Cover Crop Programs and Incentives

A 2019 Landscape Assessment

In order to assist policymakers, farmers, and cover crop advocacy groups understand the full scope of cover crop programs and incentives, we conducted a landscape assessment of existing cover crop resources available nationwide during Fall 2019. We found that across the United States, varying programs and policies are available to assist farmers, nongovernmental organizations, schools, and soil and water conservation districts in promoting the education and adoption of cover cropping. Federally, the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) are the most popular sources for federal cover crop incentive payments. Both programs are administered by the USDA Natural Resource Conservation Service (NRCS) and pay farmers a per-acre incentive rate that varies by state. For non-governmental organizations, the NRCS Regional Conservation Partnership Projects program provides short-term grants to partners that can assist with expanding the implementation of conservation activities. Many NGO projects to educate or incentivize cover crops have been funded through Regional Conservation Partnerships.

At least 29 U.S. states support cover crop education, technical assistance, or incentive payment programs within their state. By far, the most common programs include incentive payments or grants to farmers or NGOs who work with farmers. These programs are often implemented through county-level soil and water conservation districts, who work closely with individual producers to provide technical and financial assistance to support the implementation of agricultural best management practices. A few states provide low-interest loans, tax credits, or insurance discounts to farmers who adopt cover cropping practices.

Companies and NGOs have also collaborated to develop supply chain incentives for cover crop adoption by domestic farmers. For example, Pepsico, Unilever, and Cargill have all partnered with Practical Farmers of Iowa to provide per-acre incentive payments to Iowa farmers who plant cover crops. General Mills has also established a strong track record of collaborating with NGO’s, granting $650,000 to Kiss the Ground to advance regenerative agriculture practices and working with the Nature Conservancy to develop the Soil Health Roadmap, which outlines steps to achieve adoption of soil health systems on 50% of U.S. cropland by 2025. Indigo’s Terraton Initiative aspires to act more broadly, developing a marketplace called Indigo Carbon where farmers can be compensated for sequestering carbon through regenerative agriculture practices. These innovative company initiatives reflect the growing acknowledgement that planting cover crops provides economic and environmental benefits across the agricultural industry.

Supply Chain Incentives

Archer Daniels Midland Company (ADM) has set the goal of having 10 percent of its wheat processing volume come from farmers monitoring their environmental footprint by 2022 and increasing adoption of cover crops by 25 percent among participating farmers. ADM would also like to have a minimum of 50 of their farmers complete the Illinois Saving Tomorrow’s Agriculture Resources (STAR) program survey in 2018, part of a farmer certification program aligned with the Illinois Nutrient Loss Reduction Strategy. ADM has joined the AgWater Challenge, an initiative founded in 2016 encouraging participating companies pledge greater transparency about the success of commitments, their ability to drive more resilient production systems and positive impacts they have made in freshwater basins.

General Mills granted $650,000 to the organization Kiss the Ground in March 2019 to advance regenerative agriculture practices on one million acres of farmland by 2030. The initiative will train farmers about using soil health practices to increase farm profitability and resilience. General Mills also worked with The Nature Conservancy to develop the Soil Health Roadmap, which outlines steps to achieve adoption of soil health systems on 50% of U.S. cropland by 2025.

Indigo’s Terraton Initiative aims to sequester one trillion tons of carbon dioxide from the atmosphere by incentivizing farmers to adopt regenerative agriculture practices, including cover cropping. Indigo will measure how much carbon a farm has sequestered through soil sampling and satellite imagery, which farmers can be compensated for through a marketplace called Indigo Carbon. Indigo will guarantee farmers who join in the first year a price of $15 per ton of carbon, but prices will ultimately set by supply and demand.

PepsiCo and Cargill are offering a $10 per acre cost share for corn growers who use cover crops on 10 percent of their acreage in 2019, in partnership with the Practical Farmers of Iowa.

In October 2018, Target committed to developing new markets for small grains and cover crops grown in rotation with corn and soybeans. This effort is a partnership between Ceres and the World Wildlife Fund for the AgWater Challenge, an initiative launched in October 2016, where participating companies pledge greater transparency about the success of commitments, their ability to drive more resilient production systems and positive impacts they have made in freshwater basins.

In 2019, Unilever is offering Iowa farmers cash incentives for cover crops in partnership with the Practical Farmers of Iowa. The company is offering $40/acre for up to 40 acres to those new to cover crops and $10/acre for up to 160 acres or 10% of acres farmed (whichever is larger) to existing users.

Foundation Programs

DendriFund is supporting a rye cover crop commercialization initiative that began in 2018 to expand acreage of cover crops across the state. The foundation is supporting the University of Kentucky, Kentucky Corn Growers Association, American Farmland Trust, and others to breed different rye varieties suitable for cover crops. Currently, 7 farmers are participating in field-level trials for rye that could be sold commercially.

The Walton Family Foundation supports a variety of conservation related initiatives focused on working lands and limited to the Mississippi River Basin. It supports NGO’s, grower associations, universities, and other nonprofits that work to expand the number of acres impacted by conservation in the basin with the goal of improving water quality. For more information they type of programs supported see its Environment Program grants page.

NGO Programs

TNC and Purdue developed the lease insertion to help landowners work with their farm operators and farm managers to incorporate cover crops into their leases.

The Ecosystem Services Market (ESM) program is a program incubated by the Noble Research Institute to advance the creation of a marketplace to compensate farmers for improving the environment through voluntary conservation actions. Farmers and ranchers would voluntarily adjust their crop and livestock production systems in ways that increase soil carbon sequestration and retention, as well as improve water quality and conserve water utilization. The quantified improvements would be measured, documented, and verified by a third party to create ecosystem services credits. The farmers and ranchers would then be paid for those outcomes before those credits are sold through a voluntary, regulatory, or compliance market to entities seeking to reduce their environmental impacts. This initiative began in 2017 in the Noble Research Institute and transferred to the Ecosystem Services Market Consortium housed under the Soil Health Institute in February 2019.

Since 2009, American Farmland Trust and the Electric Power Research Institute have worked to develop American Farmland Trust Ohio River Basin Water Trading Program developing an interstate water quality trading program in Ohio, Indiana, and Kentucky. The program connects buyers of nutrient credits (power plants and wastewater utilities) with farmers who are implementing conservation practices. Power plants purchase these credits, reimbursing farmers for their costs while improving overall water quality.

State Programs

Alabama Department of Environmental Management: Nonpoint Source Pollution Program uses Clean Water Act Section 319 grant funding to implement agricultural best management practices, including cover crop planting, to reduce nonpoint source water pollution.

California Department of Food and Ag Healthy Soils Incentive Program: The HSP Incentives Program provides financial incentives to CA growers and ranchers to implement conservation management practices to sequester carbon and improve soil health. For the 2018 HSP Incentives Program, CDFA has selected 194 projects requesting $8,667,596 in grants.

Sussex County Conservation District: Cover Crop Program provides direct payments up to $75,000 to assist in planting cover crops in accordance with program guidelines. Only annual crop fields are eligible for enrollment.

Hawaii Carbon Farming Task Force: A new law, HB 2182, signed into law by Governor David Ige in 2018 establishes a permanent GHG Sequestration Task Force. The Task Force identifies criteria to measure increases in GHG sequestration, soil health improvements, and crop yields. It also establishes a baseline for GHG emissions benchmarks for increasing GHG sequestration in the state’s agricultural environment through cover crops.

  • The Illinois Department of Agriculture, Prevented Planning Cover Crop incentive program to support farmers unable to plant given record rains and flooding. In 2019, the program was allocated $400,000 to be distributed through local Soil and Water Conservation Districts. To be eligible for the program, producers must have chosen the Prevented Planning option in the USDA RMA crop insurance and use cover crops on their prevented planning acres for weed control.
  • The Illinois Corn Growers operates a farmer service program called Precision Conservation Management (PCM) with 30 partners to increase conservation practice adoption using farm business management principles. 200 farmers are enrolled in the 16-county service area and represent 20,000 acres of farmland.
  • The Illinois Sustainable Ag Partnership was formed to promote whole systems conservation solutions focused on soil health and nutrient loss management. Members include AFT, Zea Mays Foundation, Precision Conservation Management (farmer-led program developed by the IL Corn Growers Association), ICGA, and Purdue University.
  • The Illinois Department of Agriculture, Partners for Conservation Program is a state-funded initiative to maintain soil and water health and improve agricultural resources. Within this program, the Conservation Practices Cost-Share Program incentivizes conservation practices, including cover crops, by distributing cost-share funds through soil and water conservation districts (SWCDs). To be eligible, land must experience erosion at a rate 1.5 times the tolerable soil loss level. SWCDs select projects and construction funds are shared by the landowner and the state.
    • Additionally, the Sustainable Agriculture Grants Program provides grants to governmental units, educational institutions, non-profits, and individuals to demonstrate and educate about sustainable farming practices.
  • The Fall Covers for Spring Savings: Crop Insurance Reward Pilot Program: Program approved by the Illinois General Assembly in 2019 that allocates $300,000 to the Illinois Department of Agriculture to provide a $5 per acre crop insurance reward to farmers who plant cover crops after harvest. The proposal intends to have 50,000 acres enrolled in the first year, 100,000 acres enrolled in the second year, and 200,000 acres enrolled in the third year. This pilot program was developed by American Farmland Trust Midwest and the Natural Resources Defense Council.

The Maryland Department of Agriculture: Cover Crop Program offers a payment of $45-90/acre to plant on-farm livestock forage, and $25-35 for cover crops planted for harvest. Cost-share grants are intended to offset seed, labor, and equipment costs associated with planting cover crops immediately following the summer crop harvest. Cover crops may not be harvested but can be grazed or chopped for on-farm livestock forage after becoming well-established. Cost-share rates vary from year to year with a maximum payment of $90/acre and bonuses available for farmers who plant and/or terminate cover crops before or after certain dates.

  • The Massachusetts Department of Agricultural Resources: Agricultural Environmental Enhancement Program (AEEP) is a competitive, reimbursement grant program that funds materials and labor for the implementation of agricultural conservation practices, including cover crops, that prevent negative impacts to natural resources. Grants up to $25,000 are awarded. The next open application period is anticipated for spring of 2020.
  • The Massachusetts Department of Agricultural Resources: Agricultural Climate Resiliency & Efficiencies (ACRE) Program is a competitive, reimbursement grant program that funds materials and labor for the implementation of practices that address the agricultural sector’s vulnerability to climate change and improves economic resiliency, including practices that improve soil health, such as cover crops. Maximum funding per applicant is 80% of total project costs up to $25,000. The next open application period is anticipated for spring of 2020.
  • A proposed bill, the MA Healthy Soils Bill, calls for incentives including loans, grants, research, technical assistance, and educational material for farmers to incentivize them to adopt soil health practices including cover crops. The bill is supported by American Farmland Trust, MA Farm Bureau, and New England Farmers Union. In February 2018, the bill was referred to the committee on House Ways and Means. No further action has been taken.
  • The Michigan Department of Agriculture and Rural Development: Michigan Agriculture Environmental Assurance Program (MAEAP) assists with the implementation of agricultural pollution prevention practices, including cover crops, through enrolling farms in a process designed to help producers evaluate and address the environmental risks of their operation. Farmers are educated about emerging regulations and opportunities, participate in an on-farm risk assessment, and implement recommended practices specific to their farm. Once these requirements are met, producers are officially recognized and gain access to incentives.
  • The Allegan Conservation District: Rabbit River Watershed Pay-For-Performance Program provides funding to help farmers implement conservation practices, including cover crops, on up to 4,500 acres in the Rabbit River Watershed to reduce agricultural pollution. The program provides yearly performance payments of $150 per ton of sediment reduced to the implementation of best management practices. Additionally, bonuses will be paid to landowners with land in high erosion risk areas and those who agree to a 3-year contract within the first year of the project. The project will run May 2017- May 2020 with $465,402 of allocated funding.
  • The Minnesota Department of Agriculture: Sustainable Agriculture Demonstration Grant Program provides funding to projects that explore sustainable agriculture practices and systems that could make farming more profitable and resource efficient. Grants are available to fund on-farm research and demonstrations and may include, but are not limited to, cover crops and crop rotations, conservation tillage, and farm diversification. Findings are published in the Minnesota Department of Agriculture’s annual Greenbook. Applicants can request up to $50,000 per project, with $250,000 available during fiscal year 2019. For proposals between $25,000 and $50,000, applicants must provide a dollar for dollar match on the amount above $25,000.
  • The Minnesota Department of Agriculture: Water Quality Certification Program (MAWQCP) is a voluntary certification program that rewards farmers who implement and maintain approved farm best management practices, including cover crops. Under this program, certified producers receive official recognition, regulatory certainty for ten years, and priority for technical and financial assistance to implement practices that promote water quality. Financial assistance includes grant awards up to $5,000 that cover up to 75% of the cost of implementing an agricultural best management practice.
  • Nebraska Healthy Soils Task Force: Nebraska governor Ricketts approved a bill in April 2018 to create a Soil Health Task Force to emphasize the importance of soil health to the future of farming. The Task Force would include representatives from the state Department of Ag, farmers, natural resource districts, academics, and environmental groups, to develop a comprehensive soil health initiative for the state and a five-year action plan. Several commodity groups support the idea, including Nebraska Farmers Union and Nebraska cattlemen, corn and soy growers.
  • Nebraska state officials are also considering the Soil Health and Productivity Incentives Act, which would provide payments to farmers to plant cover crops through a $20/acre payment for single-species cover crops and a $45 an acre payment for a multi-species cover crop. The bill was introduced in January 2019.
  • The Nebraska Environmental Trust: Grants Program provides grant funding for proposals that bring public and private partners together to implement conservation projects with long-lasting results. Grant priorities include projects that preserve, conserve, and restore soil health and water quality; actions to research, design, or foster the implementation of best management practices, and actions to inform and educate.
  • The New Hampshire Department of Agriculture, Markets, and Food: Agriculture Nutrient Management Grant Program provides grants to agricultural land and livestock owners to implement on-farm projects such as cover crops, no-till, and manure/compost storage to better manage agricultural nutrients. Applicants may apply for cost assistance up to $5,000. Matching funds are not required, but in-kind services such as labor provided by the applicant will enhance the application. Grant applications are due by April 1st and must be completed by November 30th of the same year.
  • The New Hampshire Association of Conservation Districts provides statewide coordination of conservation districts to implement demonstration projects, provide equipment rentals, and support education initiatives to promote soil health, including encouraging the use of cover crops.
  • The New Hampshire Department of Agriculture, Markets, and Food: Conservation Grant Program provides competitive grants to environmental projects that foster stewardship and sustainability of the natural environment. Focus areas include promoting water quality, soil conservation, and agricultural best management practices. Eligible grant applicants include county conservation districts, municipalities, non-profits, schools, and scout groups. The 2020 SCC Conservation Grant applications will be due on September 13, 2019.

The New Jersey Department of Agriculture provides technical assistance to help farmers and landowners plan for and implement best management practices to control erosion, manage nutrients, and improve water quality. Cost-sharing grants are also available through state conservation districts.

The North Carolina Foundation for Soil and Water Conservation: Soil Health Initiative- Multi- Species Cover Crop program promotes the use of multi-species cover crops by constructing demonstration sites to educate producers.

The North Dakota Department of Health – Environmental Health: Nonpoint Source Pollution Management Program is a voluntary, incentive-based program to reduce nonpoint source water pollution. The program uses Section 319 Clean Water Act funding to assess water quality conditions in a watershed, create water quality improvement goals, and implement watershed improvement projects, which may include cost-share funding to implement agricultural best management practices, including cover crops.

South Dakota Department of Agriculture: Coordinated Natural Resources Conservation Grants are competitive grants available for conservation districts to implement projects with a conservation benefit to the state. Past projects have included rotational grazing of rangeland and no-till cropping system incentives. Applications must be received no later than March 1 for the Spring award cycle or October 1 for the Fall award cycle.

The Oklahoma Conservation Commission: Cost-Share Program provides financial assistance for landowners to implement soil and water conservation practices. Funds are appropriated by the state legislature and distributed through state conservation districts. In the 2017-2018 program cycle, $33,800 was paid to implement 14 cover crop projects on 1,200 acres.

The Pennsylvania Department of Agriculture: Resource Enhancement and Protection (REAP) Program provides tax credits to farmers, landowners, and businesses that implement best management practices, including cover crops, that enhance farm production and protect natural resources. Eligible applicants receive between 50% and 75% of project costs in the form of state tax credits for up to $150,000 per agricultural operation. Tax credits can be used incrementally for up to 15 years to pay state income taxes or can be sold after 1 year. The State Conservation Commission began accepting FY 2019 REAP Applications on September 3, 2019.

The Tennessee Department of Agriculture: Agricultural Resources Conservation Fund provides cost-share assistance to landowners who implement best management practices, including cover crops, that reduce agricultural water pollution. Funding is distributed primarily through soil conservation districts. Landowners may receive up to 75% of the cost of installing the best management practice.

The Texas State Soil & Water Conservation Board works with local soil and water conservation districts to produce water quality management plans (WQMPs) that reduce or prevent water pollution consistent with state water quality standards. WQMPs often include the implementation best management practices, including cover crops, which are incentivized through technical assistance and cost-share funding.

The Utah Department of Agriculture and Food: Agriculture Resource Development Loan program provides low interest loans to farmers and ranchers for improvement projects that conserve soil and water resources, increase agricultural yields, maintain and improve water quality, and conserve or develop on-farm energy. The program has advanced more than $40 million for improvement projects since its establishment.

Washington King Conservation District Landowner Incentive Program: KCD reimburses farmers for up to $135 per acre for the purchase of cover crops seeds. Cover crop cost-share contracts are written for three years and participating farmers are reimbursed each planting season. Applications for 2019 will be accepted on a monthly basis through November.

Wisconsin Department of Agriculture, Trade and Consumer Protection: Producer-Led Watershed Protection Grants are available for projects that focus on ways to prevent and reduce runoff from farm fields and that work to increase farm participation in these voluntary efforts. Each application must come from a group of at least 5 farmers in the same watershed, collaborating with conservation agencies, institutions or nonprofit organizations. Projects can include incentive payments to producers to support the adoption of best management practices, including cover crops. The maximum grant award ​per group will be $40,000. In 2018, 19 groups were awarded a total of $558,246.

Federal Programs

Administered by the USDA Natural Resource Conservation Service (NRCS), the Environmental Quality Incentives Program (EQIP) program provides financial and technical assistance to farmers to implement conservation practices such as cover crops. Payment under EQIP contracts are limited to $450,000. The rate for cover crop incentive payments vary depending on state, special category of applicant (beginning farmers, organic farmers, or historically underserved audiences), and whether farmers use a single or multiple cover crop species. Detailed state-by-state payout rates for the 2019 EQIP program can be found in the PDF document linked on this page below.

Farmers enrolled in the Conservation Stewardship Program (CSP) agree to implement a suite of conservation practices (including cover crops) during a 5-year contract. Payment rates for cover crops vary by state in availability and amount. Rates also vary by whether a single species or multiple species of cover crops are planted, and whether organic farming practices are used.  Often the highest rate is offered for basic organic cover crop use. Below are the payment rates by state for fiscal year 2019. Language in the 2018 Farm bill increased cover-crop incentive payments to 125% of their previous level. Detailed state-by-state payout rates for the 2019 CSP program can be found in the PDF document linked on this page below.

The Natural Resource Conservation Service (NRCS) Regional Conservation Partnership Program (RCPP) provides approximately $300 million dollars annually to partner-led projects that promote the coordination of conservation activities in a regional or state area. Selected examples of RCPP projects can be found in this NRCS publication. The 2020 application period is open from September 3, 2019 through December 3, 2019.