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October 4, 2021

Five Ways the Infrastructure Bill Could Impact U.S. Agriculture

Although the bipartisan Infrastructure Investment and Jobs Act is light on direct farm aid, it aims to revitalize rural communities across the nation.

The $1.2 trillion infrastructure package was approved in the Senate on August 10th, 2021, in a 69-30 bipartisan vote. Finally, after months of being blocked from a House vote in order to push the Build Back Better plan through with it, the infrastructure bill was passed in a 228-206 vote late into the night on November 5, 2021.

This infrastructure plan will cost an estimated $1.2 trillion over the next 8 years, with $550B in new spending and a historic infusion of federal funding for rural infrastructure development.  

Here are the five main impacts the infrastructure bill will have on the U.S. agricultural community.

1. Improve the Ag Transportation Network

Nearly 10 percent of total funding in the bill will go towards repairing roads and bridges. This $110 billion investment is the biggest-ticket initiative and carries overwhelming support from a vast majority of agricultural groups. Other initiatives that will provide needed upgrades to our agricultural trade network include $66 billion in passenger and freight rail improvements and $17 billion for ports and waterways.

Along with these repairs which will ease the burden of agricultural trade logistics, the infrastructure bill includes important provisions from the previously proposed Haulers of Agriculture and Livestock Safety (HAULS) Act. Introduced back in March, the HAULS Act would allow livestock haulers to bypass normal trucking hours-of-service limitations if the livestock haulers are within 150 miles of their destination.

2. Increase Environmental Resilience

The infrastructure bill would also serve as a stepping stone in providing several avenues of funding for environmental remediation and protection against the impacts of climate change. First, $21 billion would fund the cleanup of abandoned wells and mines. Second, funding for roads, bridges, ports, waterways, and more, will increase overall resilience against future severe weather events. Events like the Texas winter storm and the ongoing ‘megadrought’ are examples of the importance of building more resilient infrastructure to face the increasing number of severe weather events in the years to come. While the bill does not specify at this time, it is imperative that farming communities are included and prioritized when building this infrastructure in order to protect our domestic food system and our farmers from this escalating threat.

One environmental program missing from the bill—funding for carbon markets. Funds for carbon-capturing programs are tucked into the proposed $135 billion ag and nutrition budget, which is a part of the $3.5 trillion spending bill currently under negotiation in Congress as well.  

3. Enhance Existing Water Infrastructure

Another big-ticket item on the infrastructure bill that will impact American farmers is the $63 billion for improvements to national water infrastructure, with more than $8 billion specifically dedicated to Western water infrastructure as major water reservoirs reach record lows. According to an Agri-Pulse news update,

  • $3.2 billion will be used to repair aging water infrastructure;
  • $1.2 billion will go towards new water storage, groundwater storage, and conveyance systems; and
  • $618 million will be dedicated to the USDA’s watershed programs.

These investments come at a time when Western farmers are facing tough decisions and restricted water access that is limiting production and profit. While funding for water infrastructure is needed, so is a regulatory environment that supports their efforts in feeding our nation and the world.

4. Bridge the Digital Divide

Next to transportation route repairs and environmental remediation, the infrastructure bill also includes $65 billion to expand broadband connectivity and affordability in low-access areas. $2 billion will be allocated for the USDA’s Reconnect Loan and Grant Program—an initiative first launched in 2018 to fund “costs of construction, improvement, or acquisition of facilities and equipment needed to provide broadband service in eligible rural areas.” The bill also includes $47 billion in funding to protect against cybersecurity threats, a pressing issue within the agricultural community as the U.S. food supply chain has been the target of recent ransomware attacks.

The infrastructure bill further aims to address the digital divide with the passage of the Digital Equity Act of 2021, which would prioritize federal funding for those from communities of color, people with disabilities, low-income households, and rural communities. Stronger and more affordable broadband connectivity in rural areas could contribute to the deconsolidation of small family farms by removing some of the roadblocks these farmers currently face when integrating precision ag technology and smart data collection software into their operation.

5. Create Job Opportunities in Rural America

One secondary impact of passing this massive infrastructure bill will be the increase in job opportunities within rural communities. Economists estimate that the infrastructure package could create roughly 650,000 jobs by 2025. Manufacturing will be a heavily impacted industry as infrastructure projects are implemented, but another essential industry impacted that will benefit farmers is the trucking industry. Trucker shortages have increased transportation costs for agricultural goods substantially this year. If passed, the infrastructure bill would include funding and provisions for job training programs to get more women involved in construction and trucking industries.

Potential Concerns with the $1.2 Trillion Infrastructure Package

The federal deficit is among the top concerns of lawmakers who oppose the mammoth spending bill. On August 5th, 2021, the Congressional Budget Office reported that this legislation would add an estimated $256 billion to the deficit over 10 years.

 Despite these concerns, amendments and cuts to the initial $2.2 trillion American Jobs Plan generated enough bipartisan approval to move it forward to the Senate. Most ag groups have expressed their support for this bill, saying that improvements to the ag transportation network are long overdue.

The National Corn Growers Association (NCGA) highlighted the benefits of improving ports and inland waterways, stating that 60 percent of corn exports rely on these routes to reach their destination.

“This is a once-in-a-lifetime investment in America’s infrastructure, and we are extremely pleased that it includes funding for priorities that are important to farmers and rural America. The legislation will benefit agriculture for years to come, and it is encouraging for corn farmers to see Senators working together on a bipartisan basis.”

John Linder, President of NCGA

American Farm Bureau Federation (AFBF) President Zippy Duvall also praised the infrastructure deal while reiterating how important it was to “not place the burden of these investments on America’s farmers and ranchers through increased tax rates or by eliminating stepped-up basis.”

“Our nation’s infrastructure gives America’s farmers and ranchers a competitive advantage and helps us move products from fields to consumers around the world. These investments will ensure we continue to safely and efficiently transport the agricultural and food products that our nation and the world rely on.”

Zippy Duvall, President of AFBF

One sector that still opposes the bill—renewable fuels. Director of Communications for the Iowa Renewable Energy Association Cassidy Walter stated that the infrastructure spending bill is, “definitely a disappointment and a huge, missed opportunity to further our carbon reduction goals by supporting biofuels.” This legislation also comes at a time when ag and biofuel groups are fighting for a rehearing against a July 2nd court ruling that could end year-round sales of E15 (ethanol-blended gasoline). If upheld, this ruling would be a significant blow to the biofuels industry and, in turn, the U.S. corn sector as 33 percent of domestic corn production was used for ethanol in 2020. Many in the renewable fuel industry view the lack of biofuel funding in the infrastructure bill as a short-sighted approach that will cause more problems than solutions.

AgAmerica Supports a Thriving Future for Our Nation’s Rural Communities

While the infrastructure bill holds a lot of promises, it is not without understandable concern. That’s why it is so important to take the feedback of farmers and rural communities when implementing these initiatives to ensure they provide support rather than create unintended consequences.

As an advocate for a thriving future for rural America, AgAmerica hopes this bipartisan bill follows through with the proposed initiatives to provide a competitive edge for American farmers and ranchers while revitalizing the rural communities in which they dwell. Stay informed on the latest updates in agricultural legislation along with their direct impacts on American farmers through AgAmerica’s trade and legislation page.

You can also sign up for AgAmerica’s newsletter to get legislative and trade news related to the ag sector sent straight to your inbox.

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