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.

 

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