Edward Niblock

June 19, 2013 | General

Bioenergy Outlook: Farm Bill Quagmire

Edward Niblock

Edward Niblock
BioCycle June 2013, Vol. 54, No. 6, p. 53

Washington D.C., contrary to what people might think, is a very hardworking city. When your job is to prevent epidemic disease, poisoned food, missing nuclear waste, airplane accidents, damage to the environment, poverty, homelessness and terrorist attacks, you tend to put in the time at the office. This is in part because it is difficult to measure output so people compensate with input, and also because people with these jobs take them very seriously.
Even within this context, however, there are times on Capitol Hill when after a great deal of input, measurable output is expected. The Farm Bill moving through the Congress is a case in point, especially because the Farm Bill also moved through the Congress last year. The bill was not passed, and instead was prolonged at the last minute with a short extension that expires this fall. The Farm Bill is traditionally a five year bill, requiring time on the legislative calendar only once during that cycle, like a quinquennial insect emerging from its larval state (think cicada but uglier).
Whatever the original causes for the five year cycle, one major reason we keep it (or try) is that the U.S. agricultural economy is so massive and complicated that the entire five years between bills is consumed with gathering data about the programs and the U.S. agricultural system. In general, the Farm Bill takes longer to move through Congress because it still goes through what we call “regular order.” This term refers to the passage of a bill in the manner that all bills used to be passed. The various committees with jurisdiction over the bill, which are many, hold hearings, consider provisions, etc. and then a bill goes to the floor.
Hardly anything is passed this way anymore because of the “partisan gridlock” in the Congress (a tiresome term but still the only truly accurate description). Instead what happens is that leadership discusses possible compromises in closed door sessions taking into account the various ranting and ravings of their party members and then a bill pops out fully formed which hopefully passes and often does not. This is how we ended up with a short extension of the Farm Bill instead of the whole bill at the end of last year.
The Farm Bill is actually an agriculture and nutrition bill, and includes several supplemental nutrition programs including what we know as “food stamps.” This combination has usually created a majority coalition, including members of Congress representing rural constituencies and members representing urban populations, which comes together and passes a bill that ensures a stable agricultural economy and appropriate nutrition support for low income Americans.
One large threat to the passage of the Farm Bill this year is a large number of members in the House of Representatives who are demanding huge cuts to the food stamp program. This impasse (much of the rest of the Congress, both House and Senate, is against cutting the food stamp program) could derail the bill indefinitely. In fact, some observers think that the Farm Bill will be a series of one-year extensions until the economy improves to the point that subscription in the food stamp program goes down and cuts are possible.

Energy Title

For bioenergy, what we care about is the so-called “Energy Title,” which is Title 9 in the current Farm Bill. The Energy Title programs have been extremely helpful to digester projects that qualify for U.S.Department of Agriculture assistance, especially the Rural Energy for America Program (REAP), which was Section 9006 in the 2002 Farm Bill and is Section 9007 in the 2008 Farm Bill.
Between 2003 and 2010, Sections 9006 and 9007 of the Energy Title funded 147 anaerobic digester facilities with a total of $74.5 million in grants and loan guarantees, which leveraged $205 million in total investment. In fiscal year 2011, various USDA programs helped develop over 60 dairy-based anaerobic digester projects. For the same fiscal year, the REAP program alone funded 19 different projects with $7.8 million in grants and $13 million in loan guarantees, which leveraged $110 million in private investment. Ever since the renewal of the Farm Bill went into limbo, it has been very difficult for the agricultural biogas industry to rely on or plan to use these programs.
In the 2008 Farm Bill, these programs were passed with what is known as “mandatory funding,” meaning that the programs were funded for all five years. This is relatively unusual, and assured those counting on the programs that they would not be subject to the vicissitudes of the annual appropriations process. (Congress funds the entire government every year through appropriations, and the current level of “vicissitude-ness” of the process is extremely high.) Failure to agree on appropriations bills has resulted in numerous “continuing resolutions” that simply extend funding for the government at current levels. These extensions are often last minute, and leave anyone dependent on continued government solvency at constant risk.
Therefore the challenge for bioenergy advocates in Washington is to ensure that the Energy Title is not just renewed, but also receives mandatory funding, to allow business cycle planning with regard to the energy programs. Currently, the Senate bill has the funding and the House bill does not. Since the energy title is one percent of the Farm Bill, the reconciliation between the House and Senate bills will be focused on controversies involving higher dollar amounts, such as the food stamp debate. If the two bills are not reconciled, there is a very real risk of further short-term extensions, and the eventual discontinuation of the Farm Bill’s five-year tradition. If all the Farm Bill programs, including the Energy Title, become annual programs, the effect on the U.S. agricultural economy — including bioenergy production — would be significant.
Ted Niblock is General Counsel for Turning Earth, LLC, and is cochair of the American Biogas Council’s Federal Legislative and Regulatory Affairs Committee.

Sign up