SALEM, Ohio — For the last month, agricultural producers have gone without the reimbursements they were promised through the U.S. Department of Agriculture’s Partnerships for Climate-Smart Commodities Project.
“I’m deeply concerned about the federal funding freeze, the false narrative of efficiency over impact and the serious threat being posed to trust in our federal government’s word,” said Hannah Smith-Brubaker, executive director of Pasa Sustainable Agriculture during a Feb. 20 virtual media briefing.
In 2023, USDA made more than $3 billion in funding available for 141 selected agricultural projects under the Partnerships for Climate-Smart Commodities banner so farmers could adopt climate-smart practices and mitigate the environmental impact of farming. The funds came from President Joe Biden’s Inflation Reduction Act.
Serving the eastern United States from Maine to South Carolina, Pasa, a farmer-member group based in Pennsylvania, aims to give farmers technical assistance and financial support to enable them to adopt regenerative techniques including agroforestry, cover cropping and low tillage to help to improve soil health, water quality and climate resilience. The organization is also a key partner in implementing Climate-Smart Commodities programs across several states.
But that was before the presidential administration changed. Now, Pasa is seeing firsthand the impact of the Trump administration’s ongoing freeze on federal loans and grants.
Nearly 200 of Pasa’s members are enrolled in Climate-Smart Commodities programs, with another 750 applicants hoping to join them. Should that funding continue to be delayed or eliminated, Smith-Brubaker said it risks as much as $40 million in direct payments and technical support for Pasa members for widely accepted conservation practices like tree planting, fence installation, grassed waterways, pasture and hay planting and livestock water pipeline.
Producers who were already in the middle of projects may not be fully reimbursed for implemented practices and new projects cannot be started, Smith-Brubaker said.
Another casualty of the freeze is the Dairy Grazing Apprenticeship, which promotes sustainability and soil health through regenerative grazing while preparing aspiring farmers to take over their mentors’ operations upon their retirement. Pasa administers the DGA program in Pennsylvania. When asked by Farm and Dairy if there are any alternative funding sources or policy solutions that could help mitigate the impact of the freeze on grant-funded initiatives such as DGA, Smith-Brubaker said that Pasa has been able to secure some state-level funding for it.
“But there really seem to be very few options other than, you know, maybe our bank will offer us a bullet loan,” she said. Banks, however, may no longer have confidence that loans given to businesses or individuals with government contracts will be repaid, she said.
“We have gotten a little bit of extra support from private foundations, but we’re talking about millions and millions of dollars; in the Climate-Smart case, $3 billion,” she said. “Filling that gap is going to be very challenging.”
Funding thaw
On the same day as the briefing, USDA announced it was finally releasing approximately $20 million that had been previously withheld in IRA-funded contracts, including for the Environmental Quality Incentives Program, Conservation Stewardship Program and Agricultural Conservation Easement Program funds. Together, they help farmers conserve natural resources and improve environmental quality.
In a statement, the department said “Additional announcements are forthcoming as soon as USDA continues to review IRA funding to ensure that we honor our sacred obligation to American taxpayers — and to ensure that programs are focused on supporting farmers and ranchers, not DEIA (Diversity, Equity, Inclusion, and Accessibility) programs or far-left climate programs.”
Despite the partial release of funds, USDA continues to withhold payments promised to farmers — despite the administration’s prior assurances the freeze would not harm them.
“Hearing that the United States government may cancel our existing binding agreements is more than concerning,” Smith-Brubaker said. “These agreements represent real commitments to farmers who have made critical business decisions based on a promise. They are investments in small businesses and a more resilient food system. They are also prime examples of the very public private partnerships that our legislators say that they revere. Yet the trust of thousands of farmers is on the line.”
Background
The press briefing took place on the eve of a Feb. 21 court hearing to decide whether a federal court should permanently block the funding freeze.
The dispute began with a Jan. 27 memo from the White House Office of Management and Budget which told federal agencies to review funding programs and ensure they were following the president’s policies, pausing “financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.”
In response, 22 states and Washington, D.C. asked Judge John J. McConnell, Jr. to issue a temporary restraining order to keep funding flowing. While the freeze was officially lifted only a few days later, confusion has since reigned in its wake, with questions and uncertainty eclipsing any funding that has subsequently been restored.
That lack of clarity was compounded by White House Press Secretary Karoline Leavitt who wrote on X (formerly Twitter) that only the OMB memo had been withdrawn.
“The president’s (Executive Order) on federal funding remains in full force and effect, and will be rigorously implemented,” she posted on Jan. 29.
Following the hearing, the temporary restraining order remains in place. A decision by the court is expected later this week, after press time.
Ag response
After the USDA thawed some of the frozen grants and other funds, environmental and agriculture organizations quickly took notice. On Feb. 21, the National Association of Conservation Districts released a statement commending the USDA’s release of the first tranche of frozen IRA funding for the EQIP, CSP and ACEP programs.
“We strongly encourage Secretary Rollins to expand USDA’s commitments to producers and provide long-term security in conservation programs,” said NACD President Gary Blair. “Producers plan for conservation and make land management decisions well in advance of planting season. Funding uncertainty has multi-year impacts on agricultural production and the security of our food chain.”
Blair added that he hopes the administration will fully fund other IRA-supported programs and continue to dispense financial assistance through Partnerships for Climate Smart Commodities.
National Farmers Union and American Farm Bureau Federation also released statements praising the USDA’s honoring its commitment to farmers.
“America’s family farmers and ranchers are facing a year of economic uncertainty, exacerbated by the uncertainty of the administration’s pause on federal funding and staff dismissals,” said National Farmers Union President Rob Larew, calling on the USDA to release all remaining funds and ensure continuity in the programs that were impacted.
