Trump's Funding Freezes Bruise a Core Constituency: Farmers

New York Times

13-02-2025

Skylar Holden, a cattle rancher in Missouri, had signed a $240,000 cost-sharing contract with the Agriculture Department to add fencing and improve the watering system for his property. But after the Trump administration abruptly froze federal funding, Mr. Holden said, he was suddenly out tens of thousands of dollars and on the hook for tens of thousands more in labor and material costs, and risked losing his farm.
'Whenever my farm payment comes due, there's a good chance that I'm not going to be able to pay it,' he said in an interview.
Mr. Holden's situation underlines the potentially precarious position of farmers across the country, as a rapid-fire array of directives by the Trump administration have paused federal funding on a range of programs and grants. Even as courts have halted many of the orders, rural communities are reeling from the effects, setting off confusion and panic among one of President Trump's core constituencies.
Billions of dollars in funding are at stake. One executive order targets the Inflation Reduction Act, including money for farmers to conserve soil and water and to complete energy projects. Other directives touch on grants to states and producers. Another, which froze U.S. foreign aid spending, temporarily left hundreds of millions of dollars worth of food and supplies sitting in ports and has stopped future purchases of grains and goods.
Farmers, who voted overwhelmingly for Mr. Trump, have already had a tough stretch. In the last two years, falling prices for corn, soybeans and wheat from 2022 high levels have resulted in declines in net farm income. While that figure is projected to rise sharply this year, largely because of government farm payments, the administration's high-speed policymaking has left many farmers and some agribusinesses wary.
'Farmers don't need any more uncertainty than they already have,' said Nick Levendofsky, the executive director of the Kansas Farmers Union, which represents about 4,000 farms in the state, most of which are family-owned.
Direct payments to farmers are in peril.
Shortly after being inaugurated, Mr. Trump ordered an indefinite pause on funding provided by the Inflation Reduction Act, President Joseph R. Biden Jr.'s signature climate and domestic spending law. Though a federal judge on Monday ordered the Trump administration to unfreeze the funds, it is unclear when and whether it will follow suit.
Asked if it would release the money, the Agriculture Department did not directly respond, saying only that it had ordered 'a comprehensive review' of its contracts, work and personnel. Agency employees who spoke on the condition of anonymity for fear of retribution said that funding had not been released.
If funds remain frozen, that could affect more than 25,000 conservation contracts worth $1.8 billion funded by the climate change law, potentially involving thousands of farmers nationwide.
The contracts, typically cost-sharing arrangements reached with the Agriculture Department, are enormously popular, with demand exceeding the amount of money available. Under the contract, farmers, ranchers and landowners are reimbursed for practices that help conserve and protect soil, water and the environment. But the funding has become a prime target for the Trump administration because of its connection to Mr. Biden and its focus on climate.
'This isn't just hippie-dippy stuff,' said Aaron Pape, who raises cattle, pigs and poultry on 300 acres in Wisconsin. 'This is affecting mainstream farmers.'
Mr. Pape, who is owed $30,000 for a fencing and water management contract frozen under the directive, said he may be forced to take on additional loans to cover his costs. While he did not vote for Mr. Trump, Mr. Pape said he hoped the president understood that farmers were 'the constituency that put you in power and the actions you are taking are having serious, immediate ramifications for our livelihood.'
More than a dozen farmers and ranchers told The New York Times that the tumult had made it more difficult to plan for the year, affecting decisions on seed and equipment purchases. Many expressed worry that the administration could again pause future payments with little warning or take aim at other programs like disaster relief payments and crop insurance, resulting in untold consequences for the food supply.
The climate change law also provided about $1.7 billion to shore up an Agriculture Department program for rural energy grants. As with conservation programs, grantees receive reimbursement for projects. The halt, ordered under the directive titled 'Unleashing American Energy,' has left potentially thousands of grantees in limbo or footing the bill.
Adam Greene, who raises sheep in a remote area of Washington State, received two grants worth about $33,000 to install solar panels and a heat pump on his farm, where fuel is expensive and the supply is unreliable. To cover the upfront costs, Mr. Greene took out a loan, intending to pay it off when he received reimbursement. Those plans, and hopes of expanding his operation, are now on hold.
Like all the farmers who spoke with The Times, Mr. Greene emphasized that while he did not blame Agriculture Department employees, he was more hesitant to work with the federal government again.
'These are commitments that the federal government has made to farmers that we're depending on,' he said. 'If you want to change policy, change policy, but just don't go and blow stuff up.'
Mr. Trump has also paused payments made by the Commodity Credit Corporation, a pot of money his first administration used to pay farmers suffering financially from retaliatory tariffs and the Biden administration used to incentivize climate-friendly agricultural practices. It is unclear how much of the funding has been frozen; the Iowa Soybean Association said recently that its members were owed $11 million in reimbursement through that program alone.
Adding to the confusion, some farmers reported that grants for marketing their products or buying equipment for distribution were also halted, though those programs are not funded with Inflation Reduction Act dollars. It was not immediately clear what directives were causing the issues.
Tom Smude, who operates a seed processing business in Pierz, Minn., recently learned that his $530,000 grant, funded by the state through the American Rescue Plan, was also paused.
Mr. Smude took out a bank loan to afford a down payment for equipment that could more efficiently mill sunflower seeds, expecting the grant to cover three-quarters of the cost. But when the equipment arrives, he will have no way of paying for it.
Though Mr. Smude said he shared Mr. Trump's belief in cutting government spending, he expressed confusion about the president's priorities.
'It's what he wants, growth in industry and keep America going,' he said. 'I feel like I'm doing my part and now you're going against what you said, a little bit.'
For his part, Mr. Holden does not blame Mr. Trump, nor would he change his vote in the presidential election.
But as a first-time grantee, Mr. Holden said he regretted having promoted the conservation programs on his popular TikTok account, vowing to 'never do anything with any government agency ever again.'
The halt to international aid extends to commodity producers.
The move to effectively shut down the U.S. Agency for International Development and place the bulk of its staff on leave has left $489 million of food assistance languishing at docks, in warehouses and in transit at risk of spoilage. Last weekend, Senator Jerry Moran, Republican of Kansas, and others scrambled to find other nonprofit organizations to oversee the logistics.
But future humanitarian purchases of grains and other foods grown in the United States are unclear. U.S.A.I.D. buys about $2 billion from farmers a year, and 41 percent of its food assistance shipped abroad is grown domestically, according to a 2021 report. The agency estimated that it purchased 1.1 million metric tons of food from farmers and ranchers in 2023. Some 430 large-scale farmers growing crops in nearly every state fulfilled direct orders from the agency, data compiled by a U.S.A.I.D. employee and shared with The Times shows.
The agency bought 161,000 metric tons of American-grown rice for $126 million last year, according to Michael Klein, a spokesman for USA Rice.
Likewise, the Agriculture Department's Food for Progress program had purchased as much as one million metric tons of wheat in recent years to distribute to those in need overseas, according to U.S. Wheat Associates, a lobbyist organization for the wheat industry.
While that is only a sliver of the annual U.S. wheat production, the program has the additional benefit of promoting American wheat in foreign markets, said Steven Mercer, a spokesman for U.S. Wheat Associates.
Ending millions of dollars in grants by U.S.A.I.D. also resulted in the potential closing of research programs at universities across the country. The University of Nebraska, for instance, had a five-year, $19 million grant to develop irrigation techniques in developing nations. Funding for that and other grants has been either terminated or sharply reduced, putting the research in jeopardy.
'We are very, very large beneficiaries of government contracts,' said Dr. Jeffrey Gold, the president of the University of Nebraska, saying that the consequences of such pauses in funding were more far-ranging than many would believe. Elected officials, he added, should 'understand that public land-grant institutions like us are being directly and significantly impacted by these changes.'
Some of the ramifications have been averted, for now. In moving to shut U.S.A.I.D., the Trump administration also issued, and then rescinded, stop-work orders to some American manufacturers of food sent abroad.
One nonprofit in Georgia, Mana, produces ready-to-use therapeutic food to address childhood malnutrition. It buys about two million pounds of peanuts monthly from American farmers, its said its chief executive, Mark Moore.
About $12 million worth of Mana's products — 300,000 boxes, each containing 150 sachets of food to treat severe malnutrition for six weeks — is waiting to leave the Port of Savannah. Mr. Moore did not expect this particular shipment to be delayed, but he was also uncertain whether U.S.A.I.D. would foot the bill or if it would deliver future shipments.
'The real impact of the shutdown will happen a month from now, six weeks from now, when the supply chain begins to crumble, which by that time, will it still be a story?' he asked.