.S. Farms, 2001 Family Farm Report, Ag. Info.
    Bull. #768,
    [[http://www.ers.usda.gov/publications/aib768/]{.underline}](http://www.ers.usda.gov/publications/aib768/)