A View of the Farm Bill Through Policy Design, Part 1: EQIP

As Congress takes tentative steps towards reauthorizing the Farm Bill, this article introduces a multi-part series presenting a view of the Farm Bill through the perspective of policy design. The discussion begins by reviewing the Environmental Quality Incentives Program (EQIP) as it was reauthorized in the conservation title (Title II) of the Agricultural Improvement Act of 2018. The Congressional Budget Office projects that EQIP will spend almost $20 billion in the 2023 Baseline, with an additional $7.25 billion in spending from the Inflation Reduction Act of 2022 (farmdoc daily, February 23, 2023). USDA’s Natural Resources Conservation Service (NRCS) reports that nearly $6 billion in total assistance was obligated during fiscal years (FY) 2018 to 2022 under EQIP (NRCS Financial Assistance Program Data, farmers.gov).

Background

The articles in this series will explore the major mandatory titles, policies, and programs in the Farm Bill. The articles also serve as previews and updates on the development of a Policy Design Lab at the University of Illinois. The Policy Design Lab is a project of the Gardner Agriculture Policy Program in conjunction with the National Center for Supercomputing Applications (NCSA), the Institute for Sustainability, Energy, and Environment (iSEE), the Institute for Government and Public Affairs (IGPA), and the College of Agricultural, Consumer, and Environmental Sciences (ACES); it is very much a work-in-progress, with much of the website under construction. Conceptually, the Policy Design Lab will be a web-based resource in which to explore and analyze existing policies and policy alternatives. The effort will work from statutory and legislative text to incorporate and apply research, publicly available data, and computational resources for analysis and visualization efforts; research and data guided by statutory provisions or legislative options to produce comparative analysis. One goal will be to advance understanding about existing policy outcomes, as well as research-backed potential outcomes of alternative designs. Eventually, it will also seek to improve understanding of the policymaking process and facilitate open discussions about policy options. Development begins with the major mandatory farm bill programs to establish the status quo, visualized through maps of the distribution of benefits and payments by State. The first policies explored are those in the Environmental Quality Incentives Program (EQIP).

Discussion

In the Agricultural Improvement Act of 2018 (P.L. 115-334), Congress reauthorized EQIP through FY2023 and extended the authorization through FY2031 in the Inflation Reduction Act of 2022 (P.L. 117-169). The statutory text for all Farm Bill authorizations can be found on the compilations page of the Senate Committee on Agriculture, Nutrition, and Forestry (Senate ANF) website (Senate ANF, Library: Compilations). The Office of the Law Revision Counsel of the U.S. House of Representatives maintains the up-to-date U.S. Code and EQIP is in Title 16, Chapter 58 (16 U.S.C. §3839aa et seq.). Figure 1 presents excerpts from the EQIP statute in the Senate ANF compilation for the EQIP program purposes and definitions for practices.

EQIP is funded through the Commodity Credit Corporation (CCC), which provides mandatory funding each fiscal year using borrowing authority. In the 2018 Farm Bill, Congress authorized fixed amounts of funding each fiscal year for EQIP, beginning with $1.75 billion in FY2019-2020, increasing to $2.025 billion in FY2023. With the Inflation Reduction Act, that funding authorization of $2.025 billion continues through FY2031. Figure 2 provides a screenshot of the funding authority from the updated statute as presented by the Office of Law Revision Counsel website (16 U.S.C. §3841).

Exploration of EQIP policy design begins with reviewing the total EQIP funding distribution. Figure 3 includes an interactive map of the total EQIP funds from FY2018 to FY2022 by State and the State’s share of the national total (https://policydesignlab.ncsa.illinois.edu/eqip). In total, the map presents the distribution of nearly $4.7 billion to all 50 States. For close observers, that total is less than the total obligations reported by NRCS on its website (https://www.farmers.gov/data/financial-assistance/overview). The map is based on data received by NRCS through a Freedom of Information Act (FOIA) request for EQIP payments and NRCS reports obligations, which may account for the discrepancy. In terms of performance by State, Texas has received the most in total EQIP funding at over $433.5 million (9% of the national total), followed by California at over $386 million (8% of the national total); by comparison, Illinois has received $54 million (1.2% of the national total).

Figure 3. Distribution of Total EQIP Benefits (2018-2022)

Total EQIP funding and distribution presents a partial perspective of EQIP’s design. In the statute, Congress authorized payments to producers who enter into EQIP contracts with USDA; the contract and payments are for the performance or implementation of one or more practices to cover a portion of the costs (16 U.S.C. §3839aa-2). Congress has defined categories of practices in the statute that are either improvements (6(A)) or conservation planning (6(B)) (16 U.S.C. §3839aa-1; see also, Figure 1). Almost all funds are spent on improvement practices. From these statutorily-defined categories of conservation practices and planning, NRCS provides technical and financial assistance using a vast set of practice codes (NRCS, Conservation Practice Standards Information). For example, in Illinois the unit cost for basic cover crop practice (practice code 340) is $61.89 per acre (NRCS, Illinois EQIP Payment Rates).

In this initial stage of development, we have aggregated the spending by practice code into the statutory definitional categories. The interactive map allows a user to select from among the seven categories of improvement practices (land management, forest management, structural, soil remediation, vegetative, other improvement and soil testing) and five categories for conservation planning. The map will present the distribution of spending for each category selected, as well as interactive tables for State performance data and the share of total EQIP spending for each of the categories.

For example, selecting the structural practices produces a revised map in which California and Texas stand out. California leads the nation with more than $290 million in funds (13% of national total for structural practices); Texas follows with nearly $154 million (7% of the national total). By comparison, Illinois received $32 million (1.5% of the national total). The interactive table below the map presents additional data on the performance by State; nearly 75% of California’s EQIP funds are for structural practices but only 35% of Texas’ EQIP funds are for those practices. Illinois receives nearly 60% of its EQIP funds for structural practices. The structural category includes practices such as agrichemical handling facility (practice code 309), high tunnel system (practice code 325), anaerobic digesters (practice code 366), and many irrigation practices such as irrigation pipeline (practice code 430), irrigation sprinkler system (practice code 442), and surface and subsurface irrigation system (practice code 443). From a perspective on policy design, these practice codes and the aggregated spending connect the purposes of the program, such as conserving surface and ground water, with the definitions of practices for which financial assistance payments can be contracted (16 U.S.C. §3839aa-1(6)(A)(i)). In total, we estimate nearly 51% of the total EQIP funding from FY2018-2022 was spent on structural practices.

The map of structural practice spending can be compared to that of the other categories, such as vegetative practices, for example. Vegetative practices include cover crops (practice code 340), windbreak/shelterbreak (practice code 380), field border (practice code 386), grassed waterway (practice code 412), saturated buffer (practice code 604), and similar practices. In this category, the interactive map presents a wider distribution of benefits. Tennessee leads the Nation in funding for vegetative practices with nearly $49 million (7% of the national total for vegetative practices), followed by Missouri at nearly $47.5 million (7% of national total); Illinois received $7 million (1% of the national total). In total, vegetative practices accounted for 16% of total EQIP funds and was the third largest category after structural (51%) and land management (21%).

Concluding Thoughts

To put it simply, the words of the statute contain the policies of the programs enacted by Congress. Those words drive agency implementation and operation, ultimately resulting in the distribution of the benefits authorized by Congress. The benefits are paid to individuals and have political implications, the collection or aggregation of which impact the political development of policies. A new Policy Design Lab being developed at the University of Illinois is working to apply research, data, computational resources, and statutory or legislative textual analysis to visualize policy design. This article initiates a series on the mandatory programs in the Farm Bill and the development of web-based resources for policy design and analysis. Beginning with EQIP—the largest working lands program, distributing more than $5 billion in funds under the 2018 reauthorization to farmers and landowners to assist with the cost of adopting conservation practices—this article and the interactive maps present a review of the performance of the program and initiate a view of the Farm Bill through a lens on policy design.