Shortly after his inauguration on January 20, 2025, President Trump issued an array of executive orders, a practice that has become common in recent years. However, abnormally, several of these executive orders triggered a pause on broad swaths of federal funding. As a result of this pause, the US Department of Agriculture (USDA) is now refusing to make payments to farmers on signed contracts for voluntary conservation. By threatening to renege on these contracts, the Trump Administration is breaking commitments to farmers and threatening the economic stability of rural America.
Since the passage of the Inflation Reduction Act (IRA) in 2022, America’s farmers, ranchers, foresters, and rural small businesses have been signing up in droves to receive funds by entering into formal contracts with USDA. Rural residents in every state have benefited from the IRA through contracts to support conservation efforts on working lands and to improve energy efficiency and energy independence. These programs are designed to provide reimbursements, where farmers take on the initial expense of any contracted project with the expectation that USDA will promptly reimburse them. However, the freeze on payments is preventing those timely reimbursements from happening.
Many projects funded through the IRA are already a year or more underway, and consequently farmers and ranchers have spent hundreds of thousands of dollars out of pocket, trusting that USDA would hold up their end of a legally binding agreement. Pausing IRA funding means leaving tens of thousands of farmers holding the bill for work they were legally promised they would not have to complete alone. Many now face an unplanned expense so large it could destroy their farm businesses. Crushing farms by withholding contractually promised funding is not only unlawful, but it harms rural communities by undermining families that are central to local economic growth, and leaving small businesses that service the farm economy all across this country in a state of panic.
On Friday, February 21, Secretary of Agriculture Brooke Rollins released the “first tranche” of IRA funding originally promised to farmers. Unfortunately, this release represents less than 1% of the IRA funding already guaranteed to farmers through signed contracts. As farmers make decisions for next season’s planting and rural businesses operate in a challenging economic climate, this announcement fails to address the sheer scale of the promises broken. The nation’s farmers, and rural America as a whole, deserve the certainty that the USDA will honor its commitments and immediately release funds on all signed contracts.
What Rural Programs Are Supported by the IRA?
IRA funding has reached rural communities and farmers through a number of programs. This post focuses on the boosts that the IRA provided to working lands conservation programs and the Rural Energy for America Program (REAP).
The IRA appropriated more than $19.5 billion to existing agricultural conservation programs administered by the Natural Resources Conservation Service (NRCS):
These programs are long-standing conservation programs that help farmers, ranchers, and foresters maintain and adopt conservation practices on their land and keep their land in agricultural production. Farmers pay for conservation improvements such as planting cover crops, prescribed grazing, efficient irrigation, nutrient management, improving tillage programs, and planting wildlife habitat. These are all classic conservation activities that address a wide variety of farm-site and environmental challenges, above and beyond limiting a farm’s greenhouse gas emissions. In fact, the IRA targeted funds at the majority of the most popular practices supported through contracts over the last three years.
Table 1: Top CSP Activities Funded By Acres – Pre IRA
Table 2: Top EQIP Activities Funded by Acres – Pre-IRA
These conservation contracts operate almost entirely on a reimbursement and cost-share model. EQIP has a total payment limit of $450,000 and CSP $200,000, meaning that farmers enrolling in both programs can incur significant costs before receiving reimbursement from USDA. Further, since EQIP allows contracts up to 10 years in length and CSP requires five year contracts, farmers who enrolled in either program at any point in the last three years have likely already begun to make expenditures on their contracts, or are already halfway through building entirely new infrastructure on their farms. Both programs offer to support the planning, design, materials, equipment, installation, labor, management, maintenance, or training costs of adopting conservation practices, meaning farmers are asked to take the lead in paying for every element of the conservation practices outlined in their contracts, and those contracts stipulate each element, from the first written plan through final installation in the field. Interrupting such contracts at any point guarantees farmers are left holding a big, even farm-threatening bill.
The IRA also appropriated $820.25 million to the Rural Energy for America Program (REAP). Since it was established in 2008, REAP has helped farmers and rural small businesses with grants and loan guarantees that help them improve energy efficiency and energy independence through projects like energy efficient irrigation systems and solar panels. REAP has been extremely popular with rural businesses and farms seeking to reduce energy costs and improve financial viability. As with conservation programs, IRA funding has provided a much needed boost to this wildly popular program. Read more about REAP and IRA funding in NSAC’s blog here.
IRA Boosts to Conservation Contracts
To date, the IRA has funded 30,715 conservation contracts across all 50 states, promising more than $2.3 billion directly to American farmers, ranchers, and foresters.
Historically, these programs have been hugely popular with farmers and ranchers and have often turned away over 75% of many applicants each year because they lacked adequate funding. IRA funding provided a much needed boost to these valuable and trusted programs, which still proved insufficient to fund even a third of the farmers applying. These conservation programs are extremely popular with farmers and every year thousands of applicants are turned away due to lack of funding. Even with the boost from the IRA, just 31% of applications were awarded contracts in CSP in FY2023.
Withholding IRA funds means breaking nearly 31,000 contracts with farmers and ranchers that support their farm’s financial and environmental sustainability. Of the $2.3 billion promised to farmers on those contracts, the majority is likely still in USDA’s coffers. As noted above, contracts span years, meaning some simpler contracts signed in the earliest years of IRA funding (FY2023) may already be paid out in full. However, the charts below show that over $1.9 billion worth of USDA’s obligations to farmers fall in FY2024 or later, meaning contracts signed within the last year. Farmers have likely only begun to make major expenditures under these contracts during this winter season, when many farms plan and make purchases to support their upcoming field seasons. This means the vast majority of what USDA owes farmers is both yet to be paid out, and must be delivered as fast as possible to avoid farmers making dramatic changes to their plans for the 2025 crop year. News articles and anecdotes from the NSAC network have already confirmed that many farmers have chosen to change their plans for this growing season, as these unnecessary and unlawful delays from the Trump Administration have shattered farmer trust in USDA and caused them to make what they feel are farm-saving decisions.
Table 3: IRA Supports Conservation Contracts
IRA Strengthens Rural Energy Independence
The IRA has funded 6,822 REAP grants across all 50 states, paying farmers and rural businesses more than $1 billion for projects that increase their energy independence and save costs, supporting $2.75 billion in rural economic development. Withdrawing IRA funds means pulling out of investments in rural businesses and rural energy independence.
Table 4: IRA Supports Rural Energy Independence
Every State Benefits from the IRA
Farmers, ranchers, and rural businesses in every state have received conservation contracts and REAP grants funded by the IRA. The map below shows the total IRA funding paid to farmers and rural businesses through CSP, EQIP, ACEP, and REAP.
The IRA has invested in rural communities, businesses, and farms in both red and blue states. These funds have provided a much needed boost to extremely popular and long-standing programs that support small businesses and farmers to reduce costs and ensure their viability.
Conclusion
Through lawfully signed contracts, the USDA has promised critical funding to farmers, ranchers, and rural businesses in every state – funds that stand to strengthen conservation efforts and advance rural energy independence. By reneging on these promises, the USDA is not only cutting off vital resources, but also breaking commitments to farmers and rural communities that have acted in good faith and moved forward spending their hard-earned money to honor their contractual obligations. The $20 million released on February 21 is only a drop in the bucket compared to the full extent of the financial support promised to America’s farmers. USDA must honor all existing contracts and agreements now, and communicate its commitment to do so to farmers with a unified voice at all levels of government. To do anything else is to tarnish the full faith and credit of the Department, and force unneeded fear and hardship on rural America writ large.
