USDA Programs Freeze: What We Know
According to a press release from the National Sustainable Agriculture Coalition, for more than two months, billions of dollars of lawfully obligated USDA funding have been frozen or terminated. While the agency has not made public the full scope of what remains frozen or targeted for termination, the harms to communities, farmers, and organizations are already clear.
This blog post takes a closer look at what we know—highlighting national and state-level impacts on four programs that support agricultural conservation and resilience, local food systems, and rural clean energy development. This post focuses in particular on the termination of future funding for the (1) Local Food Purchase Assistance (LFPA) and (2) Local Foods for Schools and Child Care Settings (LFSCC) programs, the pause (and forthcoming restart) of (3) Inflation Reduction Act (IRA)-funded Rural Energy for America Program (REAP) projects, and the current freeze of the (4) Partnerships for Climate-Smart Commodities (PCSC) initiative. The post explores the scope of these four freezes and cancellations, what they mean for each program nationally, and how impacts are playing out across states.
The full impact of the funding freeze and terminations at the USDA will be much larger than the direct impacts to these four programs. The agency administers hundreds of programs, and the National Sustainable Agriculture Coalition (NSAC) has identified more than thirty under direct threat. NSAC and our members continue to experience ongoing payment delays and limitations for programs beyond these four specific programs; organizations are facing layoffs and programmatic impacts with accumulating unpaid federal reimbursements. NSAC is glad to see the USDA finally moving on honoring existing farmer contracts with the recent news that the USDA plans to release obligated IRA-REAP funds and hopes that those funds are released on time. Given the uncertainty that remains regarding contract modification requests and the release of obligated funds, the IRA-REAP program is still discussed throughout this post.
Local Foods Programs Terminated
In October 2024, USDA announced additional funding for existing LFPA and LFS programs in addition to funding for a new program that would support local food purchases in child care settings. On March 10, 2025, however, all of these new contracts with states, tribes, and local agencies for these programs were terminated.
These investments, while small in terms of the overall federal budget, provide big returns for farmers and rural communities. LFPA and LFS help states and tribal nations buy food from local and regional producers and distribute it to schools and communities in need. LFPA funding is awarded to state and tribal governments, which then partner with local organizations and food hubs to purchase food directly from producers and distribute it through food banks, pantries, and other community channels. LFS provides funding to state agencies to offer additional cash incentives for every meal served that uses local products. Both programs enable the purchase of fresh locally grown or raised foods that they otherwise would not have been able to purchase, expanding options for consumers and markets for farmers.
Local food purchases like those supported by LFPA and LFS are considered “multipliers”, meaning that every dollar of federal funding generates additional economic activity as it moves through the economy, so the impact of these cancellations is much greater than the federal dollars themselves.
Conclusion
The funding freezes and cancellations in 2025 have created significant challenges for farmers and organizations that have utilized these investments to build viable and resilient farms, strengthen regional supply chains, and put healthy food on the plates of our most vulnerable community members. With nearly $4.8 billion in frozen or canceled investments, across the country, projects that strengthen rural economies and advance conservation are now in limbo—despite many having already been awarded funding or initiated implementation. NSAC is glad to see steps taken to honor existing farmer contracts with USDA’s announcement that IRA-REAP obligated funds will be released. NSAC hopes that this will occur in a fair and timely manner, but USDA must make its guidance clearer that modifications to projects are not required for payments to be processed, nor will failure to propose modifications result in terminations. NSAC urges USDA to quickly release all frozen funds before these impacts to our farms and communities become irreversible.
NSAC remains committed to advocating for transparency, timely communication, and the restoration of funding so that farmers and their partners can continue this critical work.
