The One Big Beautiful Bill’s USDA Conservation Spending Shuffle

Ming Wang and Matthew Gammans

As Congress negotiates a new Farm Bill under the constraints of reconciliation, USDA conservation funding is being reshuffled. The Inflation Reduction Act (IRA) made a one-time investment of over $18 billion in USDA conservation programs (EQIP, CSP, RCPP, and ACEP) for fiscal years 2023 (FY2023) through FY2026, with a strong emphasis on climate-smart practices such as cover cropping, reduced and no-till farming, and nitrogen management. In the One Big Beautiful Bill (OBBB) passed by the House, a portion of the IRA funding is incorporated into the baseline of the Farm Bill conservation programs, increasing total obligations by $10.705 billion from FY2026 to FY2031 relative to the baseline Farm Bill. According to projections from the Congressional Budget Office (CBO), this change results in a net decrease of $1.795 billion in total conservation outlays from FY2025 to FY2034 (Figure 1), along with a shift in targeted practices and programs (CBO June 2025).

Figure 1: Total Changes in Spending for Conservation, CBO's projection, Million Dollars

Specifically, the CBO projects a total decrease of $11.702 billion in IRA outlays from FY2024 to FY2033, representing approximately 71% of the originally projected $16.483 billion in IRA spending during that period (CBO, February 2024). For EQIP, $7.222 billion was initially allocated under the IRA, but since IRA funds are only available through FY2031, any unspent amounts after that year will no longer be accessible. In contrast, the reconciliation bill replaces part of the rescinded funds by incorporating an additional $2.6 billion into the Farm Bill baseline, which supports ongoing, long-term conservation funding (CBO, August 2024). While this results in a short-term reduction in EQIP funding, the shift to permanent Farm Bill authority suggests potential long-term gains. According to Coppess and Peng (2024), it would take roughly 11 years for Farm Bill funding to match the cumulative support initially projected under the IRA.

Unlike the IRA’s emphasis on short-term climate-smart practices, the reconciliation bill removes explicit climate-related priorities and reallocates funding more broadly across traditional conservation efforts. This change may lead to a geographic shift in how conservation dollars are distributed. Figure 2 illustrates a scenario in which all IRA funding reductions for EQIP are fully restored through the Farm Bill by 2043, as projected by Coppess and Peng (2024). In this analysis, the rescinded IRA funds are reallocated across states using the distribution shares observed in 2024. The results suggest that some states would receive increased funding under this reallocation, while others could see a decline. Specifically, states with more diversified conservation portfolios are likely to benefit under the new structure, as their lower funding shares under the IRA and higher shares under the baseline Farm Bill structure are expected to result in a net funding gain over time. 

Figure 2: IRA funding redistribution. This figure presents the change in IRA-funded conservation program funding for each state under the House’s OBBB.

Figure 3 shows the share of IRA-funded EQIP spending within each North Dakota county for FY2023–2024. As shown, approximately 20 of the state’s 53 counties received IRA funding during this period, indicated by labeled values on the map. Counties without labels did not receive IRA support through EQIP, although they may have benefited from baseline Farm Bill funding. In some counties, IRA contributions made up more than half of total EQIP funding. For instance, Kidder County received approximately 79.3% of its EQIP funding from the IRA, while Burke County received 64.7%. The rescission of IRA funds may therefore pose a more substantial short-term impact on these counties.

Figure 3: Within-county IRA share of total EQIP funding in North Dakota. This figure reports the share of EQIP funding in FY2023-2024 that came from the IRA. The average share of EQIP funding coming from the IRA is 0.33.

References:

CBO June 2025. https://www.cbo.gov/publication/61534

CBO February 2024. https://www.cbo.gov/system/files/2024-02/51317-2024-02-usda.pdf

CBO August 2024. https://www.cbo.gov/system/files/2024-08/hr8467.pdf

Coppess, J. and Y. Peng. "Conservation Tradeoff: EQIP in the Inflation Reduction Act and the House Farm Bill."  farmdoc daily (14):185, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, October 10, 2024.