Last Updated: April 2, 2025
For more than two months, billions of dollars of lawfully obligated USDA funding have been frozen or terminated. While the agency has not made public the full scope of what remains frozen or targeted for termination, the harms to communities, farmers, and organizations are already clear. This blog post takes a closer look at what we know—highlighting national and state-level impacts on four programs that support agricultural conservation and resilience, local food systems, and rural clean energy development. This post focuses in particular on the termination of future funding for the (1) Local Food Purchase Assistance (LFPA) and (2) Local Foods for Schools and Child Care Settings (LFSCC) programs, the pause (and forthcoming restart) of (3) Inflation Reduction Act (IRA)-funded Rural Energy for America Program (REAP) projects, and the current freeze of the (4) Partnerships for Climate-Smart Commodities (PCSC) initiative. The post explores the scope of these four freezes and cancellations, what they mean for each program nationally, and how impacts are playing out across states.
The full impact of the funding freeze and terminations at the USDA will be much larger than the direct impacts to these four programs. The agency administers hundreds of programs, and the National Sustainable Agriculture Coalition (NSAC) has identified more than thirty under direct threat. NSAC and our members continue to experience ongoing payment delays and limitations for programs beyond these four specific programs; organizations are facing layoffs and programmatic impacts with accumulating unpaid federal reimbursements. NSAC is glad to see the USDA finally moving on honoring existing farmer contracts with the recent news that the USDA plans to release obligated IRA-REAP funds and hopes that those funds are released on time. Given the uncertainty that remains regarding contract modification requests and the release of obligated funds, the IRA-REAP program is still discussed throughout this post.
The National Scope
Across these four programs alone, more than $4.7 billion in federal investments have been affected. $1.2 billion of that is lost funding due to the cancellation of LFPA and LFSCC beyond 2025. Since local food purchases like those supported by LFPA and LFSCC are considered “multipliers”, meaning that every dollar of federal funding generates additional economic activity as it moves through the economy, that equates to a loss of more than $1.8 billion of economic activity. An additional $3.57 billion has already been legally obligated to farmers and businesses through REAP (more than $908 million in remaining obligations) and PCSC (more than $2.6 billion in remaining obligations). This money is already legally promised through signed agreements but have not been paid due to the ongoing freeze. The table below summarizes the national scope of the cancellations and freezes for these programs.
* remaining obligations calculated using data from USASpending.gov, accessed on 3/20/2025
**economic impact estimated using the Local Food Impact Calculator
States with the Largest Frozen or Canceled Funds
The states with the largest overall amounts of frozen or canceled funds through these four programs are Texas ($336 million), California ($330 million), and Virginia ($292 million). On average, states have lost $85 million per state in frozen or cancelled funds, and 28 states and the District of Columbia have all lost more than $50 million in frozen or cancelled funds.
States with the largest amount of remaining IRA-funded REAP obligations to be paid are Illinois ($99 million), Pennsylvania ($42 million), and Michigan ($37 million). On average, states have more than $17 million in remaining IRA-REAP obligations, and 24 states and Puerto Rico all have more than $15 million in remaining IRA-REAP obligations frozen.
States with the largest amount of remaining PCSC frozen obligations are Virginia ($255 million), Texas ($191 million), and California ($188 million). On average, states have nearly $65 million in remaining PCSC obligations frozen, and 19 states and the District of Columbia have more than $20 million in remaining PCSC obligations frozen.
The interactive map below shows the overall funds frozen or cancelled for these programs in each state. Click on a state to see the specific amounts frozen or cancelled for each program, and click on “get the data” to download the data. REAP and PCSC remaining obligations were calculated as the full obligations minus the full outlays reported on USASpending.gov as of March 24, 2025. LFPA and LFS award amounts were publicly reported by USDA before cancellation.
Local Foods Programs Terminated
In October 2024, USDA announced additional funding for existing LFPA and LFS programs in addition to funding for a new program that would support local food purchases in child care settings. On March 10, 2025, however, all of these new contracts with states, tribes, and local agencies for these programs were terminated.
These investments, while small in terms of the overall federal budget, provide big returns for farmers and rural communities. LFPA and LFS help states and tribal nations buy food from local and regional producers and distribute it to schools and communities in need. LFPA funding is awarded to state and tribal governments, which then partner with local organizations and food hubs to purchase food directly from producers and distribute it through food banks, pantries, and other community channels. LFS provides funding to state agencies to offer additional cash incentives for every meal served that uses local products. Both programs enable the purchase of fresh locally grown or raised foods that they otherwise would not have been able to purchase, expanding options for consumers and markets for farmers.
Local food purchases like those supported by LFPA and LFS are considered “multipliers”, meaning that every dollar of federal funding generates additional economic activity as it moves through the economy, so the impact of these cancellations is much greater than the federal dollars themselves.
FarmsSHARE, an LFPA project coordinated by the Carolina Farm Stewardship Association, is a great example of the type of activity supported by LFPA. FarmsSHARE connects approximately 350 farms across the Carolinas with 18 food hubs and other purchasers. FarmsSHARE has delivered 179,457 food boxes to food insecure families and serves more than 1,400 families each week. Without federal LFPA funding, the future of projects like FarmsSHARE that serve both farmers and food insecure families is dim.
LFS programs like the one in Washington state, managed by the Office of Superintendent of Public Instruction, work with school districts to bring locally grown foods into schools. In the Selah School District, for example, LFS funding supported the purchase of over half a million pounds of dried cherries directly from Rowley and Hawkins Fruit Farm. The cherries are not just served in school meals, they are also used as a learning tool in the classroom, helping students connect with local agriculture and get excited about nutritious foods on their plates. Federal funding through LFS has made these programs possible for farms and schools across the country.
REAP Funds Are Being Released, But Questions Remain
Following President Trump’s executive order on January 20, 2025, projects that are part of the Rural Energy for America Program (REAP) that were funded by the Inflation Reduction Act (IRA) were frozen, and payments to recipients were stopped. More than $911 million in obligated funds through REAP have been frozen, although on March 26, 2025, USDA announced previously obligated REAP funds would be released. However, questions remain about the release of obligated funds.
The March 26 announcement that previously obligated IRA-REAP funds would be released also included a message that USDA was giving funding recipients thirty days to “review and voluntarily revise their project plans to align with President Trump’s Unleashing American Energy Executive Order issued on January 20, 2025.” What this means for recipients and the release of their already obligated funds remains unclear. Farmers say they are receiving unclear guidance from USDA about the revisions, but, at this time, our understanding is that USDA does not intend to terminate any REAP agreements based on the information provided via the form or on the decision not to submit the form. State Energy Coordinators should confirm that guidance. While existing farmers’ contracts should now be honored, the ability to proceed with new REAP IRA obligations remains uncertain.
REAP provides grants and loan guarantees to help farmers, ranchers, and rural small businesses invest in renewable energy systems and energy efficiency improvements. This includes things like installing solar panels, upgrading to energy-efficient equipment, or improving building insulation. Through these investments, REAP helps farmers lower energy costs, boosts rural economic development, and supports the transition to clean energy in agricultural and rural communities. Like many USDA programs, it operates on a reimbursement model, meaning that farmers and small businesses have been waiting to be reimbursed for costs they have already incurred.
REAP projects like Maine farmer Kevin Leavitt’s installation of solar arrays to power his greenhouses or Maryland farmer Laura Beth Resnick’s project to install solar panels on her barn have already been completed, and the farmers are now awaiting reimbursement funds.
Partnerships for Climate Smart Commodities Invest in Farm Resilience and Viability
Partnerships for Climate Smart Commodities (PCSC) are public-private partnerships that support the adoption of agricultural practices that promote on-farm conservation and resilience and the development of markets for commodities produced using those practices. PCSC agreements are with partner organizations ranging from large agribusiness corporations to farmer cooperatives; more than 14,000 farms are enrolled in PCSC projects, and more than 3.2 million acres of working agricultural land are enrolled. PCSC funds have remained frozen since President Trump took office, despite court orders directing the Administration to halt the funding freeze. Currently, more than $2.6 billion in already obligated PCSC funds remain frozen. On March 28, 105 PCSC organizations and 260 farmers sent a letter to Secretary Rollins detailing the positive impact the program has had on farming operations nationwide and requesting clarification on the future of the program.
As just one example, PCSC supports partners like Pasa Sustainable Agriculture, which is helping 2,000 farms across the East Coast adopt well-established conservation practices such as cover cropping, reduced tillage, and prescribed grazing. Pasa was awarded a $55 million PCSC grant to collaborate with twenty other organizations to recruit and train farmers in these practices, but the future of their program is now at risk due to the frozen funds. According to data from USASpending.gov, Pasa is still owed more than $52 million in obligated funds. Due to the freeze of these legally obligated funds, Pasa has had to furlough staff. The longer the legally obligated funding remains frozen, the more devastating the long-term effects will be for groups such as Pasa and the farmers they work with. Organizations will be unable to retain their highly specialized staff, and farmers will lose trust in government partnerships, undermining not just PCSC but other federal programs.
Conclusion
The funding freezes and cancellations in 2025 have created significant challenges for farmers and organizations that have utilized these investments to build viable and resilient farms, strengthen regional supply chains, and put healthy food on the plates of our most vulnerable community members. With nearly $4.8 billion in frozen or canceled investments, across the country, projects that strengthen rural economies and advance conservation are now in limbo—despite many having already been awarded funding or initiated implementation. NSAC is glad to see steps taken to honor existing farmer contracts with USDA’s announcement that IRA-REAP obligated funds will be released. NSAC hopes that this will occur in a fair and timely manner, but USDA must make its guidance clearer that modifications to projects are not required for payments to be processed, nor will failure to propose modifications result in terminations. NSAC urges USDA to quickly release all frozen funds before these impacts to our farms and communities become irreversible.
NSAC remains committed to advocating for transparency, timely communication, and the restoration of funding so that farmers and their partners can continue this critical work.
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