INTRODUCTION
Many of the historical southern Texas Panhandle ranches were established in the late 1800’s. With a long-standing commitment to western heritage, they embody ranching traditions, with a focus on raising high quality cattle and working ranch horses. The host ranch of this case study consists of native rangeland with no cultivated ground. Important landowner considerations include natural resource management and rangeland health, economic sustainability, and the preservation of western heritage and traditions.
Realizing the need for additional ways to reduce operating costs, the King Ranch® Institute for Ranch Management assisted in identification of federal and state cost share programs with potential utility on their properties located in Texas.
OBJECTIVE
The objective of this project was to: 1) investigate federal and state resource management assistance programs and; 2) identify programs with potential to help (financially) achieve resource, ownership and management goals.
PROJECT APPROACH
Conversation with ranch owners suggested natural resource management should be the focus, with emphasis on brush management to enhance habitat for both cattle and wildlife. Applicable assistance programs were identified via web research and personal communication with agency professionals. Specifics regarding programs offered, cost share rates, long-term commitments, participant qualification, application process, and cost share funding availability were identified.
RESULTS
Three agencies with oversight of potential cost share opportunities were identified: Natural Resources Conservation Service (NRCS), U.S. Fish and Wildlife Service (USFWS), and Texas Parks and Wildlife Department (TPWD).
Environmental Quality Incentives Program
One of the most popular and widely used NRCS cost share programs is Environmental Quality Incentives Program (EQIP). This program is designed to provide financial and technical assistance to agricultural producers seeking to implement conservation practices addressing natural resource conservation concerns. A voluntary program, EQIP encourages agricultural producers to implement conservation practices by providing cost-share opportunities for certain practices.
The application process for EQIP consists of:
1) Participants must acquire a farm and tract number provided by the Farm Service Agency (FSA) in order to be eligible for United States Department of Agriculture (USDA) programs. Participants must provide proof of identity, a copy of the recorded deed, and a copy of articles of incorporation, bylaws, or partnership (if applicable).
2) Successful applicants must have a rolling average annual adjusted gross income of less than $900,000 for the last three tax years.
3) A conservation plan is required. If the ranch does not have a conservation plan, the NRCS will help develop a plan. A conservation plan should include, but is not limited to:
Upon completion of 1-3 above, a participant is prepared to apply for the EQIP program. Application for EQIP is filed through the local NRCS agent, a fundamental participant in this process.
Over the life of a farm bill (>4 years), recipients are eligible for up to $450,000 in assistance. The probability of individual projects being chosen for cost-share funding is based on several factors. The NRCS has different ways of prioritizing projects for assistance consideration, but the primary method by which Texas NRCS agents prioritize projects is by identifying priority resource concerns.
To consider the different ecosystems and priorities within, when allocating resources across the state NRCS has divided Texas into five administrative zones. These administrative zones are then further divided into resource teams with responsibility by county. The host ranch falls into Administrative Zone 1, based in Lubbock. The Snyder and Spur resource teams have responsibility for the counties wherein the ranches lie. The resource teams consist of conservation districts that are responsible for considering local input to select top priorities for each land use type. Local input is collected by NRCS resource teams hosting local work groups (LWG). Producers and other stakeholders are invited to attend and discuss natural resource management priorities. Input from LWG guides implementation of the EQIP program (and other USDA cost share programs as well).
Each resource team identifies three priorities for each land use type. The five land use types include: non-irrigated cropland, irrigated cropland, pastureland, rangeland, and forestland. Priorities can be classified under different categories such as soil, water, air, plant, animal, and energy. Since the host ranch is concerned with rangeland improvement (including wildlife habitat), these results focus on programs for rangelands. The main rangeland concerns for the Snyder and Spur resource teams are:
Unfortunately, at the present time, the ranches are not in an EQIP priority area nor are Regional Conservation Partnership Programs applicable. If the ranch does not have projects that fall under the priority resource concerns for their resource team but has other concerns that need attention, ranch representatives can attend LWG meetings, offer input, and potentially influence the priorities.
When an applicant is approved for funding, the project moves forward. The NRCS refers to different practices as treatments, and these treatments must be completed to NRCS specifications. For example, if the NRCS is providing fence construction cost sharing, the fence must be built to NRCS specifications. Most fencing contractors are familiar with the NRCS specifications. Each treatment through EQIP has a lifespan – the time lapse before a treatment can be repeated, or a different treatment can be performed using the same set of objectives for a targeted species.
All brush management EQIP treatments have a 10-year lifespan. For comparison, the actual useful life of a mechanical brush treatment (depending on species) is typically 15 years. Water-wells have a 25-year lifespan, and all prescribed grazing treatments have a 1-year lifespan. Cost share payments are distributed upon approved project completion (including a final inspection by a NRCS agent).
As mentioned previously, these treatments are cost shared, wherein participants are responsible for the difference between total project cost and cost share funding. However, producers must pay the full cost of the treatment up front, and if the project is completed to NRCS specifications the landowner will then receive the cost share funding. For example, the cost of a brush management project (mechanical treatment and reseeding) for juniper with heavy cover (>51% brush canopy), is approximately $550/acre. The NRCS cost share is $325, leaving the resource owner responsible for $225/acre. The NRCS has an extensive list of projects with the corresponding cost share amount. Local NRCS and county extension agents can be helpful with estimation of total project cost and expected results.
Since ranch owners are concerned with native rangeland improvements and have no cropland, cost share rates for applicable practices were included (Table 1).
Table 1. Cost share rates for rangeland improvement practices with potential application on Texas Rolling Plains Ranches
Conservation Stewardship Program
The Conservation Stewardship Program (CSP) is a voluntary conservation program administered by NRCS wherein resource owners are compensated for conservation-based practices that help the environment thrive. Conservation Stewardship Program functions via five-year contracts; participants receive an annual payment for participation. Three components determine the annual payment:
Again, the local NRCS agent can explain which management practices warrant compensation.
Partners for Fish and Wildlife
The Partners for Fish and Wildlife (PFW) program, administered by the US Fish and Wildlife Service (USFWS), has been in effect since 1987 to provide technical assistance and cost share support to landowners with wildlife habitat enhancement goals. Land improvement projects through the partners program are voluntary. Throughout the project, landowners continue to own and manage their land for their personal benefit while simultaneously improving habitat for wildlife.
The PFW operates similar to EQIP as a cost share program designed to help landowners improve land for the benefit of wildlife and livestock production. Cost share rates are the same as for EQIP however, they are more flexible on the rates and can customize projects to benefit landowners. Depending on the project, cost share may be greater or less than published cost share rate. Some projects are completely paid for with no cost to the landowner. Full payment projects involve returning land back to its native state (ex. cultivated to native range). The PFW program specifically focuses on the conservation of federal trust species and their habitats. Federal trust species include migratory birds, threatened or endangered species, and marine mammals of interest.
Unlike EQIP, PFW does not have an adjusted gross income cap, payment amounts are not limited, and payments are not tied to the tenure of the Farm Bill. Projects under $25,000 can be approved at the state level, whereas if the project budget is over $25,000 it must receive federal approval. Funding for PFW is allocated directly by Congress (instead of through the Farm Bill).
PFW has a different ranking system than NRCS programs. The primary ranking factors for PFW projects are:
- Does the proposed private lands project complement activities on National Wildlife Refuge System lands? Or,
- Is there potential for the proposed project to improve habitat for a federal trust species?
Secondary ranking factors include:
- Is the project in conjunction with state fish or wildlife agencies, conservation districts, or other partners?
- Does the project reduce habitat fragmentation?
- Does the project conserve or restore a natural community that is nationally or globally imperiled?
- Is the project self-sustaining?
- Is the project on lands that serve as buffers for federal or state conservation lands?
General ranking factors include:
- prioritizing longer duration projects over shorter duration projects,
- prioritizing projects that involve cost sharing opportunities with non-USFWS partners (a landowner cannot use NRCS funds for the same project that they are also trying to secure PFW funding) and,
- prioritizing the most cost-effective projects
If an applicant has a conservation plan on file with NRCS, the request is preferred over those without a conservation plan. Once an application is approved, the recipient may do the work or hire a contractor. Upon completion, a project must be maintained for 10 years or the cost share funds must be repaid. Project maintenance will depend on specifics outlined in the PFW contact. If a project involves improving habitat for a huntable species, that species may be responsibly hunted during the contract period with no repercussions.
Landowner Incentives Program
Due to very limited USFWS representation in Texas, the Landowner Incentives Program (LIP) is overseen by Texas Parks and Wildlife Department (TPWD). All LIP funding comes through the previously-described PFW program. Participants cannot receive funding for the same project through both LIP and PFW. The program priorities are the same, the only difference being LIP participants work specifically with TPWD staff. Since the ranches lie in the Upper Brazos River Basin, which is a LIP priority area, there is a possibility that qualifying projects may be given priority.
ECONOMIC CONSIDERATIONS
Maintenance of natural resources and ranch infrastructure is a never-ending responsibility. Brush management and water development seem to be universally commonplace on most Texas ranches. Neglecting maintenance needs compromises ranch productivity and sustainability. Many ranch owners opt to not use voluntary cost share programs for improvements, which is perfectly acceptable. However, from an economic viewpoint, cost share programs can have appreciable positive impacts on financial indicators like Net Present Value (NPV) and Internal Rate of Return (IRR). Possible positive project outcomes include, but are not limited to, increased carrying capacity, improved resource utilization, improved wildlife habitat and productivity, and increased recreational revenue. Assuming cost share projects in fact improve ranch productivity, lower initial project costs (via a cost share program) will directly impact return on investment.
RECOMMENDATIONS
Whether ranch ownership elects to apply for cost share funds or not, development of a sound written conservation plan is recommended. A conservation plan on file with NRCS is a prerequisite for EQIP and CSP and is often an asset when applying for other federal or state cost share opportunities. In addition, a written conservation plan is an integral component of effective generational transfer of resource management responsibility.
Federal and state cost share programs have the potential to help landowners accomplish resource improvement goals. If ranch owners identify resource improvement projects that align with PFW/LIP interests, pursue cost share via LIP; only TPWD is involved which simplifies the process. Beyond, LIP, pursue PFW; one USFWS agent for the Panhandle and Rolling Plains is involved and historically almost all PFW projects receive funding.
If ranch owners intend to pursue cost share programs with the NRCS (EQIP or CSP), develop relationships with the appropriate resource teams and be personally involved in the local working groups. A working relationship with local NRCS professionals is essential for efficient navigation of cost share program opportunities.
This article was originally published in our Spring 2023 Newsletter, view all newsletters here.
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