The Inflation Reduction Act has been passed by both the Senate and House. The $740 billion bill contains several components that are favorable for agriculture. It includes around $38 billion for agriculture, with $19.5 billion for conservation, a good step moving into the new farm bill.
Mary Kay Thatcher, Syngenta Senior Lead, Federal Government Relations says, “There’s $40 billion in funding for agriculture which would be great as we go into the next farm bill to hopefully have that. It’s not an automatic we’d have to do the budget committees next year and see if they will continue it and see if can be moved any of it from just the conservation programs, but it would be really helpful.”
Biofuels scored $13.3 billion for farm bill energy title programs such as $3 billion for renewable energy projects in rural areas. Plus, extension of the $1 per gallon tax credit for blending biomass-based diesel….so both biodiesel and renewable diesel.
Grant Kimberley, Iowa Biodiesel Board Executive Director says, “So it will go out another two years and then from that point forward through 2027 it becomes what they call a tech neutral producer credit. And so there is some different accounting methods that are used depending on the greenhouse gas methodology different feedstocks would have various tax credit capabilities at that point.”
In addition, it establishes a Sustainable Aviation Fuel tax credit. “At $1.25 per gallon and then it can go up to $1.75 depending on the feedstocks that are utilized and certainly that market is growing there’s over 25-billion gallon potential market here in the U.S. alone, 100-billion worldwide.
The ethanol industry was also pleased with key infrastructure support. Monte Shaw, Iowa Renewable Fuels Association Executive Director, says, “It also provides $500 million for higher blend infrastructure for retailers which is very important on the ethanol side. You know we can sell higher blends of fuels like E15 or E85 but sometimes the retailers need to upgrade their equipment to do that so that’s a big part of the bill as well.”
Other key provisions include: $5.3 billion in farm debt relief, including $3 billion for underserved farmers.
Reaction to the legislation has been mixed among farm groups and ag leaders.
USDA Secretary Tom Vilsack praised the bill saying it will support farmers and ranchers caring for the land, help mitigate climate change through a clean energy economy and ensure food security and economic opportunity for rural communities. ‘
House Ag Committee Ranging Member GT Thompson criticized the legislation as fiscally irresponsible, saying it ignores problems like inflation, labor shortages and overregulation. Plus, increases uncertainty and complicates the pathway to a Farm Bill.
