Extension Study Shows Farmers Using Conservation Loans

Extension Study Shows Farmers Using Conservation Loans

Iowa State University study examines farmer use of soil and water conservation loan programs.

Iowa is one of the most productive agricultural states in the U.S., but it also faces water quality challenges related to crop and livestock production practices. A number of soil and water conservation programs are in place to help farmers and landowners improve conservation practices; however, demand for the programs often outweighs the funds available.

CONSERVATION LOANS HELP: "The amount of cost-share funding for soil and water conservation is limited. However, conservation loan programs, which make loans available to farmers and landowners at a reduced rate of interest, can be used to leverage the cost-share funding and help farmers put more conservation practices on the land," says J. Gordon Arbuckle Jr., an ISU Extension sociologist.

To help address this issue, Iowa introduced the Clean Water State Revolving Fund nonpoint source pollution program in the state in 2004. To understand the impact of the program and find ways to expand its reach, state CWSRF staff contacted Iowa State University Extension for research assistance. Results from an ISU Extension-led evaluation of CWSRF's Local Water Protection Program were published in the February 2013 issue of the Journal of the American Water Resources Association. ISU Extension sociologist J. Gordon Arbuckle Jr. led the research team.

To see if the loan programs are making a difference, ISU conducted an evaluation

Congress established the CWSRF in 1987 to help communities fund infrastructure and other water-quality improvement projects. In 1992, some states' CWSRF programs began providing loans for agricultural pollution projects. These programs use federal money to provide subsidized loans to help farmers and landowners fund conservation practices that improve water quality.

The Iowa CWSRF established the Local Water Protection Program and the Livestock Water Quality Program in 2004. These are jointly administered by the Iowa Department of Natural Resources, Iowa Finance Authority and Iowa Department of Agriculture & Land Stewardship.~~~PAGE_BREAK_HERE~~~

The CWSRF nonpoint source loan programs were designed to increase the scope, scale and rate of best management practices adoption on Iowa ag land by relieving capital constraints and decreasing the financial burden associated with adopting the practices. While the programs gained traction in their first years, by 2007 they had not attained desired levels of participation and Iowa CWSRF staff wanted to find out why. They also wanted to know if the programs were helping participants to increase investments in conservation practices.

Loan programs are helpful in accomplishing farm pollution control goals

In 2008, Arbuckle began working with IDNR and IDALS staff to evaluate the programs. The research team surveyed farmers and landowners and conducted focus groups with agency field staff.

"We learned that farmers who had taken these conservation loans viewed them as effective and user-friendly," Arbuckle says. "Nearly all loan recipients believed the loans had helped them to accomplish their conservation goals more rapidly than they would have otherwise. More than 90% agreed they would recommend the programs to others and would take a loan again if needed. Our focus groups with agency field staff found that many of the staff who weren't promoting the programs simply weren't familiar enough with them to feel comfortable using them."

Loans help farmers put more conservation practices on the land more quickly

Referring to the Local Water Protection Program, Arbuckle says, "The LWPP loans aren't necessarily a replacement for cost-share funding of on-farm conservation projects; results from our survey show that farmers typically supplemented cost-share funding with loans." However, some farmers just used the loans and other resources and didn't use cost-share at all.

Perhaps more importantly, the research indicates that loan users invested about 25% more in conservation projects than similar landowners who had not taken loans. "So, the loans are helping farmers make larger investments in conservation projects and complete them more quickly than they might have otherwise," says Arbuckle. "Given the on-going strength in farm income, now is a great time to invest in soil and water conservation. The CWSRF low-interest loans can be an important tool to help facilitate those investments."

For information about Iowa's conservation loan program along with conservation cost-share funding, contact the local Soil and Water Conservation District office in your county or visit this link.

TAGS: USDA Extension
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