It has been a week of chaos and confusion for agricultural producers, non-profits, and numerous others following the uncertainty caused by a memo from the Trump administration warning that it would freeze federal loans and grants.
It started with a memo Monday from the Office of Management and Budget (OMB). That memo read in part: "to the extent permissible under applicable law, Federal agencies must temporarily pause [bold in original] all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated by the executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal."
The funding freeze was the Trump administration’s attempt to purge priorities and purposes that did not align with the president’s political ideology. It essentially directed agencies to review all recipients to make sure that they were supporting missions that Trump would find acceptable.
The memo said that the funding freeze would go into effect on Tuesday at 5 p.m. Eastern. But what funding would freeze? How long would it last?
Much uncertainty ensued. And in some cases, panic, too. Would payments to farmers stop? OMB later clarified that it would not. Neither would payments for food assistance to families.
What about funding for organizations that provide agricultural-related services, like non-profits? That is where answers were not as clear.
The Organic Trade Association was among the groups demanding clarification and urging Congress to make sure that the Trump administration would fulfill existing financial agreements.
“Many farms and businesses have already spent dollars and are awaiting reimbursement from these government programs. Farm businesses and organizations have made financial decisions, signed contracts, and otherwise obligated themselves and exposed themselves to financial risk based on the belief that they had a legal and binding agreement with the federal government. Funds must be dispersed for any grants or contracts that have already been executed with American businesses.
Within our membership there are awardees for grants for on-farm infrastructure or equipment, expanding manufacturing capacity, technical assistance to farmers, dairy business innovation, and overseas market development. A pause for any length of time would be extremely challenging and disrupt investments for American farms, rural communities, and businesses. We urge Congress to work with the administration to quickly resolve the confusion and broad blanketing of such important investments in American agriculture.”
REWIND: Organic Trade Association Co-CEO Matthew Dillon told American Farmland Owner last June how producers handled inflation while committing to expanding connections with consumers. Listen or watch that conversation here.
The backlash against the Trump administration’s action was strong. This wasn’t just typical politics of Democrats criticizing Republicans or vice-versa. This was much more far-reaching.
Non-profit organizations, associations, schools, veterans’ services, groups that deliver meals to the homebound, or help addicts recover, or heal children who had been sexually abused were alarmed that they did not know whether their funding would be impacted, or whether their services could continue.
RELATED: AgricultureDive looked into the concerns from agricultural groups about the potential of a federal funding freeze. Read that here.
(Note: AgricultureDive announced that it would cease publishing on February 1st. American Farmland Owner expresses our gratitude to AgricultureDive for providing timely, relevant information to those of us committed to the future of agricultural success.)
The Trump administration offered some clarification on some of the programs that would not be impacted by the freeze. But it stuck with its plans to institute the freeze for other programs that were not exempted.
Late Tuesday afternoon, a federal judge intervened and blocked the federal freeze’s implementation until Monday.
“The government doesn’t know the full scope of the programs that are going to be subject to the pause,” U.S. District Judge Loren L. AliKhan said in her ruling in response to a federal lawsuit on behalf of several groups representing organizations concerned about the ramifications and legality of the funding freeze.
On Wednesday, the Trump administration rescinded its memo.
RELATED: CNN reviews the actions that took place during the week and the pushback that the Trump received, both from groups affected and by the legal system, as critics questioned whether a president has the authority to stop payments that had already been approved.
