real key is measuring the success of the spending. For many pilots and launched programs around regenerative practices, success is measured only through the allocation and spending stage. It never makes it to actual grower metrics that improve their economics. As above, reallocating some of this capital toward automation incentives provides a much better set of metrics for rural economies. I am in the middle of an analysis of federal economic development grants. For now, know that there appears to be $4.7 billion to $5.2 billion a year in federal grants through programs such as Community Project Funding (EDI) ($3.3 billion in fiscal 2024), the Economic Development Administration ($1.1 billion), Revitalization Grants ($320 million) and USDA and DOE economic development ($800 million). The next action item is to identify which of these apply to rural economies and how the success metrics are measured to determine how competitive the economic development impact of automation incentives is compared with existing programs. So now we come to the final topic: What does it mean when we get to $5 billion in annual automation revenue? First, it means that we create three separate but related billion-dollar categories of opportunity. The first is systems integration work—the work of integrating the robots into grower operations, supporting them and providing repairs. At $5 billion in automation revenue, this category could easily be worth $1 billion to $2 billion in annual revenue. The second is data and analytics built around all the data produced by the $5 billion in robots being operated on farms for multiple non-harvest tasks. The third is manufacturing and support. At a certain level, it will be worthwhile for manufacturers to consider bringing manufacturing for their robots to California because of the volume of business they are creating for their products here. Each of these three could generate $1 billion in annual revenue. In addition, there’s an AI optimization layer that’s hard to measure in revenue terms, but we know it will emerge as the core automation category grows. Furthermore, $5 billion in annual revenue means that 42,000 to 50,000 new jobs are created based on comparisons with other technology segments. And unlike many rural sectors, these are not construction jobs to build solar farms, energy production facilities, lumber processing operations or mining facilities. These are permanent, ongoing jobs, and they are highly skilled and well paid. This is why we all need to start looking at agtech automation not only as something that creates successful startups and helps solve the real and ongoing labor challenges, but also as a key piece of rural economic infrastructure. We have a clear path to $1 billion based on existing results and an equally clear, emerging path to $2.5 billion based on forecast venture capital and automation sales growth. We need an additional $5 billion to $6 billion in funding to reach our target of $5 billion in annual automation revenue. The combination of climate-smart funding from the IRA and the USDA Regenerative Pilot should be reallocated toward an EV tractor subsidy-style program to help accelerate the push to $5 billion in automation revenue. The sooner we get there, the sooner the new $1 billion categories emerge and scale, and the faster the 42,000 to 50,000 new jobs are added to support rural economies wherever specialty crops are grown.
and added a requirement that 65 percent of funds go to farmers (by putting in place lower admin cost caps). So how is this program doing? Well, the original USDA targets were 60,000 participating farms, 25 million-plus acres and 60 million metric tons CO2e. The actual results two years in are: 14,000 farms, 3.2 million acres and 400,000 metric tons. As with the IRA program, there are no farmer success metrics established as targets or measured. Now let’s take a look at the model for building the agtech incentives infrastructure to help support accelerating agtech purchases. It already exists and is part of the Climate Smart Funding efforts of the last 10 years. It’s the electric (EV) tractor subsidies program that uses California Air Resources Board (CARB) payments. The first program is FARMER, which pays for EV tractors that replace diesel FARMER, requires proof that the replacement tractor was turned into scrap and provides an average check size of $80,000 to $100,000. FARMER represents 85 percent of program payments through CARB. The second program is CORE, which pays to incent EV tractor purchases, represents 15 percent of program payments, and has an average check size of $50,000 to $60,000. As an example, one of the program participants, Monarch Tractor, made EV tractors that received significant CARB dollars. The business model for Monarch was selling 40 horsepower (HP) tractors for $85,000 and receiving a $50,000 to $60,000 payment from CARB. Even after receiving $155 million in VC funding and significant CARB funding to help support their EV tractors being purchased by growers, Monarch was unable to raise more capital and was acquired by Caterpillar after attempting to pivot from a tractor company to an IP company. Now let’s look at the success metric for these two programs. The program win was based on emissions reductions tied to the number of hours the EV tractor was driven. But here’s where the EV tractors meet the road. It’s very hard to prove these emissions because it appears that the system was largely based on an honor system of self-reporting and top-down economic models that are not verified through any bottom-up analysis. I have seen some of these EV tractors in their native habitat at growing operations. They are very rarely in use because of the lack of a compelling use case, but the same unused tractors are getting credit for success metrics because of the factors mentioned above. Next, let’s look at the Regenerative Pilot Program, USDA’s $700 million program that was announced Dec. 10, 2025. It is being run by NRCS as a fiscal 2026 pilot that redirects and sets aside funding inside two existing conservation programs: $400 million through EQIP and $300 million through CSP. The stated goal is to move USDA conservation funding from isolated practice-by- practice payments toward whole-farm regenerative conservation plans focused on soil health, water management and natural vitality. It is a large conservation delivery pilot layered on top of EQIP and CSP, with a stronger emphasis on whole-farm planning, soil health testing, bundled practices and public-private supply chain partnerships. To date, many of the success metrics for similar practice payment programs seek credit for approving a budget and spending the money. You can excuse farmers for not being overly impressed with passing a budget and actually spending the money. That’s basically table scraps for any grower operations team. The
24 Western Grower & Shipper | www.wga.com July – September 2026
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