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 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 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 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.

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 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 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 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.