At last week's Master Farmer Awards Luncheon, Pennsylvania Ag Secretary George Greig complemented the Master Farmer audience for their proactive leadership in conservation and Chesapeake Bay clean-up efforts. "That commitment to conservation is paying off," he noted. And, he added that more state and federal help is available.
Farmers have been using effective practices like nutrient management, cover crops, streamside buffers and no-till or low-till farming for several decades. "Nitrogen and phosphorus loads going into the Chesapeake Bay have been reduced by an estimated 41%," he reported. "More than 2,900 farmers across the state have established nutrient management plans for 700,000 acres.
"Thanks to programs like [Resource Enhancement and Protection], farmers have invested more than $25 million to implement more than 2,000 conservation practices on their farms." He also pointed out that there are substantial state and federal dollars to do more, and encouraged farmers to investigate how they can benefit.
REAP investments have prevented an estimated nearly 11.5 million pounds of nitrogen, more than 850,000 pounds of phosphorus and 877,000 tons of sediment from entering state waterways. That means cleaner streams, increased farm productivity, reduced costs and healthier natural resources.
REAP, for instance, allows farmers and businesses to earn tax credits in exchange for best management practices to enhance farm production and protect natural resources. The program is administered by the State Conservation Commission. The tax credits are awarded by Pennsylvania Department of Revenue.
Three ways to REAP
In brief, you can receive 50% to 75% of project costs as state tax credits for up to $150,000 per ag operation. The tax credit depends on the BMP put in place. And there are three ways to participate: Receive the tax credit directly, sell it to another Pennsylvania taxpayer or be financed for making improvement by a sponsor who'll receive the tax credit.
To be eligible, ag operations must have a current conservation plan (or an NRCS approved grazing (528) plan; a nutrient management plan, if required; best management practices for animal concentration areas such as a barnyard or loafing area; plus fully Implemented field crop best management practices.
- Tax credits for 75%: Eligible costs include development of a nutrient management or conservation plan, BMPs for ACAs and barnyard runoff, stream bank fencing with 50-foot forested riparian buffers, and 50-foot forested riparian buffers.
- Tax credits for 50%: Eligible costs include any approved BMP or equipment necessary to reduce existing sediment and nutrient concerns, such as: manure storage systems, alternative manure treatment practices, filter strips, grassed waterways, management intensive grazing systems and no till planting equipment. It also includes stream bank fencing with 35-foot riparian buffers (grassed or forested).
REAP differs from traditional conservation programs. It's a tax credit where, unless the farmer works with a sponsoring business, the farmer must finance all up-front costs. The tax credit is issued after the installation of a practice or purchase of eligible equipment.
State or federal cost-share portions of a project are ineligible for REAP tax credits.
Many producers owe few, if any, state taxes. That's why REAP tax credits can be used by the farmer for up to 15 years, and are transferable and can be sold to other taxpayers.
For more details, contact REAP Program Administrator Amy Smith at (717) 787-8821 or email her at firstname.lastname@example.org .