Inflation Reduction Act: What's in it for farmers?

Jan Shepel
With its investment in agricultural conservation programs, the IRA is being praised by many as the biggest investment in agriculture since the Dust Bowl years of the 1930s.

When President Joe Biden signed the Inflation Reduction Act (IRA), with its provisions to curb climate change, it put the United States on the path to cutting the pollution that leads to climate change to 40 percent below 2005’s levels by 2030.  With its investment in agricultural conservation programs, the measure is being praised by many as the biggest investment in agriculture since the Dust Bowl years of the 1930s.

One environmentalist and sustainability advocate on Capitol Hill said it puts farmers front and center in the national response to climate change.

The IRA is the most substantial measure passed by Congress in history to combat climate change with $375 billion to be spent over a decade – and there’s a good share of that money that will go to fund projects on U.S. farms to help in the battle against climate change.

In a statement, the White House noted that the measure should help up to 280,000 farmers and ranchers apply conservation practices to about 125 million acres of land.

Those studying the massive bill said that there is about $19.5 billion in it for USDA programs dealing with conservation programs.

The statement also noted that the bill, now signed into law, would protect 1.8 million acres of national Forest System Lands from wildfire and restore an additional 550,000 acres of federal lands. It will also support conservation easements on 475,000 private acres and prepare management plans for 1.5 million privately owned acres.

The new law provides relief to distressed USDA borrowers whose agricultural operations are at risk through loan modifications and will help keep distressed farmers farming and provide assistance to farmers who have experienced discrimination in USDA’s lending programs.

 The bill passed on a party-line vote in both the Senate (51-50) and the House (220-207) – all Democrats voting for it and all Republicans voting against it -- includes provisions to help reduce drug costs in the Medicare system and other non-climate related things, and will be paid for by new taxes on large companies with average earnings of over a billion dollars, as well as additional enforcement at the Internal Revenue Service on those who don’t pay their income taxes.

House Agriculture Chairman David Scott (D-Georgia) said the IRA delivers on the promises that his committee made to increase investments in forestry, conservation, rural development and energy programs. “This funding will help our farmers, ranchers and foresters address climate change impacts by using these programs on their operations to sequester carbon and reduce greenhouse gas emissions,” he said.

National Farmers Union president Rob Larew called passage of the Inflation Reduction Act a “cause for optimism” for farmers and ranchers.

Funds for underfunded programs

The funding included in the big bill will go toward existing government programs that have been underfunded for many years even as more farmers wanted to participate than funding would allow.

One of the biggest funding beneficiaries will be the Environmental Quality Incentives Program or EQIP with $8.45 billion; the USDA’s Conservation Security Program (CSP), which pays farmers to make their land more sustainable, will benefit from the new law with $3.25 billion in new funding.

There is also money in the bill for Regional Conservation Partnership Program, which will benefit from $4.95 billion, and the Agricultural Conservation Easement Program, which is slated to get $1.4 billion. As many farmers know, these conservation easement programs protect farmland from development and assure that it will remain in farmland in perpetuity.

About $1.7 billion will go to the Renewable Energy for America Program (REAP) for energy efficiency programs and smaller renewable energy programs for farmers and other business owners in rural areas.

National Farmers Union president Rob Larew called passage of the bill a “cause for optimism” for farmers and ranchers, “with historic investments in voluntary, incentive-based conservation programs that are critically underfunded.”

A total of $1 billion will go to the Natural Resources Conservation Service (NRCS) for technical assistance to farmers and the USDA will receive $300 million to study carbon sequestration and emissions on farms. Rural electric cooperatives will receive $9.7 billion for loans that will build out renewable energy infrastructure, especially those that feature zero-emission and carbon-capture.

Reportedly there is $4 billion in the new law to offer drought relief in the Colorado River Basin which supports 5.7 million acres of irrigated agriculture and which is suffering under a mega-drought and searing temperatures.

Farms cover about 40 percent of the country.

For Watertown farmer Tony Peirick, the practices of no-till and cover cropping have made a huge difference in improving soils on his fields and he is zealous in talking to other farmers about the value in these practices.

Conservation comments

Wisconsin Conservation Voters Executive Director Kerry Schumann praised the legislation, saying it “charts a path forward to reduce climate change pollution in the United States…It promises a better future for our children and for generations to come.”

However, Schumann said the bill unfortunately includes damaging provisions “designed to benefit the still-too-powerful fossil fuel industry that could continue to harm Indigenous communities and communities of color along our Gulf and Alaskan coasts and elsewhere.”

Upon passage of the bill, Senator Debbie Stabenow, (D-Mich.) chair of the Senate Agriculture Committee, said that the money will flow to farmers and ranchers through the USDA to help with climate-smart farming and forestry practices, rural power, clean energy and wildfire protections.

One of the practices that could see a big uptick in adoption through the new funding, is the planting of cover crops, which experts have been saying for years is a key practice in preventing soil erosion and improving the health of the soil. The added organic matter brought to the soil by the cover crops has been shown to help soils lock in any available moisture in cases of drought. Another advantage of cover crops is that during excessive rainfalls – which have increased in recent years due to climate change – water can more easily penetrate the soil profile.

The measure includes funding to help create habitat for pollinators, store more carbon in the soil and make farms more resilient in dealing with weather extremes.

The American Farmland Trust said that the passage of the Inflation Reduction Act comes at a pivotal time for the nation’s farm and food system. Tom Fink, the group’s policy director, praised Congress for investing $20 billion in agriculture conservation. “Farmers and ranchers are critical allies in the fight against climate change, but they need tools and resources to protect their land, increase resilience to extreme weather, sequester carbon in the soil and reduce emissions,” he said.

The Land Trust Alliance – a national land conservation organization – also praised the bill for the $20 billion investment in Farm Bill conservation programs. “The increase in funding of Farm Bill conservation programs is a clear acknowledgement of the critical role that private landowners continue to play in addressing climate change and its impacts,” said Andrew Bowman, president and CEO of the group. “This is an unprecedented investment in voluntary private land conservation and the work of land trusts to protect our irreplaceable farmlands, forests, ranches and wetlands.”

Corn ethanol —made at refineries —has driven land-use changes and crop choices that have resulted in carbon emissions negating any climate benefits from replacing gasoline with ethanol said  Tyler Lark, assistant scientist at the University of Wisconsin-Madison’s Center for Sustainability and the Global Environment,

Ethanol criticism

There was some criticism of the farm-related allocations for not doing enough to change meat production practices and for supporting the production of corn for ethanol fuels.

Some of that criticism cited a study from earlier this year published in the Proceedings of the National Academy of Sciences which criticized ethanol for it contribution to greenhouse gases. The lead author of that study, Dr. Tyler Lark, assistant scientist at the University of Wisconsin-Madison’s Center for Sustainability and the Global Environment, states that corn ethanol is “not a climate-friendly fuel.”

The study, which was funded in part by the U.S. Department of Energy and the National Wildlife Federation, concluded that ethanol is at least 24 percent more carbon-intensive than gasoline because of emissions resulting from changes in land use, processing and combustion. However, renewable fuels advocates said the study relied on “cherry-picked data and worst-case assumptions.”

Renewable Fuel Standards, which were enacted in 2005, require the addition of ethanol in motor vehicle fuel as an oxygenate, replacing other petroleum-based additives that had been used before. Today there are 15 billion gallons of corn-based ethanol mixed with gasoline each year. The RFS’s goal was to reduce emissions, support farmers and cut U.S. dependence on oil import.

Part of the criticism of ethanol production in the recent study was that the RFS mandate ended up expanding corn production on an additional 6.9 million acres – some of which may have been destined for conservation program enrollment.

In contrast, a 2019 USDA study found that ethanol’s carbon intensity was 39 percent lower than gasoline, due largely to carbon sequestration attached to planting crops.