The USDA canceled $300M in farm grants, citing fraud. Did it make up the evidence?
Leah Atwood was rattled. 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 from the USDA. While their peers were figuring out how to pick up the pieces, it seemed as though their $2.5 million grant, structured largely to help farmers of color acquire and sustain land, remained untouched. All they could do was wait. Resignation settled in — after all, they’d been in this position before.
Shortly after President Donald Trump returned to office last January, his administration launched a sweeping campaign to eliminate initiatives it 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 has repeatedly framed as the administration’s attempt to “stop wasteful spending.”
During the administration’s first year, Agroecology Commons lost multiple grants amidst 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 that restored their access to some of the money until the court makes its final determination based on the merits of the case.
All 49 other recipients of the Increasing Land, Capital, and Market Access grants received termination emails from the USDA during that week in March. In their written cancellations, which gave grantees two business days’ notice, Steven Peterson, the associate administrator of the USDA’s Farm Service Agency, explained to the grantees that their programming doesn’t align with the agency’s priorities and that its funding structure was not in keeping with the intent of Congress. He used the same language about cutting waste and discontinuing DEI efforts that had become routine for the administration. But whereas the administration tended to be vague about its claims of waste and fraud, Peterson’s letter was surprisingly 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 swirled throughout the grantee network, but no one could explain why Agroecology Commons’ project alone was spared. Atwood’s team presumed their grant wasn’t terminated because of the ongoing litigation. Now, they continue to wait to see whether their funding will abruptly disappear, too.
“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,” said Atwood. “It’s a strange reality.”
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 one of the 49 grants that was cancelled; they’d been awarded $8.5 million to help agricultural producers in North Carolina, Florida, Puerto Rico, and the U.S. Virgin Islands.
Koppa says RAFI was just about halfway through its five-year contract with USDA and had spent roughly $1.1 million when the termination notice came. From the beginning, almost $2.3 million of their total award had been set aside for grants to support farmer land acquisition and market access, with around $400,000 of that set aside for RAFI to acquire land parcels on behalf of farmers. Another $1.9 million was budgeted for project management costs, which included the fees associated with verifying financial compliance in federal audits, attorneys for farmland acquisition, and translation fees; and then $350k for a bucket of miscellaneous project activities, such as paying guest speakers at workshops, contracting report writers, and mass distributing hard-copies of farmer resources. The last $3.9 million was budgeted for technical assistance, a figure that encompassed the full budgets of the five subawardees that RAFI was working with on the project.
“Under the guise of increasing land access for producers, the ILA program included no minimum requirement for direct producer support,” a USDA spokesperson told Civil Eats in March. “Instead, 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. To no surprise, a peek behind the curtain of this Biden-era program revealed the egregious misuse of taxpayer dollars to the tune of nearly $300 million dollars.”
Koppa says she has never seen the budget items that the USDA cited. “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, who led another land access project working to expand Iowa’s fruit and vegetable farmers ability to secure permanent and affordable land access, is also adamant that her $1.8 million grant had no carve-outs for the expenditures detailed in their termination notice. Viva Farms’ Anna Chotzen, project manager of another ILCMA project that was awarded a $2.5 million grant to help beginning and historically underserved farmers in two Washington counties access farmland, said the same. Her team has no idea where those budget items came from. All she knows is that it wasn’t them.
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, questions the validity of the excessive spending claims.
“If that dollar amount for $20,000 in pens was put in there, did they show proof of that?” said Montaño Greene. “Show the proof, right?”
Throughout April, at least 45 of the 49 terminated grantees — including two subgrantees — filed appeals against the termination to the National Appeals Division, an independent office of the USDA, Grist has learned. According to Amanda Koehler, a consultant on the land access program, all but two were informed that their award terminations are not appealable because the decision to terminate “was a matter of general applicability and not based on the individual application of specific program criteria.” (The outstanding two, says Koehler, have not heard back yet.)
That finding by NAD should put the USDA’s justification for cancellation under closer scrutiny, she added, because it “underscores, in my opinion, that terminations were not based on anything the awardees did or didn’t do.” To her knowledge, none of the grantees — including Agroecology Commons — had budgets that included any of the claims USDA has made concerning wasteful or fraudulent spending.
“This termination doesn’t seem like it was rooted in anything about our conduct with this grant,” said RAFI’s Koppa. “It seems to be part of some sort of larger motivation where we were not being treated fairly.”
JohnElla Holmes, who oversees the Kansas Black Farmers Association, which was awarded a land access grant of $8.4 million to help Black producers acquire farmland across Kansas, Texas, Missouri, Oklahoma, and Nebraska, says that roughly 62 percent of the organization’s grant was intended to go directly to farmers. She alleges that, following the administration change, the USDA took nearly a year to supply her team with the necessary approvals required by the grant’s built-in budgetary structure to award payments to farmers. Last November, Holmes says they finally heard from FSA staffers who requested changes to their paperwork. Over the next two months, she worked with them to submit all the 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 also say that the USDA obstructed the distributions of funding to farmers with its 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, with the aim of reversing the grant cancellations and restoring grantees’ access to the funds.
While it still has its money, Agroecology Commons plans to move forward with the land access grant. Atwood’s team, though, is proceeding cautiously — holding off on making longer-term investments into hiring or programming, and scrambling to fundraise against the possibility 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 incredulously. That, to her, “seems like the real waste.”
This story was originally published by Grist with the headline The USDA canceled $300M in farm grants, citing fraud. Did it make up the evidence? on Jun 1, 2026.
