Funding Agricultural Best Management Practices with
the Clean Water State Revolving Fund
The U.S Environmental Protection Agency's (EPA) Clean
Water State Revolving Fund (CWSRF) program is the
largest public source of water quality financing in the
country. The funding flexibility inherent in CWSRF
programs allows states to address their unique water
quality priorities.
U.S. farmers, who farm over 900 million acres of
agricultural land, depend on their water quality to be
clean and reliable for livestock, crops, and irrigation. To
date, the CWSRF has funded over $700 million in
agricultural best management practices (BMPs), such as
feedlot runoff control, manure management, and
conservation tillage and erosion control. These practices
have improved the quality of water for farmers and well as
rural landowners. Many of these projects are eligible for
assistance because they implement state Clean Water Act
Section 319 nonpoint source (NPS) management
The CWSRF was created to provide reduced-rate loan
funding for water quality projects of all kinds, including
agricultural BMPs. CWSRF programs in each state and
Puerto Rico operate like banks. Federal and state
contributions are used to capitalize the programs. These
assets are used to make low interest loans for important
water quality projects. Funds are then repaid to the
CWSRFs and are recycled to fund other water quality and
public health projects.
Since the CWSRF program is managed by the states,
project funding varies according to the priorities, policies,
and laws within each state. Those interested in learning
more about CWSRF funding opportunities should seek out
the CWSRF program in their state and participate in the
process that determines which projects are funded. The
list of CWSRF state programs can be found on our website
at: https://www.epa.gov/cwsrf
The CWSRFs can offer many types of financial assistance to
fund agricultural BMP projects. While direct lending is one
option, many states have successfully used other sources
of funding such as linked-deposit loans and pass-through
loans. In these types of arrangements, the loans are passed
through state agencies, municipalities, or local banks and
the financial risk and management responsibilities of the
loan are placed with the program partners. Other types of
available financial assistance used to fund agricultural
BMPs are co-financing, guarantees, and sponsorship
lending. For more information on CWSRF assistance for
agricultural BMPs, please reference our paper on
"Financing Options for Nontraditional Eligibilities in the
Clean Water State Revolving Fund Programs," which can be
found on our website.
The CWSRF can fund a wide range of agricultural BMP
activities that address runoff and erosion from agricultural
cropland and animal feeding operations (AFOs), including:
	Cropland activities such as the installation of manure
injection equipment, water efficient irrigation
equipment, conservation tillage equipment, and
sediment control basins.
	Chemical use reduction, such as chemical spray
equipment and chemical storage containment
	AFO activities such as the installation of livestock/milk
house waste management systems, manure
containment structures, and injection equipment.
	Well sealing and water diversions to avoid feedlots.
BMP activities at concentrated animal feeding operations
(CAFOs) are not eligible for CWSRF assistance unless they

implement a National Estuary Comprehensive
Conservation Program. BMPs that treat or make beneficial
use of manure are eligible.
Farm credit banks are a group of nationwide commercial
lending institutions that specialize in providing services to
farmers and rural communities at competitive rates.
Maryland and Virginia have both established agreements
with several farm credit banks throughout their respective
States to help meet a farmer's financing needs to
implement agricultural BMPs. Maryland's agreements are
very similar to a linked-deposit program. In Virginia, the
state inspects the projects and approves the invoices
before they are paid. Farm credit banks are ideal partners
for the CWSRF because they are uniquely qualified to
directly market to farmers. A CWSRF loan can provide the
working capital the farmer needs to finance the
construction cost of an entire project, not just the cost-
share portion under a United States Department of
Agriculture (USDA) grant. Invoices are usually paid within
three days of submitting an invoice. After the project is
built, the farmer receives the USDA grant reimbursement,
usually several months after construction, and uses the
grant funds to pay down the CWSRF loan. Repayment
periods for the remaining ioan balance, which represents
the farmer's cost-share, are typically 7 to 10 years.
The Minnesota Ag BMP Loan Program & Rock County
In 1995, Minnesota began what is now known as a widely
successful agricultural BMP (Ag BMP) loan program that
has successfully provided assistance for NPS pollution
control practices to farmers, agriculture supply businesses,
rural landowners, and water quality cooperatives. The
program uses both federal CWSRF funds combined with
state and local funds. Even though these projects are
usually modest in size and cost an average of only $25,000
per project, they have the cooperation of 87 counties
within the state and more than 250 lenders. This
collaboration has resulted in $220 million in loans and
13,000 projects over the life of the program.
The Ag BMP loan program provides funds to all counties in
Minnesota, but the Rock County Land Management Office
is recognized as one of the most effective government
Leuthold Farm Alley between South Feedlot to settling area
units in managing their Ag BMP program. Rock County
was the first county to process a loan in this program,
where they have funded over 400 loans totaling $7.9
million in CWSRF funds. While their program uses both
CWSRF funds and state funding, they also leverage close
to 30% more from other financing sources that help to
reduce the financial burdens for the borrower, thus
making their Ag BMP program even more affordable.
One example that demonstrates Rock County's ability to
fund multiple Ag BMPs over several years was a series
of loans with the Leuthold Farm to address high nitrates
in local wells. Leuthold has a beef production facility
with a current population of 926 animal. In 1998,
nitrates exceeded 70 ppm in wells nearby the facility.
Between 2000 and 2016, the landowner was approved
for loans to implement reconstruction of the stockyard,
stack slabs, retaining wails, scrape aprons, diversions,
and an onsite septic system. Upon completion, nitrate
concentration fell back below drinking water standards.
The loan amount for all practices financed with Ag BMP
loans was $149,000, with about $107,000 of those
funds from the CWSRF.
For more information about the CWSRF please contact us at
Clean Water
State Revolving Fund
United States Environmental Protection Agency
Clean Water State Revolving Fund Branch
Office of Water, Office of Wastewater Management
1200 Pennsylvania Avenue , NW (Mailcode 4204M)
Washington, DC 20460
EPA 832F17004