Farmers Await Millions in REAP Payments Post Federal Freeze

TL/DR –

The Trump administration froze federal funding and payments to farmers across the U.S., causing around 2,252 farmers to wait for their 2024 Rural Energy for America Program (REAP) payments, totaling $410 million. The funding was supposed to assist small farmers like Kevin Leavitt in West Gardiner, Maine, who was authorized to receive reimbursement through the REAP program for a project to generate efficient electricity on his small vegetable farm. The freeze affects various USDA programs, such as the New ERA program that provides loan and grant financing for rural electric cooperatives, thereby affecting rural communities’ access to energy and electricity.

Federal Freeze Halts Funding to REAP Farmers

Kevin Leavitt, owner of Farmer Kev’s Organic in Maine, was on the verge of receiving a $48,000 reimbursement from the U.S. government when the Trump administration signed an executive order halting federal funding, affecting farmers nationwide. Leavitt’s funding, approved through the U.S. Department of Agriculture’s Rural Energy for America Program (REAP), was intended for a $140,000 project to generate efficient electricity on his small vegetable farm.

Leavitt’s pending reimbursement was halted due to the order, and with over a month of silence from the USDA, he and approximately 2,252 farmers are left in suspense, waiting for their fair share of the $410 million worth of 2024 REAP awards as detailed in the data compiled by Jeremy Fisher. “This isn’t something that shakes out cleanly along blue or red lines … these are individual farmers, small businesses that have to put their own money down on the table,” said Fisher.

If the expected REAP funds don’t materialize, Farmer Kev’s Organic and similar farms could face an uncertain future. Despite Agriculture Secretary Brooke Rollins announcing the release of $20 million in contracts, this figure is less than 1% of all USDA funding, according to the National Sustainable Agriculture Coalition.

The Role and Purpose of REAP

REAP, intended to guarantee loan financing and grant funding to agricultural producers and rural small businesses for energy efficiency improvements, can be a critical lifeline for smaller farms and younger farmers like Leavitt. “To be able to start producing food and do something sustainable, you do need some assistance — farming is a very capital-intensive industry to get into,” Leavitt stated.

However, REAP is just part of the USDA’s Rural Development umbrella, which includes grants and low-interest loans for rural programs. Other initiatives like the Empowering Rural America (New ERA) program are also awaiting funding approval. Established by the Inflation Reduction Act in 2022, the New ERA program is meant to provide $9.7 billion in loan and grant financing for rural electric cooperatives to transition to clean, affordable, and reliable energy. The Sierra Club estimates roughly 40% of all rural electric cooperative customers in the U.S. are due to receive funding through the program.

However, funding freezes across USDA programs are causing significant issues for farmers and rural communities. “The $20 million that was released is just a very small drop in the bucket compared to the national amount that those programs would normally be funding at this time of year,” said Sarah Alexander, executive director of the Maine Organic Farmers and Gardeners Association. The lack of funding may lead to higher food prices and impact consumers directly.

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