After nearly three months of frozen payments, the U.S. Department of Agriculture has canceled a five-year, $35 million climate-smart agriculture grant to a Freeport demonstration farm.

Wolfe’s Neck Center for Agriculture & the Environment was informed last week that it had lost its grant because its overhead costs exceeded new guidelines set by the Trump administration, Wolfe’s Neck communications director Harry Kimball said.

The USDA announced it was canceling most of the 135 projects funded by the $3.1 billion Partnerships for Climate-Smart Commodities program last week, calling it a Biden administration-era slush fund “built to advance the green new scam at the benefit of (nongovernmental organizations).”

In its notice to Wolfe’s Neck, the USDA cited the project’s failure to pay at least 65% of its funding directly to farmers. But Kimball said the project’s indirect spending still benefited farmers.

“This PCSC-funded work provided a critical amount of funding to support farmer practice transition,” Kimball said in an email. “It is also focused on other areas of agricultural support, including technical assistance, soil analysis, and data systems and technology development.”

Maine farmers will benefit from longer growing seasons brought on by a warming climate, but they also will face greater risks as milder winters make conditions ripe for more harmful plant diseases and pests, and extreme weather patterns make it harder to predict and plan for drought and downpours.

Wolfe’s Neck was using the funds to equip and train workers at 400 U.S. farms in climate-smart agriculture, create transition financial incentives for farmers and ranchers, and develop a marketplace for climate-smart commodities. To date, it had enrolled 75 farms, including a few in Maine.

The center had pledged to use 40% of funds to help historically underserved farmers: farmers of color, veterans, low-income farmers or those who are new to farming. It would have supplied materials and services in English, Spanish, Chinese, Hmong, Vietnamese and Punjabi.

Although it was at the height of program implementation, Wolfe’s Neck has been preparing for the possibility of grant termination for weeks. In mid-March, it told 25% of its staff they would be furloughed in mid-April and their role terminated in May if the then-frozen USDA funding was not restored.

The center has until June 20 to reapply to the new Advancing Markets for Producers program that USDA has set up to replace the Climate-Smart Commodities program. However, this program still includes the 65% direct-to-farmer payout requirement that the initially funded program failed to meet.

Kimball said Wolfe’s Neck Center staff is still evaluating this new grant funding opportunity.

Earlier this month, Wolfe’s Neck posted about the project’s uncertain future in its online blog.

“We knitted a beautiful sweater and now we are being forced to pull out a number of strands of yarn,” Executive Director Dave Herring is quoted as saying. “While it is painful to see this ‘sweater’ that we have worked so hard on unraveling, it does not mean the (grant) work will end.”

The USDA has said it will honor eligible climate-smart program expenses incurred before April 13.

As of last summer, the USDA reported that 14,000 farms were already implementing climate-smart practices such as cover cropping, furrow-based irrigation and manure management on 3.2 million acres nationwide.

USDA Commissioner Brooke Rollins claimed last week that many climate-smart projects had “sky-high administrative costs” and paid out less than half of their funding to farmers. The new market program would cut bureaucratic red tape, streamline reporting and put farmers first, Rollins said.

Wolfe’s Neck Center is not the only Maine group impacted by this cancellation.

The Maine Organic Farmers and Gardeners Association was supposed to get $150,000 to help local farmers promote sustainable farming practices, but the umbrella group funding the work got a termination letter last week after the USDA concluded it fell below the 65% direct-to-farmer payment threshold.

That group, the Pennsylvania Association for Sustainable Agriculture, is appealing USDA’s determination.

MOFGA’s climate-smart work would have helped farmers use soil and financial data, design conservation projects, complete environmental reviews, enhance market access for environmentally friendly products and monitor practice outcomes, MOFGA said in its Monday newsletter.