Farm Loans

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UNITED STATES DEPARTMENT OF AGRICULTURE

FARM SERVICE AGENCY FACT SHEET March 2016

Conservation Contracts

BACKGROUND

The Conservation Contract Program is a unique 

program for eligible landowners that protects 

important natural resources and other sensitive 

areas while providing a debt management tool.

A conservation contract is available to persons 

with Farm Service Agency (FSA) loans secured 

by real estate. These individuals may qualify for a 

reduction of their FSA indebtedness in exchange 

for a conservation contract with a term of 50, 

30 or 10 years. The conservation contract is a 

voluntary legal agreement that restricts the type 

and amount of development that may take place 

on portions of the landowner’s property. Contracts 

may be established on marginal cropland and other 

environmentally sensitive lands for conservation, 

recreation and wildlife purposes.

HOW CONSERVATION CONTRACTS 

WORK

All FSA Farm Loan Program borrowers who have 

loans secured by real estate are eligible if they have 

land that qualifies for a conservation contract. This 

includes both borrowers who are current on their 

payments as well as those who are experiencing 

difficulty in keeping their loans current. A 

conservation contract may be considered alone, 

in conjunction with FSA’s primary loan servicing 

programs, or on new loans that are secured by real 

estate.

By participating in this program, borrowers reduce 

their FSA debt, thereby improving their overall 

financial stability. In addition, borrowers conserve 

wildlife habitat and improve the environmental and 

scenic value of their farms.

Eligible lands include the following types:

• Wetlands;

• Highly erodible lands;

• Lands containing aquatic life, endangered 

species or wildlife habitat of local, regional or 

national importance;

• Lands in 100-year floodplains;

• Areas of high water quality or scenic value;

• Historic or cultural properties listed or eligible 

for the National Register of Historic Places;

• Aquifer recharge areas of local, regional or 

State importance;

• Buffer zones necessary to protect proposed 

conservation easement areas; and

• Areas within or adjacent to Federal, State or 

local conservation areas.

CONTRACT PROCESS

FSA will determine if the borrower is eligible 

and establish a contract review team. This team, 

consisting of representatives from FSA, the 

Natural Resources Conservation Service (NRCS), 

the U.S. Fish and Wildlife Service and interested 

State, local and nonprofit conservation agencies, 

will work with the borrower to conduct a field 

evaluation of the farm. Within 30 days of the site 

review, the team provides a report to the county 

FSA official indicating the following:

• A finding of whether the land being offered 

is suitable for conservation, recreation and/or 

wildlife purposes;

• Potential contract boundaries;

• Recommended conditions of the contract; and

• A proposed management plan that is consistent 

with the contract purposes.

FSA evaluates the contract review team’s report 

to determine if a conservation contract can be 

established on the farm in exchange for debt 

reduction.

REDUCTION OF DEBT

In general, the maximum amount of a borrower’s 

FSA debt that can be canceled is calculated by 

considering the present market value of the farm; 

the borrower’s FSA debt secured by real estate;
FACT SHEET

Conservation Contracts March 2016

and the number of acres to be covered by the 

contract. For borrowers who are up to date on their 

loan payments or receiving a new loan secured 

by real estate, no more than 33 percent of the 

loan principal can be canceled in exchange for a 

contract. For delinquent borrowers, the amount of 

debt canceled may surpass this amount provided 

it does not exceed the appraised value of the land 

on which the contract is placed. Conservation 

contracts can be used in conjunction with other 

FSA primary loan servicing options available to 

delinquent and financially distressed borrowers.

CONTRACT ESTABLISHMENT COSTS

If FSA determines that a survey is necessary in 

order to develop legal descriptions, FSA will cover 

the cost. FSA will cover the costs of appraisals and 

recording fees associated with the conservation 

contract.

TERMS AND CONDITIONS

The term of a conservation contract may be either 

50, 30 or 10 years. In general, the following 

activities are prohibited:

• Building, construction or other development;

• Altering the vegetation or surface or ground 

water on the contract area, except for the 

purpose of wildlife habitat restoration or 

management functions;

• Allowing access for livestock unless necessary 

to provide drinking water;

• Harvesting timber*;

• Agricultural production; and

• Placing refuse, wastes or other debris or 

contaminants on the contract area.

*Timber thinning/harvesting and other compatible 

uses may be allowed if they achieve the protection 

and enhancement of the conservation values for 

which the contract was established.

The borrower retains the right to control public 

access to the contract area and may use the area 

in a manner compatible with the contract (e.g., 

hunting and fishing, if allowed by the management 

plan). Access to the contract area must be provided 

to FSA for enforcement purposes.

The borrower is responsible for ensuring 

compliance with the terms and conditions of the 

conservation contract. If the property is sold, the 

borrower must ensure that the purchaser is aware 

of the conservation contract and that the terms and 

conditions remain applicable and binding on all 

subsequent owners.

FOR MORE INFORMATION

For more information about FSA and its programs, 

visit your local FSA office or online at 

www.fsa.usda.gov. To find your local FSA office, 

visit http://offices.usda.gov.

___________________________________________

In accordance with Federal civil rights law and U.S. Department of 

Agriculture (USDA) civil rights regulations and policies, the USDA, 

its Agencies, offices, and employees, and institutions participating in 

or administering USDA programs are prohibited from discriminating 

based on race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital 

status, family/parental status, income derived from a public assistance 

program, political beliefs, or reprisal or retaliation for prior civil 

rights activity, in any program or activity conducted or funded by 

USDA (not all bases apply to all programs). Remedies and complaint 

filing deadlines vary by program or incident.

Persons with disabilities who require alternative means of communication for program information (e.g., Braille, large print, audiotape, 

American Sign Language, etc.) should contact the responsible Agency 

or USDA’s TARGET Center at (202) 720-2600 (voice and TTY) or 

contact USDA through the Federal Relay Service at (800) 877-8339. 

Additionally, program information may be made available in languages other than English.

To file a program discrimination complaint, complete the USDA 

Program Discrimination Complaint Form, AD-3027, found online at 

http://www.ascr.usda.gov/complaint_filing_cust.html and at any USDA 

office or write a letter addressed to USDA and provide in the letter 

all of the information requested in the form. To request a copy of the 

complaint form, call (866) 632-9992. Submit your completed form or 

letter to USDA by:

1) mail: U.S. Department of Agriculture Office of the Assistant

 Secretary for Civil Rights 1400 Independence Avenue, SW

 Washington, D.C. 20250-9410;

2) fax: (202) 690-7442; or

3) email: program.intake@usda.gov.

USDA is an equal opportunity provider, employer, and lender.

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