NRCS Adopts New Payment Schedule Plan

By 2008, the USDA Natural Resources Conservation Service (NRCS) in Maine will have a different method for compensating landowners for conservation projects.  A new financial payment schedule will give a mathematical break-down of all of the factors that determine how much projects typically cost and the percentage that the government will contribute.

The traditional cost-share process is being replaced with the concept of program participant compensation.  The use of average costs, cost-share methods, and cost-share rates will be eliminated.  Each eligible practice and activity will have a payment rate, which will be the unit cost rate of compensation for the program participant.

“We are starting to use the payment schedule because we have to show that the conservation payments are not trade distorting and to show the total cost of conservation,” said John Long, Economist for NRCS in Maine.  Long also said that the new method of recording expenditures will show the IRS how much the farmers are being compensated, and reduce administrators’ workloads.  The new payment schedules have a column that includes the expected costs for materials, equipment, labor, mobilization, and maintenance.  “Program administrators will not have to take time to calculate costs…they can simply look at the payment schedule,” said Long.

By implementing the payment schedule, NRCS will simplify and streamline conservation program development, increase staff time available for conservation planning, improve producers’ understanding of conservation program payment amounts, and ensure that all conservation program payments are World Trade Organization (WTO) green box compliant and that the cost basis for payments is adequately documented, where appropriate, to substantiate exclusion from adjusted gross income.

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