Pressure Builds on USDA to Release Rural Energy Grants

Agriculture (USDA)Federal Agency/Executive Branch Funding/Financing/Investing grants Opinions Policy White House

February 26, 2025

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by Marc Heller (Politico Pro E&E News: The Agriculture Department said it will make an announcement on rural energy funding "soon," after Democrats likened the holdup to stealing. -- A dustup over small rural energy projects is adding to the argument that the President Donald Trump's spending freeze is hitting his own allies.

Congressional Democrats complained in recent days that the Agriculture Department owes farmers and small businesses — the anchors of red-state rural America — hundreds of millions of dollars in unpaid grants through the Rural Energy for America Program, which pays for energy efficiency projects such as solar panels, wind turbines and biogas systems.

While there’s some sign the logjam is about to break — the Agriculture Department said Tuesday that it will soon announce an update on REAP grants — the skirmish has given Democrats additional ammunition for their attacks on the administration’s sweeping approach to spending cuts.

“The administration’s move to freeze REAP funds has caused chaos that will harm Americans across the country,” said House Appropriations ranking member Rosa DeLauro of Connecticut and Agriculture Appropriations ranking member Sanford Bishop of Georgia in a letter last week to Agriculture Secretary Brooke Rollins. READ MORE

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Farmers and Community Groups Sue Trump and the USDA, Seeking Funds They Were Promised -- The funds, allocated for tree-planting, solar panels and farming assistance, were frozen by the administration on Trump’s first day in office. (Inside Climate News)
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USDA to release previously obligated REAP funds, directs recipients to revise applications (Ethanol Producer Magazine)

Excerpt from AgFunderNews: New agriculture secretary Brooke Rollins says USDA is releasing payments from three conservation programs that were temporarily frozen in the early days of Trump’s presidency, but says others remain “under review” as the new administration reassesses priorities.

Speaking on Sunday (March 9, 2025) evening at the Commodity Classic, the annual meeting of grain and oilseed growers and equipment manufacturers in Denver, Rollins said funding through the Environmental Quality Incentives Program, Conservation Security Program, and Agricultural Conservation Easement Program would be released.

But she did not reference funding made available through the Inflation Reduction Act or the Commodity Credit Corporation, under which scores of companies had secured the promise of funds to support everything from regenerative agriculture to agroforestry projects via the Climate Smart Commodities scheme.

“We’re still reviewing other programs to make sure that they are focused on making American agriculture the most competitive in the world,” said Rollins. “Gone are the days when the USDA will be advancing the Green New Deal [a plan proposed by Democratic lawmakers to decarbonize the US economy].”

Meanwhile, the $30 billion economic and disaster aid package approved by Congress in December will be called the Emergency Commodity Assistance Program, said Rollins, who said USDA will beat the 90-day deadline for distribution of the first $10 billion in economic assistance, with payments to start flowing in the coming weeks. USDA is also working on rapid implementation of $20 billion in disaster assistance due to volatile weather, she added.

Charting ‘a new course for American agriculture’

Noting that the state of the ag economy is “perhaps the worst it’s been in 100 years,” with crop prices going down and farm input costs going up, Rollins promised to “chart a new course for American agriculture.”

As part of this, USDA officials will go “line by line through the budget to root out wasteful programs, especially ones that focused on diversity, equity and inclusion and far left climate agendas,” she added.

USDA has also “cut millions in media subscriptions such as to Politico and others that don’t necessarily align with our values,” added Rollins.

“My commitment to you is that we get a farm bill done by the end of this year.”

President ‘will not forget our farmers’

While Rollins has previously indicated that USDA might provide financial aid to US farmers damaged by a trade war, she did not mention Trump’s proposed 25% tariffs on goods coming from Canada and Mexico, saying only that the President “will not forget our farmers when he’s negotiating with foreign leaders.

...

As for deregulation, she said, “We’re going to carefully review every regulation instituted over the last four years and remove all those that stifle your production.

“Rest assured that this administration will never rest until we get government off the back of all of our great innovators and entrepreneurs… Under the Biden administration, American ranchers and farmers face many harmful regulations, particularly from the EPA, which has severely limited access to critical crop protection tools that help increase yields, use fewer inputs, and implement conservation practices.

“I’ll be working with my good friend and one time policy partner, Lee Zeldin at the EPA to unleash prosperity in rural America through a massive deregulation project.” READ MORE

Excerpt from Inside Climate News: Now (Beth) Resnick, five other farmers and three nonprofit community organizations are suing President Donald Trump and the USDA to get their money.

Butterbee Farm is among thousands of recipients of funding from the Rural Energy for America Program (REAP), which was established in 2008 and has since distributed tens of millions of dollars to help farmers install renewable energy systems or energy efficiency projects. The program is funded through the Farm Bill, which directs $50 million a year toward these projects. But in 2022, with the passage of the Biden administration’s signature climate law, the Inflation Reduction Act (IRA), the program got a major boost of an additional $820 million through 2031.

On Trump’s first day in office, he signed an executive order that immediately froze IRA funds, including those promised to Resnick and her co-plaintiffs, while the administration conducts an ongoing review.

On Thursday, the legal advocacy organization Earthjustice filed a lawsuit in the U.S. District Court for the District of Columbia on behalf of Butterbee Farm and its co-plaintiffs, seeking a court order to force the administration to release the funds.

“This administration is unlawfully withholding these funds in violation of the Constitution and the Administrative Procedures Act,” said Hana Vizcarra, an Earthjustice senior attorney. “By refusing to disperse the funds that Congress allocated to specific grant programs, they’re violating the separation of power and the Take Care Clause. These are arbitrary and capricious actions taken without a reasoned explanation.

“Small businesses and community groups trusted the government to uphold its end of the agreements,” Vizcarra added, “and we’re not seeing that happen now.”

Thursday’s lawsuit is not the first legal attempt to restore IRA funding. In January, a coalition of 23 states and the District of Columbia sued Trump and a dozen government agencies and offices, seeking to unfreeze promised dollars. Earlier this month, a federal judge ruled that the executive branch didn’t have the power to stop funding approved by Congress and issued a preliminary injunction blocking the agencies from freezing the funds.

The USDA was not among the agencies named in that lawsuit.

Thursday’s lawsuit extends beyond REAP to other USDA programs, including the National Resources Conservation Services’ Technical Assistance Program and the U.S. Forest Service’s Urban and Community Forestry Program.

“Small businesses and community groups trusted the government to uphold its end of the agreements, and we’re not seeing that happen now.”
— Hana Vizcarra, Earthjustice

One of the co-plaintiffs, an environmental group called Faith in Place, was awarded $1.9 million through the forestry program to help support 50 faith-based and community organizations in the upper Midwest plant trees to lower extreme urban heat.

“We spent months carefully planning our tree canopy and workforce community grant to ensure that critical funding reached the right places,” said Rev. Brian Sauder, the group’s president. “We hired staff, we built infrastructure and we followed every federal requirement, fully expecting the government to uphold its commitment, just as we did ours. Instead, this administration is turning its back on our most vulnerable communities and putting the very organizations that make federal programs work in jeopardy.”

The USDA did not immediately return a request for comment Thursday.

Mike Lavender, policy director of the National Sustainable Agriculture Coalition, noted that the REAP program has been especially popular with farmers, regardless of political affiliation.

“There’s a difference between a new administration coming in and having different policy priorities—that’s how democracy should work,” Lavender said. “But here there are signed legal contracts that are not being honored. A farmer is spending $30,000 out of pocket and they’re being told it’s under review. This is a fundamental question about contract law.” READ MORE

Excerpt from Successful Farming: Agriculture Secretary Brooke Rollins used National Ag Day on Tuesday to announce the release of $10 billion in economic assistance payments for growers of corn, soybeans, wheat, cotton, rice and other field crops.

The payments were authorized by Congress in a year-end spending bill in December. The aid is intended to compensate growers for a downturn in commodity markets in 2024.

Producers will have from Wednesday until Aug. 15 to apply for the Emergency Commodity Assistance Program. Producers will initially receive 85% of the payment they are eligible for to ensure there is enough money to go around, USDA officials told reporters Tuesday. Farmers could receive a second payment sometime after Aug. 15.

The Farm Service Agency will provide pre-filled applications to farmers who filed 2024 acreage reports for eligible commodities. READ MORE

Excerpt from Ethanol Producer Magazine: The USDA on March 25 announced it will release previously obligated funding under the Rural Energy for America Program (REAP), Empowering Rural America (New ERA) and Powering Affordable Clean Energy (PACE) programs. To receive the funds, however, applicants will be required to remove “harmful DEIA and “far-left climate features” from project proposals.

According to the USDA, funding recipients will have 30 days to review and voluntarily revise their project plans to align with President Trump’s Unleashing American Energy Executive Order issued on Jan. 20, 2025. The agency said the the revision process will give applicants “the opportunity to refocus their projects on expanding American energy production while eliminating Biden-era [diversity, equity, inclusion and accessibility (DEIA)] and climate mandates embedded in previous proposals.” USDA Rural Development will individually inform awardees about the revision requirement. Respondents will also be asked to answer several questions and provide a short narrative description of any proposed changes.

The USDA said the “updated guidance reflects a broader shift away from the Green New Deal and the so-called Inflation Reduction Act (IRA) and toward practical energy investments that prioritize the needs of rural communities.”

The Unleashing American Energy Executive Order directed all federal agencies terminate the “Green New Deal” by immediately pausing the disbursement of funds appropriated through the Inflation Reduction Act of 2022 and review whether those disbursements are in line policy guidelines outlined by the Trump administration. Within 90 days, the heads of each federal agency were to submit a report to the National Economic Council and the White House Office of Management and Budget detailing the findings of their reviews. The impacted IRA funds would be eligible for disbursement only after the OMB director and assistant to the president for economic policy determined that such disbursements are consistent with the administration’s goals.

The REAP program was first established by Congress in the 2008 Farm Bill. The program provides grants and loan guarantees to agricultural producers and rural small businesses to support energy efficiency improvements and renewable energy systems. REAP funds are routinely awarded to support the development of biogas systems and to support improvement projects at ethanol and biodiesel plants.

The PACE and New Era programs support the development of rural energy infrastructure projects, including those that are fueled with biomass.

The USDA in February released approximately $20 million in IRA funding that was awarded through the Environmental Quality Incentive Program, the Conservation Stewardship Program, and the Agricultural Conservation Easement Program.

Funding for other USDA programs allocated through the IRA remains on hold, including funding for various climate-smart agriculture programs. READ MORE