Business News for the Mississippi Delta

Inflation Reduction Act 

Legislation Opposed by All Senate Republicans

By Becky Gillette

Agriculture is taking a huge hit from drought, extreme heat, flooding and other impacts that scientists have linked to climate change caused from greenhouse gas emissions leading to high level of carbon dioxide in the air. And agriculture can also play a critical role in helping preserve the climate with “green” agricultural practices. 

In early August, Congress passed the Inflation Reduction Act by the narrowest possible margin in the U.S. Senate. Fifty Democratic Senators voted for it, and all 50 Republican Senators opposed it. The bill passed with Vice President Kamala Harris breaking the tie.

Frank Howell and family

Frank Howell, executive vice president of the Delta Council, said bill includes unprecedented funding for “climate smart” practices on agricultural lands. 

“Of the more than $369 billion that was approved for climate change and clean energy investments, approximately $40 billion, or roughly ten percent of the funds, will go to the USDA for climate-smart agriculture programs, biofuel development, forest restoration work, renewable energy tax credits, conservation technical assistance and rural electric cooperative carbon capture and storage, and resilience projects,” Howell said in an email to members of Delta Council. “We will outline more as we get into the details, but this funding is larger than farm bill allocations for conservation programs.”

The bill was passed after a twenty-seven-hour session by a process known as “reconciliation” that which allows the Senate to bypass the filibuster and pass legislation with a simple majority vote so long as it meets certain budgetary requirements. The party-line vote shut out any input from half of the Senators in the country, which is considered particularly significant since more Republicans come from farm states than Democrats. 

Arkansas Sen. John Boozman

“When it comes to agriculture policy, this bill sets a particularly bad precedent for farm bill programs,” Arkansas Sen. John Boozman said during a speech on the Senate floor regarding the reconciliation process and the deal brokered between Senate Majority Leader Chuck Schumer and Sen. Joe Manchin, considered the most conservative Democratic senator. “If they go down this road, we very well might be looking at reconciliation as the only way future farm bills get written. Whoever holds the pen wields the fate for vital programs that farmers, ranchers and foresters depend on. Not to mention nutrition programs that help low-income families and policies that allow conservationists to achieve our shared goals.”

Normally there are a large number of hearings and opportunities for input from the grassroots before a farm bill is finalized. Boozman says there was not a single hearing held on the bill, which spends $40 billion under the agriculture title, with no input from Republicans or most Democrats.

“It is antithetical to how the Senate—and the ag committee in particular—should operate,” Boozman said. “We have a storied history of working together at the agriculture committee. Our stakeholders value the fact that we approach the issues they face together, rather than as Republicans and Democrats. They appreciate that their voices are heard. Unfortunately, with this decision, the majority has changed that dynamic.”

Mississippi Sen. Cindy Hyde-Smith

Mississippi Sen. Cindy Hyde-Smith said in an email to the Delta Business Journal that she shares Boozman’s concerns regarding future farm bills and the lack of stakeholder input in the Democrats’ tax and spend package. 

“More than $20 billion for popular USDA conservation programs may sound appealing to some, but I fear this is a trick,” Hyde-Smith wrote. “What Democrats refer to as ‘environmental improvements’ can be achieved in two ways—through regulations and/or incentives.  I worry that with their singular focus on the climate, the Biden administration and congressional Democrats will eventually climate-change-regulate American agriculture into bankruptcy. We’ll see that the regulatory burden placed on the backs of America’s farmers will far exceed these conservation incentives.”  

Howell said the funding breakdown in the bill includes the following:

• $8.45 billion for the Environmental Quality Incentives Program (EQIP)

• $6.75 billion for the Regional Conservation Partnership Program (RCPP)

• $3.25 billion for the Conservation Stewardship Program (CSP)

• $1.4 billion for the Agricultural Conservation Easement Program (ACEP)

• $1 billion to boost USDA conservation technical assistance as well.

The USDA’s Natural Resources Conservation Service would receive $300 million to quantify carbon sequestration and emissions on farmland. 

Among the provisions, the bill would pay farmers $25 an acre, up to 1,000 acres, to establish cover crops through the 2026 crop year, and include 2022 cover crops as well. The bill also includes a $5 per acre incentive for landowners to establish cover crops with renters, as well. Another provision would provide payments to farmers with crop insurance who were prevented from planting an eligible crop to plant cover crops.

The bill includes $9.7 billion in grants and loans to rural electric cooperatives to buy renewable energy, renewable energy systems, carbon capture and storage systems, and make energy efficiency improvements on generation and transmission systems. Those provisions have the support of the National Rural Electric Cooperative Association.

The Rural Energy for America Program would get $1.72 billion to promote energy efficiency and renewable energy for farmers and other rural small businesses.

Another $1 billion would go for “Section 317” loans for electric generation from renewable energy resources for rural and nonrural power companies. This includes solar, wind, hydropower, biomass, or geothermal. The federal government would cover up to fifty percent of the loans for such projects.

Howell said biofuels would see another $500 million to develop blender pumps and other infrastructure to increase the blends of biofuels above ten percent blend levels for ethanol and twenty percent for biodiesel blends. The bill also extends the $1 per gallon biodiesel tax credit to 2024 and retroactively restarting it at the beginning of 2022.

Howell echoed the concerns of Senators Boozman and Hyde-Smith about the dangerous precedent this legislation could portend, and emphasized the Delta will continue to advocate for a responsible Farm Bill process while also looking at ways the new conservation funding can benefit the region’s agricultural community.