Calling all food and ag companies: it’s time to reap the benefits of the Inflation Reduction Act for climate-smart agriculture.
On average, two-thirds of food sector companies’ emissions are generated by farm-level production. Advancing climate-smart farming practices is critical to bringing those emissions down and meeting corporate and U.S.-wide climate goals.
The Inflation Reduction Act (IRA) is a game-changer for American food and agriculture companies, and for the farmers in their supply chains. The IRA provides billions of dollars in tax credits, loans, and other financial support to hasten progress toward reaching critical climate and sustainability goals and help businesses thrive in the 21st century. However, business leaders may struggle to see the financial benefits, given the length and complexity of the law.
To address this challenge, EDF created the IRA Implementation Guide for Climate-Smart Agriculture to help companies within the sector use IRA-funded agricultural programs to support their climate goals while benefiting their business. In partnership with Deloitte, EDF helped build this guide to aid companies that work in food processing, beverages, grocery and wholesale club stores, restaurants, packaged food and agricultural and meat production.
Whether a company has been hard at work on sustainability or just getting started, the Guide will help navigate the IRA’s complexities to mitigating harmful climate effects and to strengthen supply chains.
How the IRA supports climate-smart agriculture
The IRA adds nearly $20 billion in funding to six federal programs to support on-farm sustainability over the next five years. These programs can be relevant to any food and agriculture company that has sustainability targets or programs encompassing:
- Greenhouse Gas emissions mitigation.
- Water and land conservation
- Drought and wildfire mitigation
- Renewable energy and energy efficiency
- Energy efficient agricultural production and processing equipment
- Fuel cells, solar and wind energy on-site, energy storage
- Nutrient management for crops and livestock
Many of the programs – such as the Environmental Quality Incentives Program (EQIP), Conservation Stewardship Program (CSP), and Agricultural Conservation Easement Program (ACEP), along with new funding for the Conservation Technical Assistance (CTA) program – offer direct financial and technical support to farmers in adopting conservation and climate-smart practices. While companies do not directly participate, they can benefit from supporting farmer engagement in these programs in their supply chains. This can increase climate resilience in core sourcing regions and support action toward corporate climate targets. Public sector funds can help raise the floor on typical agricultural practices used across the U.S., and support overall transitions needed from the sector.
Additionally, two of the programs amplified by the IRA are the Regional Conservation Partnership Program (RCPP) and Rural Energy for America (REAP). Food and agriculture companies can engage in these programs directly, creating opportunities for public-private investments that help reach goals faster, together. The guide goes into more detail on how to access these funds and how the IRA helps expand their reach.
What food and agriculture companies can do NOW
The IRA offers extraordinary opportunities to help the U.S. food and agriculture sector meet its climate goals. But American businesses need to act now if they want to access IRA funding to realize these emissions reductions. Some of the IRA funding programs are capped so the first movers will be the ones to benefit. Moreover, business support is critical to defend the IRA-allocated funding for conservation programs in the budget appropriations process and Farm Bill negotiations. Here are four actions companies can take now:
- Identify relevant provisions in the Inflation Reduction Act for your company and its suppliers. Check out EDF’s IRA Activation Guide for Climate-Smart Agriculture, and the IRA Snapshot for Businesses.
- Engage internal stakeholders. Connect with your finance, procurement, tax, and government relations teams to gain buy-in and build your business case for access to IRA funding.
- Act quickly. Start preparing now to be able to meet incentive caps for grant programs and capitalize on first-mover advantages.
- Advocate. Ask your members of Congress to maintain mandatory funding levels for conservation programs during the appropriations process, and to protect new funding that the Inflation Reduction Act allocated to such programs last year.
For more information on how you can benefit from – and defend – critical funding programs for climate-smart agriculture, reach out to me at kanderson@edf.org.
