USDA cancels $300M farm grants—grantees question proof

USDA canceled – In the span of one week, 49 of 50 USDA grantees tied to a $300 million farm program received cancellation notices in March—some pointing to budget details they say they never included. Agroecology Commons, one of the grantees, still hadn’t received its own not

Leah Atwood kept refreshing her inbox while the rest of the land-access network tried to process what was happening. It was the tail end of March. and for days she and her colleagues at Agroecology Commons had been fielding dozens of emails alerting them to grant terminations targeting a $300 million U.S. Department of Agriculture program.

One after another, within a single week, 49 of the 50 grantees received notices from the USDA informing them that their grants were cancelled. By the end of the month, Agroecology Commons still hadn’t gotten a notice.

While other groups began trying to pick up the pieces, their own $2.5 million grant—structured largely to help farmers of color acquire and sustain land—sat in limbo. All they could do was wait. Resignation settled in. They’d been here before.

After President Donald Trump returned to office last January. his administration launched a sweeping campaign meant to eliminate initiatives the administration has deemed wasteful or misaligned with its political agenda. At the USDA. that has meant slashing billions in grants and gutting a mix of newer and longstanding federal programs that Agriculture Secretary Brooke Rollins repeatedly framed as the administration’s attempt to “stop wasteful spending.”.

During the administration’s first year, Agroecology Commons lost multiple grants amid the USDA’s funding purge. In response, the nonprofit filed a joint lawsuit against the agency, claiming that the grants were terminated unlawfully. In August. a judge granted the plaintiffs a preliminary injunction restoring their access to some of the money until the court makes its final determination based on the merits of the case.

That backdrop—already lived through—made the March cancellations feel less like a sudden break and more like a familiar tactic returning.

All 49 other recipients of the Increasing Land, Capital, and Market Access grants received termination emails from the USDA during that week in March. The cancellations came with two business days’ notice.

In the written notice. Steven Peterson—associate administrator of the USDA’s Farm Service Agency—told grantees their programming didn’t align with the agency’s priorities and that the funding structure was not in keeping with the intent of Congress. Peterson also used language about cutting waste and discontinuing DEI efforts that had become routine for the administration.

But where the administration often stayed vague about its claims, Peterson’s letter was unexpectedly specific. “Instances of excessive or frivolous expenditures. ” he wrote. “such as purchasing gazebos. massages. a camper/RV. and oversized office supply budgets (in one case. over $130. 000) — instead of land are an affront to taxpayers.”.

Through it all, Agroecology Commons still hadn’t heard a thing. Questions spread across the grantee network, but no one could explain why their project alone was spared. Atwood’s team presumed their grant wasn’t terminated because of the ongoing litigation. They continued to wait for whether the floor would drop under them next.

“We are trying to accomplish as much as we can in the time that we have, because we don’t know when it’s going to be canceled,” Atwood said. “It’s a strange reality.”

For many other grantees, the dispute sharpened around a blunt contradiction: they say they can’t locate the budget items USDA cited, even as they were told those items were the basis for cancellation.

Neither Agroecology Commons nor any of the other grant recipients that Grist spoke to seems to know who may have made those expenditures.

Kavita Koppa helps run RAFI, a farming organization based in North Carolina that was among the 49 grants canceled; RAFI received $8.5 million to help agricultural producers in North Carolina, Florida, Puerto Rico, and the U.S. Virgin Islands.

Koppa said RAFI was roughly halfway through its five-year contract when the termination notice came, having spent about $1.1 million. From the beginning. she said. almost $2.3 million of the total award had been set aside for grants to support farmer land acquisition and market access. About $400,000 of that set aside was for RAFI to acquire land parcels on behalf of farmers.

She said another $1.9 million was budgeted for project management costs. including fees tied to verifying financial compliance in federal audits. attorneys for farmland acquisition. and translation fees. Koppa also said $350. 000 was allocated for miscellaneous project activities such as paying guest speakers at workshops. contracting report writers. and mass distributing hard-copies of farmer resources. The final $3.9 million. she said. was budgeted for technical assistance—encompassing the full budgets of five subawardees working with RAFI on the project.

In March. a USDA spokesperson told Civil Eats that the ILA program included “no minimum requirement for direct producer support. ” and that the program “permitted the abuse of federal funds. ” including expenditures on the purchasing of a barbeque smoker. construction of a gazebo. massages. and for one awardee. “a $20. 000 budget for ink pens alone.” The spokesperson said a “peek behind the curtain” of the Biden-era program revealed “egregious misuse of taxpayer dollars to the tune of nearly $300 million dollars.”.

Koppa said she has never seen the budget items cited by USDA. “The details were shocking,” she said. “We didn’t do those things. Why are we being treated as if we did something unethical or wasteful?”

Breanna Horsey. executive director of Sustainable Iowa Land Trust. said her $1.8 million grant had no carve-outs for the expenditures detailed in the termination notice. Viva Farms’ Anna Chotzen. project manager of another ILCMA project awarded a $2.5 million grant to help beginning and historically underserved farmers in two Washington counties access farmland. said her team has no idea where those budget items came from. “All she knows is that it wasn’t them,” according to the account Grist received.

Even Gloria Montaño Greene. former Deputy Undersecretary of the USDA’s Farm Production and Conservation in the Biden administration who helped oversee the creation of the ILCMA program. questioned the spending claims. “If that dollar amount for $20. 000 in pens was put in there. did they show proof of that?” Montaño Greene said. “Show the proof, right?”.

As the cancellations reverberated. at least 45 of the 49 terminated grantees—along with two subgrantees—filed appeals during April with the National Appeals Division. an independent office within the USDA. Consultant Amanda Koehler said all but two were informed that their award terminations weren’t appealable because the decision to terminate “was a matter of general applicability and not based on the individual application of specific program criteria.” Koehler said the outstanding two had not yet received a response.

That finding by NAD should place the USDA’s cancellation justification under closer scrutiny. Koehler said. because it “underscores. in my opinion. that terminations were not based on anything the awardees did or didn’t do.” She also said. to her knowledge. none of the grantees—including Agroecology Commons—had budgets that included any of the claims USDA made about wasteful or fraudulent spending.

RAFI’s Koppa framed it bluntly: “This termination doesn’t seem like it was rooted in anything about our conduct with this grant. “It seems to be part of some sort of larger motivation where we were not being treated fairly.”

Other grantees added a second kind of grievance—less about the alleged expenditures and more about how approvals and timing affected their ability to spend in the first place.

JohnElla Holmes. who oversees the Kansas Black Farmers Association. said the group was awarded a land access grant of $8.4 million to help Black producers acquire farmland across Kansas. Texas. Missouri. Oklahoma. and Nebraska. Holmes said roughly 62 percent of the organization’s grant was intended to go directly to farmers.

She alleged that after the administration change. the USDA took nearly a year to supply her team with the approvals needed by the grant’s built-in budgetary structure to award payments to farmers. In November, Holmes said they finally heard from FSA staffers who requested changes to their paperwork. Over the next two months. she said. she worked with them to submit revisions and additional documentation the agency asked for. Then, after another period of waiting on USDA, the grant was cancelled.

Other grantees and sources close to the program said the USDA obstructed distributions of funding to farmers through scarce and severely delayed communication, lack of institutional support, and—crucially—the absence of necessary budgetary approvals over the last year.

The USDA declined to comment for this story.

On Tuesday, 24 other ILCMA grantees joined the lawsuit that Agroecology Commons filed last year. The plaintiffs are seeking another preliminary injunction to reverse the grant cancellations and restore grantees’ access to the funds.

For now, Agroecology Commons still has its money, and Atwood’s team plans to continue moving forward with the land access grant. Even so, they’re proceeding cautiously—holding off on making longer-term investments into hiring or programming and scrambling to fundraise in case of a sudden cutoff.

“When you talk about wasteful spending — the years and years that went into getting this program to even exist, and then to just terminate it,” Atwood said, incredulous. “That, to her, ‘seems like the real waste.’”

USDA farm grants Increasing Land Capital and Market Access ILCMA Farm Service Agency fraud allegations grant terminations National Appeals Division preliminary injunction DEI cuts land access for farmers of color