With President Biden’s signature climate change-focused legislation, the Build Back Better bill, languishing in Congress, Secretary of Agriculture Tom Vilsack announced today that he is creating the Partnerships for Climate Smart Commodities. Through this new program the Secretary will dispense $1 billion in competitively awarded grants to non-profits, commodity groups, private companies, or other entities (but not individuals). The grants are intended to fund pilot projects focused on increasing the adoption of agricultural and forestry conservation practices that reduce greenhouse gas emissions or sequester carbon. While the goal of this program is laudable, the means of creating it should concern taxpayers, lawmakers, and the vast majority of individuals involved in agricultural production.

Climate change is a pressing problem that needs to be addressed. Reorienting agricultural conservation programs to focus on climate change and removing barriers to climate adaptation are actions Taxpayers for Common Sense supports. Using the Commodity Credit Corporation (CCC) to create a program focused on climate mitigation, however, presents a problem. It may exclude the bulk of farm owners and operators, it lacks the authority of Congressional buy-in, and it may be fiscally irresponsible. Congress should cast a weary, and strong oversight, eye on the Secretary’s efforts.

First, it should be noted the “innovative” way the Secretary is justifying this agricultural program designed to increase adoption of conservation practices on farm, ranch, and forestry lands. According to the Secretary it is not a conservation program. It’s also not a carbon market. Instead, it’s a program “focused on commodity production” and “increasing exports.” Producers that implement climate-friendly conservation practices will be able to market their crops toward businesses and consumers wanting crops that are better for the environment. This will give producers a competitive advantage when exporting their crops to foreign purchasers also seeking more climate-friendly crops. Basically, the USDA is looking to create a Climate-Smart Commodity® certification not unlike the Organic designation for crops. It’s a means of distinguishing one’s crops from another’s as being better at achieving certain goals, in this case reduced greenhouse gas production or increased carbon sequestration.

This roundabout way of justifying the program is because the Secretary cites two authorities provided by the Commodity Credit Corporation Charter Act in order to dispense the $1 billion without waiting on Congress to appropriate the funds.

The Commodity Credit Corporation (CCC) is a wholly owned corporation of the United States government. The CCC is mostly an accounting vehicle to cut and track checks for mandatory farm bill programs, including income subsidy, conservation, and foreign aid programs. The Commodity Credit Corporation Charter Act of 1948 (15 U.S.C. 714), however, also makes the CCC a source of nearly unrestrained power. The Charter Act articulates a number of specific authorities granted to the CCC. Exercise of these authorities is at the discretion of the Secretary of Agriculture. The authorities include the ability to create programs aimed at increasing domestic consumption of commodities, removing “surplus” commodities, assisting in production and marketing, and aiding in exports. The only real limit on this discretionary authority is the CCC’s $30 billion spending limit to pay for farm programs, both those authorized by the farm bill and those the Secretary chooses to undertake.

This announcement undermines Congressional Authority. Congress should not continue to surrender its authority to set spending policy to the Secretary. The CCC Charter Act is overly broad and undermines Congressional oversight. There is a history of it being used to end run Congress. The most recent and costliest being when Secretary Purdue tapped it to make nearly $30 billion in payments to farming and ranching businesses that suffered losses due to President Trump’s trade war. It was also used to get around Congressional restrictions on spending and to send bonus subsidies to politically favored growers. Even lawmakers supportive of focusing farm bill programs on climate mitigation should be concerned with a Secretary of Agriculture once-again bypassing Congress to create a billion-dollar program.

We are still reviewing all the programmatic details in the official notice of funding. The Secretary may have designed a program that ends-up funding a number of beneficial projects. But relying on the CCC Charter Act political escape valve is a bad process. Lawmakers should include vigorous oversight of the Partnerships for Climate Smart Commodities as part of the oversight and hearing process for the farm bill reauthorization.