Testimony for the
Environmental Quality Incentives Program (EQIP)

March 12, 2003

VIA U.S. Mail and e -mail FarmBillRules@usda.gov

Mark W. Berkland, Conservation Operations Divisions Director
U.S. Department of Agriculture (USDA), Natural Resources Conservation Service (NRCS)
1400 Independence Avenue SW. - Room 5241
Washington, DC 20250-2890

Re: Environmental Quality Incentives Program (EQIP)

Dear Mr. Berkland:

Thank you for this opportunity to submit comments on the Environmental Quality Incentives Program. I appreciate the logical approach taken by USDA and NRCS in developing a set of guidelines in such a short time frame. I would add the following comments for consideration as you draft the final language for this important issue.

• 1466.3 Definitions

I commend USDA for allowing the Limited Resource and Beginning Farmer to be eligible for up to 90 percent cost share. Many of our beginning farmers are taking over their family operations which may have existing waste management problems. Such criteria are crucial to attract and retain more young agricultural producers in our state. Without assistance, these operators do not have the means to bring their operation into compliance with the new EPA requirements.

• 1466.8 Program requirements

North Dakota's livestock producers are highly dependent on the EQIP as a primary funding source of livestock grazing and waste containment systems. Without an adequate level of funding, many important concerns will not be addressed. I concur with the program requirements that there will be at least 60 percent of available EQIP financial assistance to target conservation practices related to livestock production.

• 1466.9 EQIP Plan of Operations

The Comprehensive Nutrient Management Plan (CNMP) regulatory requirement of the livestock permitting agencies such as EPA and the state regulations will require all CAFO operations to include a comprehensive nutrient management plan. It makes sense for NRCS to require the development and implementation of comprehensive nutrient management plans on all EQIP contracts relating to animal waste storage or treatment facilities.

• 1466.6 State Allocation and Management

To help critical needs in certain counties, measures need to be taken to create a special statewide livestock waste system resource concern fund that would be used to address specific counties and operations that have critical water quality and regulatory concerns. However, if a special statewide fund is developed, every application should be limited to the same funding limitation and cost share rates set by the state. County offices should be allowed to sign off on applications in every case.

• 1466.20 Application for contracts and selecting offers from producers

It is important for NRCS to simplify the EQIP contract process as much as possible. I believe the approving authority for any EQIP contract with total payment greater than $100,000 should be with the NRCS Regional Conservationist. Higher payouts should be required to adhere to a higher level of accountability in order to preserve limited public monies. I recommend that NRCS considers a lower percentage cost share on larger contracts. In addition, I concur with the proposed rules that no competitive bidding by applicants should be allowed. This bidding process would benefit larger projects at the expense of smaller and limited resource projects.

• 1466.23 Cost Share rates and incentive payment levels

It is important for smaller and mid-size operations to be funded at a high enough level to encourage producers to participate in EQIP practices. I agree that cost-share payments made to a participant under the program should not be more than 75 percent of the actual cost of the structural practices. The State Conservationist should be allowed to develop a graduated cost share limitation on projects of $50,000 or less with a 75 percent cost share; those projects that are greater than $50,000 should have a 50 percent cost share. At the current time, North Dakota NRCS has a backlog of 2,050 EQIP applications pending, totaling around $22 million at the 75 percent cost share level or $15 million at the 50 percent cost-share level. A graduated system would help alleviate some of the backlog that has developed over the years. To avoid confusion and uncertainty, it is important to adopt a cost share percentage that will remain constant from year to year.

• 1466.24 EQIP payments

The proposed maximum of $450,000 per individual is excessive for an individual or entity. My recommendation would be not to grant more than $150,000 to any individual or entity. Further, all grants must be approved by either the state or regional conservationist. In order to reflect NRCS's revised purpose to "optimize benefits of EQIP", adequate funding should be first directed to small to mid-size operations because of their financial limitations.

General Comments

I encourage USDA to overturn the decision to cost share new facilities. The purpose of EQIP funding should not be to subsidize owners of the new operations. Rather, it should be to solve existing water quality concerns.

It is important for small and mid-size operations to receive the help they need to meet current EPA waste water policies. I do not believe it was Congress's intent to allow a few large operations to use up a state's allocation of EQIP monies.

Again, thank you for the opportunity to submit comments on the interim rules regarding the EQIP program.

Sincerely,

Roger Johnson
Agriculture Commissioner

RJ/jw