Wall Street Journal: Farm Conservation Efforts Get $20 Billion Bounty From Climate, Health and Tax Bill

WALL STREET JOURNAL, KRISTINA PETERSON

Farmers’ conservation efforts will get a funding boost from the climate, healthcare and tax package President Biden is expected to sign into law this week after Democrats muscled it through Capitol Hill.

The legislation, passed along party lines in both chambers, allots roughly $20 billion over 10 years to help more farmers and ranchers participate in popular conservation programs run by the Agriculture Department.

The bill has drawn mixed reviews from food and agricultural trade groups, with the American Farm Bureau Federation and others objecting to some of the tax increases used to pay for the package. Some trade groups have criticized provisions they said will raise taxes on many farmers and ranchers and could make food and other supplies more expensive for restaurants.

The programs, which currently have long waiting lists, incentivize and help farmers to use environmentally friendly practices to reduce greenhouse-gas emissions and bolster the health of their land, such as expanding the planting of cover crops between harvests to improve soil quality.

Some programs help farmers and ranchers plan and implement new projects, while others set up partnerships between farmers and other groups, including nonprofits.

“We are taking proven programs that make smart investments,” Rep. Abigail Spanberger (D., Va.), who leads the House Agriculture Committee’s conservation panel, said in an interview before House passage of the bill Friday. “These really beneficial, tested programs are receiving major investments in this bill as part of our effort to fight climate change.”

GOP lawmakers objected to funding the conservation programs through legislation passed along party lines on Capitol Hill. The programs are typically funded in the farm bill, a multiyear package that sets federal farm policy and funding for nutrition benefits and which usually draws strong bipartisan support.

Crafting the farm bill “requires a lot of discussion and a lot of give and take,” Sen. Kevin Cramer (R., N.D.) said in an interview. Lawmakers weigh the funding needs for supporting farmers, conservation and nutrition programs, he said. “You blow up that balance—I think it really doesn’t bode well for farm bills going forward and somehow we have to restore that,” he said.

Supporters said the new funding will help compensate farmers and ranchers for some of the steps many are already taking to boost their sustainability and cut down on emissions from their lands and livestock.

“There’s more demand for the programs than there is money to go around,” said Paul Bleiberg, senior vice president at the National Milk Producers Federation, which lauded the increase in funding for the conservation programs.

The bill instructs the Agriculture Department to give priority to “climate-smart” practices in allocating the new funds, including reducing methane emissions from cattle’s belching through efforts such as changes to their diet. Beef and dairy cattle, along with other farm animals, contribute more than one-quarter of the country’s methane emissions, according to the Environmental Protection Agency. But some GOP aides worried that lawmakers had ceded too much authority to the administration over how the money would be spent. Some academics also have questioned whether these existing programs are the most effective way to curtail the agriculture industry’s emissions.

The package also directs $14 billion to help rural communities transition to cleaner energy sources; $5 billion to forestry programs, including wildfire mitigation; and $4 billion to combat drought, a late push from Sen. Kyrsten Sinema (D., Ariz.) and lawmakers from other Western states before its passage in the Senate.

The legislation, dubbed the Inflation Reduction Act, passed both chambers using a special process known as reconciliation, allowing it to pass with a simple majority in the Senate, with Vice President Kamala Harris casting the tiebreaking vote.

Most bills need 60 votes in the Senate, which is currently split 50-50 between the two parties. Republicans unanimously opposed the package in both chambers.

Democrats have said the climate crisis requires immediate action and noted that the conservation programs funded in the bill are both voluntary and popular.

The Farm Bureau praised funding for the conservation programs but criticized the bill’s tax provisions.

“Farmers and ranchers support voluntary, market-driven programs that help the environment while ensuring farms remain economically sustainable,” Zippy Duvall, the group’s president, said in a statement.

A spokesman for the group said it objected to the late addition of a provision extending for two years a policy that caps the business losses noncorporate taxpayers can deduct at $250,000, saying it would heavily impact farms and ranches.

The National Restaurant Association said it expected the bill’s new 15% minimum corporate income tax on large profitable companies would likely increase taxes for some manufacturers and producers of poultry, meat, frozen food, soft drinks and alcohol, increasing costs for restaurants.

“Passage of this bill will likely lead to higher supply costs for restaurants already struggling to weather the economic storms,” Sean Kennedy, a spokesman for the group, said in a statement.

Democrats said the tax provisions in the package are aimed at ensuring wealthy Americans and big, profitable companies are paying their fair share of taxes.

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