WASHINGTON, D.C. — The Biden administration has inherited a $30 billion fund the Trump administration used for pandemic and trade war relief for farmers.
But the Biden team may have other plans for the money.
Insiders say the new administration wants to use the money to tackle climate change, potentially by establishing a carbon bank that pays farmers to store carbon in their soil.
The $30 billion fund comes from the Commodity Credit Corporation, or CCC, a government-owned and -operated financial institution created in 1933 to "stabilize, support and protect farm income and prices."
Last November, the Capital Press reported that members of Biden's transition team, including Robert Bonnie, USDA's new climate adviser, proposed that the agency establish a carbon bank to provide financial incentives for carbon sequestration on farm and forest lands using money from the CCC.
Historically, the CCC has been used much more narrowly — for example, by purchasing cheese to boost the incomes of struggling dairy farmers.
During Donald Trump's term, officials expanded the CCC's role. The agriculture secretary, Sonny Perdue, leveraged the fund to help producers hurt by retaliatory trade tariffs. During the pandemic, officials also dipped into CCC money to provide relief to farmers hit hard by COVID-19.
The CCC gets its money as annual appropriations from the U.S. Treasury with limits set by Congress. It also borrows from private lending institutions.
The CCC is allowed to borrow up to $30 billion at a time. Some industry and farm groups want lawmakers to raise the cap to $60 billion.
Much like Perdue, Biden's USDA nominee, Tom Vilsack, will have a lot of power over how to use CCC funds. According to a 2021 report from the Congressional Research Service, the corporation's charter grants the secretary of agriculture "broad powers and discretion to use the CCC."
Vilsack said in a recent interview with the Storm Lake, Iowa, Times that he believes he will have significant executive authority through the corporation. New Senate Agriculture Chairwoman Debbie Stabenow told reporters last week she also expects Vilsack will have significant leeway to create a carbon bank with the funds.
The Agriculture Department did not immediately respond to a request for comment.
According to officials, the Biden transition team is in discussions now about how to convert some portion of the CCC fund into a carbon bank.
But the deal is not certain yet.
Bonnie, USDA's climate adviser, and others have also proposed alternatives, such as allowing farmers to sequester carbon on the private market.
And Vilsack may run into obstacles in Congress. During his Senate confirmation hearing Tuesday, Vilsack is expected to face questions about his intentions with the CCC.
The Biden administration may also try to use CCC dollars for other purposes. In public statements, Biden has said USDA may also use the fund as a source of economic relief for restaurants and as additional farm aid during the pandemic.