Farm Bill passes Senate, energy title programs intact

The Senate has finished voting on 73 amendments proposed for the $500 billion 2012 Farm Bill and subsequently passed it on to the House, leaving the Biomass Crop Assistance Program, Rural Energy for America Program and Biorefinery Assistance Program slated for continuation.

Amendment 2226 was proposed by Sen. Pat Toomey, R-Pa., and would have eliminated all Farm Bill energy title funding. It was voted down in a June 20 vote of 36-63.

Among multiple programs under the energy title, REAP has been reauthorized at $20 million per year, with mandatory funding of $48.2 million for each of fiscal years 2013-2017. A cap of $500,000 has been put on grants, and no money is available for feasibility studies.  Leftover funds from the Repowering Assistance Program, which has been repealed, will be transferred to REAP.

The Biorefinery, Renewable Chemical and Biobased Product Manufacturing Assistance Program has been reauthorized at $150 million per year, with mandatory funding of $100 million for fiscal year 2013 and $58 million for each of fiscal years 2014 and 2015.

BCAP, which has been on a funding rollercoaster since its inception, has been reauthorized at $20 million per year, with mandatory funding of $38.6 million for each of the fiscal years 2013-2017. Of the mandatory money, no less than 10 percent and not more than 50 percent may be used to make collection, harvest, transportation and storage payments.

USDA-FSA Chief of Staff Todd Atkinson said that with the most recent project area announcements USDA made mid-June, all BCAP funds have been spent. Despite the funding uncertainty it’s seen, Atkinson said the program has seen a tremendous amount of success. Grower payment contracts are guaranteed so participation hasn’t been lacking in that regard, but he said some project sponsors that may have otherwise participated were wary of the low funding levels and opted to wait until the new Farm Bill was out to decide whether or not to participate.

On what has been learned in implementing the project area component of BCAP, Atikinson said relationships with farmers are very important. “It isn’t necessarily ‘if you build it, the farmers will come,’ you’ve got to have trusting relationships with them, because they are making the tough choice of entering into a five-year contract to grow new a crop when they could be growing something else, and they need to know that there’s something at the end of the tunnel; that the crop can be used,” he said.  

Though saved in the Senate, there is still danger that the energy titles will be stripped in the House. If that happens, Atikinson said that he believes BCAP will still have had a meaningful impact on the U.S. bioenergy/biofuel industries. “The information that is being generated has been indispensable,” he said. “It has brought down the start-up costs for sterile miscanthus, it has educated people on planting patterns, standards and best practices, and it has moved us from the theoretical stage to the actual application, and that’s good.”

Atikinson pointed out that the president has said there are no short-term solutions to gas price, only long-term solutions, but the current Congress is making counterproductive decisions.  “When gas prices dip lower, that’s not a good time to hit the snooze button—we have to keep moving forward on this,” he said. “Five years ago at a time of high gas prices, the 110^th Congress started these long-term investments with the 2007 Energy Bill and the RFS 2 (Renewable Fuels Standard 2), and the 2008 Farm Bill and BCAP, and what are we seeing with the 112^th Congress? An end to the tax credit for cornstarch ethanol, cuts to BCAP, people entertaining calls to revisit RFS 2, and efforts to stop the Navy from entering into biofuels.”

Meanwhile, he added, the U.S. is seeing the same tax treatments for 100-year-old energy industries. “The question is, are we going to kick the can, or are we going to make investments for the future?”