On August 16, 2022, President Biden signed into law the Inflation Reduction Act (IRA), historic legislation that for the first time directly addresses climate change mitigation across multiple sectors, including agriculture. The IRA provides approximately $20 billion over four years to existing Farm Bill conservation programs to support agricultural practices that the Secretary of Agriculture determines will reduce net greenhouse gas emissions or increase carbon sequestration. Thus, for the first time, Congress explicitly identified climate change mitigation as a necessary goal of agricultural funding. The IRA both expands the 2018 Farm Bill and provides an inspiration for the (hoped-for) 2024 Farm Bill.
The import of this express acknowledgment of the connection between climate change and agriculture cannot be overstated. While many policy makers recognize the impact that climate change has on agriculture – how the increasing frequency and severity of extreme weather events harm farmers and ranchers – until recently very few acknowledged how much agriculture contributes to the warming planet. Just over four years ago, when Congress passed the 2018 Farm Bill there was not a single mention of climate throughout the hundreds of pages of the law. (Fortunately, many of the practices that reduce soil loss or water pollution also help curb climate change, so the bill’s current conservation programs provide some support for climate change mitigation.)
Specifically, the IRA directs $8.45 billion over the next four years to the Environmental Quality Incentives Program (EQIP), which nearly doubles EQIP’s prior funding under the Farm Bill alone. Critically, this funding can be used only for practices that the Secretary determines will help mitigate climate change, and should not be used for more manure lagoons and aquifer draining irrigation, which increase emissions in the long run. In addition, the IRA dedicates $4.95 billion for the Regional Conservation Partnership Program, $3.25 billion for the Conservation Stewardship Program, and $1.4 billion for the Agricultural Conservation Easement Program. Again, all these funds must be used for practices or interests in land that “reduce, capture, avoid, or sequester carbon dioxide, methane, or nitrous oxide emissions.”
Underscoring Congress’s intent that these programs help mitigate climate change, the IRA further dedicates an additional $1 billion to technical assistance and $300 million to monitoring. (The IRA also provides $3.1 billion in aid to distressed farm borrowers and $2.2 billion for debt relief for farmers who have experienced discrimination in USDA programs; funding that does not directly address climate change but will likely help more sustainable farmers.)
Although this funding has already been enacted, that does not mean it is safe. In the negotiations to reauthorize the Farm Bill, one of the most contentious issues is whether to reallocate some of this IRA climate-focused conservation funding. Although Senator Debbie Stabenow (D-Mich.), Chair of the Senate Agriculture Committee, has taken a firm stance to maintain this funding to help farmers reduce their emissions, others have suggested that IRA’s climate-smart requirements could undermine farmers or traditional conservation goals. This claim does not withstand scrutiny.
Critics of the IRA claim that the climate-smart requirements for IRA eligibility are too restrictive and include only a few funded projects. However, in fact IRA funding is on top of Farm Bill funding, and so actually frees up other Farm Bill funding for non-climate conservation purposes. Over half of farmers seeking conservation funding are turned away due to lack of funds; already existing farmer demand exceeds the funds. Moreover, past requests by farmers to USDA for conservation funding indicate a strong desire for exactly the funding the IRA provides – for climate-change mitigation practices. For example in FY21, about 30 percent of both EQIP and CSP funds went to Climate Smart Agriculture and Forestry practices and in FY22, 31 percent of EQIP and 38 percent of CSP funding was so allocated – indicating ample demand for the climate-focused funding of the IRA. For those farmers preferring other conservation practices, there is now less competition for the other Farm Bill funding. Thus, thanks to IRA funding, fewer farmer applicants will be turned away.
Relatedly, critics argue that the IRA, by prioritizing certain activities, overlooks the diverse conservation, natural resource, and wildlife habitat needs of farmers and ranchers. There is no doubt that many traditional conservation practices remain essential for achieving producers’ sustainability goals. But, again, the IRA does nothing to discourage them and, on the contrary, frees up funds from other Farm Bill programs – which are always oversubscribed – for these practices.
The IRA thus has created a dedicated source of funds for farmers addressing climate change within their operations. By maintaining this funding as it is and looking to the IRA as a model for building climate resilience and accelerating climate change mitigation in the next Farm Bill, Congress can benefit farmers, ranchers, and the environment.
