Farm Bill Energy Programs: All-of-the-Above Value

The all-of-the-above energy approach of the Farm Bill energy programs enables investment in rural America, supports innovation and new manufacturing industries, and generates economic opportunities and jobs.
By Lloyd Ritter | July 10, 2017

American farmers have built an impressive record of productivity in the past several years. Despite their success, rural America is facing new economic headwinds. Congress should move expeditiously with its work on a new Farm Bill to help farmers and rural communities respond to the challenge. Agriculture energy programs remain a vital part of the legislation because they help farmers diversify the sources of energy they use and the types of products they generate.

Despite years of record harvests—perhaps even because of them—a worldwide decline in commodity prices cut U.S. net farm income by 15 percent to about $68 billion in 2016, the lowest level since 2009, according to the USDA. Income is projected to drop another 9 percent in 2017. That decline in income reverberates throughout rural America, undercutting the economic vitality of communities and several states. Farm Bill programs support investments in rural communities that diversify economic opportunities and bring new jobs. Every one of the farm bill energy programs is important and effective, and each of them provides a success story.

While making his first policy speech in Iowa, our new Secretary of Agriculture Sonny Purdue recently thanked farmers for their innovations and technological developments, promising that this new administration would continue to look for opportunities to support the agriculture industry in its efforts to innovate. Ensuring funding for these important Farm Bill programs is one critical way to do just that.
The Biobased Markets Program, also known as the BioPreferred Program, provides tangible evidence of the diversity of rural America’s contribution to the national economy. The program supports a voluntary product label that informs consumers about the biobased content of products on their local store shelf. One example is Procter and Gamble’s Tide bottles. According to USDA, sales of products that qualify for the label equaled $127 billion in 2014; the overall U.S. economic impact of the biobased industry was nearly three times higher, at $393 billion. Moreover, the biobased product industry employs more than 1.5 million people, and for every job in the industry, another 1.76 jobs are created.

The Section 9003 loan program works just like the other rural loan programs to help small communities capitalize new investments. This particular program supports advanced biofuel and renewable chemical manufacturing facilities, which create new markets for agriculture, new manufacturing jobs, and new biobased products. California-based Biosynthetic Technologies is using this program to secure sufficient funds to build a Baton Rouge, Louisiana, manufacturing plant that will produce 20 million gallons a year of the company’s industrial lubricant products. Likewise, Fulcrum Sierra Biofuels is building a new biorefinery in Storey County, Nevada, to convert the county’s municipal solid waste into jet fuel.

The Rural Energy for America Program helps farmers, ranchers and small businesses cut energy costs with modern, energy-efficient technologies and renewable energy. It also helps them build investment in new sources of energy. Nearly 13,000 projects have been awarded in all 50 states since the 2008 Farm Bill, leveraging more than $3 billion in private investment. The program has enabled farmers to take waste streams—manure and crop residues—and make energy, soil amendments, fertilizers, biogas and even raw materials for renewable chemicals and bioplastics. These new products diversify income for farmers during times of uneven commodity prices.

The Biomass Research and Development Initiative underpins research opportunities across the country to explore new agricultural biomass sources and conversion technologies. Under this program, Dartmouth University is researching biomass pretreatment technologies that are bringing down the cost of cellulosic biofuels and other products. Innovation is necessary for every industry, and this program ensures that development of new technology targets the needs of American rural industries.

The Biomass Crop Assistance Program helps farmers and forest owners establish, produce and deliver new biomass resources. Without this program, farmers would have to take a multiyear risk in planting new energy crops before they could harvest a return on their investment. And biobased product manufacturers might never be able to establish a new market for the new crops. BCAP was critical in helping Aloterra work with northeast Ohio and northwest Pennsylvania farmers to establish 5,000 acres of a new perennial grass on underutilized cropland in. That cooperative effort enabled Aloterra to build two new manufacturing facilities in Ashtabula County, Ohio.

So while the U.S. farm economy is facing economic challenges in the near-term, there is a solution for the long-term. The all-of-the-above energy approach of the Farm Bill energy programs enables investment in rural America, supports innovation and new manufacturing industries, and generates economic opportunities and jobs. Congress should reauthorize the entire energy title—and ensure proper funding—because each program has a proven track record of diversifying the farm economy.

Author: Lloyd Ritter
Director, Agriculture Energy Coalition