Grant funds promised to New Mexico farmers and ranchers caught up in federal funding freeze

SANTA FE — Millions in already approved grant funding meant to pay for soil health and water conservation projects in New Mexico has been in limbo, creating an impossible dilemma for some farmers.

Although the money was already approved by Congress and signed off by the last presidential administration, and in some cases grant contracts had already been signed with recipients, President Donald Trump’s administration froze payments for some Environmental Quality Incentives Program (EQIP) grants. A Trump executive order to freeze federal grants so they can be reviewed to ensure they align ideologically with the president’s agenda has been temporarily paused by federal courts. But Trump also signed an executive order pausing all funding provided through the 2022 Inflation Reduction Act and Bipartisan Infrastructure Law.

“(Trump) does not have the legal right to not spend that money now,” said Rep. Teresa Leger Fernández, D-N.M., during a news conference drawing attention to the funding freeze Thursday morning.

Thursday afternoon, Agriculture Secretary Brooke Rollins announced that some frozen Inflation Reduction Act funds would be released and that the U.S. Department of Agriculture would honor contracts that were made directly with farmers. That includes releasing $20 million for EQIP, the Conservation Stewardship Program and the Agricultural Conservation Easement Program, according to the announcement.

“After careful review, it is clear that some (Inflation Reduction Act) funding went to programs that had nothing to do with agriculture — that is why we are still reviewing — whereas other funding was directed to farmers and ranchers who have since made investments in these programs,” Rollins said in a statement.

EQIP is a longstanding federal program to incentivize farmers to care for natural resources — like water and air — by reimbursing them for projects that benefit those natural resources. The program is typically a cost share where farmers pay for some of the expenses, said Paula Garcia, executive director of the New Mexico Acequia Association.

Under the Biden administration, producers in New Mexico received $133.4 million through EQIP, Leger Fernández said, with $22 million specifically coming from the Inflation Reduction Act.

Robert Lopez, a third-generation Tucumcari farmer who grows corn and cotton, was trying to decide Thursday morning if he should complete his three-phase EQIP grant. The first two phases are finished. Those included removing a crumbling concrete water ditch and replacing it with new pipe and a new concrete ditch to ensure less water evaporates or leaks out. Phase three, seeding a field with grass to protect the soil from erosion, will cost $85,000.

“I’m at a loss. … I know that I’ve signed a contract with the federal government, and then if I don’t honor the contract, well, then I’m in breach,” Lopez said. But he worried that if he spent tens of thousands to finish the project, the federal government might not honor its side of the bargain and reimburse him, or could reimburse him after a long delay that he cannot afford.

Still, Lopez considered himself lucky, because the project was broken up into three phases.

“It still leaves my farm operational. What’s left ... it’s part of the conservation part of it, so it doesn’t really affect my farming part of it. But other guys aren’t as lucky. They’ve entered into these contracts with the entire sprinkler. So now they’ve already ordered the sprinkler, paid for it, and now they don’t know if they’ll get reimbursed,” Lopez said.

Garcia was concerned for the many acequia users throughout the state who regularly apply for EQIP grants. The nonprofit Acequia Association helped over 200 farmers apply for the grants over the last decade, she said.

The nonprofit itself is being strained financially by federal funding freezes. Garcia expected the organization to add four staff positions this year, because it was able to secure three federal grants. But with grant funding disrupted, the nonprofit will instead be working hard not to shrink.

The Acequia Association is waiting for a $65,000 reimbursement from the USDA for work it already did through a cooperative agreement to repair acequias after fire and flood damage in Lincoln and Rio Arriba counties. Garcia believes that funding may be on hold because the Elon Musk-led Department of Government Efficiency effort has interpreted the acequia repairs, which targeted underserved rural communities, as a diversity, equity and inclusion (DEI) program. Federal agencies were ordered to pause any potential DEI programs for review via a Trump executive order.

“Never in my wildest dreams did I think that a billionaire would be calling the shots on the work that we’re doing for the people in our communities and in our state,” Garcia said, referring to Musk, who has been given broad authority by Trump to downsize the federal government.

Trump’s attempts to erode Congress’ constitutionally held power to dictate federal spending makes Leger Fernández worry that no already approved federal funds are safe from disruptions, including billions meant to help northern New Mexico communities recover from the Calf Canyon/Hermits Peak Fire, which was started by the U.S. Forest Service.

“The Hermits Peak/Calf Canyon Fire money is separately appropriated, sitting in a separate pot. My hope is they’re not going to touch it,” Leger Fernández said. “But at this point in time, because they are acting unconstitutional in a manner that is illegal, we can’t guarantee what they will do.”