The incoming Trump administration has stopped payments to at least one major climate-smart commodities project, raising questions about whether farmers across the country will be reimbursed for practices they implemented under the $3 billion Partnerships for Climate Smart Commodities initiative.
In a letter dated Monday to the Iowa congressional delegation obtained by Agri-Pulse, the Iowa Soybean Association says, “USDA has suspended all farmer and program reimbursements. This suspension puts the program and its participating farmers at risk.”
The letter warned that farmers participating in its project are “contractually owed $11 million” for practices the growers implemented in 2024.
USDA hasn’t provided any official guidance to groups about how long payments could be suspended, or even whether project work would be allowed to continue after some type of review period, leading to confusion among leaders of the projects. ISA received a note from a USDA official last Thursday that said, "Reimbursements are currently on hold while we await guidance from the Department."
USDA representatives didn’t respond to requests for comment or information on the issue Monday. A spokesperson for Sen. Chuck Grassley, R-Iowa, said his office was reviewing the concerns raised by the letter.
The PCSC initiative, launched by the Biden administration with broad support from farm groups and some environmental organizations as well as food and energy companies, combined $3 billion in funding from USDA’s Commodity Credit Corporation account with more than $1 billion in investments by corporations, universities and non-profit groups. The goal of the projects is to pay farmers to adopt climate-friendly practices and collect data to help guide future carbon reduction efforts with the goal of creating new markets.
Iowa Soybean is leading one of the largest projects, called the Midwest Climate-Smart Commodity Program, that was awarded $95 million from USDA and matched by more than $60 million in private sector funding. Farmers in 12 states, including Iowa, have enrolled 900,000 acres in the project.
Deborrah Smith of the Arizona Association of Conservation Districts said her group also has been notified by USDA that payments are on hold.
“To date, we have not received payment for any outstanding invoices submitted at the end of the quarter in January for work completed in 2024. Unfortunately, we have not received any indication of when payments may be reinstated. However, we have been advised that we may continue our work in the interim,” she told Agri-Pulse.
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The leader of another project who didn’t want his name used said that farmers would bear the brunt of a suspension of payments, which would also likely dampen future enrollment that's scheduled for this spring.
“There are literally — I don’t know about the climate-smart projects as a whole — but just on our project, hundreds of farmers will not get reimbursed for money that the farmer has already spent, which seems to fly counter to other messages that we’ve heard,” the project official said.
He said farmers have been in the process of verifying receipts and documentation for practices they implemented in 2024.
“There’s several steps they have to go through before they can get paid. But the ones that have completed all that and are ready to be paid…they’re just not going to get paid if there is a stoppage until whenever it gets freed up. I’m quite concerned about that.”
A representative of another project sponsor said the group was expecting USDA to impose a "90-day pause" on the program.
Kirk Leeds, CEO of the Iowa Soybean Association, said his group has a pending request to USDA for reimbursement of $700,000 in expenses. Altogether farmers are owed $11 million in reimbursement for 2024, he said.
He said farmers are paid half of what they are owed up front, and then they get the remaining half after their practices are verified.
“We have a contract for USDA for $95 million over the next five years. We're a year and a half in. It took us six or nine months to negotiate that contract, and then we went out and have contracts with growers,” he said.
“In our case, the payments to farmers are not only from USDA, but we also secured in the same initiative about $60-some million in private sector commitments to farmers.”
He said the project pays farmers $1.20 for every $1 provided by USDA.
The confusion around the PCSC initiative comes as USDA has been removing some climate change-related content from its website while officials review whether the information should remain online. In an email to public affairs directors within the department, the Office of Communications (OC) in Washington, D.C., asked agency website managers to “conduct a review of their websites for any content related to climate change.”
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