Divided House sends climate, health care bill to President Biden’s office in partisan vote

USDA’s $19.5 billion for conservation programs aims to inspire more farmers to adopt crop and livestock practices that reduce greenhouse gas emissions, reduce nitrogen losses or sequester carbon in the soil.

Among USDA’s major spending items, the Environmental Quality Incentive Program (EQIP) will receive $8.45 billion; the Regional Conservation Partnership Program (RCPP) receives $4.95 billion; the Conservation Stewardship Program (CSP) receives $3.25 billion; and the Agricultural Conservation Easement Program (ACEP) receives $1.4 billion.

At least $4 billion of the bill is for drought relief in the Colorado River Basin. Western Growers, which represents fruit and vegetable growers in California and other western states, welcomed the drought addition to the West, noting that the Colorado River supports 5.7 million acres of irrigated agriculture – mainly winter vegetables.

“Not only does the Colorado River supply the water and power needs of nearly 40 million people in the West, it supports agricultural production in Yuma, Arizona, and the Imperial Valley of California,” Dave said. Puglia, president and CEO of Western Growers. “Without prompt and serious federal assistance, a significant portion of the country’s food supply is at stake.”

Another billion dollars will go to the Natural Resources Conservation Service (NRCS) for technical assistance to producers. The USDA will also receive $300 million to quantify on-farm carbon sequestration and emissions.

RENEWABLE ENERGY

Renewable energy programs through the USDA will receive $13.3 billion overall. Rural electric cooperatives will receive $9.7 billion in loans to build renewable energy infrastructure with specific language on “zero emissions systems” and carbon capture programs.

Biofuels will see an additional $500 million to develop blender pumps and other infrastructure to increase biofuel blends above blend levels of 10% for ethanol and 20% for biodiesel blends.

The bill also extends the $1 per gallon tax credit for biodiesel and renewable diesel through 2024. The $1.01 per gallon tax credit for second-generation biofuels is also extended through 2024. ‘in 2024.

A major boost for airlines transitioning to aviation fuels will come from a $1.25 per gallon Sustainable Aviation Fuel (SAF) tax credit for 2023 and 2024. The credit SAF tax is also increased for fuels that reduce emissions by more than 50%.

Groups supporting ethanol and biofuels backed the bill, pointing to investments in infrastructure and sustainable aviation fuels.

“While this bill may not have everything on our wish list, it does contain incredible incentives for farmers and ethanol producers looking to capitalize on carbon intensity, and we encourage the President to enact it, so that farmers and ethanol producers can continue to innovate and play a meaningful role in the fight against climate change,” said Brian Jennings, CEO of the American Ethanol Coalition.

Another $1 billion is dedicated to loans for the generation of electricity from renewable energy resources for rural and non-rural electricity companies. This includes solar, wind, hydro, biomass or geothermal. The federal government would cover up to 50% of the loans for such projects.

The production tax credit is also extended with tax credit adjustments for technology used and when construction of the project has begun. The tax credit also includes bonuses for projects that use certain levels of domestic materials.

The legislation also provides several residential and energy efficiency tax credits for the purchase of products such as heat pumps or the installation of solar panels on homes.

CARBON SEQUESTRATION

The 45 Q tax credit for industrial carbon sequestration would be extended to projects whose construction begins before 2033. The tax credit for injection or use is increased to $60 per tonne. Direct air capture would go to $180 per tonne and carbon removal to $85 per tonne.

Tax credits would likely incentivize focusing more on carbon pipelines and getting carbon into the ground where possible. Tax credits increase incentives for large chemical and cement projects to seek ways to capture emissions.

When added together, all the various tax incentives for renewable energy and emission reductions total nearly $271 billion over 10 years.

FORESTRY

An additional five billion dollars will be used for forest management, including about $2.15 billion to fund the reduction of dead wood and other vegetation that would fuel wildfires. An additional $2.75 billion will go to urban areas and other non-federal forests to develop incentives such as carbon sequestration in those areas.

FARMER CREDIT ASSISTANCE

Leaders of the Southern Cooperative Federation/Land Assistance Fund and the National Black Farmers Association have expressed frustration with the debt relief provisions for farmers contained in the bill. The senators rewrote the provisions following several lawsuits by white farmers last year that cut off minority farmer assistance that was included in the American Rescue Plan Act (ARPA).

Despite criticism from some groups representing black farmers, House Agriculture Committee Chairman David Scott, D-Ga., said the bill provides “fast-track relief” to loan recipients from the USDA at risk of losing their farms. “It also allows the USDA to help farmers and ranchers who have been discriminated against in Farm Service Agency agricultural loan programs,” Scott said.

The bill provides USDA with $3.1 billion in USDA funding to provide relief to at-risk farms. All distressed borrowers of USDA-administered direct or guaranteed loans are potentially eligible for assistance under this provision, which is intended to keep these farmers in production.

The bill provides $2.2 billion for a financial relief program for farmers, ranchers or forest owners who have been discriminated against in USDA loan programs. Under the new language, the financial assistance would go to farmers, ranchers, or forest owners who are “determined to have been discriminated against before January 1, 2021,” under USDA agricultural loan programs. Financial assistance cannot exceed $500,000 “as deemed appropriate based on the consequences suffered from the discrimination”.

As written, the bill does not prioritize the 17,000 farmers and ranchers who have received letters promising debt relief.

The bill also includes $250 million that would go to research, education and extension, as well as scholarships for 1890 institutions – land grants, historically black colleges and universities (HBCUs).

An additional $250 million in the bill would go to help underserved growers through loans and subsidies, like those growing on heirs’ property.

The full text of the Inflation Reduction Act can be viewed at https://rules.house.gov/….

Chris Clayton can be reached at [email protected]

Follow him on Twitter @ChrisClaytonDTN

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