Agricultural Cost-Share in Pennsylvania

forest buffers separate farm fields Will Parson Chesapeake Bay Program 1171x593

Forest buffers separate farm fields from the West Branch Susquehanna River, providing a highly effective filter that reduces the amount of nutrient and sediment pollution that runs into the Commonwealth's waters.

Photo Credit: Will Parson/Chesapeake Bay Program

Agriculture is an integral part of Pennsylvania's history and cultural identity. It also serves as a precious natural filter, soaking up rainfall and farm runoff before it reaches streams and the Bay. But farmers need help to implement critical conservation practices to clean up the Commonwealth's waters.

Pennsylvania does not have a true state cost-share program to help farmers implement best management practices on their land. Instead, the state offers a tax credit program called the Resource Enhancement and Protection (REAP) program. REAP funding is regularly used in conjunction with federal cost-share programs.

How the REAP Program Works

Established in 2007, REAP has historically provided farmers with 50 to 75 percent of out-of-pocket expenses, depending on the conservation practice, in the form of state tax credits. Farmers can receive a maximum of $250,000 in credits over a seven-year period. Following passage of the Pennsylvania Farm Bill in 2019, eligible applicants can receive 90 percent of the costs for certain high-priority conservation practices. The priority practices include: riparian forest buffers, livestock exclusion from streams, stream crossings, cover crops, soil health best management practices, and additional practices as determined by the State Conservation Commission.

The REAP program was historically capped at $10 million in tax credits, though actual credits issued under the program averaged $8.4 million for the five fiscal years between 2013 and 2018. The Pennsylvania Farm Bill expanded the cap to $13 million.

In 2018, 32 percent of the program credits funded no-till planting equipment, 30 percent funded management of animal concentration areas (such as barnyards and feedlots), 18 percent funded cover crops, 12.5 percent funded nutrient management plans, 6 percent funded projects to address field and stream erosion, and 2 percent funded precision fertilizer application equipment.

A well-designed cost-share program would provide dedicated funding for years in advance, allowing farmers to plan ahead; would provide multiple cycles of funding each year; and would allow decision-making to remain at the local level.

Many farmers, conservation groups, and other boots on the ground are working hard to put practices in place that will improve water quality in Pennsylvania's streams, rivers, and the Chesapeake Bay. They need financial and technical support to finish the job.

Why Agricultural Cost-Share is Important to Meeting Pennsylvania's Blueprint Goals

Pennsylvania reduced its agricultural nitrogen pollution flowing to the Bay by 1.6 million pounds between 2010 and 2018. Farms will need to cut an additional 22.3 million pounds of nitrogen to meet the Commonwealth's 2025 Blueprint goals—roughly 93 percent of its total remaining reductions.

While the REAP program and the Pennsylvania Farm Bill provide a positive foundation to build upon, they still fall far short of the level of investment needed in agriculture to successfully meet the Commonwealth's pollution reduction goals. Pennsylvania's final Clean Water Blueprint identifies a funding shortfall in excess of $300 million annually between now and the Blueprint's 2025 deadline—the vast majority of which is needed to help farmers implement conservation practices on their land.

To help bridge the gap, state lawmakers should establish a true agricultural cost-share program to support Pennsylvania farmers. Many farmers do not pay a large amount of Pennsylvania income tax, limiting the benefit of the tax credits provided through REAP. And while brokers can help farmers sell their REAP tax credits to businesses with a higher tax burden, farmers often receive only 70 to 90 cents on the dollar.

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