INSIGHTi

Inflation Reduction Act: Agricultural
Conservation, Forestry, and Renewable
Energy
August 3, 2022
Overview
On July 27, 2022, Senate Democrats posted the Inflation Reduction Act of 2022, a bill that is the Senate
majority’s version of the House-passed Build Back Better Act (BBBA, H.R. 5376, text in H.Prt. 117-18).
Like the BBBA, the Senate majority’s bill is a budget reconciliation measure, which allows for an
increase in spending pursuant to instruction in the FY2022 budget resolution (S.Con.Res. 14).
Programs in the jurisdiction of the House and Senate Agriculture committees are included in each bill
(Title I in the BBBA and Title II in the Inflation Reduction Act). For agriculture, the Senate majority’s bill
is narrower than the House bill. The House passed the BBBA in November 2021. The BBBA would have
increased agriculture spending by $82 billion over the 10-year period FY2022-FY2031. The Senate
majority’s bill includes a subset of nearly $40 billion for agricultural conservation, forestry, and
renewable energy (the latter organized as rural development). Funding for Title II in the Senate majority’s
bill would remain available through FY2031. The Senate majority’s bill excludes entirely sections that
were in the House bill for agriculture research (-$2 billion), agriculture credit (-$7 billion), and rural water
and rural development partnerships (-$2 billion). Compared with the BBBA, the Senate majority’s bill
would provide less for agricultural conservation (-$7 billion), forestry (-$22 billion), and renewable
energy (-$3 billion).
Conservation
The Inflation Reduction Act would provide $21.3 billion for agricultural conservation in Subtitle B of
Title II. It would add nearly $20 billion in additional funding for existing farm bill conservation programs,
including the Environmental Quality Incentives Program (EQIP; $8.45 billion), Regional Conservation
Partnership Program (RCPP; $6.75 billion), Conservation Stewardship Program (CSP; $3.25 billion), and
Agricultural Conservation Easement Program (ACEP; $1.40 billion). These programs provide financial
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and technical assistance to private landowners to voluntarily implement conservation practices on
agricultural land. Program funds would be directed to climate change-related goals and would prioritize
mitigation activities. The Senate majority’s bill would also extend some of these programs’ authorities
beyond their current expiration in FY2023, to FY2031. Some program authorities would not be extended,
such as payment and income limits. Additional funding would also be provided for conservation technical
assistance ($1.0 billion), a carbon sequestration and greenhouse gas emissions quantification program
($300 million), and administrative expenses ($100 million).
The Senate majority’s bill would fund some, but not all, conservation programs and initiatives that were
included in the BBBA. Those included in the Senate majority’s bill are funded at lower amounts than the
BBBA, with the exception of funding for conservation technical assistance, which would be $800 million
higher under the Senate majority’s bill than under the House-passed bill. The Senate majority’s bill
excludes the BBBA’s new $5 billion soil conservation program to incentivize cover crop planting. All
farm bill conservation programs (i.e., EQIP, CSP, ACEP, and RCPP) included under the BBBA are
included in the Senate majority’s bill but would be funded at $2.45 billion less in total.
Renewable Energy
The Inflation Reduction Act would support renewable energy initiatives for rural development in Subtitle
C of Title II, primarily by providing $13.3 billion for farm bill energy title programs; in comparison, the
BBBA would provide over $15 billion. The Inflation Reduction Act would provide $1 billion for electric
loans for renewable energy under the Rural Electrification Act. The U.S. Department of Agriculture may
use the funding to make loans for electric generation from renewable energy resources, including for
projects that store electricity. The bill would provide appropriations of approximately $1.7 billion for
eligible projects under the Rural Energy for America Program (REAP; 7 U.S.C. §8107) and
approximately $304 million for grants and loans for underutilized renewable energy technologies and for
technical assistance with REAP applications. The bill would amend 7 U.S.C. §8103 to provide $500
million for grants to increase the sale and use of agricultural commodity-based fuels through
infrastructure improvements for blending, storing, supplying, or distributing biofuels (e.g., upgrading fuel
pumps, building home heating oil distribution centers). For rural cooperatives, the bill would provide $9.7
billion—for financial assistance (e.g., loans) to eligible entities for the long-term resiliency, reliability,
and affordability of rural electric systems; for reducing the reliance on nonrenewable energy resources in
rural areas; for zero-emission systems; or for carbon capture and storage systems. The bill would provide
$100 million to cover administrative costs.
Sections in other titles of the Senate majority’s bill pertain to rural and renewable energy, specifically
biofuels. For example, the bill would provide $5 million to the U.S. Environmental Protection Agency to
carry out the Renewable Fuel Standard program, in part, for data collection and analysis for lifecycle
greenhouse gas emissions of a fuel and would provide $10 million for new grants to support investment in
advanced biofuels. The bill would establish a sustainable aviation fuel tax credit that would eventually be
absorbed into a clean fuel production tax credit established in the bill. Lastly, the bill would extend certain
tax incentives for biofuels, including for biodiesel and renewable diesel.
Forestry
The Inflation Reduction Act would provide $5.0 billion in Subtitle D of Title II for forest management,
planning, and restoration activities for federal and nonfederal forests. In comparison, the BBBA would
provide $27.2 billion in funding for a wider array of forestry activities, including funding for forestry
research.

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The funding in the Inflation Reduction Act would include $2.15 billion for management of the National
Forest System (NFS, administered by the U.S. Forest Service), including funding for hazardous fuel
reduction or vegetation management projects on NFS lands, for inventorying and protecting old-growth
and mature forests on NFS lands, and for improving environmental reviews. Subtitle D would also
include $2.75 billion to support grants and other financial assistance for nonfederal forest management,
including funding for urban and community forestry programs. The grant programs would support climate
mitigation activities on nonfederal forests, facilitate participation in forest carbon markets, and support
the development and application of innovative wood products. Several of the grant programs would be
specifically targeted to support the participation of “underserved forest landowners.” In addition, the
funding in Subtitle D would include $100 million for administrative expenses.

Author Information

Jim Monke
Kelsi Bracmort
Specialist in Agricultural Policy
Specialist in Natural Resources and Energy Policy


Megan Stubbs
Katie Hoover
Specialist in Agricultural Conservation and Natural
Specialist in Natural Resources Policy
Resources Policy





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