Few pieces of government legislation anywhere in the free world have drawn attention like the $369 billion U.S. Inflation Reduction Act (IRA). It’s many things to many people, but to the agri-food sector, it’s the start of recognition that farmers, ranchers, growers and others who put food on the world’s table are allies and partners, not enemies.
Politically, the IRA addresses two of U.S. President Joe Biden’s most pressing issues: inflation and the environment.
In May, the Pew Research Center said inflation was the top worry for seven out of 10 Americans. Inflation hits home hard every day in American kitchens with escalating grocery bills. It also gets the attention of a U.S. government that’s faltering in the eyes of the public.
The IRA brings the Biden environmental agenda back into view. The Pew research showed climate change was considered a “very big problem” by just a little more than four out of every 10 Americans. That finding put climate change way behind inflation, as a woe.
But climate change reminders are many and easily triggered by new developments. For example, in mid-August, the non-profit group First Street Foundation predicted that in 30 years, more than 1,000 U.S. counties with 107 million citizens will experience at least one day above 51° Celsius (125° Fahrenheit). They’re part of what the foundation describes as an emerging extreme heat belt, stretching from northern Texas and Louisiana to as far north as Illinois, Indiana and Wisconsin. That includes a lot of agricultural land.
Biden, though, didn’t deal with the environment and inflation separately. Wisely – maybe even brilliantly – he wrapped them in the same piece of legislation.
Activists gushed with praise. “The law will put us on a path to 40 per cent emissions reduction by 2030 and restore U.S. credibility to lead climate action around the world,” said the U.S. group Climate Solutions. It praised Biden for signing “the most consequential federal climate policy in our nation’s history into law.” Many other pro-environment groups were equally impressed.
Farmers are a key part of the solution, in a practical, on-farm way. Nearly $20 billion of the Inflation Reduction Act is for new conservation funding to support climate-smart agriculture. This money will bolster the USDA’s Natural Resources Conservation Service’s efforts to improve opportunities for nutrient management. This arm of the government will target funding, increasing program flexibilities, launch a new outreach campaign to promote nutrient management’s economic benefits, and expand partnerships to develop nutrient management plans. “This is part of USDA’s broader effort to address future fertilizer availability and cost challenges for U.S. producers,” it says.
I’m most curious to see how the outreach campaign – called the Nutrient Management Economic Benefits Outreach Campaign – will work. It goes to great lengths to highlight the economic benefits of nutrient management planning for farmers. For example, the USDA says the potential net savings to farmers who adopt a nutrient management plan is estimated to be an average of $30 per acre for cropland. Doing the math, the department estimates there are 89 million acres of cropland (almost 30% of total U.S. cropland) now exceeding the nitrogen loss threshold. It says if all those acres implemented a nutrient management plan, the average net savings to producers would be more than $2.5 billion.
Further, a huge chunk of the IRA money for agriculture, more than $8 billion, will go towards the Environmental Quality Incentives Program. It provides financial and technical assistance to producers and others to address natural resource concerns and deliver environmental benefits such as improved water and air quality, conserved ground and surface water, increased soil health and reduced soil erosion and sedimentation, improved or created wildlife habitat, and mitigation against drought and increasing weather volatility. Part of the reason that this program is possible is because the U.S. has such a strong and enviable extension system connected to its agricultural universities.
Fruit and vegetable growers in the U.S. didn’t see anything specifically in the IRA for them. For the most part, the act will help corn producers, thanks to a huge emphasis on support for ethanol, biofuel and renewable fuel. Overall, the thinking is that farm-related savings of any type can be passed on to consumers, in the form of lower food and fuel costs, while simultaneously offering some relief to the environment.
All this may be a sign that the U.S. is moving away from blaming farmers for being environmental pariahs, to supporting them and perhaps even calling them problem solvers. That recognition is exactly what farm communities everywhere are clamouring for. They are the ones at the center of nutrient management, as well as greenhouse gas sequestration. And it will be them who turn the IRA into real environmental change, and ultimately, inflation relief.