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Tuesday, November 29, 2011

Renewable Energy Programs and the Farm Bill: Status and Issues


Randy Schnepf
Specialist in Agricultural Policy

U.S. Department of Agriculture (USDA) renewable energy programs have been used to incentivize adoption of renewable energy projects including solar, wind, and anaerobic digesters. However, the primary focus of USDA renewable energy programs has been to promote U.S. biofuels production and use—including corn starch-based ethanol, cellulosic ethanol, and soybean-based biodiesel.

The 2002 farm bill (Farm Security and Rural Investment Act of 2002, P.L. 107-171) was the first omnibus farm bill to explicitly include an energy title (Title IX). The energy title authorized grants, loans, and loan guarantees to foster research on agriculture-based renewable energy, to share development risk, and to promote the adoption of renewable energy systems. The 2002 farm bill was followed by two major energy bills (the Energy Policy Act of 2005, P.L. 109-58; and the Energy Independence and Security Act of 2007, P.L. 110-140), which established and expanded a national biofuels mandate along with several other renewable energy programs.

The 2008 farm bill (Food, Conservation, and Energy Act of 2008, P.L. 110-246) built on the 2002 farm bill as well as the previous renewable energy legislation, but refocused biofuels policy initiatives in favor of non-corn feedstocks, especially cellulosic-based feedstocks, in response to growing concerns about the emerging spillover effects of increasing corn use for ethanol production. Like the 2002 farm bill, the 2008 farm bill contained a distinct energy title (Title IX) that significantly expanded the number and types of programs available to support renewable energy production and use. In addition, new renewable-energy provisions were included in the rural development (Title VI), research (Title VII), livestock (Title XI), and tax (Title XV) titles of the 2008 farm bill.

The 2008 farm bill authorized $1.1 billion in mandatory funding for energy programs for FY2008 through FY2012, compared with $800 million in the 2002 farm bill (FY2002-FY2007). Mandatory authorization in the 2008 farm bill includes $320 million to the Biorefinery Assistance Program, $300 million to the Bioenergy Program for Advanced Biofuels, and $255 million to the Rural Energy for America Program (REAP). The Biomass Crop Assistance Program (BCAP) is authorized to receive such sums as necessary (i.e., funding is open-ended and depends on program participation). Discretionary funding in the 2008 farm bill totaled $1.7 billion (including $600 million for the Biorefinery Assistance Program), compared to $245 million in the 2002 farm bill. However, all discretionary program funding is subject to the annual appropriations process, which may or may not appropriate funds due to budget constraints. Actual discretionary appropriations to Title IX energy programs have been substantially below authorized levels through FY2012.

Implementation of the farm bill’s energy provisions is ongoing. President Obama, in May 2009, directed USDA and the Department of Energy (DOE) to accelerate implementation of renewable energy programs. Notices, proposed rules, and final rules have appeared in the Federal Register soliciting applications for those programs with available funding. The primary energy-related issue for the next farm bill is the expiration at the end of FY2012 and lack of baseline funding going forward for all major energy-related provisions of Title IX. In addition, the appearance of substantial redundancy across renewable energy programs at USDA and DOE, the slow development of the U.S. cellulosic biofuels sector, and concerns about the emerging spillover effects of increasing corn use for ethanol production are issues that are likely to emerge during the next farm bill debate.



Date of Report: November 1
8, 2011
Number of Pages:
36
Order Number: R41
985
Price: $29.95

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Environmental Regulation and Agriculture


Megan Stubbs, Coordinator
Analyst in Agricultural Conservation and Natural Resources Policy

As the U.S. and global economies continue to struggle, some inside and outside of Congress have expressed concern about how environmental regulation may stifle growth and productivity. Much of the criticism has focused on environmental regulations promulgated by the Environmental Protection Agency (EPA). Some claim that EPA is overreaching its regulatory authority and imposing costly and burdensome requirements on society. The agriculture community, among others, has been vocal in its concerns, contending that EPA appears to be focusing some of its recent regulatory efforts on agriculture. Environmental advocates, on the other hand, support many of EPA’s overall regulatory efforts to protect public health and the environment. Where agriculture contributes to environmental impairment, these groups say, it is appropriate to consider ways to minimize or eliminate the adverse impacts.

A healthy agriculture industry and a healthy environment are both important to the nation. However, agricultural production can have varying impacts on the environment. The use of both natural resources and synthetic inputs in agricultural production can sometimes create a negative impact on human health and the surrounding ecosystem. The magnitude of these environmental impacts varies widely across the country and changes over time. Given the agricultural sector’s size and potential to affect its surrounding environment, there is interest in tightening environmental policies while also maintaining an economically viable industry. Most recognize the agriculture community’s efforts to protect natural resources while striving to maintain a sustainable and abundant food supply.

The current federal response to environmental issues associated with agriculture is viewed as being both restrictive and supportive. Traditionally, farm and ranch operations have been exempt or excluded from many environmental regulations. The challenges and complexity of regulating numerous crop and livestock operations can be cost-prohibitive for government regulators; thus environmental policies have historically focused on large industrial sources such as factories and power plants, not farms. Much of the current farm policy addressing environmental concerns is through economic incentives to encourage beneficial production practices.

Growing interest in the impact of EPA’s regulatory actions on many sectors of the economy is evident in Congress, which has been examining the roles of EPA and other federal agencies in regulating environmental protection. Among the broad options for Congress, besides conducting general oversight, are reviewing rules under the Congressional Review Act, amending current law to modify an agency’s authority, introducing freestanding legislation, or using appropriations bills to prevent funds from being used for specific actions.

The majority of environmental regulations that could affect agriculture are administered by EPA, though not all. In some cases, agriculture is the direct or primary focus of the regulatory actions. In other cases, agriculture is one of many affected sectors. Of particular interest to agriculture are regulatory actions affecting air, water, energy, and chemicals. Issues associated with air (e.g., dust and emissions) and water quality (e.g., fertilizer and nutrient run-off) are a primary focus of many regulations affecting agriculture because of agriculture’s potential to affect these resources. Changes in energy policy, namely bioenergy, have recently become important to many in the agricultural industry based on the potential of corn-based biofuel production to contribute to the nation’s energy supply. The risks associated with agricultural chemical use and possible impacts on human health and the environment have also led to recent federal regulatory reviews of chemical fertilizer and pesticide use.



Date of Report: November 1
5, 2011
Number of Pages:
46
Order Number: R416
22
Price: $29.95

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Monday, November 21, 2011

Farm Safety Net Proposals for the 2012 Farm Bill


Dennis A. Shields
Specialist in Agricultural Policy

Randy Schnepf
Specialist in Agricultural Policy


Ongoing budget deliberations by the Joint Select Committee on Deficit Reduction have generated concerns that a farm bill to reauthorize farm programs expiring in 2012 may be written by budget negotiators rather than by the House and Senate Agriculture Committees. Various proposals have emerged that recommend lower federal spending, including cuts to agriculture programs ranging from $10 billion to more than $80 billion over 10 years.

In response, Members of Congress, the Administration, and a number of farm groups have put forward proposals to reduce government expenditures on farm subsidies and revise farm programs. Many of these farm program proposals were unveiled in September 2011 as the Joint Select Committee on Deficit Reduction began its deliberations on government-wide budget cuts. The proposals discussed here might be a starting point for developing the next installment of farm programs when the 2008 farm bill expires in 2012. Other ideas have also been proposed but are not discussed here because of duplication or due to insufficient information at time of publication.

Many proposed cuts and policy changes have been directed at commodity programs and crop insurance because these programs account for the bulk of agricultural funding (excluding conservation and nutrition programs, which are also considered part of the agricultural budget). Commodity programs, crop insurance, and the recently expired farm disaster programs comprise the so-called “farm safety net”—the federal government’s suite of programs designed to support farm income and help farmers manage risks associated with variability in crop yields and prices. To generate budget savings and provide funding for proposed changes to the farm safety net, nearly all of the proposals either reduce or eliminate direct and counter-cyclical payments. Most proposals either leave the marketing loan program unchanged or retain it with modest modifications; however, it would be eliminated under two proposals.

To facilitate comparisons, the various proposals are loosely grouped into five categories: (1) minor policy changes, (2) revised revenue programs, (3) enhanced crop insurance, (4) whole-farm insurance, and (5) other.



Date of Report: November
10, 2011
Number of Pages:
29
Order Number: R4
2040
Price: $29.95

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Monday, November 14, 2011

Agriculture and Related Agencies: FY2012 Appropriations


Jim Monke, Coordinator
Specialist in Agricultural Policy

The Agriculture appropriations bill provides funding for all of the U.S. Department of Agriculture (USDA) except the Forest Service, plus the Food and Drug Administration (FDA) and, in alternating years, the Commodity Futures Trading Commission (CFTC).

Separate FY2012 Agriculture appropriations bills have been passed by the House and Senate; a final conference agreement is pending. FY2012 has begun under a short-term continuing resolution through November 18, 2011.

In the House, the Agriculture appropriations subcommittee marked up its FY2012 bill by voice vote on May 24, 2011. The following week, the full appropriations committee reported the bill (H.R. 2112, H.Rept. 112-101) by voice vote, after adopting several amendments. On June 16, 2011, the House passed H.R. 2112 by a vote of 217-203 after adopting 22 amendments and removing 4 provisions by point of order.

In the Senate, the full Appropriations subcommittee marked up an FY2012 Agriculture appropriations bill (H.R. 2112, S.Rept. 112-73) by a vote of 28-2 on September 7, 2011. On November 1, 2011, the Senate passed H.R. 2112 by a vote of 69-30 as part of a “minibus” appropriation that includes Agriculture and two other appropriations bills. Twelve amendments were adopted on the floor for the Agriculture portion of the minibus.

The House-passed bill would cut discretionary Agriculture appropriations to $17.25 billion, a reduction of $2.7 billion (-14%) from FY2011 levels, and following a 15% cut in FY2011. Much of the floor debate related to funding reductions for the Women, Infants, and Children (WIC) feeding program (-11%), food safety (-10%), and international food aid (-31%); preventing USDA payments to Brazil in relation to the U.S. loss in the WTO cotton case; and programs promoting locally produced food (USDA’s “know-your-farmer-know-your-food” initiative).

The Senate-passed bill would cut discretionary Agriculture appropriations to $19.8 billion, a cut of -0.8% below FY2011 levels. The Senate bill is $2.7 billion more than the House bill in its discretionary total (excluding CFTC from the House bill for comparison). The Senate bill’s discretionary total is greater than the House bill primarily in the following areas: domestic nutrition programs (+$645 million, mostly for WIC), foreign assistance (+$544 million), FDA (+$350 million), agricultural research (+$320 million), rural development (+$180 million), and fewer rescissions and farm bill limitations (+$430 million). In addition to the amounts above, the Senate bill contains $376 million of disaster assistance for conservation and forestry.

The House bill for FY2012 contains nearly $2 billion in rescissions and limitations on mandatory farm bill programs. The Senate bill contains about $1.5 billion of such rescissions and limitations. These actions are used to score savings that help meet the discretionary budget allocations and help avoid deeper cuts to regular discretionary accounts. The FY2012 bill has about the same $2 billion level of rescissions and limitations as the FY2011 appropriation. Had the FY2012 House proposal not maintained this level of reductions—which is significantly greater than in past years—even larger cuts might have been required to the regular discretionary accounts. The FY2012 bills propose a unusually high reduction to mandatory farm bill programs ($1.4 billion in the House bill, $1.1 billion in the Senate bill), including about $1 billion from conservation programs.



Date of Report: November 3, 2011
Number of Pages: 82
Order Number: R41964
Price: $29.95

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Tuesday, November 8, 2011

Agriculture and Related Agencies: FY2012 Appropriations


Jim Monke, Coordinator
Specialist in Agricultural Policy

The Agriculture appropriations bill provides funding for all of the U.S. Department of Agriculture (USDA) except the Forest Service, plus the Food and Drug Administration (FDA) and, in alternating years, the Commodity Futures Trading Commission (CFTC).

An FY2012 Agriculture appropriations bill has been passed by the House and a separate version has been reported by the Senate Appropriations Committee and amended on the Senate floor. FY2012 has begun under a short-term continuing resolution through November 18, 2011.

In the House, the Agriculture appropriations subcommittee marked up its FY2012 bill by voice vote on May 24, 2011. The following week, the full appropriations committee reported the bill (H.R. 2112, H.Rept. 112-101) by voice vote, after adopting several amendments. On June 16, 2011, the House passed H.R. 2112 by a vote of 217-203 after adopting 22 amendments and removing 4 provisions by point of order.

In the Senate, the full Appropriations subcommittee marked up an FY2012 Agriculture appropriations bill (H.R. 2112, S.Rept. 112-73) by a vote of 28-2 on September 7, 2011. Floor consideration of the bill began on October 18, 2011, as part of a “minibus” (
S.Amdt. 738, in the nature of a substitute to H.R. 2112) that includes Agriculture and two other appropriations bills. Cloture was approved on October 21, and further action is expected the week of October 31.

The House-passed bill would cut discretionary Agriculture appropriations to $17.25 billion, a reduction of $2.7 billion (-14%) from FY2011 levels, and following a 15% cut in FY2011. Much of the floor debate related to funding reductions for the Women, Infants, and Children (WIC) feeding program (-11%), food safety (-10%), and international food aid (-31%); preventing USDA payments to Brazil in relation to the U.S. loss in the WTO cotton case; and programs promoting locally produced food (USDA’s “know-your-farmer-know-your-food” initiative).

The Senate bill, as amended to date on the floor, would cut discretionary Agriculture appropriations to $19.8 billion, a cut of -0.8% below FY2011 levels. The Senate-reported bill is $2.7 billion more than the House bill in its discretionary total (excluding CFTC from the House bill for comparison). The Senate bill’s discretionary total is greater than the House bill primarily in the following areas: domestic nutrition programs (+$645 million, mostly for WIC), foreign assistance (+$544 million), FDA (+$350 million), agricultural research (+$320 million), rural development (+$180 million), and fewer rescissions and farm bill limitations (+$430 million). In addition to the amounts above, the Senate bill contains $376 million of disaster assistance for conservation and forestry.

The House-passed bill for FY2012 contains nearly $2 billion in rescissions and limitations on mandatory farm bill programs. The Senate-reported bill contains about $1.5 billion of such rescissions and limitations. These actions are used to score savings that help meet the discretionary budget allocations and help avoid deeper cuts to regular discretionary accounts. The FY2012 bill has about the same $2 billion level of rescissions and limitations as the FY2011 appropriation. Had the FY2012 House-passed proposal not maintained this level of reductions— which is significantly greater than in past years—even larger cuts might have been required to the regular discretionary accounts. The FY2012 bills propose a unusually high reduction to mandatory farm bill programs ($1.4 billion in the House bill, $1.1 billion in the Senate bill), including about $1 billion from conservation programs.



Date of Report: October 28, 2011
Number of Pages:
82
Order Number: R419
64
Price: $29.95

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Document available via e-mail as a pdf file or in paper form.
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