May 22, 2012
On Friday, May 18, the Subcommittee on Conservation, Energy, and Forestry of the House Agriculture Committee held a hearing that included testimony on the next Farm Bill’s Energy Title. This is the final hearing in a series of Farm Bill hearings held in Washington D.C. by House Agriculture Subcommittees that featured farmers, ranchers, agricultural organizations, conservation organizations, bioenergy coalitions and other stakeholders as witnesses.
The Farm Bill approved by the Senate Agriculture Committee included $800 million in new mandatory funding for Energy Title programs, none of whose current funding is extended beyond the 2008 Farm Bill. The Senate found offsets for the Energy Title in an estimated $1.7 billion surplus in the draft Senate bill above the Senate Committee’s goal of a $23 billion cut to the Farm Bill budget. That surplus was divided in the Senate markup between the $800 million energy amendment and an amendment to increase the payment acres for the proposed new shallow loss revenue protection payment program.
The House Agriculture Committee, however, is aiming for $33 or 34 billion in cuts to the Farm Bill budget rather than $23 billion, which will make it difficult to find additional Energy Title funding.
Highlights of the hearing included the testimony of Steve Reinford who operates the Reinford Farms Inc., a dairy farm in central Pennsylvania. The Reinfords used funding from a Rural Energy for America Program (REAP) grant and state funding sources to construct an anaerobic digester to treat the dairy’s waste, initially to deal with odor problems. Mr. Reinford was told that he would need to increase the dairy to 800 cows in order to have the digester function at a profit. But when the digester was installed, he was approached by local Walmart stores to take food waste from their stores for the digester. This waste stream significantly increased the energy output and income from the digester. The additional waste from non-farm sources allowed the Reinfords to keep the dairy herd at about 500 cows. Mr. Reinford noted in his testimony that in Germany many dairies with 100 cows also take food waste and other organic wastes and operate their digesters at a profit. The Reinford digester provides energy for the Reinford home and dairy operation, as well as powering 80-100 homes.
Jerry Taylor, president of MFA Biodiesel Co., focused his testimony on the Biomass Crop Assistance Program (BCAP), which has provided funding for a project to raise hybrid Miscanthus giganteus as feedstock for a biomass energy project. NSAC does have concerns about the use of Miscanthus in BCAP projects because of its potential to become invasive. But we also found merit in recommendations for BCAP proposed by Mr. Taylor in his written testimony. These recommendations include focusing on projects involving perennial crops. He also agreed that BCAP funds should not be used for projects on land that has not been cultivated but should rather focus on projects that can improve marginal land with the establishment of a perennial crop or trees.
Mr. Taylor also recommended that BCAP be modified to provide funding for a long enough period to establish sufficient biomass production for a bioenergy facility to undertake investments in the facility, seed sources and equipment necessary to plant and harvest a new type of crop in a region. He suggested that projects be guaranteed funding for at least three years. In response, Rep. Reid Ribble (R-WI) raised the concern that business ventures dependent on subsidies might never transition to a competitive market and would return to Congress for continued funding. Mr. Taylor pointed out the BCAP was structured to avoid that problem because the biomass facility did not receive the BCAP funding directly and would not be basing its product pricing on the subsidy. Instead, a longer time course for the BCAP funding to farmers would encourage more farmers to produce the feedstock for the biomass facility, helping to ensure the success of the venture.