On Thursday, March 29, Senator Tom Harkin (D-IA) introduced the Rural Energy Investment Act (S. 2270) which would reauthorize and provide mandatory funding for several programs in the Farm Bill’s Energy Title.  The bill would provide $1.285 billion in farm bill mandatory funding over five years, including support for two farmer-based programs (see below) plus the Biorefinery Assistance Program which provides funding to companies developing commercial advanced biofuel plants.

Senators Kent Conrad (D-ND), Amy Klobuuchar (D-MN) and Al Franken (D-MN) are cosponsors of the bill.

NSAC is supportive of the bill’s provisions for the Rural Energy for America Program (REAP).  That portion of the bill would:

• Simplify the application process for small projects by creating a three-tiered application system with application simplicity reflecting the size of the project;
• Strengthen the environmental and health provisions by requiring USDA to include stronger environmental and health aspects in its award considerations; and
• Expand start-up support for feasibility studies so that rural farmers and businesses can start projects with sound planning.

These provisions are the same as those in Senate Bill 2225 introduced by Senators Franken (D-MN) and Harkin (D-IA) on March 22, 2012.

The Rural Energy Investment Act would authorize mandatory farm bill funding for REAP of $70 million per year from FY2013 through FY2017.

The new bill would also amend the Biomass Crop Assistance Program (BCAP) to:

• Allow lands scheduled to come out of the Conservation Reserve Program to be prepared for biomass crop production during the last fiscal year of their conservation enrollment schedule;
• Define “qualifying eligible material” to better specify what materials are eligible to apply for collection, harvest, storage, and transportation payments and change payment limits to a maximum of $25 per dry ton for a maximum of 3 years;
• Reduce the maximum number of years for contracts for establishing woody biomass feedstocks from 15 to 7 years;
• Cap crop establishment payments at $500 per acre and at 50 percent cost share, but increase those limits to $750 per acre and to 75 percent for beginning, socially disadvantaged, and geographically disadvantaged farmers or ranchers; and
• Provide USDA with additional authorities to limit CHST payments to avoid wasteful payments.

In our 2012 Farm Bill Platform, NSAC calls for more comprehensive reforms of BCAP, including to:

• Eliminate the CHST component of the program given the very significant problems with the Farm Service Agency implementation of the CHST component;
• Ensure that BCAP projects for the establishment of bioenergy crops conform to the program purpose of establishing new bioenergy crops, particularly perennials;
• Require that, if project money is used to fund the production of an annual crop for bioenergy, annual crops must be part of a resource-conserving crop rotation;
• Ensure that the BCAP project component is competitive and only available for developing new sources of energy;
• Require that NRCS play a central role in the development and implementation of BCAP conservation plans; and
• Deny BCAP eligibility for commodity program crop residues.

The new bill would authorize mandatory farm bill funding for BCAP of $75 million per year from FY2013 through FY2017.