Limbo. Havoc. Chaos. This is the vocabulary surrounding conversations about the USDA’s freeze of federal funds already in contract with farmers, food businesses, and other drivers of the local food economy. A review of contracts for language about DEI (diversity, equity, and inclusion) or environmental justice has led to large program cuts, including $660 million for local schools to purchase from community farmers, $3.1 billion for climate-smart farming innovations, and more. A large number of commitments still have yet to pass through this surprise secondary approval process, and cancellations are already being challenged in court as unlawful.
“Many of these grants are reimbursement-style grants, meaning the farmers spend their own money up front with the intention of being reimbursed for qualified expenses as part of the grant. They do this in good faith that the grantor, in this case the Federal government, will uphold their end of the contract, and follow through on reimbursements,” says Taste the Local Difference Director of Impact, Erika Tebbens. “Failing to do this not only puts a considerable financial burden on the farms but also erodes trust. When trying to spread the word about other grants, we’ve already seen that farmers are more cautious to spend time and energy applying, for fear they could receive the grant and still be shouldered with unexpected expenses.”
For Lakeview Hill Farm in Traverse City, this rings true. With as much as $300,000 lost or frozen in federal funding for their organic farm between grants in notice of award and in contract, business owner John Dindia says they’re very hesitant to make any large strides in financial commitments this year.
In Ypsilanti, the loss of federal funding means that growth for CSA farm Old City Acres is delayed. The business moved to a new property in 2024, and with that came a need to combat invasive species and add environmentally-friendly farm infrastructure. With the USDA’s recent cancellation of the Partnership for Climate-Smart Commodities, those plans will be scaled back, growth plans will have a longer timeline, and it also means that owner Alex Ball will need to dedicate more time to these projects, instead of paying a local professional and focusing on farming.
Beyond that, the $100 million TOPP (Transition to Organic Partnership Program) has been indefinitely paused, leaving Old City Acres to pivot from plans to produce under a Certified Organic label this growing season. This program provided help with the back-end paperwork and valuable mentorship to achieve the certification for foods grown without chemical fertilizers or pesticides. Now, Old City Acres has called to inform partners and wholesale accounts about this shift, customers who had planned on selling locally-grown produce under the trusted label.
Pauses to funding in this critical period of planning and sowing for farms can be just as harmful to farms as cancellations. “The biggest thing is this limbo state,” explains Dindia. “This causes havoc for folks who are planning on these things.” Their FLSP, or Farm Labor Stabilization and Protection, grant, which improves working conditions for farmworkers and addresses the labor shortage issue in the food industry, has also been frozen. Until they receive word one way or another, they’ll continue to uphold their end of the grant’s requirements, spending time and money even while the USDA doesn’t do the same, a process he understates as ‘frustrating’. “Change plans for the future, but honor the contracts you have,” is what Dindia advises these agencies to do.
“Black and Brown businesses get hurt the worst,” says Ball. “I saved capital to weather the storm, but other businesses are not in the position [to do the same.]” Not only will farms suffer in an uncertain environment, but so will the entire local food economy and beyond. His plans to include other food businesses in his mobile box truck market and farmstand are now downscaled. Recommending that eaters pay close attention to the next Ag Census, Ball underscores that this is “definitely going to be a scary time.”
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