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Big Ag Opens Another Vein of Public Funding

Money from the Climate-Smart Commodities program, designed to reduce
agriculture emissions, is going disproportionately to multinationals.

At the COP27 climate summit this past year in Egypt, Secretary of
Agriculture Tom Vilsack addressed his role in President Biden's plan
to cut U.S. greenhouse emissions in half by 2030.

While urging for international cooperation, Vilsack lauded the
department's "unprecedented" green investments to reduce
agriculture's substantial carbon footprint. He singled out a signature
new program initiated under his tenure: the Partnerships for
Climate-Smart Commodities.

Launched in 2022, the program was set up to provide grants and other
funding for sustainable farming practices that keep carbon in the soil,
prevent deforestation, and other measures. The price tag, just over $3
billion, was unusually high for a "pilot program," surpassing the annual
budgets of other long-standing conservation programs that, at least
theoretically, were supposed to support many of the same farming
practices.

"Our goal is to ... make sure that small and underserved producers reap
the benefits of these market opportunities," Vilsack said at COP27.

But nearly a year later, the top grants have instead been awarded to
large corporate interests, including Tyson, JBS, Cargill, and other
organizations underwritten by Big Ag. The program is under renewed
scrutiny from watchdog groups, which claim the department has provided
limited public information about the selection process for applications,
the contracts being negotiated with grant recipients, and the criteria
for what exactly constitutes "climate smart."

"We don't need USDA facilitating a pay-to-pollute carbon scheme that
only goes to benefit big operations," said Rebecca Wolf, senior policy
director at Food & Water Watch.

In the absence of transparency, outside groups have come to view the
program as a greenwashing operation to market "climate smart" products
without actually cutting emissions. They also allege that the program is
a way to use public funds to launch private carbon trading markets, a
kind of cap-and-trade system except without the cap or evidence that
offsets alone can substantially reduce emissions. It's an example of
how USDA, according to its critics, has lagged behind its fellow
agencies in meeting the climate challenge, instead falling back on
unambitious policy ideas.

VILSACK'S TESTIMONY
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AT A RECENT House Appropriations Committee hearing offered a window into
the Climate-Smart program's origins. He explained that USDA set up the
funds at the request of over 80 industry groups and lobbyists, including
the Farm Bureau.

The department then issued the funds from the Commodity Credit
Corporation, a New Deal-era entity that acts like an agency savings
account.

Since its inception, the Climate-Smart program was pitched with lofty
goals. The program's web page claims
<[link removed]> the
funds will sequester 60 million metric tons of carbon dioxide, while
helping disadvantaged farmers and creating new market opportunities.

But when watchdog groups first inquired in the fall of 2022 about how
USDA made these sequestration calculations or how they planned to meet
these metrics, they were rebuffed.

As mandated by the National Environmental Policy Act, USDA had to
conduct an environmental assessment of the program before its official
rollout in September 2022. However, no environmental groups were able to
assess the evaluation, because the department, without explanation, cut
the public comment period from 30 days to 14, narrowing the window for
when documents were available for review. Petitions to open the review
period were denied. In protest, 13 groups sent a letter expressing their
concern about how the program was being administered.

Many of these concerns were seemingly validated in the fall of 2022,
when USDA announced its first round of funding partners. The list was
dominated by agribusiness giants and other corporations, the bulk of
which are large meat and dairy processors that drive the highest carbon
emissions.

Of the $2.8 billion granted to 70 selected projects, meatpackers Tyson
Foods and Cargill, Walmart, PepsiCo, and food processing firm
Archer-Daniels-Midland were among the top recipients listed on projects,
totaling over $490 million combined, according to a review
<[link removed]>
by the Union of Concerned Scientists. Meatpacking firm JBS, seed giant
Bayer, and Target also took in major funding hauls from the first round.

On a number of these projects, the companies are not the sole grantee
but a major partner, joined by other commodity groups, research
institutes, or trade associations.

[link removed]

Not all of the grant projects are going to corporations. The second
round of funding, while far smaller at around $300 million, sent more
money to groups supporting regional and medium-sized farms, in ways that
could very well be beneficial. Many of these contracts are still being
finalized at USDA.

But in both rounds, the largest projects are lining the pockets of Big
Ag. For example, Tyson is receiving $61 million for its own project. The
Climate-Smart Commodities website
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at USDA only offers a few sentences describing how that grant will green
the company's beef products, one of the leading causes of greenhouse
gas emissions in agriculture.

Given the current consolidation in agriculture, the companies producing
the most emissions can't be left out of an emission reduction scheme,
of course. But climate groups criticize the funding selections for
giving public dollars to companies that have repeatedly violated federal
environmental laws. Tyson, for example, was listed as the second-biggest
polluter of U.S. waterways from 2010 to 2014, and recently settled
several multimillion-dollar fines in Missouri and Alabama for
discharging toxic waste from their processing facilities into nearby
water supplies.

"It would be like giving money to ExxonMobil to 'greenwash' their
operations without any strings attached," said Chloë Waterman, a senior
program manager at Friends of the Earth.

As USDA sees it, grants to large companies can be more efficient for
reducing greenhouse gas emissions. "We have to move fast on climate
change and one advantage of big companies is they can scale up more
quickly," a USDA official told the

**Prospect**.

Ag policy advocates are warning that the funds may aid companies in
promoting their products as climate-friendly merely through their
participation in the program, without actually reducing emissions.

The program's website explicitly says the funds can help companies
market products. But it only offers a few sentences describing what
specific sustainable practices are being supported by the funding. USDA
says more specific details will come later once contracts are finalized
with the recipients.

For much of the past year, public watchdog groups have tried to request
public documents from USDA to clarify the terms of the contracts. A
coalition of advocacy groups met with USDA officials, and submitted
repeated Freedom of Information Act (FOIA) requests to get insights into
the program. So far, little information has been divulged.

One FOIA request submitted by the Center for Biological Diversity tried
to pull back the curtain on USDA's prior communications with grant
recipients during the application process, and which members sat on the
selection committee. The request came back with over 60 pages, most of
which were heavily redacted, including the names on email addresses in
communication with the department.

"Getting information out of them has been like getting blood out of
stone," said Hannah Connor, the environmental health deputy director and
senior attorney at the Center for Biological Diversity.

In the absence of clearly defined terms, the department may not be able
to effectively enforce the program and hold companies accountable for
"greenwashing" their products with public funds. All the major meat
producers have started selling goods with climate-smart labeling.

ANOTHER TENSION BETWEEN USDA and its detractors involves the extent to
which data and funding from the program will be used to launch carbon
trading markets for agriculture. The way this works would be that
corporations like Microsoft can purchase offset credits from farmers who
sequester carbon in the soil. Farmers receive a payment, and companies
get to say they're helping reduce emissions, to improve ESG scores or
other green branding.

The problem is that it's nearly impossible to verify how much carbon
reduction is really taking place. The verification process may also hand
over valuable farmer data to large agribusiness or commodity traders,
which can then be used to further consolidate the industry, according to
a new report
<[link removed]>
from Friends of the Earth and the Open Markets Institute.

Many climate reformers say that USDA has long-standing ambitions to
develop carbon trading markets, instead of taking more aggressive
climate actions. A bill that passed Congress this past year called the
Growing Climate Solutions Act requires USDA to help facilitate these
markets.

USDA disputes that carbon trading was part of the intention behind the
Climate-Smart Commodities program. What's not in dispute, however, is
that a bulk of funding from Climate-Smart Commodities went to platforms
that facilitate the exchange of carbon offsets and carbon credits,
including Indigo, Nori, AgriCapture, and Terra Carbon.

There is growing evidence
<[link removed]>
these markets are not as effective as advertised. While California and
Europe have relied on cap-and-trade policies for years, they at least
incorporate restrictions on carbon emissions. So far, the effort to
replicate these markets for agriculture has lacked even that basic stick
as a counterweight for the carrots offered by USDA.

It raises the question of why taxpayer dollars should be going to set up
private markets for companies to trade on, especially when it's not
clear these markets actually deliver on their promised public benefits.

"Offsets [in this context] fits within a larger goal of creating this
illusion of a climate-smart brand that has no real meaning," said Ben
Lilliston, the director of rural strategies and climate change at the
Institute for Agriculture and Trade Policy.

~ LUKE GOLDSTEIN, WRITING FELLOW

Follow Luke Goldstein on Twitter <[link removed]>

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