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Climate Smart Ag Priorities Advance in House

December 6, 2021

NMPF’s year-long advocacy for robust new conservation funding yielded another step forward as the House of Representatives passed its budget reconciliation measure on Nov. 19. The bill, now known as the Build Back Better Act, includes a once-in-a-generation, NMPF-backed $27 billion funding boost for conservation programs, with an emphasis on climate smart agricultural practices. This substantial funding will provide producers with technical assistance for sustainability and stewardship practices, which will be critical to realizing the dairy industry’s 2050 sustainability goals, as embodied in the Net Zero Initiative.

The House’s action is no small feat. Democratic leadership negotiated for months to find a compromise that would satisfy the various factions of their caucus while also fulfilling budget reconciliation requirements that allow the measure to pass the Senate with a simple majority. NMPF has worked throughout this process to further the interests crucial to dairy farmers and their cooperatives, both advocating for key provisions and urging against harmful efforts that would undermine dairy’s stewardship goals.

NMPF praised the new climate-smart ag investments in the bill as the measure moved closer to full House consideration. “Dairy farmers have long been proactive land and water stewards because they seize opportunities for innovation,” said NMPF President and CEO Jim Mulhern. “These investments will better position dairy farmers to proactively implement the dairy sector’s Net Zero Initiative and fulfill its 2050 environmental stewardship goals.” Mulhern also thanked Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI) for her leadership in spearheading the climate smart ag provisions.

Highlights among the bill’s investments:

  • $9 billion in new funds for the Environmental Quality Incentives Program, which provides important technical assistance to dairy farmers, targeted toward stewardship practices that can reduce greenhouse gas emissions;
  • $25 million annually for Conservation Innovation Trials, with the new funding targeted toward initiatives that use feed and diet management to reduce enteric methane emissions, which can comprise roughly one-third of a dairy farm’s greenhouse gas footprint. NMPF is excited for this opportunity to amplify its focus on innovative feed additives and rations that reduce enteric emissions;
  • A new cover crop initiative to pay producers $25 per acre of established cover crop practices to reduce nutrient runoff and soil erosion; and
  • $7.5 billion in new funds for the Regional Conservation Partnership Program, which funds locally developed, targeted partnership projects, with emphasis on initiatives that incentivize or target reduced methane emissions.

NMPF has also worked successfully to exclude from the measure proposed changes to the tax code which would have changed how and when capital gains on inherited assets are taxed, including inherited farms and other farm assets. NMPF has actively worked to prevent these changes – commonly referred to as modifying “stepped-up basis” – since they were initially floated earlier this year to pay for the spending initiatives in the larger package.

Thanks to significant NMPF-led advocacy, the tax-writing House Ways and Means Committee did not include these changes in its original portion of the measure, and the full House upheld the committee’s decision. “We are grateful that Congress is likely to heed our call and put aside problematic tax proposals that if enacted would have harmed the future of family farming,” Mulhern said.

The Senate is expected to take up the budget reconciliation package after Thanksgiving. The Senate will likely change the measure in some respects, which will require the House to vote on the revised version. NMPF does not anticipate modifications to the climate smart ag provisions or an attempt to insert the problematic capital gains taxes changes and will work closely with congressional offices to ensure that these dairy priorities make it across the finish line.