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• 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’s purposes.

Overview

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 it Works

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;

FACT SHEET

August 2019

Conservation Contracts

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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.

More Information

For more information, visit fsa.usda.gov/farmloans or 

farmers.gov. Find your local USDA Service Center at 

farmers.gov.

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; 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.

CONSERVATION CONTRACTS - AUGUST 2019

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