Reconciliation Raises Conservation Funding Long Term But at Near-Term Cost

Conservation programs will see a long-term boost in funding under the budget reconciliation bill recently signed into law, but that benefit comes at a cost: For the coming fiscal year there will be significantly less money available for program applicants than there otherwise would have been. 

Unobligated Inflation Reduction Act funding previously expected to be available in fiscal 2025 and 2026 for the Agricultural Conservation Easement Program, the Regional Conservation Partnership Program, the Environmental Quality Incentives Program and the Conservation Stewardship Program has been rescinded to be folded into the permanent farm bill baseline.

Because of congressional budget rules, that change should guarantee somewhat higher funding levels for these programs over the coming decade and beyond. But it will also likely mean fewer producers will get funding for their projects in FY26 compared to what they could have gotten under IRA — at least for some programs, said National Sustainable Agriculture Coalition policy specialist Jesse Womack. FY26 begins Oct. 1.

“I think, ultimately, the trade-off we just made is we’re going to see slightly smaller single-year signups in FY26 than we saw in FY24,” Womack said. “But we’re going to see that level increase a little bit over the next couple years and then be maintained in perpetuity.”

For instance, EQIP was to have $3.4 billion in FY26 under the IRA in addition to $2 billion in farm bill funding, according to the Congressional Budget Office. The reconciliation bill set total baseline funding at $2.6 billion for FY26 before ramping up to $3.2 billion by FY31.

Under IRA, CSP was slated for $1.5 billion in budget authority in FY26 plus $1 billion from the farm bill, according to CBO. Reconciliation sets the baseline at $1.3 billion for FY26, which will rise to $1.37 billion in FY31.

ACEP was expected to have $600 million in budget authority in FY26 from IRA on top of $450 million from the farm bill. After reconciliation, FY26 baseline funding is $625 million, increasing to $700 million by FY31.

The RCPP was slated for $2.4 billion in IRA budget authority on top of $300 million from the farm bill. Baseline funding under reconciliation was set at $425 million for FY26, rising to $450 million by 2031.

Womack said the reconciliation bill’s provisions will probably allow fewer applicants get into the programs in FY26 than previously expected under the IRA funding, which was set to run out after 2026. EQIP and CSP in particular are known for having more applicants than available funding, although IRA in recent years allowed a greater share to receive funding.

Between 43% and 44% of all EQIP applicants were able to secure contracts through the program in FY24, an increase of between 18 percentage points and 19 percentage points from the prior year, according to an analysis by the Institute for Agriculture and Trade Policy. Between 53% and 54% of CSP applicants were awarded contracts that year, 22 percentage points to 24 percentage points up from the year before. 

Producers will now have access to more funds beyond 2026 since the reconciliation bill offered a permanent boost to the baseline. Since IRA funding was set to run out after 2026, conservation program spending would have dipped to 2022 levels if the reconciliation bill had not passed.

“For many years, the issue of being oversubscribed and underfunded meant that people were raising their hand to do the right thing and to make improvements, and we weren’t able to satisfy all that demand,” said Kate Hansen, agriculture program director for the Isaac Walton League of America. “So now this should help us do that and also expand the conversation of who else can we get in the door.”

However, the bill also updates current income limitations to allow a producer who receives 75% or more of average gross income from farming to apply for conservation programs. Previous rules barred farmers with adjusted gross incomes of $900,000 or more from enrolling in several programs, including EQIP and CSP. 

“We could be looking at a perfect storm between increased funding levels, decreased staffing levels and this AGI waiver where we’re pumping out more of the biggest possible contracts to some of the largest farms in the country,” Womack said. “I think that would be a little bit problematic.”

Bruce Knight, who was NRCS chief during the George W. Bush administration, said the updated baseline created through reconciliation provides more certainty that farmers will have access to more conservation spending in the future.

“That’s what we got out of the big, beautiful bill, certainty,” he said. “We know we’ve got a robust budget. We know there’s money to support the kind of work that farmers are wanting to do.”

This article was originally published by Agri-Pulse. Agri-Pulse is a trusted source in Washington, D.C., with the largest editorial team focused on food and farm policy coverage.