Climate-smart projects on life support as USDA withholds funding

A flagship Biden administration initiative to evaluate the impact of “climate-smart” practices and promote conservation-based agriculture is starving for money.

Funding for the $3.1 billion Partnerships for Climate-Smart Commodities program was frozen shortly after the Trump administration took office, and project participants tell Agri-Pulse they can’t hold out much longer.

Now, they have taken their concerns to Agriculture Secretary Brooke Rollins. In a March 28 letter, 260 farmers and 105 PCSC project award recipients said the program helps farmers “reduce erosion; improve water infiltration; prevent nutrient loss, and build farmland wealth and security. Thanks to this program, farmers across the country are learning and implementing innovative techniques with immediate benefits.”

The five-year public/private partnership, launched in 2022, “works to educate and assist farmers, resulting in improved production practices that pay long-term dividends.” The signers of the letter offered to “collaborate with USDA leadership to ensure the continued success of America’s farmers and ranchers by investing in best agronomic practices through the PCSC,” they said.

But, they noted, “time is of the essence. Each day without certainty regarding the program’s status further places farmers, agricultural service providers, and ultimately, the American public, at risk.”

The funding freeze is now more than two months old, but participants still don’t know the fate of the program. It’s been “radio silence” from USDA, says a representative from one group involved in a project, who did not want to be identified in order to speak freely about the program.

Iowa Soybean Association CEO Kirk Leeds told Agri-Pulse "it's crunch time" for the program his group has helped implement across 12 states. 

 “We've got millions of dollars of payments that are due to farmers mid-April, and at this point, we're unable to pay those farmers and they've completed the work," he said.

Kirk Leeds (Iowa Soybean Association photo)

At $95 million in federal funding – $114 million with corporate matches – the Midwest Climate-Smart Commodity Program is one of the largest PCSC projects. Corporate sponsors include Pepsi-Cola, Target, Chevron Renewable Energy Group and more. More than 1,000 farms growing corn, soybeans, wheat and sugar beets across nearly 1 million acres are enrolled and have received average payments of $33/acre to implement conservation practices.

In early February, ISA expressed its concern about the project's future, saying farmers are owed nearly $11 million, and that another $86 million of future payments is in jeopardy.

“We are incurring expenses every day,” Leeds told Agri-Pulse in Iowa this week, alleging “breach of contract” by the government. 

“I want to continue to work with farmers to improve conservation practices, to improve soil health, to improve water quality, which is what we've been working to do,” Leeds said. “Our farmers are committed to it. Our board is committed to it. My staff continues to work, but we need answers, and whatever that answer is going to be, we need it soon, or we're going to have to pull the plug.”

Employees at Working Landscapes, a North Carolina nonprofit involved in a project that incentivizes farmers to grow for local food hubs, also are worried.

“The federal government has been a big driver of the growth in regional food systems in the last decade, and their support has been very important to our organization and to many other organizations like ours,” said Executive Director Carla Norwood. 

Norwood called it “devastating to see this pullback from something that, I think, has benefits all along the food supply chain – from the farmers growing the food to organizations like ours that are creating jobs and investing in small communities, to the consumers who are getting better food access.”

The project “promotes climate-smart agriculture practices among small and underserved producers, including tribal producers, principally by equipping food hubs to finance and advise on-farm climate-smart practice implementation and marketing to wholesale and direct-to-consumer channels,” according to the summary on USDA’s website.

Norwood said Working Landscapes has signed up 41 farmers and has another 20 in the process of enrolling and “are most impacted by the funding freeze.” The goal is to sign up 90 farmers.

“Part of what this program is doing and what we're doing, especially in the local food movement, is economic development, and this has economic multipliers that are going to be lost when we don't have this type of regional circulation of food and the revival of a local farming economy,” said Jon White, climate smart project director for the group and an organizer of the letter to Rollins, which includes testimonials from farmers across the country.

The total amount of the stipend and financial incentive farmers can get under the Working Landscapes project is $3,350. While “modest,” White said that “with some of the farmers that we're working with, who are farming at small scale to be able to feed their local community, it has made a huge difference, and it's also made a huge difference that we pay this money up front.”

Without federal funding, Norwood said organizations like hers will have to “be creative and adapt.” However, “If we don't get any federal money in the next few months, it will be very hard for our organization to function.” She said they’re exploring bridge loans at the moment.

White said Working Landscapes and others simply want a chance to sit down with USDA officials and discuss how to keep the program going, even if the administration wants to change the focus or rebrand PCSC as something else.

“The letter offers our collaboration in understanding, how do we transition this program from one administration to the next?”

USDA representatives did not respond to questions about the future of the program. However, the focus on reducing pollution that contributes to climate change may be fueling skepticism at USDA about the program.

The department reached out to awardees of frozen energy grants recently, giving them 30 days "to review and voluntarily revise" their project proposals to remove "harmful [Diversity, Equity, Inclusion and Accessibility] and far-left climate features from project proposals."

Bruce Knight (SCS photo)Bruce Knight, a consultant with Strategic Conservation Solutions who held senior positions at USDA during the George W. Bush administration, said the projects could be modified to de-emphasize climate reporting.

"Dozens and dozens of projects are strong conservation proposals that mix in the perceived requirements by the Biden administration to address the carbon aspects,” Knight said. 

“Excessive reporting requirements [were] built in there from the get-go,” Knight said. “Those could easily be dropped and modified and good conservation will continue to be delivered." 

One project participant, who spoke on condition of remaining unidentified, said “we were expecting some sort of rebranding” from USDA.

In meetings with administration officials, this person said “the point that we've hammered home … is that this is under the label of climate-smart, but in reality, most of these projects are supporting practices that have been around for decades and popular with farmers. You take away all the carbon sequestration, you're just left with more resilient operations, higher profitability and better water quality.”

One possibility is privatizing some projects.

“Whatever happens, we are far enough along now that we see the light at the end of the tunnel, and we think we've got a viable program, no matter what happens,” said Lucas Sjostrom, managing director of Minnesota Milk. “Grant money is always good, but if the world changes and we're 100% privatized tomorrow, we feel really good about going that mode as well.”

Whatever direction USDA decides to take, project participants are hungry for information. 

USDA has no answers at this point, a representative of one project told Agri-Pulse. That project has sent invoices worth “millions” to USDA, but with no response.

“We just don't have have much guidance at this point,” this person said.

Iowa Soybean Association’s Leeds said he has received reassurances from lawmakers – but not USDA. 

“We've had lots of politicians tell us that we'll get reimbursed, but they're not the ones making the decision,” he said.

For more news, go to Agri-Pulse.com.