Inflation Reduction Act's Impact on Ag Community

The Inflation Reduction Act signed into law by President Biden on Tuesday will have impact on the agricultural community.

The legislation, which passed on party line votes in both the House and the Senate, was opposed by Illinois Farm Bureau and American Farm Bureau Federation because of tax provisions the organizations say could impact farmers and ag businesses.

The Act includes $40 billion for climate-smart ag initiatives, with about half the funding going toward four USDA conservation programs and conservation technical assistance.

Another $14 billion will go toward rural development programs that incentivize rural electric cooperatives to pursue renewable energy projects, while $500 million is slated to build and expand blending, distribution and other ethanol and biodiesel infrastructure.

The bill also extends through 2024 the $1/gallon tax credit for biomass-based diesel, then shift in 2025 to a clean fuels tax credit, which would vary based on the carbon rating of the biofuel.