Category Archives: Financial

Understanding NRCS EQIP Grants – Part 3 

We hope you’ve enjoyed this 3-part series (Part 1 | Part 2 | Part 3). In this last portion we’ll continue discussing how you can better understand the availability and function of EQIP grants provided by the Natural Resource Conservation Service.

After you meet and discuss your ideas they will draw up plans, put some cost estimates together and give you a preliminary set of paperwork to look over.  If you want to make any changes to the systems or time frame in which they will be installed, now is the time to do it!  Realize at this juncture, there is no commitment to do anything and if you are going to back out this is your chance.  If not and you want to move forward, sign on the dotted line.  But be warned, once you sign you are committed!  You have just entered into a contract with the United States government!  Scary huh?  It’s really not that bad, but there are penalties if you decide to change your mind after signing the contract and tying up funds.  From my understanding, if you don’t complete your contract on time and to the specifications given to you there is a 10% penalty.  So if you default on a $10,000 grant be prepared to pony up $1,000 to your favorite uncle.  Each district only has so many funds given to them via the farm bill and they don’t want to tie those up with folks who are going to back out.  Those could have gone to some other guy who would put them to good use.

Once your contracts are signed, that money is locked up under your name (or the name of the landowner) and is all yours once you complete the project(s).  This is where a lot of the confusion comes in:  With NRCS project funding, you have to front the capitol to complete the project.  It s a grant, not a loan!  Once work is completed, the NRCS will inspect it and have you finish any punch list items to meet the specifications they gave to you prior to work starting.  After that, your paperwork will be submitted for reimbursement.  Please note that all systems have to be installed with new components, and you can’t begin work on something prior getting your contracts signed.  So if you have already begun building fence and ran out of money, they are not going to come to your rescue.  And while you and I may believe that a used telephone pole would make a great end post, they disagree.  Remember, no used materials!  The only exception I have seen to this is the use of certain used materials for fence posts.  The NRCS has allowed the use of existing oil and gas fiberglass piping for fence posts all over Indiana.  Some of this stuff is truly used, but a lot of it is new “reject” material, meaning it didn’t meet the specs for the intended use.  This fiberglass material sure does make fine fence posts though, and being thick and heavy they will outlast me and my kids.  I don’t know if the use of these materials is an Indiana NRCS thing, or something nationwide.  Be certain to inquire about it in your meeting with your NRCS representative if fence is on your agenda.

My experience with their cost estimates is that they are pretty spot on, and maybe a little on the high side for certain things but this is in our favor.  The way it works is they will look at your intended system and give you an estimate including labor and materials.  They might say a 5 strand high tensile fence will run $1.05/foot installed with labor at “x” linear feet so your project money equals “y”.  That includes posts, gates, wire, ratchets, labor, equipment, etc.  You can then hire the whole thing out, hire it partially out or do the entire thing yourself.  That is totally up to you as project manager!  But remember, there are specifications to meet and crooked fence posts won’t fly very far towards getting reimbursed.  Things like digging a 4′ deep trench and hydraulically driving 10′ long single end fence posts are best left to contractors with the proper heavy equipment in my opinion.  Pulling fence wire and installing buried water pipe are skills that you should have as a farmer, and you can pay yourself to do it with these grants.  A hybrid approach is my suggestion.  Of course there will be tools to acquire, but you’ll need these for system maintenance anyway.  In the end, your system costs what it costs and you get reimbursed a flat amount based on your contract.  You may come out ahead, break even or get into your own pocket it just all depends.  While you can pocket a little money if you do some of the labor yourself, you are best off to not skimp on the materials.  The way I view it is that I’ve been blessed with this grant, so I’m going to install the best possible system I can with the best materials I can afford.  You can install PVC fittings for buried water if you want, or you can install a solid brass tee that will outlast you and your kids if properly installed.  And who wants to go digging holes looking for a leaky fitting anyhow?  Spend the money you’ve been granted to put things in right, especially the buried ones!

The final thing I want to mention is to keep your expectations in check in terms of turn around time on meetings, plans, and especially the reimbursement process.  We are talking about the federal government here and sometimes things move slower than we in the private sector would prefer – like at the speed of molasses flowing uphill in January.  Okay, it’s not that bad but it can take a couple of months for you to receive your reimbursement from NRCS after you complete your project and get it signed off on.  And please note that the reimbursement comes with a 1099 attached to it that you or whomever the landowner is must claim as income, so there are tax implications.  Be certain to speak with your tax advisor about that beforehand, as many of these systems have to be depreciated over time and can’t be written off in whole the year of purchase.

But in the end, my opinion is that the NRCS a good organization with good people who are genuinely trying to help those of us that want to raise food in a sustainable manner.  And regardless if you are a beginner or seasoned farmer, homesteader or full time farmer, or if you need a grant or just some technical help, the NRCS is a worthy ally that you should involve.


Understanding NRCS EQIP Grants – Part 2

In this 3-part series ( Part 1 | Part 2 | Part 3 ) we’ve been discussing how you can better understand the availability and function of EQIP grants provided by the Natural Resource Conservation Service.

Another reason I’m a huge fan of the NRCS is a larger issue not many people think about:  Our country cannot sustainably feed itself with our current agricultural model.  Today’s food system is predicated on cheap oil, cheap chemical inputs and massive subsidies whereby 2% of the population is feeding the other 98%.  It does not take a degree in rocket science to figure out that at the end of that road is a civilization destined to implode.  By promoting systems whereby we are taking the animals to the food, cutting petrol inputs, improving soils and decentralizing food production we may have a fighting chance of saving our country.  Now that may come off as a doom and gloom perspective but demonstrate to me where I am wrong in my thinking.  We have implemented with great efficiency just-in-time manufacturing principles into our food production and while it’s innovative, the risks are downright frightening.  What happens if tomorrow morning we wake up and the subsidies are gone?  Or diesel fuel is $10/gallon?  Our vertically integrated food system would fall apart in a matter of weeks, leaving the citizens of this country in disarray.  While I believe it is the personal responsibility of every citizen to produce as much of their own food as they can, obviously not everyone can raise all of their own protein needs.  This is why I believe we need to work with programs like the NRCS for solutions that will actually strengthen our overall food supply, and hence our national security, with sustainable grazing systems.  This will decentralize food production, invigorate new farmers to take up the mantel of “real food” production and point this thing in the right direction.

My personal belief is that the NRCS is one way we can begin to do that.  Like myself, there are many out there who have the will, determination and drive to farm with sustainable methods but may lack some of the resources they need to be successful.  In my case, we had property available to us and were able to fund our poultry and pork operations with our own seed money.  But when it came time to really get rolling with beef, we were talking about big boy money!  I held off using the grants for a long time out of pride but finally changed my mind after moving portable cattle fencing a quarter to half acre at a time every day for two years.  And before you think about passing on a resource like this, go and rent a 20 acre field, fence it, route buried water to it and see how much you spend.  For example, an 18 acre pasture we just completed this Spring took 15 months of work and required over $11,000 of investment before we ever put the first animal on it.  Could we have gotten there on our own?  Yes, in time with a lot of diligence.  But in my mind, we need to jumpstart this decentralized sustainable food model now while we still have the opportunity to do so.  If you have deep pockets to fund large projects, great!  Not everyone does.  Add to that the fact that we as small farmers are fighting an uphill battle against government bureaucrats and huge food corporations with an army of lobbyists, paid for politicians and lawyers at their disposal.  This is a tough fight.  Again, I’m not a proponent of government handouts but time is of the essence.  In my mind we either accept a helping hand from a program that is all about farming the right way, or we accept that our personal health and whats left of our soils are goners.  A country that can not feed itself is destined for failure!  And in the end, we are talking about are our own tax dollars so we might as well put them to work doing something that is going to heal our country and not further destroy it.  And this is money well spent, laying the way for multiple generations on a farm to raise healthy, nutrient dense food and make a good living while doing it.  Personally I think this is the best investment our country can make in itself and is why I have changed my attitude about accepting grants from the NRCS.

Now that I’ve climbed down from my soapbox, you are probably wondering how these NRCS programs work.  Well, the first thing you need is access to land.  You can own it, or you can have a contract drawn up to lease or rent it.  Either way, you have to have legal control of it in order for the NRCS to get involved if the grants are to be in your name.  As an aside, in the case of renting or leasing I would personally want to know that I would have control of the property for a long period of time prior to putting the in the effort for something like building fence.  Now, another solution might perhaps be that a family member, friend or adjacent farmers owns some property but is willing to sign off on the paperwork in order for you take advantage of the programs.  The grants could all be done in their name, while you do the labor and project management and simply rent or lease the property on the backend.  And maybe the “lease payment” is the sweat equity from you building the fence, planting the grasses, etc.  However you can work it out, my advice is to do it and make this happen if you are serious about truly sustainable farming.  And that advice goes regardless of scale, it could be 2 acres or 500 acres.

Next, call your local NRCS office (you can find your local office here) and tell them you would like to schedule a time for them to come out and view your property.  You’ll want to mention that you are interested in the EQIP grants, and if you haven’t had any (or little) farm income on your tax return in the last 10 years, mention the Beginning Farmer grant as well.  If you qualify as a “beginning farmer”, then you will get a slightly higher reimbursement rate on projects.  Think of it as a bonus for being a newbie.  If you have an existing farm with systems in place and have been going about things from a conventional manner, or if you are above taking a grant, you might just want some technical assistance and how-to advice.  The NRCS is happy to provide that as well, and you would be wise to tap into the vast amount of knowledge available to you thru their staff.

Before your meeting, you’ll need to have in mind what it is you want to accomplish and some idea of the systems you are looking to put in or improvements you want to make.  Are you wanting to graze cattle?  Produce surplus hay?  Install a freeze proof livestock watering area?  In the case of a conventional farm, you would want to be open to how you can change your practices to increase yields, profit and quality of life thru sustainable practices.  On our farm, we have built high tensile fence, installed buried water, planted grazing areas and have received grants for all of the above.  So consider printing out an aerial view of your property and doing some basic sketching, showing where you are interested in installing fence, water, seeding or all of the above.  You might even want to show this in phases over multiple years.  How do you see the whole thing coming together?  Maybe you have an existing grazing area that is overrun with fescue, you can get small grants to help inter-seed new stands of grasses and legumes into these areas.  Tell them what you want to accomplish where, list the obstacles, and let them help you find the right solution.

Understanding NRCS EQIP Grants – Part 1

In this 3-part series (Part 1 | Part 2 | Part 3) we’ll be discussing how you can better understand the availability and function of EQIP grants provided by the Natural Resource Conservation Service.

I’m from the government and I’m here to help.” ~ Ronald Reagan

Normally when I think about the above quote, I’m as reluctant as the next guy to believe anyone from the federal government can be of much help with anything.  That being said, and as odd as it may sound, there is one division of government I have found to be very helpful when it comes to farming the right way.  In a recent podcast interview, I mentioned a grant we received and used on our farm called the EQIP program thru the NRCS which is a division of the USDA.  I have received some emails asking about this program and it’s obvious that since we didn’t cover many of the details about it in the interview, there is some confusion about what this is and more precisely what it is not.  While I’m not a proponent of government handouts, I’m a huge cheerleader of the NRCS for a number of reasons I’ll discuss in this article.

A little background:  The NRCS (natural resource conservation service) is what I would call the mentally balanced division of the USDA.  If you are looking for a sustainable, quasi organic bent on how to do farming within the USDA, the NRCS is it.  They have a vast number of financial and technical resources, and in my experience the knowledge base of the folks working there has been pretty outstanding.  We are fortunate enough to have a gentleman here in Indiana who is a top notch grazer on his own farm, and his day job with NRCS pays him to help dispense his knowledge and experience to the rest of us.  In meeting other NRCS speakers at various conferences, I have found that same depth of knowledge to be the norm.

Simply put the main goal of the NRCS is to help farmers conserve our natural resources and heal the land, creating healthy ecosystems.  In the case of grazing, there is funding available to take lifeless, destroyed row crop fields and convert them into living polyculture grazing systems.  They want farmers and homesteaders alike to take the cattle, sheep and goats to the food and not take the food to the animals – what a concept.  They promote mob grazing, rotational grazing, soil building and low energy input systems.  There are grants (more on that later in this article) available to install fencing systems, buried water systems and to seed things like grasses and legumes for the sole purpose of grazing.  There are even some smaller grants available for simply practicing rotational grazing within existing systems.  Who among us can apply for these grants?  Anyone with access to land.  And you don’t have to be a full time farmer to tap into these grants, I know of homesteaders in my county who own as little as five acres and received a grant to fence it off so they could raise their own beef.

Yet another function for the NRCS is all about helping row crop farmers improve yields while decreasing or eliminating the use of chemical based pesticides, insecticides and herbicides.  They also teach how to improve soils by the use of green manures, no till cropping and even promote “chop and drop” to create a think layer of mulch to plant into.  If you really want to get schooled by the NRCS on healthy soils, watch this YouTube presentation by NRCS agronomist Ray Archuleta.  I’ve never seen anyone get as fired up as Ray about dirt!

The greatest practical example I have seen of this particular model is from a man I met at an NRCS conference named Gabe Brown who farms with his son Paul in North Dakota.  They have a large row cropping business as well as a grass-fed beef enterprise and are even doing pastured poultry.  Gabe row crops thousands of acres and has not tilled since 1993 and uses zero chemicals on his farm. You can watch a pretty neat video on YouTube of Gabe talking about his farm and how they transformed it starting over 20 years ago.

You can also read more about his operation on his website.  Gabe and his family are a model of success for anyone to look towards on how to farm in conjunction with what the NRCS teaches and promotes, especially when it comes to large scale commercial row cropping.  If all row cropping were done they way Gabe does it, our soils would be a model for the whole world to admire.