On February 7th, 2014, president Obama signed the latest American farm bill, the Agriculture Reform, Food, and Jobs Act of 2014.
Title IX of the new farm bill, the Energy Title, will authorize a total of $879M in mandatory spending on energy programs through 2023, according to the congressional budget office (CBO). Programs receiving funding include the:
- Biobased marketing program
- Biorefinery assistance program
- Bioenergy for advanced biofuels
- Biodiesel education program
- Biomass refinery repowering assistance program
- REAP, Rural Energy for America Program
- Biomass research and development support
- Feedstock flexibility program
- BCAP, Biomass Crop Assistance Program
- Community wood energy program
- USDA Internal Energy Audits
The Rural Energy for America Program (REAP) and the Biomass Crop Assistance Program (BCAP) received major design changes and funding appropriations in the new Farm Bill.
REAP, which provides loans and grants for agricultural producers to develop renewable energy systems or pursue energy efficiency projects, has been broken into a three-tiered funding system to more effectively fund projects of different scales and costs. Three separate applications will be developed for projects under $80,000, projects between $80,000 and $200,00, and projects over $200,000. This should allow the program to more effectively administer funding to projects of different sizes and scales. Additionally, the new farm bill repeals funding to conduct project feasibility studies under REAP. REAP will receive $50M in mandatory funding each fiscal year over the next 10 years, in addition to up to $20M in discretionary funding each fiscal year from 2014 through 2018.
BCAP, which provides payments for the growing, harvest, and transportation and usage of non-food bioenergy crops, will receive $25M in funding for each fiscal year through 2018. This represents a significant change in funding from the 2008 Farm Bill which gave BCAP relatively unrestricted funding by granting it “…such sums as needed” to carry out the program. This reduction in funding is driven by the high cost of BCAP under the 2008 Farm Bill, which cost roughly $900M through fiscal year (FY) 2012, much higher than CBO estimate of $36M total for the authorization of the program. Additionally, the Collection, Harvest, Storage, and Transportation program, which was mainly responsible for previous cost overruns, is limited to receiving no less than 10 percent and no more than 50 percent of the funding appropriated for BCAP. The remaining funds must establish new biomass crop project areas and payments to farmers growing biomass crops.
Ultimately, new funding allocations, as well changes to mandatory funding levels and program design under the farm bill should allow continued U.S. bioenergy industry support, while avoiding some of the 2008 Farm Bill inefficiencies.