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SOIL AND WATER

Virginia Agricultural BMP
Cost Share and Tax Credit Programs

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The need

Reductions in nonpoint source(NPS) pollution can be attained by reducing activities that produce NPS pollutants, reducing the amount of pollutants generated by an existing activity and reducing the negative effects these pollutants can have by controlling their dispersal. To that end, NPS best management practices (BMPs) are important tools in controlling NPS pollution and environmental contamination.

While there are many sources of NPS pollution, agriculture is among the most significant in Virginia. Because agriculture requires many acres, its potential impact on water quality is great. For example, one EPA study estimates that 27 percent of the phosphorus and 60 percent of the nitrogen entering the Chesapeake Bay originate from cropland. These pollutants need to be controlled to protect the environment.

Publications

The following documents further explain elements of the cost-share program:

Solutions

DCR administers programs through local soil and water conservation districts (SWCDs) to improve or maintain water quality in the state's streams, lakes and bays through the installation or implementation of agricultural BMPs:

Through the programs, financial and technical assistance are offered as incentives to carry out construction or implementation of selected BMPs. DCR's process for allocating funds to districts is outlined in Policy and Procedures - Cost-Share and Technical Assistance Funding Allocations for FY2014 - Approved July 26, 2013.

Details on the BMPs that apply to both programs can be found in the Virginia Agricultural BMP Cost Share Manual.

Funding varies by district. The state provides funds to the districts for targeted priority hydrologic units. Areas with the greatest need, therefore, receive the greatest funding.

Assistance is available year-round to individuals willing to carry out an approved conservation plan. The business of farming requires as much planning and organization as any other. Strategies to protect surface and ground water should be in those plans. Many plans qualify but all must be approved by the local district board to participate in these programs. Districts seek and recruit individuals whose efforts can make the greatest positive impact upon water quality.

The Virginia Agricultural BMP Cost Share (VACS) Program

The cost-share program supports using various practices in conservation planning to treat animal waste, cropland, pastureland and forested land. Some are paid for at a flat rate or straight per-acre rate. Others are cost-shared on a percentage basis up to 75 percent. In some cases, USDA also pays a percentage. In fact, the cost-share program's practices can often be funded by a combination of state and federal funds, reducing the landowner s expense to less than 30 percent of the total cost.

Because demand for cost-share assistance is great, districts support the implementation of only those plans which meet local water quality guidelines. Since all requests can't be satisfied, priority ranking of practices must be used to make sure money is distributed and spent wisely.

An individual may receive a maximum of $50,000 for cost-share, except for those utilizing animal waste (WP-4 and WP-4b) practices, who may receive up to $70,000. In any case, the VACS payment, combined with federal payments, cannot exceed 75 percent of the total eligible costs. Practices related to livestock exclusion (SL-6) will be funded at 100 percent of eligible costs for FY2014 (See the approved policy and procedures for additional detail.)

All practices in the program have been included because of their ability to improve or protect water quality. Many will also increase farm productivity by conserving soil and making wise use of other farm resources.

The BMP Tax Credit Program

The Virginia Agricultural BMP Tax Credit Program, which began with the 1998 tax year. The program supports voluntary installation of BMPs that will address Virginia's nonpoint source pollution water quality objectives.

Agricultural producers with an approved conservation plan can take a credit against state income tax of 25 percent of the first $70,000 spent on agricultural BMPs. The amount of the tax credit can't exceed $17,500 or the total state income tax obligation. Starting with tax year 2011, any unusable tax credit - i.e., exceeding the state tax obligation - will be refunded to the taxpayer by the Virginia Department of Taxation.

Agricultural operators' BMPs, if approved, will be inspected by the district after they're installed. Soon after this certification, the operators will receive cost-share payments or a tax credit approval letter from their local SWCD.

Other tax credits

There are also tax credits to encourage farmers to use conservation equipment. A tax credit for the purchase of precision agricultural equipment is available for:

  • Sprayers for pesticides and liquid fertilizers.
  • Pneumatic fertilizer applicators.
  • Monitors, computer regulators and height-adjustable booms for sprayers and liquid fertilizer.
  • Manure applicators.
  • Tramline adapters.
  • Starter fertilizer banding attachments for planters.

This equipment qualifies for a tax credit equaling the lesser of 25 percent of the equipment purchase or $3,750. The equipment must meet state-established criteria, and the farmer must have a nutrient management plan approved by the local SWCD.

A tax credit for purchasing conservation tillage equipment also is available. It is for up to 25 percent, not to exceed $4,000. Eligible equipment includes that which is used to reduce soil compaction. It includes equipment such as "no-till" planters and drills, and guidance systems that control traffic patterns and minimize soil disturbance when planting. Soil compaction-reducing implements to be attached to existing equipment also are eligible.

What do I do now?

Need help with your conservation plan? The place to begin is your local soil and water conservation district. It will always help a landowner willing to support Virginia s efforts to protect water quality.

If you're a district employee in need of cost-share program training, please visit DCR's training page.

Do you want financial assistance with your conservation efforts? If so, contact your nearby conservation district for a cost-share application form and/or tax credit assistance for the practices needed to implement your conservation plan. The district board must then approve the request.

Other agencies that offer assistance include the USDA Farm Service Agency and Natural Resources Conservation Service, Virginia Cooperative Extension, Virginia Department of Game and Inland Fisheries, and the Virginia Department of Forestry. More information is also available from the Department of Conservation and Recreation, (804) 786-2064.

Click here to the latest BMP Cost-Share Program brochure.