Stories / Impact

How the New Inflation Reduction Act Impacts Food

Alexina Cather

September 20, 2022


Photo: Clay Williams

On Tuesday, August 16, President Biden signed H.R. 5376, also known as the Inflation Reduction Act of 2022 (IRA), a comprehensive $750 billion climate, tax, and health care law. The largest climate bill the United States has ever passed, the IRA will invest $369 billion in clean energy, including investments in electric vehicles, renewable energy, and reducing methane emissions from fossil fuels. The bill will have numerous impacts across the food system, including creating opportunities for the restaurant industry from how our food is grown to how workers can access affordable health care (read highlights of the bill here).

How Will this Bill Effect the Agricultural/Restaurant Industry? 

Highlights of the legislation include nearly $40 billion in investments to agriculture, forestry, and rural communities to tackle the climate crisis. More than $20 billion will go to United States Department of Agriculture (USDA) conservation programs, which incentivize climate friendly practices such as planting cover crops, creating hedgerows as habitats for bees and other pollinators, and reducing tillage. The Conservation Resource Program has a current annual budget of $1.8 billion. The IRA will expand that budget to $3.5 billion annually over the next four years. 

Senators Cory Booker (D-NJ) and Raphael Warnock (D-GA) also advocated to include $2.2 billion in financial assistance to farmers who have experienced discrimination in regards to access to USDA agricultural lending programs as well as $3.1 billion in relief for farmers who are at financial risk. These investments come at a critical time, especially looking forward to the 2023 Farm Bill Reauthorization. Funds to historically disadvantaged farmers can provide new opportunities and revenue streams for these individuals, including partnerships between chefs and restaurants to support local farms and seasonal produce. 

Furthermore, this reconciliation bill includes about $60 billion in investments to support programs that will clean up pollution and create healthy, toxic-free communities, including:

  • Environmental and climate justice block grants, funded at $3 billion, to invest in community-led projects in disadvantaged communities
  • Neighborhood Access and Equity Grants, funded at $3 billion, to support neighborhood equity, safety, and affordable transportation access
  • Greenhouse Gas Reduction Fund, a clean energy and sustainability accelerator funded at $27 billion, with at least 60% of those funds focused on disadvantaged communities 
  • Reinstates the Hazardous Substance Superfund financing rate tax on oil production and import, raising over $11 billion and ensuring that Superfund cleanups will have a guaranteed stream of funding for years to come
  • Improving energy efficiency or water efficiency or climate resilience of affordable housing, funded at $1 billion

What’s Missing

While considered the most transformational climate reduction bill in history, many farmers, agriculture experts, and food system advocates argue that the IRA falls short of transforming our food system by not taking into account the significant impact agriculture has on climate change. We should both support and be excited by how transformational this bill is, while continuing to fight for the policies that were not included.

Climate experts critique the bill’s $500 million investment for increased biofuel infrastructure and market expansion citing that increased ethanol use leads to increased greenhouse gas emissions. Furthermore, penalties that the bill imposes on methane emissions for the oil and gas industries have not been extended to large animal farms, which produce equal amounts of methane. The latest report from the United Nations’ Intergovernmental Panel on Climate Change (IPCC) concluded that reducing food system greenhouse gas emissions is critical to limiting global warming to 1.5°C this century.

Perhaps the biggest omission in the legislation is lack of funding allocated for programs that reduce childhood hunger. This includes extending the USDA’s waiver authority to allow schools to offer meals to all students at no charge through the 2022-2023 school year, expanding eligibility to allow more schools to offer meals to all students at no charge, and creating a nationwide Summer EBT Program to provide resources to families over the summer when childhood hunger spikes. Rising rates of inflation and food costs mean more families are struggling to put food on the table.We will have opportunities to continue to advocate for policy priorities related to food, conservation, food waste, and more as Congress gears up for the reauthorization of the Farm Bill.

Read more about the Inflation Reduction Act here and here

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