How to get more USDA grants to small farms

Last week, the Institute for Agriculture and Trade Policy made headlines by stating that most farmers who apply for the USDA’s multi-billion dollar, sustainable agriculture funding program don’t get funded. The Environmental Quality Incentives Program – called EQIP among farmers –  is 3X oversubscribed and large, polluting farms receive more conservation funding than smaller, sustainable operations. 

Our startup FarmRaise has helped hundreds of small and mid-sized farm businesses apply for EQIP funding over the past year.  We’ve seen how game-changing this critical funding can be to farmers starting regenerative farming practices and just how tough it is for small farmers to access this money. The challenges these small producers face are more nuanced than the USDA simply favoring large, polluting farms, as the IATP report suggests. 

Democratizing information 

We founded FarmRaise because small farmers told us that they struggled with bureaucratic paperwork and long wait times when they apply for sustainability funding. To solve the problem, we built a simplified, automated application to ensure that farmers submitted the right information quickly to get approved. After sharing this solution on Facebook, we were flooded with farmer interest, especially from non-conventional and regenerative farmers, farmers of color, and women farmers (these demographics compose over half of our customer base). As hundreds of farmers applied for millions in EQIP funding through our app, we naively clapped ourselves on the back for removing these barriers to access, but the real work was just getting started.

When funding decisions trickled in, we saw that our customer’s success rate was only slightly higher than the national average. Submitting a winning application required more than correctly filling out the right fields: there is a complex application ranking system based on what the USDA calls resource priority concerns, a fancy term for environmental issues on the farm. From erosion to water quality, every state in the U.S. has a unique prioritization of these resource concerns that determine farmer application success. 

We brought in an expert – a farmer who had studied the ranking system for years and helped many others apply – to support a cohort of our farmers to optimize their resource priority concerns. He carefully studied each farmer’s unique operation, watershed, and the resource priorities of their state to craft a compelling application. While we’re still awaiting some funding decisions, we currently have a ~2X higher funding success rate for this cohort compared to prior applicants.

Farmers can learn about their resource priority concerns by calling the USDA or researching data online, but this information is hard to access and interpret. Large farm businesses have the human resources to study these resource concerns and optimize their applications, but smaller farmers don’t have the same bandwidth and application savvy to compete. We’re working on streamlining this knowledge for small farmers at FarmRaise, but we need the USDA to eliminate this confusion all together. The government can democratize this knowledge online by making it easier to learn and interpret the priorities in a farmer’s locale, empowering small farmers with knowledge and confidence to put forward a compelling application. 

Reaching everybody

Every year, the USDA sets aside 5% of EQIP funds specifically for farmers of color. Across the 12 Midwestern states studied in the IATP’s report, only two met their 5% quota. Over half our customers are non-conventional, underrepresented farmers, and we’ve been fortunate to gather their perspectives over the years.

While they’re encouraged by recent USDA strides to serve underrepresented farmers through actions like debt forgiveness and targeted grant funding, these farmers remain skeptical that local USDA offices are truly committed to making their opportunities accessible to all. We’ve heard a repeated sentiment that local USDA offices target the same cohort of producers year over year. As one farmer said “It’s a networking game. If your USDA rep knows you, you’ll be more plugged in and likely to get funding.” The USDA still has a chasm to cross in outreach, relationship building, and execution if the Agency wants to gain the trust of these underrepresented farmers and get funding to them. 

Paying to play

EQIP is not affordable to many small farmers. The funding is delivered on a reimbursement basis, and farmers are expected to pay upfront for sustainable practices – like cover cropping or installing a greenhouse – projects that may require tens of thousands of dollars in out of pocket costs before the reimbursement comes in. While the USDA does offer some financial flexibility for farmers, upfront payment opportunities are not widely advertised or understood, and many small farmers are dissuaded by the cash flow pinch that EQIP participation requires. We’ve heard from farmers maxing out their credit cards to fund USDA-approved projects before reimbursement, or undecided as to whether they’ll accept their spot in the program due to up front costs. Similar to IATP’s recommendation, why not relieve this stress by giving farmers who can’t afford the project a cash advance secured against the future funding? This upfront payment would make it easier and faster for the farmer to get started on these game-changing initiatives in line with their planting calendar constraints. 

To make farm funding accessible to small and underserved farmers, the USDA should democratize the rules of the program, build strong and sustaining relationships with farmers of color, and craft flexibility and accessibility into the fabric of the funding process. We’re thankful to be learning from underserved farmers and building a solution alongside them, and we need an ever-expanding team of teams to make farm finance accessible to them. Team USDA – seated in the halls of power in Washington and in local offices within farming communities across the U.S.. – must take these steps to bring financial access to the farmers who need it most. 

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