In helping better understand the role farmers and ranchers can play in mitigating climate impacts and creating new revenue streams for farmers with the creation of climate-smart commodities, USDA under the Biden administration established Partnerships for Climate-Smart Commodities. In the first rollout of the novel program, Secretary of Agriculture Tom Vilsack announced USDA is investing up to $2.8 billion in 70 selected projects under the first pool of funding, with $700,000 worth of projects in a second funding pool to be announced later this year.
Vilsack explains these resources will be invested over a period of up to five years and be used to provide technical and financial assistance to implement climate-smart practices on private working lands and forested areas. “The funds will pay for, incent and encourage pilot projects that are innovative and cost effective that also include methods for quantifying, monitoring, reporting and verifying greenhouse gas benefits and carbon sequestration benefits. And they'll help to develop and expand markets for climate smart commodities,” Vilsack shares.
Applicants submitted more than 450 project proposals in this first funding pool, and the strength of the projects identified led USDA to increase its investment in this opportunity from the initial $1 billion Vilsack announced earlier this year to nearly triple that level. “We requested and received permission to utilize an additional $2.5 billion dollars from the Commodity Credit Corporation so that we would have a total of roughly $3.5 billion for this effort,” Vilsack states. Initial applications would have required $18 billion to fund fully.
Vilsack says he believes these 70 projects will enlist more than 50,000 farms across the United States involving somewhere between 20 and 25 million acres dedicated to developing climate-smart commodities. “We believe that the practices that will be instituted in these pilots could be responsible over the course of the life of this effort of sequestering or reducing the equivalent of 50 million metric tons of C02 equivalent,” he adds.
Projects announced September 14 are from the first funding pool, which included proposals seeking funds ranging from $5 million to $100 million. USDA received over 450 proposals from more than 350 entities for this funding pool, including nonprofit organizations; for-profits and government entities; farmer cooperatives; conservation, energy and environmental groups; state, tribal and local governments; universities (including minority serving institutions); small businesses; and large corporations. Applications covered every state in the nation as well as tribal lands, D.C. and Puerto Rico, and the recipients reflect participation in all 50 states and Puerto Rico.
Vilsack says USDA is excited that more than 50 universities, including historic Black colleges and minority serving institutions, will be involved in partnering with major food companies and agricultural commodity groups working with conservation and environmental groups collaboratively. The projects represent five timber and forest projects; 13 beef and livestock projects; 12 corn and soybean projects; six projects in the cotton, peanuts and nut segment; nine dairy projects; 13 fruit, vegetables and specialty crop projects; three hay, grass and energy crop projects; and three wheat and grain projects.
Vilsack highlighted a handful of selected projects on a call with media including one submitted by Field to Market that covers more than 30 states to use innovative finance mechanisms to accelerate climate-smart practice uptake by farmers, leveraging private sector demand to strengthen markets for climate-smart commodities.
Another led by the Dairy Farmers of America looks to scale methane emissions reductions and soil carbon sequestration to directly connect the on-farm greenhouse gas reductions with the low-carbon dairy market opportunity. DFA will use its cooperative business model to ensure that the collective financial benefits are captured at the farm, creating an opportunity to establish a self-sustaining circular economy model benefiting U.S. agriculture, including underserved producers, USDA explains.
Farm bill implications
All of the projects offer the ability to test drive different concepts and gather more information on establishing a climate-smart commodity. Vilsack says everyone who participates in the program enters into an agreement to be part of a network that will meet periodically and report data and information.
“I don’t know if it will be quarterly or semi-annually, but we will be issuing a report from time to time that will essentially encapsulate the information that’s reported to us through the partnership network that’s going to be established,” he says.
Vilsack says he expects some projects may get some early indications of positive news and early wins, where other projects may take a little longer to mature.
“The good news is that with the passage of the Inflation Reduction Act, there may very well already be in place resources that will allow us to continue to support projects that show significant merit,” Vilsack says of the $20 billion for conservation programs and technical assistance allocated under the IRA.
Vilsack continues with the historic amount of investment in conservation in the IRA, that USDA can learn a tremendous amount from these pilot projects and the smaller grant projects in terms of what works and what doesn’t as well as what offers a marginal impact and what kind of incentives and market opportunities exist. “We can ensure that as we invest the rather historic amount that’s available under the Inflation Reduction Act, that we do it in a way that magnifies or leverages the information and knowledge we’re going to get from these pilots,” he explains.
International leadership role
Vilsack believes the significant investment in the program will allow the United States agriculture and forest industry to take a leadership role internationally in enhancing sustainability and climate mitigation efforts.
“I don’t know another country that is going to put the kind of resources and effort behind identifying climate-smart commodities,” Vilsack says, which also includes identifying market opportunities for those commodities, being able to refine and create better methods for reporting, verifying and quantifying the results of those climate-smart practices and open up opportunities for producers to not only get a higher value proposition for what they grow, but also potentially qualify for private market ecosystem benefits.
“I think the opportunity here is for us to have just an incredible acceleration of the development of these commodities and to be able to respond more quickly to market demands, which are growing by the day,” Vilsack says.
And this action aligns with the Biden administration's goal to get net zero emissions. “It's going to allow agriculture to be front and center and trying to be a solver not a problem maker,” Vilsack says.