The Biden administration is pouring $2.8 billion, far more than originally planned, into pilot projects aimed at developing markets for climate-smart commodities in every state and across a wide range of commodities and farm types.
The 70 projects announced Wednesday by Agriculture Secretary Tom Vilsack involve a wide range of farm and environmental groups as well as minority farmer groups, American Indian tribes and some of the largest multinational food companies, from PepsiCo to Nestlé and Smithfield Foods. Another $700 million for smaller projects will be awarded later.
The projects, which were awarded up to $95 million each and will be carried out over five years, are aimed at producing lower-carbon versions of grains, almonds, meat and dairy products, biofuels, forest products cotton and even hemp and bison.
They include projects that will use conservation practices to reduce greenhouse gas emissions from the production of food and feed crops, capture biogas from livestock operations and produce low-carbon corn that can be turned into ethanol and sustainable aviation fuel.
The administration had originally planned to spend just $1 billion from its Commodity Credit Corp. account on the Partnerships for Climate-Smart Commodities projects, but raised the funding cap to $3.5 billion as a result of the demand for funding, Vilsack said. The department received 1,050 applications for nearly $20 billion in total requested funding.
USDA cannot borrow more than $30 billion from the CCC, which is also used to cover farm program payments and commodity loans, but Vilsack said the department had plenty of room in the account to fund the climate-smart projects.
By USDA’s count, there are 13 projects involving beef cattle and other livestock, 13 covering fruits and vegetables, 12 corn and soybean projects, nine involving dairy operations, six covering cotton, peanuts and nuts, and three involving hay, grass and energy crops.
All 50 states and Puerto Rico will be involved in at least one of the projects.
Over their life, the projects will reduce greenhouse gas emissions by 50 million metric tons, according to USDA. By comparison, agriculture was responsible for about 635 million metric tons of emissions in 2020, according to the Environmental Protection Agency.
USDA plans to report regularly on the progress of the projects, which Vilsack said will take advantage of the nearly $20 billion in conservation program funding provided by the recently enacted Inflation Reduction Act.
“Everyone who participates in this program and enters into an agreement in this program agrees to be part of a network that will meet periodically and report data and information,” Vilsack said.
The timeline for getting usable results from the pilots will vary. He said “there are some projects where we may get some very early indications and early wins. There may be projects that may take a little bit longer to mature.”
Vilsack said that the projects will give the United States a “fairly significant leadership role” at the next round of international climate negotiations. Food companies will benefit by being able to market their products as good for the climate, he said. He also said U.S. trading partners are "quite interested" in the U.S. initiative.
"I think we all recognize that agriculture needs to be part of the solution, not part of the problem," he said.
As many as 25 million acres of land and 50,000 farms will be touched by the projects, according to USDA. More than 50% of the federal funding will be matched by private and other non-federal sources, the department says.
Some of the projects involve more than 30 states while others are contained to one.
Two of the projects were awarded $95 million, including one led by the National Fish and Wildlife Federation that will incentivize cover crop usage on corn and soybeans and involve 20 states.
The second of those projects, led by the Iowa Soybean Association and involving companies such as Target, Coca-Cola and meatpacking giant JBS, will reward corn, soybean and wheat farmers via “outcome-based contracts” for reducing carbon emissions. That project was one of three flagged by Vilsack two weeks ago at the Farm Progress Show in Iowa, where he wanted to offer a "flavor" of the kinds of projects set to receive funding.
Truterra, the sustainability business of dairy cooperative Land O’Lakes, is leading one of three projects that were each awarded $90 million. The Truterra project, which has support from John Deere, Campbell Soup, Hershey and Nestlé, is intended to promote climate-smart practices among corn, soybeans, wheat, cotton and dairy producers across 28 states.
Thirty-two states stretching from Florida and New York to Oregon and Washington will be involved in a project led by Field to Market that will use what USDA described as “innovative finance mechanisms” to encourage farmers to adopt climate-smart practices.
In one of the efforts directed at biofuels, Gevo Inc. is leading a project awarded $30 million to offer incentives for corn that is of lower carbon intensity. The corn would then be turned into ethanol for the production of sustainable aviation fuel.
The National Sorghum Producers is leading a project awarded $65 million to incentivize practices such as reduced tillage, crop rotation, and nitrogen and irrigation management with an eye toward markets for low-carbon biofuels. The hope is that growers could also qualify for ecosystem service credits.
Among the projects aimed at developing climate-friendly meat, Tyson Foods is leading a project awarded $60 million to “increase carbon sequestration and reduce emissions in the production of beef and row crops for livestock feed.”
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Pork giant Smithfield Foods, meanwhile, is partnering in an $80 million project that will be aimed in part at sequestering carbon through the production of renewable natural gas.
South Dakota State University is leading a project funded at $80 million to use climate-smart grazing and land management practices to develop a market for low-carbon beef and bison. The project will reach 13 states as well as tribal lands.
The dairy projects USDA is funding include one led by Dairy Farmers of America with support from Nestle, Mars and Unilever, to scale up soil carbon sequestration and capture of methane emissions. DFA will “ensure that the collective financial benefits are captured at the farm, creating a compelling opportunity to establish a powerful self-sustaining circular economy model benefiting U.S. agriculture, including underserved producers,” USDA says.
Among the projects with a more narrow geographic scope, the California Dairy Research Foundation is leading a project awarded $85 million to reduce methane emissions in the state’s dairy operations.
Blue Diamond Growers is leading a project awarded $45 million to increase market opportunities for almonds through adoption of climate-smart and regenerative practices on California almond farms. The project will develop verified claims and supply-chain quantification of greenhouse gas emissions.
In South Carolina, Clemson University is leading a project awarded $70 million that involves minority farmer groups and will benefit producers of peanuts, beef, forage, leafy greens and forest products.
Texas A&M University will lead the Texas Climate-Smart Initiative, which was awarded $65 million and will benefit producers of pecans, olives, grapes, hemp, citrus as well as cotton, wheat sorghum, corn, rice, vegetables, livestock, dairy and forest products.
The projects closely align with the recommendations of a coalition of ag and conservation groups, the Food and Agriculture Climate Alliance.
“FACA appreciates USDA's use of Alliance recommendations as a guidepost when developing the Partnership for Climate-Smart Commodities,” the group said in a statement. FACA noted that the projects will include underserved producers as well as farmers who are already using climate-smart practices. “The Alliance is pleased that the projects selected recognize differences between regions, farm size and forest type, and diversity of production in the United States,” the statement said.
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