Impacts of an increase in federal assistance for cover cropping: Evidence from the Environmental Quality Incentives Program

Financial assistance for cover cropping through the U.S. Department of Agriculture's Environmental Quality Incentives Program (EQIP) has increased more than twentyfold in the past decade and a half. Available support for cover cropping increased further due to the Inflation Reduction Act, which provides significant funding for climate smart practices. In this study, we examine whether increases in available financial assistance lead to significant increases in producer participation in EQIP for cover cropping and whether these increases are additional on the landscape. We focus on the impacts of the National Water Quality Initiative (NWQI), which provides funding for cover crops and several other practices to producers in targeted watersheds on top of normal EQIP levels. We first estimate the impacts of NWQI on enrollment in EQIP using a watershed-level panel of acres enrolled in EQIP for cover crops. We find that NWQI more than triples EQIP cover crop acreage compared to similar control watersheds. Driving the increase in enrolled acreage is a small increase in the share of applications receiving a contract, as well as a significant increase in the total number of applications received. We then utilize field-level administrative data on cover cropping to estimate the impact of NWQI on cover crop adoption overall. We find evidence that the impacts of NWQI on cover cropping are largely additional.