USDA to invest $1B in establishing climate smart commodities

New pilot projects to help identify ways to help producers accelerate adoption of climate smart ag practices.

Jacqui Fatka, Policy editor

February 7, 2022

5 Min Read
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NEW REVENUE FOR FARMERS: Secretary of Agriculture Tom Vilsack wants pilot projects to help determine the parameters and effectiveness of climate smart commodities in creating new revenue streams for farmers' action on addressing the climate.

What is a climate-smart commodity? How can farmers benefit? Can this help advance climate goals? These are questions seeking science-based answers within a new Partnership for Climate-Smart Commodities unveiled by Secretary of Agriculture Tom Vilsack while speaking at Lincoln University in Missouri on Monday, Feb. 7.

Vilsack says the efforts will be voluntary and incentive-based and create a strategy to deal with the “amazing challenge” created by the changing climate as well as an “extraordinary opportunity” to create new revenue streams for producers where only 89.6% of farms today generate enough income solely from their farming operation to be profitable.

By authorizing $1 billion in funds from the Commodity Credit Corporation, Vilsack says the partnership will provide grants to partners to implement pilot projects that will help incentivize farmers to adopt climate-smart production practices, activities, and systems on working lands; measure/quantify, monitor and verify the carbon and greenhouse gas benefits associated with those practices; and develop markets and promote the resulting climate-smart commodities.

Vilsack says the efforts will be part of a new pillar in addition to USDA’s conservation program funding in USDA’s overall strategy to address climate to meet President Biden’s goal of reducing agriculture’s greenhouse gas emissions by half by 2030 and become net zero by 2050 as well as meeting new market demand already present for sustainably produced products and increasing farmer revenue streams.

For the last year, Vilsack says he and those at USDA have been working with stakeholders including farmers and ranchers as well as solicited comments on how to “accelerate the adoption of practices that we know work,” he says.

Vilsack says USDA took the advice from the more than 80 member organizations of the Food and Agriculture Climate Alliance which urged USDA to utilize large-scale pilot projects to increase the wholesale adoption of conservation practices that also offer climate and water quality benefits. In order to measure and verify the impact of those practices not just on individual farms, but on large-scale effort or entire landscape or watershed approach.  

FACA says it “shares Vilsack’s optimism that this approach will support climate-smart commodities while unlocking new market opportunities, and we believe it will build confidence in the climate benefits of advanced farming and forestry practices.” 

With the information, Vilsack says USDA wants to determine how to establish a climate-smart commodity standard and begin to meet marketing demand that offers a higher value product and more income for producers.

USDA is not launching its own carbon market, but instead focused on commodity production and all types of commodities ranging from traditional commodities to livestock to specialty crops to build on the market-based approaches already starting to occur in the private market.

Funding focuses on ag’s diversity

Funding will be provided in two funding pools, and applicants must submit their applications via The first funding pool for proposals from $5 million to $100 million will need to apply by April 8, 2022. The second funding pool with proposals from $250,000 to $4,999,999 will have until May 27, 2022 to apply.

Proposals must provide plans to pilot implementation of climate-smart agriculture and/or forestry practices on a large-scale, including meaningful involvement of small and/or historically underserved producers; quantify, monitor, report and verify climate results; and develop markets and promote climate-smart commodities generated as a result of project activities.

“Our goal is to fund a portfolio of projects” Vilsack says with a wide range from cropland, specialty crops, livestock, forestry and rangelands, large and small. “It has to be available to all producers of all sizes, all methods, all types of production,” he adds.

It also will include early adopters who were out front and led efforts to establish conservation practices on their own operations.

Potential pilot projects could be a group of small farmers working with a non-profit to implement the selling of climate smart commodities. Or a network of commodity organizations recruiting a specific specialty crop to quantify reduce emissions and then marketing those products. Or working with universities to test and monitor actions taken on the farm.

“FACA members look forward to contributing to proposals that meet the requirements of the CSAF to demonstrate the impact of voluntary, incentive-based programs,” FACA says.

National Milk Producers Federation President and CEO Jim Mulhern welcomed USDA’s leadership on the climate smart pilot projects. “This new initiative will support voluntary, producer-led efforts to increase on-farm adoption of climate smart agricultural technologies and practices. Such efforts are essential to help U.S. dairy farmers fulfill their environmental stewardship goals to become greenhouse gas neutral or better by 2050 and improve water quality while optimizing water use,” Mulhern says.

Congress mixed on USDA’s initiative

Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., also welcomed the pilot projects in helping offer insight on how to design future government support.

“This is about partnering with farmers to tackle the climate crisis,” says Stabenow. “It’s critical that we make sure that climate-friendly practices are profitable and practical for farmers – no matter what crop they produce, what region they’re in, or the size of their operation. The urgency of the climate crisis demands action, and I look forward to reviewing the feedback and data from these pilot projects, which will help inform the writing of the next farm bill.”

House Agriculture Committee Chairman David Scott says it will help create new and enhanced markets and let farms market and producers market their commodities in a climate-smart way. "The Commodity Credit Corporation gives Secretary Vilsack broad authorities, and I’m glad to see he is using those authorities to provide opportunities that are good, not only for the environment, but for producers' bottom lines,” says Scott. 

Sen. Roger Marshall, R-Kan., and member of the Senate Agriculture Committee, wrote a letter to Vilsack following the announcement questioning the legal concerns of whether USDA has the authority to use CCC funds to create the “Climate-Smart Agriculture and Forestry Partnership Initiative.”

“While I am a staunch supporter of conservation and believe farmers are the original conservationists,” Marshall writes. “Now it seems USDA is crafting its own farm bill by using the CCC to create its own programs and priorities that haven’t been established by Congress and to fund projects only USDA deems worthy.”

About the Author(s)

Jacqui Fatka

Policy editor, Farm Futures

Jacqui Fatka grew up on a diversified livestock and grain farm in southwest Iowa and graduated from Iowa State University with a bachelor’s degree in journalism and mass communications, with a minor in agriculture education, in 2003. She’s been writing for agricultural audiences ever since. In college, she interned with Wallaces Farmer and cultivated her love of ag policy during an internship with the Iowa Pork Producers Association, working in Sen. Chuck Grassley’s Capitol Hill press office. In 2003, she started full time for Farm Progress companies’ state and regional publications as the e-content editor, and became Farm Futures’ policy editor in 2004. A few years later, she began covering grain and biofuels markets for the weekly newspaper Feedstuffs. As the current policy editor for Farm Progress, she covers the ongoing developments in ag policy, trade, regulations and court rulings. Fatka also serves as the interim executive secretary-treasurer for the North American Agricultural Journalists. She lives on a small acreage in central Ohio with her husband and three children.

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