USDA Farm Bill Proposal Includes $1.6 Billion for Renewable Energy

February 7, 2007

While the federal government is gearing up for its fiscal year 2008 funding, the U.S. Department of Agriculture (USDA) has an additional distraction, as the Farm Bill is up for renewal this year. On January 31st, Agriculture Secretary Mike Johanns unveiled the USDA's 2007 farm bill proposals, which propose a total of $1.6 billion in new funding over the next 10 years for renewable energy research, development, and production. See the USDA press release.

The proposed funding over the next ten years for the Farm Bill includes $100 million in direct support to cellulosic ethanol producers; $500 million for a bioenergy and biobased product research initiative; $150 million in competitive grants for biomass research, focusing on cellulosic ethanol; $18 million to expand and improve the Federal Procurement of Biobased Products program; $210 million to support up to $2.17 billion in loan guarantees for the Renewable Energy Systems and Energy Efficiency Improvements loan guarantee program; $500 million for the Renewable Energy Systems and Energy Efficiency Improvements grant program; and $150 million for a new wood-to-energy program. The proposal also envisions adding a new program to the Conservation Reserve Program to reserve lands for biomass energy production. See the Title IX chapter (pages 142 to 147) of the Farm Bill proposal (PDF 536 KB). Download Adobe Reader.

Back in 2002, when the Farm Bill was last reauthorized, it included energy provisions for the first time in Title IX of the bill. One of those provisions was the Renewable Energy Systems and Energy Efficiency Improvements program, which assists eligible farmers, ranchers, and rural small businesses in purchasing renewable energy systems and making energy efficiency improvements. Among the other energy provisions in the 2002 Farm Bill were an extension of loans for value-added agricultural products to include renewable energy systems and the creation of the Federal Procurement of Biobased Products program. All of those provisions placed the USDA in a much more active role regarding energy development. See the description of the Title IX provisions in the 2002 Farm Bill on the USDA Web site.