Ag Policy Blog

OMAHA (DTN) -- USDA is withholding funds from farmers for conservation programs, despite the White House stating last week that funds to individuals would not be frozen.

Contractors for conservation programs also have been affected by a funding freeze. The Iowa Soybean Association, for instance, cited in a letter to lawmakers that $11 million owed to farmers is at risk.

Farmers are learning their conservation payments are frozen because those contracts were funded through the Inflation Reduction Act (IRA).

Two federal judges over the past week have ruled that the Trump administration did not have authority to block funding that was appropriated by Congress.

DTN repeatedly sought comment from USDA over which programs are frozen and questioned why payments to individual farmers were frozen. USDA's press office did not respond. Officials with the Natural Resources Conservation Service (NRCS) also did not respond.

At least one Missouri producer posted videos on TikTok worried he could lose his farm because USDA "reneged" on his cost-share contract with NRCS under the Environmental Quality Incentives Program (EQIP).

Over the past two days Skylar Holden, a 27-year-old, first-generation cattle producer in eastern Missouri, has posted multiple videos detailing how he signed a contract with NRCS. He signed a contract with NRCS for $240,000 and now has $80,000 in material purchased and signed contracts to install water lines. Holden said he was told the contract was frozen and nobody knows when the money could be released.

In an interview with DTN, Holden expressed frustration because he was initially cautious about signing up for a government program. Once he got started, however, Holden said he was excited about the prospects and what the EQIP improvements could do on his land. He touted NRCS programs on his TikTok account @cattlemenfamilyfarms.

"I made business decisions based on this contract," Holden said.

Holden said NRCS staff told him to contact his congressional delegation in Missouri to see if they could get the funds release.

He added, "Going into this, if I had known they could have frozen the payments I never would have done it. I was promoting the NRCS programs a lot on my TikTok and I talked to a lot of people who signed up for those programs. And now looking back I feel guilty because they're all in the same boat I am in. They started projects and they aren't getting paid out on them."

He added, "I don't understand how you can sign a contract and just reneg on that contract. If something doesn't change, we are going to lose this farm and I am extremely stressed about it."

IRA DOLLARS FROZEN

The distinction with Holden's EQIP project is that the funds NRCS is using for his contract are supposed to come from the 2022 Inflation Reduction Act (IRA).

The Trump administration put a freeze on all federal spending related to the IRA. Other reports have cited that renewable energy grants at EPA and the Department of Energy have been halted to communities around the country. There are reports of federal agencies now trying to "claw back" IRA dollars and contracts.

USDA received $19.5 billion for conservation programs in the IRA for "climate-smart" practices that support soil health, reduce greenhouse gas emissions or sequester carbon in the soil. That funding has been part of the tug-and-pull in the farm bill debate. EQIP under the law was supposed to have $8.45 billion. The law included $4.9 billion for the Regional Conservation Partnership Program -- grants for public-private partnership for large-scale conservation projects. Another $3.5 billion went to the Conservation Stewardship Program (CSP). An easement program got $1.4 billion and NRCS got $1 billion for technical assistance.

USDA under the Biden administration moved to sign as many contracts as they could with producers to get the funds out the door.

A cost-share essentially pays back the farmer after the contracted work is done, often in phases.

CLIMATE-SMART COMMODITIES CONTRACTORS

Contractors for another conservation pilot program, the $3.1 billion Partnership for Climate-Smart Commodities, are facing frozen funds as well. USDA issued 135 contracts to collections of groups, companies and universities to enroll farmers in climate-smart conservation practices with the goal that those farmers would then eventually be able to market their commodities at a premium based on the practices they were using on their farms. The program involves 102 different farm commodities.

Those contracts were funded through the Commodity Credit Corp., a fund controlled by the secretary of Agriculture.

Some of the grants under the pilot project paid farmers upfront for enrolling and then were reimbursed through USDA. Others provided technical assistance to farmers and then would be reimbursed. Now those contractors are also being told their funds are frozen with no clarification from USDA on how to proceed. Some of those groups, which include state and national commodity organizations, are concerned USDA may now choose not to reimburse them for their costs.

Reuters reported the president of the Iowa Soybean Association, Brent Swart, wrote a letter this week to the Iowa congressional delegation, all Republicans, expressing concerns about the freeze.

"This suspension puts the program and its participating farmers at risk," Swart's letter to lawmakers stated. He added that farmers "are contractually owed $11 million for practices implemented in 2024."

Politico also reported USDA is withholding funds for a pair of organic programs, the Organic Market Development Grant program and the Transition to Organic Partnership Program.

DEMOCRATIC LAWMAKERS WRITE USDA

Every Democrat on the Senate Agriculture Committee joined Ranking Member Amy Klobuchar, D-Minn., to send a letter to USDA Acting Secretary Gary Washington. The senators are requesting information on actions the department has taken to pause payments or terminate obligations "as well as the legal basis for pausing or terminating any funding that has been appropriated by Congress."

The senators stated, "Over the past week, farmers, ranchers, schools, and state governments have contacted our offices in search of clarity on programs, websites, offices, and activities impacted by these orders. Conflicting information from the administration has added to the uncertainty, costing those who depend on the Department time and money. The farmers, rural families, and businesses that depend on the Department need certainty to plan ahead for this growing season."

Rep. Angie Craig, D-Minn., ranking member of the House Agriculture Committee, sent a similar letter to USDA along with Rep. Sanford Bishop, D-Ga., ranking member of the House Appropriations Subcommittee on Agriculture, and Rep. Chellie Pingree, D-Maine. The House letter detailed some programs they said were impacted by the administration's "illegal freeze."

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Editor's note: DTN is a contractor for one of the Partnership for Climate-Smart Commodity grant recipients, Farmers for Soil Health.

Partnership for Climate-Smart Commodities: https://www.usda.gov/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on social platform X @ChrisClaytonDTN

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