Financial Help for Climate-Friendly Farmers, Ranchers

The Inflation Reduction Act has historic climate provisions, including tax credits, rebates, and subsidies for clean power and electric vehicles. The bill also includes $5 billion in grants to protect forests and more than $20 billion to support climate-smart agriculture practices. These practices are meant to reduce greenhouse gas emissions, increase the storage of carbon in soils and trees, and make farming and ranching operations more productive and resilient.  

According to a statement from the White House, the legislation “recognizes the critical role that America’s farmers, ranchers, and forest landowners play in addressing the climate crisis.” The bill expands or introduces numerous initiatives to support farmers, ranchers, and forest landowners and make rural lands more resilient in the face of climate change. Though scaled down from previous proposals, when President Biden signed the act into law on Aug. 16, 2022, it still marked “the single largest investment in climate and energy in American history.”

Agricultural Conservation

The Inflation Reduction Act increases funding for existing farm bill conservation programs, providing financial and technical assistance to private landowners to voluntarily adopt eco-friendly practices on agricultural land. These programs include:

• The Environmental Quality Incentives Program (EQIP), which provides financial and technical assistance to agricultural producers to conserve natural resources and improve agricultural operations – $8.45 billion
• The Regional Conservation Partnership Program (RCPP), which helps producers install and maintain conservation activities such as cover cropping and nutrient management – $4.95 billion 
• The Conservation Stewardship Program (CSP), which helps farmers defray costs of adopting practices such as cover crops and improved wildlife habitat conditions – $3.25 billion
• The Agricultural Conservation Easement Program (ACEP), which helps private and tribal landowners and other entities safeguard croplands and grasslands on working farms and ranches by using conservation easements to reduce nonagricultural land use – $1.40 billion 

Agricultural Credit

The Inflation Reduction Act also provides help to distressed farm borrowers and underserved farmers and ranchers. According to the Congressional Research Service, the provisions replace similar provisions in the American Rescue Plan that were controversially blocked by the courts because “the relief was found to be race-based and not narrowly tailored to meet a compelling state interest.” Instead, the bill provides $3.1 billion to distressed borrowers and another $2.2 billion to farmers who have experienced discrimination from the USDA, although it removes race as a condition for eligibility. The new debt relief program also provides funds for:

• Underserved farmers, ranchers, and forest landowners – nearly $2.9 billion
• Technical assistance, outreach, and mediation – $125 million
• Land loss assistance – $250 million
• Agricultural education emphasizing career development and scholarships at historically Black, tribal, and Hispanic colleges – $250 million
• Equity commissions at USDA – $10 million

Renewable Energy

The bill provides financial incentives to encourage consumers and businesses to adopt climate-friendly practices. It also includes grants and loans to support renewable energy initiatives in farming areas, including money for:

• The Rural Electrification Act, intended to advance clean energy projects, energy efficiency improvements, zero-emission systems, and more – $1 billion 
• The Rural Energy for America Program (REAP), intended to support clean energy and energy efficiency projects for more than 41,500 farms and small businesses – $1.7 billion 
• Grants and loans for underutilized renewable energy technology – $304 million
• Grants to promote commodity-based fuels – $500 million
• Financial assistance (e.g., loans) for the “long-term resiliency, reliability, and affordability” of rural electric systems – $9.7 billion

Forestry

Also included in the Inflation Reduction Act is funding for forest management, planning, and restoration activities. The funding goes to:

• The National Forest System (administered by the U.S. Forest Service), including money to support fire-resilient forests and protect old-growth and mature forests – $2.15 billion
• Nonfederal forest management in the form of support grants and other financial assistance, including funding for urban and community forestry programs – $2.75 billion

The Bottom Line

The Inflation Reduction Act aims to lower consumer energy costs, increase energy security, and substantially reduce greenhouse gas emissions. According to estimates, the bill “would put the U.S. on a path to roughly 40% emissions reduction by 2030.” Numerous initiatives in the bill invest in farmers, ranchers, and forestland owners to help them adopt climate-smart practices and adapt to a changing climate.