Trump Curbs Farmers’ Access to Funding for Energy Projects

The Trump Administration is restricting access to a federal rural energy program for farmers in another move against renewable energy. But the major change to the Department of Agriculture’s Rural Energy for America Program (REAP) that eliminates upfront funding would make energy efficiency projects and cheaper energy for farmers inaccessible to many of them, analysts say.

The USDA’s new rules, unveiled at the end of September and effective October 16, aim to eliminate taxpayer funding for “unreliable energy sources”, protect farmland from oversized solar arrays, and reduce imported components from adversaries.

“For too long many applicants have prioritized unreliable energy sources and have not fully delivered on their stated goals, as of today that ends,” Secretary of Agriculture Brooke Rollins said.

Apart from cutting red tape, the changes to the REAP protect “productive American farmland from oversized solar developments and ensuring taxpayer-supported energy investments don’t put components from foreign adversaries on American farms,” said Under Secretary for Rural Development, Glen Smith. Related: Black Sea Oil Shipping Insurance Costs Surge to $2.5 Million

“REAP should work for rural America, not foreign supply chains or projects that take good farmland out of production.”

The changes include Secretary Rollins’ direction “to disincentivize solar photovoltaic and wind energy systems on cropland.”

More importantly, projects must be fully built, operational, and should be able to demonstrate the project’s actual documented output, energy savings, costs, and system performance before applying for funding.

Under the previous rules of the program launched in the 2000s, funding could cover up to 50% of the costs of the energy project, and farmers were able to apply for it before construction began.

REAP invested almost $4.8 billion in projects across the country between 2012 and 2025, making it the agency’s second-largest business program, according to USDA-Rural Development.

Since the program was created, over two-thirds of REAP’s grants have gone to districts currently represented by Republicans. The districts receiving the highest total funding are largely clustered in the Midwest, where the majority of projects are also located, the Brookings Institution said in a report last year.

This year, there has been no funding from REAP because USDA halted applications pending the rule review.

The new rule – requiring operational projects with proven energy savings before application – would put energy-saving projects of any kind out of reach for many farmers, according to analysts.

The new rule would also be another hit to farmers who want to cut on utility bills and energy costs, according to the National Sustainable Agriculture Coalition (NSAC). America’s farmers have been reeling from record-high diesel prices and from the Trump Administration’s trade policies.

“For a lot of farmers, that just simply won’t be possible, especially with these times already being so financially uncertain,” Richa Patel, policy specialist at NSAC, told Reuters.

Environmental organizations and farmers’ unions took the U.S. Administration to court over the new rule that significantly restricted access to funding for energy projects.

The Environmental Law & Policy Center (ELPC) and Earthjustice have filed a lawsuit against the USDA challenging USDA’s efforts to write solar energy out of the Renewable Energy for America Program (REAP).

Importantly, the Iowa Farmers Union and other farmers have joined the lawsuit, which argues that “More farmers and rural small businesses who would like to access the benefits of solar energy systems, but who cannot afford the upfront costs of installation without the support of a REAP grant or loan guarantee are also harmed by the policy.”

“As finances get tighter and margins thinner, we cannot pull the rug out from the people who grow our food,” said Alex Beld, Communications Director at RENEW Wisconsin, which is also part of the group of plaintiffs.

“REAP is supposed to help farmers keep their energy costs low. Instead, the USDA has blocked solar, an incredibly affordable source of energy, and made the change retroactive—leaving farmers with bills they were told the government would cover.”

By Tsvetana Paraskova for Oilprice.com

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