The Inflation Reduction Act recently signed into law by President Biden not only extended the Affordable Care Act, but also infused funding to several agricultural conservation programs familiar to producers. Economists with the Agricultural and Food Policy Center at Texas A&M University in College Station have compiled a briefing paper evaluating the effects of the bill on agriculture.
“The bottom line is that there is an enormous infusion of funding for conservation programs,” said Bart Fischer, Ph.D., food policy center co-director in the Department of Agricultural Economics of the College of Agriculture and Life Sciences, Bryan-College Station. “Much discretion about the distribution of that funding is left to the U.S. Department of Agriculture, so we will have to see how they implement the program before we know how everything will work.”
Fischer said it’s important to note that the funding is short-lived and will run out midway through the next Farm Bill, at the end of fiscal year 2026.
“Further, in this case the conservation priorities were set by Congress rather than at the grassroots level, so it’s not yet clear what the uptake will be,” he said.
What did the Inflation Reduction Act change?
For agriculture, additional funds were given to four existing conservation programs:
The funding for these programs was extended through 2031. Additional funding was made available for rural development and forestry. According to the briefing paper, from the perspective of agricultural producers, the Inflation Reduction Act will provide a significant, short-term infusion of funding for these select conservation programs.
Highlights outlined in the food policy center briefing paper include:
— The IRA provided an additional $8.45 billion for EQIP through fiscal year 2026 and extended the program through fiscal year 2031. It increased funding for conservation innovation trials from $25 million to $50 million.
— In implementing the IRA, USDA is expected to prioritize proposals that “utilize diet and feed management to reduce enteric methane emissions from ruminants” and to provide funding for “one or more agricultural conservation practices or enhancements that the Secretary determines directly improve soil carbon, reduce nitrogen losses, or reduce, capture, avoid, or sequester carbon dioxide, methane, or nitrous oxide emissions, associated with agricultural production.”
— A new program being added is the Quantifying Carbon Sequestration and Greenhouse Gas Emissions the IRA provided $300 million “to carry out a program to quantify carbon sequestration and carbon dioxide, methane, and nitrous oxide emissions, through which [NRCS] shall collect field-based data to assess the carbon sequestration and reduction in carbon dioxide, methane, and nitrous oxide emissions outcomes associated with activities carried out pursuant to this section and use the data to monitor and track those carbon sequestration and emissions trends through the Greenhouse Gas Inventory and Assessment Program of the Department of Agriculture.”
Details will determine value
“The extent to which the additional funding is perceived as helpful will largely depend on how the USDA implements the provisions,” Fischer said.
Meanwhile, producers continue to face “enormous costs” as they approach fall harvest, and a growing number of concerns remain over the upcoming crop year, the briefing paper notes.
“We are also getting asked a lot of questions about how this will impact the next Farm Bill,” Fischer said. “My answer is that an infusion of this size is certainly a boost to these programs, but because the additional funding dries up at the end of fiscal year 2026, it undoubtedly will complicate the next Farm Bill deliberations. Conservation groups will want to see the elevated funding levels continued, but that will require coming up with new money. Generally speaking, most farm groups want to see big improvements to the farm safety net. Next year is going to be interesting.”