Analysis—RCPP and the Inflation Reduction Act
Through the Regional Conservation Partnership Program (RCPP), USDA’s Natural Resources Conservation Service (NRCS) co-invests in geographically-focused conservation projects to address targeted natural resource concerns. The 2018 Farm Bill authorized $300 million annually for RCPP which, once sequestration and USDA and NRCS overhead is taken off the top, usually amounts to between $250-$265 million made available for RCPP projects annually.
The Inflation Reduction Act (IRA), passed by Congress and signed into law by President Biden in August 2022, appropriated a new windfall of funding for RCPP—$4.95 billion between fiscal years 2023 and 2026, in addition to Farm Bill funding.
Below is the schedule of funding for RCPP for fiscal years 2023 and 2026:
A few notes about RCPP’s IRA funding:
The IRA statute stipulates that all RCPP funding provided through the bill must be expended, not just obligated, by September 30, 2031. This means, for example, that all payments to producers for land management activities must be made, and all easements must be closed, by September 30, 2031. As the funding appropriation is structured, the largest amount of funding is provided in the year closest to that 2031 deadline, providing the agency with the most amount of money to spend in the fewest number of years.
The IRA reauthorized RCPP through 2031 and appropriated all the RCPP funding. The practical implication of the reauthorization and appropriation is if Congress were to either extend the 2018 Farm Bill beyond September 30, 2023 or take no action and let the current Farm Bill expire, the agency would still have access to $1.1 billion in RCPP appropriated funds on October 1, 2023.
The IRA statute does not require NRCS to expend the RCPP funding conservation activities that sequester carbon and reduce greenhouse gas emissions. NRCS must prioritize proposals that do those things, but the agency is not put into a box where, for example, in 2026 it does not receive $2.4 billion worth of proposals that address greenhouse gas mitigation. In such an event, NRCS could spend IRA funding on other resource concerns. This is a critical flexibility for NRCS as it stares down huge RCPP funding figures in fiscal years 2024-2026. It’s also crucial for the conservation easement community as it is challenging to find easements that square with the IRA’s greenhouse gas mitigation language.
EQIP, CSP and ACEP are implemented by NRCS using its employees and conservation planning software and contracting systems. The agency must find a way to hire more staff and work with partners to help it spend the additional funds provided for those programs by the IRA. RCPP is the agency’s only relief valve—NRCS can use RCPP Alternative Funding Arrangements (AFA) provision to provide funding to partners to implement conservation similar to how NRCS does it. Importantly, the IRA lifted the 2018 Farm Bill’s cap on the agency making no more than 15 AFA awards annually. Should the IRA funding be delivered as scheduled in the bill, NRCS increasingly will need to rely on partners to implement RCPP as it focuses on EQIP, CSP and ACEP.
The first year of RCPP IRA funding--$250 million—has already been made available by NRCS as part of the 2023 funding announcement. The future of the remaining IRA funding remains in doubt. As part of the recent debt ceiling discussions, Congressional Republicans made clear their desire to claw back and repurpose the IRA funding appropriated to NRCS Farm Bill programs. While the IRA funding survived intact, it is likely House Republicans will make similar attempts during the upcoming fiscal year 2024 appropriations and Farm Bill reauthorization negotiations.
Even if the overall funding figures survive into the future, the IRA conservation funding could be built into the baseline for the next Farm Bill, which could relax the aggressive IRA appropriations schedule by pushing some of the funding out into years beyond 2026. This would ease the pressure on NRCS to award huge amounts of funding over the next four years but such a change would be of limited value without an adjustment in the IRA expenditure end date (September 30, 2031).
