BCAP Recap

It has been an eventful few months for BCAP.
By | January 25, 2011

The Biomass Crop Assistance Program has taken some major hits over the past couple of months, but the USDA Farm Service Agency has continued to release documents necessary to get the program rolling again.

In mid-December, the federal omnibus spending bill proposed to cut all expenses to administer BCAP in 2011, which would have essentially ended the program. While the omnibus was withdrawn due to lack of support, BCAP’s fate in the next spending bill is still up in the air.

Meanwhile, at the request of the FSA, a report was released by the USDA Office of Inspector General that evaluated the initial pilot program version of BCAP's collection, harvest, storage and transport (CHST) matching payments program, which was terminated in February after $243 million was spent.
OIG’s review focuses on the efficacy of processes and controls FSA used in implementing the program. Based on a review of 12 county office operations in four states, and overall administration of the program at the national office, OIG found wide-ranging problems in how the CHST program was operated. These included inconsistent application of program provisions across state and county offices, varying methods for measuring biomass moisture levels, inconsistent use of program forms and data errors. 

OIG determined that the problems occurred because FSA, in an effort to quickly implement the program to comply with a deadline established by presidential directive, didn’t have adequate time to develop a handbook, specialized forms or a computer support system suited to the specific requirements of the CHST program. “Due to these problems, FSA implemented a program that encumbered the efforts of its field-level personnel and resulted in inequitable treatment of program participants, improper payments, and reduced scope for oversight and accountability,” the report says.
To correct the problems, OIG recommends that FSA develop a program-specific handbook and forms, and a program-dedicated data system. OIG plans to provide a full report with greater scope and detail.

If the omnibus doesn’t cut 2011 funding, the next hurdle BCAP will face is maintaining funding in the 2012 Farm Bill, and whether that will happen is unknown. Daniel Simon, partner in Ballard Spahr’s business and finance department and an energy and project finance group member, says it is a matter of whether the new Congress will view the program as a worthwhile investment that helps both renewable energy and agriculture, or as a subsidy program that should be cut to address the budget deficit.

—Anna Austin