+----------+-----------------------------------------------------------+
| United   | > **Determining**                                         |
| States   | >                                                         |
| De       | > **Cost-Share Rates**                                    |
| partment | >                                                         |
| of       | > **for Watershed Protection Projects**                   |
| Agr      |                                                           |
| iculture |                                                           |
|          |                                                           |
| *        |                                                           |
| *Natural |                                                           |
| R        |                                                           |
| esources |                                                           |
| Cons     |                                                           |
| ervation |                                                           |
| S        |                                                           |
| ervice** |                                                           |
|          |                                                           |
| E        |                                                           |
| conomics |                                                           |
| and      |                                                           |
| Social   |                                                           |
| sciences |                                                           |
| Division |                                                           |
|          |                                                           |
| August   |                                                           |
| 1991     |                                                           |
+----------+-----------------------------------------------------------+
|          | > Social Sciences Technical Note No. 1                    |
+----------+-----------------------------------------------------------+

\"The U.S. Department of Agriculture (USDA) prohibits discrimination in
all its programs and activities on the basis of race, color, national
origin, sex, religion, age, disability, political beliefs, sexual
orientation, and marital or family status. (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 at
(202) 720-2600 (voice and TDD).

To file a complaint of discrimination write USDA, Director, Office of
Civil Rights, Room 326-W, Whitten Building, 14th and Independence
Avenue, SW, Washington, DC 20250-9410 or call (202) 720-5964 (voice or
TDD). USDA is an equal opportunity provider and employer.\"

**Determining Cost-Share Rates**

**For Watershed Protection Projects**

**United States Department of Agriculture, Soil Conservation Service,
Economics and Social Sciences Division, Social Sciences Technical Note
No. 1**

**August 1991**

**Introduction and Purpose**

This technical note provides guidance and a procedure for determining,
in PL-566 projects, if a watershed, or a community within a watershed,
might need increased cost-share rates and suggests an appropriate rate.
The use of the procedure described in this technical note will provide a
nationally consistent rationale for requesting increased cost-share
rates from the Director, Watershed Projects Division.

The procedure uses a weighted scale of indicators that reflect economic
and social conditions in communities. The procedure also gives special
consideration to watersheds or communities that have high percentage of
protected groups.

Watersheds may be evaluated on a total watershed area, or, if conditions
warrant, evaluations may be made on a sub-watershed (i.e., community)
basis. If a watershed, sub-watershed, or community is found to be
eligible for increased cost share rates, and those rates are approved,
then all beneficiaries in that area are eligible for that rate.

To ensure that cost-share funds are distributed mostly to socially
disadvantage farmers and ranchers, the Director of the National
Watershed Projects division has placed a dollar cap of \$20,000 on the
total amount of PL-566 cost-share money any land owner or beneficiary
can receive at the higher rate. After a person has received \$20,000 of
PL-566 financial assistance, the cost-share rates reverts to the normal
65% rate. In unusual situations, the state conservationist can request
an exception to the \$20,000 limit. This request is to be submitted the
Director of the National Watershed Projects Division with appropriate
documentation.

# **Procedure**

The first step is to determine average values in the watershed or
communities, for the indicators below (see "Informational Sources," page
4, for definitions and data sources). In order to provide flexibility to
the rating system and not to penalized farmers or ranchers who may be
disadvantaged, but have either small or large operations, there are two
sub-indicators under indicator 1; *choose only one sub-indicator to
obtain a rating for 1.* For example, if 1a has a rating of 2 and 1b has
a rating of 3, use the highest rating for indicator 1 (rating 3). There
are no sub-indicators for indicators 2 and 3.

Add together the three ratings (rating 1a *or* 1b + rating 2 + rating 3)
and use the scale to translate the ratings into a cost share level.

**Rating Scale**

Add up ratings of indicators 1a or 1b and 2 and 3 and find the
cost-share level in the table below.

+---------------------------------+------------------------------------+
| **Ratings**                     | **Cost-Share level**               |
+---------------------------------+------------------------------------+
| 15                              | 90%[^1]                            |
|                                 |                                    |
| 11 to 14                        | 85%                                |
|                                 |                                    |
| 9 to 10                         | 80%                                |
|                                 |                                    |
| 7 to 8                          | 75%                                |
|                                 |                                    |
| 5 to 6                          | 70%                                |
|                                 |                                    |
| 3 to 4                          | 65%                                |
+---------------------------------+------------------------------------+

**Information Sources**[^2]

This section outlines sources of information to provide documentation
for determining cost-share levels in disadvantaged farm areas. To attain
reliable information, it is a good idea to acquire the most currently
available information. This may mean acquiring recent census
publications from federal or state agencies, gathering primary data
(e.g., personal interviews, written or phone surveys of the community
conducted by the district or a local college), or examining secondary
data such as real estate reports, newspapers or universities studies.
Use as many sources as necessary to arrive at a reasonable estimate of
an indicator.

Table 1 lists the consumer price index from 1900 to 2002. It also
presents a simple procedure for converting a previous year's dollar
value to a 2002 value.

Indicator 1a-1b: Value of land and buildings: Average per farm or per
acre in the watershed

*Definitions and sources of information:*

-   Defined in the Agricultural Census as an estimate of the current
    market value of land and buildings owned, rented and leased from
    others. Market value refers to the value the land and buildings will
    sell for under current market conditions.

-   1997 Census of Agriculture. Table 10 of the state data tables
    contains state values. In the county data section, both table 1 and
    table 6 have state and county values.

-   Interview any or all of the following: local residents, real estate
    agents, public officials, local leaders, Chamber of Commerce,
    college teachers, Farmers Home Administration employees, private
    bankers, real estate newspapers reporters, and tax assessors^4^.

-   Mail or phone survey (conducted by a non-federal entity; NRCS can
    conduct a survey if the survey instrument is reviewed and approved
    by the Office of Management and Budget).

-   Real estate section of local papers, examine public records of real
    estate transactions at the court house or an appropriate public
    agency (e.g., FmHA)

-   County and City Data Book, U.S Department of Commerce, Bureau of the
    Census[^3].

-   Tract reports -- PHC80-2-258, which list statistics for household
    income, number employed, et al.

-   Table 191 -- Economic Characteristics for the Rural Farm Portion of
    Counties 1980 (Volume 1, Chapter 3, General, Social and Economic
    Characteristics -- Census of population.

## Indicator 2: Per capita income

*Definitions and sources of information*

-   Table 2, \"Per Capita Income," lists per capita money income in 1999
    for each state.

-   Defined in the County and City Data as the aggregated total personal
    income in a specified area during a calendar year, divided by the
    resident population. Total personal income consist of all wage and
    salary disbursement, pension, transfer payments, bonuses etc. It is
    measured before deduction of income and other personal taxes, but
    after deductions of personal contributions for social security,
    government retirement, and other social insurance programs.

-   PL26, No. 86 -- Regions of U.S. (County level) Current Populations
    Reports, Local Population Estimates Series P-26, No. 86 (Call
    301-763-5060, to request report for your state).

-   Bureau of Economic Analysis (Call 202 523-0917 or 523-0966 for April
    edition of Current Business Survey, back issue in \$5.50) this lists
    per capital by county and state or call Government Printing office.

> Or
>
> Submit written request for your states, county, and national to:
>
> Regional Economic Information System
>
> U.S Department of Commerce
>
> Bureau of Economic Analysis, BE55
>
> Washington DC 20230
>
> ATTN: Kathy Albetski$$
>
> Also available on IBM compatible 5$1/4$^"^ floppies and magnetic tape.

-   Current Population Report -- Consumer Reports, P-60, No. 161 --
    Money, income, and Poverty Status in U.S.

## Indicator 3: Ethnicity, race, and sex

*Definition and sources of information:*

-   Census Tracts. The 2000 Census of population and Housing -- PHC80-2
    -- Metropolitan Area.

-   County. General, Social and Economic Characteristics, PC80-1-C
    (Series of numbers to designate the state) Department of Commerce,
    Bureau of Census.

-   Census of Agriculture. State and County, 1997 and 1992

```{=html}
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-   Female - Table 11, Tenure and Operator Characteristics, county
    section

-   Female - Table 11, Tenure and Operator Characteristics, county
    section

-   Table 35 Farms Operated by Black and Other Races by Value of Sales
    and Occupation

-   Table 36 - Farm Operations --Black and Other Races by Tenure

-   Table 37 - Operators by Selected Racial Groups

-   Table 38 - Operators of Spanish Origin

**Expressing Economic Magnitudes in Constant Prices**

There are a number of indices that can be used to convert costs, etc.
from different time periods to dollars of constant purchasing power. The
consumer price index (CPI) is commonly used, and is appropriate for most
applications. The conversion process is best explained with an example.
Average monthly earnings of a farm laborer in 1909 were \$21.30. How
much would it have taken in 1988 to equal the same purchasing power?
Multiply \$21.30 by the CPI for 1988, 118.3, and divide by the CPI for
1909, 9. \$21.30 118.3/9 = \$279.97.

Table 1. Consumer Price Index, 1982-84 = 100

  --------- -------- -------- -------- -------- -------- -------- ----------
  Year      CPI      Year     CPI      Year     CPI      Year     CPI

  1900      8.3      1925     17.5     1950     24.1     1975     53.8

  1901      8.3      1926     17.7     1951     26.0     1976     56.9

  1902      8.7      1927     17.3     1952     26.5     1977     60.6

  1903      9.0      1928     17.1     1953     26.7     1978     65.2

  1904      9.0      1929     17.1     1954     26.9     1979     72.6

  1905      9.0      1930     16.7     1955     26.8     1980     82.4

  1906      9.0      1931     15.2     1956     27.2     1981     90.9

  1907      9.3      1932     13.6     1957     28.1     1982     96.5

  1908      9.0      1933     12.9     1958     28.9     1983     99.6

  1909      9.0      1934     13.4     1959     29.1     1984     103.9

  1910      9.3      1935     13.7     1960     29.6     1985     107.6

  1911      9.3      1936     13.8     1961     29.9     1986     109.6

  1912      9.7      1937     14.3     1962     30.2     1987     113.6

  1913      9.9      1938     14.1     1963     30.6     1988     118.3

  1914      10.0     1939     13.9     1964     31.0     1989     124.0

  1915      10.1     1940     14.0     1965     31.5     1990     130.7

  1916      10.9     1941     14.7     1966     32.4     1991     136.2

  1917      12.8     1942     16.3     1967     33.4     1992     140.3

  1918      15.0     1943     17.3     1968     34.8     1993     144.5

  1919      17.3     1944     17.6     1969     36.7     1994     148.2

  1920      20.0     1945     18.0     1970     38.8     1995     152.4

  1921      17.9     1946     19.5     1971     40.8     196      156.9

  1922      16.7     1947     22.3     1972     41.8     1997     160.5

  1923      17.0     1948     24.1     1973     44.4     1998     163.0

  1924      17.1     1949     23.8     1974     49.3     1999     166.6

                                                         2000     172.2

                                                         2001     177.1

                                                         2002     179.9
  --------- -------- -------- -------- -------- -------- -------- ----------

*Originally prepared by the National Economy and History Branch, ARED,
ERS, February 1991*

**Table 2. Per Capita Income (1999)\***

+-------------------------------+--------------------------------------+
| **State**                     | **Amount (dollars)**                 |
+-------------------------------+--------------------------------------+
| Alabama                       | \$ 18,189                            |
|                               |                                      |
| Alaska                        | \$ 22,660                            |
|                               |                                      |
| Arizona                       | \$ 20,275                            |
|                               |                                      |
| Arkansas                      | \$ 16,904                            |
|                               |                                      |
| California                    | \$ 22,711                            |
|                               |                                      |
| Colorado                      | \$ 24,049                            |
|                               |                                      |
| Connecticut                   | \$ 28,766                            |
|                               |                                      |
| Delaware                      | \$ 23,305                            |
|                               |                                      |
| District of Columbia          | \$ 28,659                            |
|                               |                                      |
| Florida                       | \$ 21,557                            |
|                               |                                      |
| Georgia                       | \$ 21,154                            |
|                               |                                      |
| Hawaii                        | \$ 21,525                            |
|                               |                                      |
| Idaho                         | \$ 17,841                            |
|                               |                                      |
| Illinois                      | \$ 23,104                            |
|                               |                                      |
| Indiana                       | \$ 20,397                            |
|                               |                                      |
| Iowa                          | \$ 19,674                            |
|                               |                                      |
| Kansas                        | \$ 20,506                            |
|                               |                                      |
| Kentucky                      | \$ 18,093                            |
|                               |                                      |
| Louisiana                     | \$ 16,912                            |
|                               |                                      |
| Maine                         | \$ 19,533                            |
|                               |                                      |
| Maryland                      | \$ 25,614                            |
|                               |                                      |
| Massachusetts                 | \$ 25,952                            |
|                               |                                      |
| Michigan                      | \$ 22,168                            |
|                               |                                      |
| Minnesota                     | \$ 23,198                            |
|                               |                                      |
| Mississippi                   | \$ 15,853                            |
|                               |                                      |
| Missouri                      | \$ 19,936                            |
|                               |                                      |
| Montana                       | \$ 17,151                            |
|                               |                                      |
| Nebraska                      | \$ 19,613                            |
|                               |                                      |
| Nevada                        | \$ 21,989                            |
|                               |                                      |
| New Hampshire                 | \$ 23,844                            |
|                               |                                      |
| New jersey                    | \$ 27,006                            |
|                               |                                      |
| New Mexico                    | \$ 17,261                            |
|                               |                                      |
| New York                      | \$ 23,389                            |
|                               |                                      |
| North Carolina                | \$ 20,307                            |
|                               |                                      |
| North Dakota                  | \$ 17,769                            |
|                               |                                      |
| Ohio                          | \$ 21,003                            |
|                               |                                      |
| Oklahoma                      | \$ 17,646                            |
|                               |                                      |
| Oregon                        | \$ 20,940                            |
|                               |                                      |
| Pennsylvania                  | \$ 20,880                            |
|                               |                                      |
| Rhode island                  | \$ 21,688                            |
|                               |                                      |
| South Carolina                | \$ 18,795                            |
|                               |                                      |
| South Dakota                  | \$ 17,562                            |
|                               |                                      |
| Tennessee                     | \$ 19,393                            |
|                               |                                      |
| Texas                         | \$ 19,617                            |
|                               |                                      |
| Utah                          | \$ 18,185                            |
|                               |                                      |
| Vermont                       | \$ 20,625                            |
|                               |                                      |
| Virginia                      | \$ 23,975                            |
|                               |                                      |
| Washington                    | \$ 22,973                            |
|                               |                                      |
| West Virginia                 | \$ 16,477                            |
|                               |                                      |
| Wisconsin                     | \$ 21,271                            |
|                               |                                      |
| Wyoming                       | \$ 19,134                            |
+-------------------------------+--------------------------------------+

\* From the 2000 Population Census

[^1]: Although 90% is a relatively high cost-share level, this amount
    does not guarantee the participation of disadvantage people (e.g.,
    participation is likely to be low for people who earn \$7,000 per
    year if 10% of a conservation practice is \$1,000). For populations
    that are extremely poor, in-kind work can substitute for their part
    of the payment. This can enable the farm or ranch owner or operator
    to pay their percent of the conservation measure, even if they have
    a low cash flow.

[^2]: This publication originally written in 1991 has been updated as of
    2003 to provide current references for the sources to use to gather
    information.

[^3]: These informational sources are appropriate to use for each
    indicator.