Democrats’ $1.8T Build Back Better deal funds climate-smart ag, creates clean fuel subsidy

Source: By Philip Brasher, Agri-Pulse • Posted: Sunday, October 31, 2021

Democrats released a compromise $1.75 trillion version of President Joe Biden’s Build Back Better plan Thursday that includes key climate-smart ag provisions, including a new $25-per-acre payment for cover crops, while creating a new low-carbon tax credit for biofuels.

The new version of the Build Back Better Act is half the size of a $3.5 trillion measure that House committees drafted in September, but preserves most of the agriculture provisions, which were negotiated by the House and Senate Ag committees.

Those provisions, worth more than $90 billion, include the cover crop payments and major increases in spending for the Environmental Quality Incentives Program, the Conservation Stewardship Program and other farm bill conservation programs.

“Agriculture can lead the way in the fight on climate with climate smart agriculture and forestry practices that sequester carbon, reduce emissions and create new and better market opportunities for producers.”

The latest version reflected changes worked out in negotiations between the White House and two key Senate Democrats, Joe Manchin of West Virginia and Kyrsten Sinema of Arizona.

The bill also includes nearly $960 million for biofuel infrastructure but would rework existing tax incentives for biofuels. The $1-a-gallon tax credit for biodiesel and renewable diesel would be extended through 2026 and then replaced by a low-carbon fuel credit extended to sustainable aviation fuel (SAF) as well as advanced biofuels such as ethanol produced with carbon-capture technology.

As a bridge to 2026 for the airline industry, a temporary tax credit for SAF would be created to run through 2026.

House Speaker Nancy Pelosi, D-Calif., hailed the agreement on the bill as historic and urged the House to pass a separate, $1.2 trillion infrastructure bill that has been stalled in the House while Democrats tried to negotiate a deal on the Build Back Better act that could pass the House. House progressives endorsed the overall deal on the Build Back Better deal but blocked a vote on the infrastructure bill Thursday. The House instead passed a short-term extension of federal highway funding until Dec. 3.

Senate Finance Committee Chairman Ron Wyden, D-Ore., cautioned that there still could be changes to the Build Back Better bill. “The deal isn’t done until the Senate acts,” he told reporters.

But the broad agreement on the Build Back Better bill, which includes $555 billion in climate provisions, could give President Joe Biden a boost as he heads to the international climate conference that starts Sunday in Glasgow, Scotland. The funding is intended to show that the country can make good on Biden’s commitment to halve U.S. greenhouse gas emissions by 2030.

The rest of the 1,684-page bill addresses many of Biden’s domestic priorities. The bill would fund universal pre-K, extend an expanded child tax credit and expand health care coverage.

The cover-crop payments the legislation would create would be run from the 2022 crop through 2026. Landowners would be eligible for an additional $5-an-acre payment.

The funding for conservation programs is heavily backloaded, which would allow it to be folded into the next farm bill. The 2018 farm bill expires in 2023.

The Environmental Quality Incentives Program would get $9 billion in additional funding; the allocation would start at $300 million in fiscal 2022, increase to $500 million in FY23, go to $1.75 billion in FY24 and end up at $3 billion in FY25 and $3.45 billion in FY26.

The Regional Conservation Partnership Program, which leverages private as well as state and local funding sources, would get $7.5 billion to assist farmers and forest owners to reduce greenhouse gas emissions. The RCPP funding would start at $200 million in FY22 and grow to $3.05 billion by FY26.

The Conservation Stewardship Program would get $4 billion to reward farmers for implementing at least one climate-smart practice or for carrying out state or regional-specific bundles of practices. Funding would start at $250 million and increase to $1.5 billion by FY26.

USDA’s Natural Resources Conservation Service would also get $600 million through the bill to carry out work to quantify the greenhouse-gas impact of farm practices and $200 million to provide technical assistance to farmers. An additional $50 million would be provided to USDA’s climate hubs to carry out their research and extension work.

The bill also would provide $9.7 billion to rural electric cooperatives to ensure the “long-term resiliency, reliability, and affordability” of their systems.

One area that was trimmed in the scaled-back legislation was agricultural research: The House version of the bill would have provided $7.75 billion for research; that total was reduced to $2 billion.

Half of the research funding would be allocated for construction and modernization of research facilities. Another $420 million would be split between the Agriculture and Food Research Initiative at USDA and the Foundation for Food and Agriculture Research. The Sustainable Agriculture Research Education program would get $120 million.

The ag measures aren’t limited to climate policy: A debt relief program for minority farmers that has been blocked by the courts because of questions about its constitutionality would be replaced by a new program that wouldn’t be limited by race or ethnicity.

“The Build Back Better Bill grows jobs in rural communities and invests in solutions to the climate crisis to help strengthen our future,” said Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich. “The bill scales up climate-smart agriculture programs that farmers, foresters, and rural businesses use to protect resources and be more energy efficient.”

Chuck Conner, president and CEO of the National Council of Farmer Cooperatives, said the funding in the bill would “help support the farmers and ranchers interested in exploring new, innovative approaches to farming that help address the challenge of climate change. It is especially notable that the money is targeted to adding a climate focus to successful, existing working lands conservation programs.”

Conner helped found the Food and Agriculture Climate Alliance, a coalition of farm groups and environmental organizations that made a series of recommendations for helping farmers adopt climate-related practices, adapt to climate change and benefit from ag carbon markets.

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