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NMPF Pursues Priorities, Poised for Climate Win in Budget Legislation

November 3, 2021

NMPF is inching its way toward a significant win in supporting dairy’s sustainability goals, with “climate-smart” agriculture support making its way into a budget reconciliation package taking shape on Capitol Hill.

A $27 billion package spearheaded by Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI) will help dairy farmers advance their sustainability leadership by bolstering farm bill conservation programs in meaningful ways for dairy. Substantial new investments will provide important voluntary technical assistance to dairy farmers who undertake a variety of stewardship practices. The legislation also includes targeted new funding that emphasizes critical farm practices that yield significant environmental benefits for dairy, notably in feed management.

“Dairy farmers have long been proactive land and water stewards because they seize opportunities for innovation,” said Jim Mulhern, president and CEO of NMPF. “We are deeply grateful to Chairwoman Stabenow for her tireless leadership to secure game-changing conservation investments, with a focus on climate-smart practices. These investments will better position dairy farmers to proactively implement the dairy sector’s Net Zero Initiative and fulfill its 2050 environmental stewardship goals.”

Dairy farmers in 2020 committed in their Net Zero Initiative to become greenhouse gas neutral or better by 2050 and maximize water quality around the country.

Congress and the White House are continuing to work to find a compromise on the larger spending bill as November begins.

The overall spending package, long pegged at $3.5 trillion, is likely to be much smaller as Democrats attempt to fund a wide range of spending priorities while simultaneously addressing policy and spending concerns of moderates. NMPF has been actively advocating on behalf of dairy producers and their cooperatives throughout the process to ensure dairy’s interests are represented and protected.

Key wins for dairy among the climate-smart ag provisions of the Build Back Better Act include:

• $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.

Beyond climate-smart agriculture, as negotiations continue between the White House and Congress, NMPF is pleased to see its priority issues persist in these discussions, including:

• Investment Tax Credit – NMPF is working to incorporate into the reconciliation package the bipartisan Agriculture Environmental Stewardship Act (H.R. 3939, S. 2461). The bill, which NMPF helped develop, would create a 30 percent Investment Tax Credit for methane digesters and nutrient recovery systems. The legislation gained momentum this spring when it was incorporated into the Senate Finance Committee’s larger energy tax marker bill. Now that the Senate has shifted focus to reconciliation, that larger package may serve as the basis for the Senate’s starting position in discussions on the energy tax title of the reconciliation bill. Additionally, the House Ways and Means Committee has advanced key components of the measure in its own tax portion of the reconciliation package.
• Capital Gains Taxes on Inherited Assets – NMPF and others in agriculture succeeded thus far to protect two current provisions regarding taxing capital gains on inherited assets. An early proposal for how to pay for various programs and projects in the reconciliation measure included changing when capital gains on inherited assets would be taxed as well as altering the basis for evaluating the amount to be taxed (a.k.a. the “stepped-up basis). NMPF and other farm groups have worked to prevent both proposed changes from becoming law, with the House Ways and Means Committee excluding these changes in its contribution to the reconciliation package.

NMPF is hopeful its priority issues will be in the final legislation, although circumstances can change rapidly, especially as last-minute negotiations occur. We will continue elevating the importance of these issues to members of Congress and their staffs as the process moves forward.