Inflation Reduction Act unleashes funds to spark a move away from emissions-intensive food production
Against the backdrop of the trillion dollar-plus U.S. agricultural sector, $3.1 billion might seem like a rounding error. But this sum could provide the spark needed to begin tackling one of the most vexing contributors to climate change — how we produce our food.
The initiative sets in motion a government-supported effort to transition from current energy-intensive and emissions-heavy commercial, commodity production to more energy-efficient, less polluting practices. It will also support forestry management to enhance the carbon sink function of healthy woodlands. The goal is to remove 60 million metric tons of CO2 over the lives of the funded projects. The effort embodies unprecedented ambition in this direction.
The program reflects growing recognition that addressing climate and environmental impacts from the massive U.S. agriculture, food and related industries is an essential piece of the overall challenge. This sector — worth $1.26 trillion in 2021 — was responsible for an estimated 671.5 million metric tons of CO2 equivalent greenhouse gas emissions in 2021 — or about 10% of the U.S. total.
The program will affect about 60,000 U.S. farms out of 2 million, and cover 25 million acres out of 893 million of total U.S. farmland — a relatively small subset to begin with, but still far more ambitious than a pilot project.
The implication behind this program is that if successful, many more farms and forests with much more acreage would be enrolled in future versions further shrinking emissions.
The effort embodies unprecedented ambition in this direction.
This investment, funded by the Biden administration’s Inflation Reduction Act (IRA) is being administered through the Rural Energy for American Program. REAP’s mission is to expand the use of wind, solar and other forms of clean energy and make energy-efficiency improvements. It also proposes to generate new revenue sources through net metering and power purchase agreements, according to a USDA statement. This latest funding follows $145 million for 700 loan and grant awards previously announced by REAP.
How does the investment process work? The $3.1 billion will be distributed to 141 projects in agreements described as Partnerships for Climate Commodities. These deals will include farmers, ranchers and producers who are engaging in climate-smart production practices such as cover crops, no-till cultivation, nutrient replenishment and pasture and forestry management.
The program should prove to have a multiplier effect: proposals for the investment include plans to match, on average, 50% of the federal investment with non-federal funds.
There’s also a significant climate justice component to the program. “All the projects require meaningful involvement of small and underserved producers,” says the U.S. Department of Agriculture. USDA anticipates involving over 30 minority service institutions (out of a projected 100); 11 projects with a Historically Black College or University (HBCU) as the lead and more than 35 projects with HBCUs as major partners; six projects with a Hispanic Serving Institution (HSI) as the lead and nearly 20 with HSIs as major partners; and over 20 tribes and tribal groups leading and partnering on many projects and representing tribes across a wide geography.
To help execute this initiative, USDA is hiring 40 Climate Change Fellows with initial appointments of up to two years to help farmers and rural small businesses access clean energy funds. People filling these new positions, also funded under IRA, through REAP, will deploy “a range of skills to find solutions to agricultural challenges, enhance economic growth and create new streams of income for farmers, ranchers, producers and private foresters.”
Fellows will be located throughout 33 states and Puerto Rico. Their input is planned to take place at the grassroots level — literally, on the ground where agriculture and forestry work takes place. This is not theoretical desk job but active partnerships put into action.
What does rural America, often thought of as a hotbed of climate-denial, think of the initiative? According to the USDA, “Thanks to Inflation Reduction Act funding, more farmers and more acres are enrolled in voluntary conservation practices than at any single point in history, and even with this unprecedented funding, USDA is seeing more demand than we have funds to support.” This development suggests that even red-state rural populations are getting in line for the climate-smart project funding.
Congressional inaction has left farmers, ranchers and producers working with policies that were supposed to be updated from those set out five years ago, when the 2018 bill was enacted.
The macro background for U.S. farmers is unsettled in historic ways. Record floods and droughts, geo-political tensions with China and Belarus (a big producer of fertilizer), rising input costs (especially for diesel fuel) and low commodity market prices for U.S. corn, soybeans and wheat that are projected to decline for the next three years have darkened the business outlook for producers.
Aside from the IRA initiative, the sector is suffering from an overall lack of policy support: Instead of passing a new Farm Bill for 2024 upon expiration of the previous one last September, lawmakers simply rolled over the existing legislation rather than revise it to reflect current agricultural conditions. The programs funded by this foundational legislation are supposed to be reviewed and set for five-year periods, although a loophole allows an existing farm bill to be simply renewed rather than rewritten. Congressional inaction has left farmers, ranchers and producers working with policies that were supposed to be updated from those set out five years ago, when the 2018 bill was enacted.
But storm clouds have never deterred those hardy folks dedicated to agriculture. Farming is as much a way of life as a business, and one that is deeply entrenched in rural America. Looking for new, innovative ways to make agriculture work better for both practitioners in the form of consistent profits and for the larger U.S. population by addressing climate change as does this IRA initiative, would seem to be a win-win all the way around — if it works as intended. We’ll be watching.