Part 3: Assessing 1st Year of Farm Policy with Inflation Act Funds
TL/DR –
The future of the Farm Bill, a key legislation for US agriculture, remains uncertain due to unspecified demands and Congressional dysfunction. However, farmers have benefited from an additional $18 billion in funding for four conservation programs, as appropriated by the Inflation Reduction Act of 2022, which boosted total assistance to farming conservation to a record level in FY2023. While all states gained conservation funding, the biggest increases were seen in Arkansas, Wyoming, and Illinois.
Moving Forward
As the month of March begins, the prospects for Farm Bill reauthorization appear uncertain, just like the unpredictable weather patterns transitioning from winter to spring (Stein, March 2, 2015; Farmers Almanac, January 25, 2024). The outcome of Congress’s ability to shift from a stagnated winter to a productive spring season remains doubtful (Barnett, March 5, 2024). However, the additional investments in conservation from the Inflation Reduction Act of 2022 have given farmers a fiscal year’s benefit, which we will explore further in this article.
Background
The Inflation Reduction Act of 2022 (IRA) allocated an additional $18 billion to four Farm Bill-authorized conservation programs: ACEP, CSP, EQIP, and RCPP (P.L. 117-169). The first federal fiscal year (FY) of IRA operation was FY2023, during which the total spent on farmer conservation assistance by EQIP and CSP were at an all-time high since the 2014 Farm Bill.
Discussion
The IRA’s additional conservation investments led to a record level of assistance from EQIP and CSP in FY2023. Including all ten years of the previous two Farm Bills, total EQIP and CSP assistance under the 2018 Farm Bill was nearly $1 billion less than the 2014 Farm Bill. The first year of IRA funds compensated for approximately one-third of this decrease in conservation.
The first year of combined IRA and CCC funding shows a state-by-state increase in FY2023. No state lost conservation funding in FY2023; all gained conservation funding, though Alaska just barely. Arkansas (190%) and Wyoming (191%) saw the most significant gains in FY2023 with IRA supplementing CCC funds.
One of the issues with conservation programs is that Congress authorizes a fixed level of funding, limiting the amount available to farmers. This capped funding has significantly contributed to the persistent problem with backlogs and farmers with approved applications not receiving assistance because of insufficient funds (farmdoc daily, September 29, 2023).
Final Thoughts
As days pass, uncertainty envelops Farm Bill reauthorization. The increased conservation funding provided in the Inflation Reduction Act presents a positive development. These additional funds have reinforced vital investments for farmers in every State in the first year, and these investments will continue to grow for the next seven years unless Congress rescinds the appropriations. This reality brings to mind the saying that “a bird in hand is worth two in the bush.” The first year of the combined funding for conservation provides a good first look at the bird in hand.
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