Farm Progress

Here’s what’s available to Iowa farmers to help pay for establishing cover crops.

October 22, 2018

6 Min Read
Cost-share programs encourage more farmers to try cover crops.

With corn and soybean harvest underway, many Iowa farmers are planning to plant cover crops this fall as soon as the cash crops are out of the field. Several federal and local funding sources for cost share are available for both new and experienced cover crop users.

A list of cost-share programs for cover crop users and links to online resources was compiled by Alejandro Plastina, Iowa State University Extension economist, and Wendiam Sawadgo, a doctoral student in the ISU department of economics. They had assistance from Sarah Carlson of Practical Farmers of Iowa; Paul Goldsmith of the USDA Natural Resources Conservation Service in Iowa; and David Brommel, also with NRCS in Iowa.

Environmental Quality Incentive Program and Conservation Stewardship Program are available through NRCS. EQIP is suitable for new users of cover crops, while CSP is more tailored to farmers looking to enhance their conservation efforts. Farmers are eligible for up to three annual payments through EQIP and five annual payments through CSP.

The payment amount differs by cover crop type. To receive payment, NRCS standards and specifications must be met for the cover crop practice. The farmer fills out an application for the adopted practice. The applications are grouped by sign-up period and chosen using a ranking tool in which points are assigned for different environmental benefits provided. The EQIP and CSP payment rates differ for different cover crop practices.

CSP gives farmers an annual payment in exchange for producing environmental benefits. Farmers work with their local NRCS agronomist to expand and strengthen conservation efforts in their crop rotation. Farmers fill out documentation of their ongoing practices and the application for the adopted practice. NRCS reviews the application, and given the proposed changes, estimates the environmental benefits using the Conservation Activity Evaluation Tool to determine the current level of stewardship.

The current level of stewardship along with the planned improvement is used for ranking applications and determining payments. CSP includes enhancement activities that address various environmental benefits of cover crops.

The Regional Conservation Partnership Program (RCPP) provides funding through local, federal and private sources administered through EQIP and CSP, following their payment rates as well. NRCS makes CSP payments for practices or enhancements. In some instances, NRCS will make CSP payments for both practices and enhancements.

Basic covers. A basic cover crop is defined as a small grain, legume or other approved cover crop that is planted within 30 days of the cash crop harvest. The cover crop, after producing as much biomass as possible, is terminated with herbicide before the subsequent cash crop is planted.

The per-acre payments for basic cover crop (organic and non-organic) are:
 EQIP payment, $33.83
 CSP practices payment, $8.45
 CSP enhancement payment: $7.90 to $14.59

Multiple species. The term “multiple species” refers to a mixture of at least two species, including a small grain and legume (and may include other species), that is seeded within 30 days of harvesting the cash crop. The cover crop, after producing as much biomass as possible, is terminated with herbicide or tillage following NRCS termination guidelines before the subsequent cash crop is planted.

Per-acre payments for multiple species (organic and non-organic) are:
 EQIP payment, $37.88
 CSP practice payment, $9.88
 CSP enhancement payment, $10.76 to $14.59

Winterkill species. Winterkill species are defined as a single species or mix of grass, legume and brassica that is planted within 30 days of the cash crop harvest. The cover crop species winterkills.

Per-acre payments for winterkill species:
 EQIP payment, $18.74
 CSP payment, $4.80
 CSP enhancement payment, $7.90 to $10.76

Farmers can obtain cost share from the Iowa Department of Agriculture and Land Stewardship through their local soil and water conservation district. First-time cover crop users are eligible for $25 per acre, and continuing users are eligible for $15 per acre on up to 160 acres, subject to maintenance agreements through the Iowa Water Quality Initiative.

Farmers who have cover-cropped acres that are not eligible for cost share can still receive a crop insurance discount through the Cover Crop-Crop Insurance Demonstration Project. Through this program, farmers are eligible for a $5-per-acre crop insurance premium discount through USDA’s Risk Management Agency in a pilot program partnered with IDALS. There is no acreage cap for this program. Farmers must follow crop insurance and NRCS guidelines for their cover crop management.

Cover crop funding opportunities are available for farmers who sell corn to Cargill or soybeans to Archer Daniels Midland, through two programs partnered with Practical Farmers of Iowa. To participate in these programs, the farmer must schedule a one-hour consultation with a PFI agronomist and provide descriptions of the fields that will use cover crops by Oct. 1. The farmer must also send cover crop seed and planting receipts to PFI and attend one educational PFI event by Dec. 31.

Pepsi Co. – Cargill Low Carbon Corn Program. Farmers who sell corn to the Cargill plant at Eddyville in southeast Iowa are eligible for $10 per acre on up to the larger of 160 acres or 10% of their total farmed acres.

Unilever – ADM Sustainable Soy Program. Farmers who sell soybeans to Archer Daniels Midland are eligible for $10 per acre on up to the larger of 160 acres or 10% of their total farmed acres.

Annual net returns to cover crops
The Center for Agricultural and Rural Development (CARD) at Iowa State University provides research-based information on the net returns to cover crops at the website Economics of Cover Crops. Research results are based on a statewide survey of Iowa cover crop users and a multistate survey of Midwest cover crop users. Survey responses were used to calculate per-acre revenues and production costs under various methods of planting and terminating cover crops, accounting for cost-savings experienced by farmers.

Differences in costs and revenues for each farmer across cover-cropped and non-cover-cropped land were used to calculate the total net returns from using cover crops. The website includes a decision tool, three peer-reviewed academic articles, three brief summaries of the academic articles, presentations, a recorded webinar and the final research report with the survey questionnaire.

More information
The following sources have more information about cover crop programs and cost sharing.

Sources for PFI Programs:
 Pepsi Co/ Cargill Low Carbon Corn Program
 Unilever/ADM Sustainable Soy Program

Sources for programs sponsored by NRCS:
 USDA NRCS Conservation Practice Scenarios
 Iowa Environmental Quality Incentives Program Practices
 Iowa Conservation Stewardship Program Practices

Sources for programs sponsored by IDALS:
 Cost share available for water quality practices
 Cover Crop – Crop Insurance Demonstration Project (main)
 Cover Crop – Crop Insurance Demonstration Project (demo)

Additional sources of information:
 NRCS Cover Crop Termination Guidelines
 Cover Crops Crop Insurance, Cover Crops and NRCS Cover Crop Termination Guidelines
 CARD Economics of Cover Crops

Source: Iowa State University

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