USDA's Research, Education, and Economics (REE) Mission Area: Issues and Background - R40819

Dennis A. Shields
Specialist in Agricultural Policy

The U.S. Department of Agriculture’s (USDA’s) Research, Education, and Economics (REE) mission area has the primary federal responsibility of advancing scientific knowledge for agriculture through research, education, and extension. USDA REE responsibilities are carried out by four agencies: the Agricultural Research Service (ARS), the National Institute of Food and Agriculture (NIFA), the Economic Research Service (ERS), and the National Agricultural Statistics Service (NASS). USDA administers extramural federal appropriations to states and local partners primarily through formula funds and competitive grants.

Discretionary funding for the REE mission area totaled $2.40 billion in FY2013 (including sequestration cuts), down 5.2% from FY2012. Under a constrained budget environment, funding has declined each year since FY2010.

The enacted 2008 farm bill (P.L. 110-246) directed USDA to reorganize the REE mission area. The farm bill created a new entity called the National Institute for Food and Agriculture (NIFA), which assumed all programs and authorities from the Cooperative State Research, Education, and Extension Service (CSREES). A new competitive grants program for basic and applied research, called the Agriculture and Food Research Initiative (AFRI), was also established by the 2008 farm bill and is administered by NIFA. The five-year 2008 farm bill also extended and expanded mandatory and discretionary funding for specialty and organic crops research, bioenergy programs, and pollinator protection programs, among others.

At the end of the 112th Congress, on January 2, 2013, the 2008 farm bill was extended one year (through September 30, 2013) as part of the American Taxpayer Relief Act of 2012 (ATRA; P.L. 112-240). While discretionary research funding continues through January 15, 2014, under the FY2014 continuing resolution (P.L. 113-46), ATRA did not provide funding for any mandatory programs that were authorized in the 2008 farm bill and have no budget baseline extending beyond the original end of the 2008 farm bill (September 30, 2012). For the agricultural research title, these are the Specialty Crop Research Initiative; the Organic Agriculture Research and Extension Initiative; and the Beginning Farmer and Rancher Development Program. If policymakers want to continue these programs in the next farm bill, they will need to pay for them with other offsets. In the 113th Congress, both the Senate-passed farm bill, S. 954, and the House-passed bill, H.R. 2642, would provide mandatory funding for these programs. A conference committee has been meeting to iron out differences between the two bills.

Debates over the direction of public agricultural research and the nature of its funding mechanism continue. Ongoing issues include the need, if any, for new federal funding to support agricultural research, education, and extension activities, and the implications of allocating federal funds via formula funds versus competitive grants. In addition, factors including the growing importance of specialty crops, international trade negotiations, and a renewed interest in international agricultural development have many groups believing that Congress needs to increase support of U.S. agriculture through expanded research, education, and extension programs, whereas others believe that the private sector, not taxpayer dollars, should be used to support these activities.

Date of Report: December 2, 2013
Number of Pages: 27
Order Number: R40819
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The Renewable Fuel Standard: In Brief - R43325

Kelsi Bracmort
Specialist in Agricultural Conservation and Natural Resources Policy

The Renewable Fuel Standard (RFS) requires U.S. transportation fuel to contain a minimum volume of biofuel. The RFS—established by the Energy Policy Act of 2005 (P.L. 109-58; EPAct05) and expanded in 2007 by the Energy Independence and Security Act (P.L. 110-140; EISA)—began with 4.0 billion gallons of renewable fuel in 2006 and ascends to 36.0 billion gallons in 2022. The Environmental Protection Agency administers the RFS. Compliance for the RFS is met using a credit system with renewable identification numbers (RINs). Some have concerns about how EPA is administering the RFS (e.g., the accuracy of EPA projections of the annual amounts of advanced biofuel that will be produced), which biofuels are eligible for which part of the mandate, how the RIN market operates, and the potential impact of the “blend wall,” among other things. Congress has expressed interest in the RFS, particularly the challenges associated with implementing the RFS and with compliance. Some question whether it is time to amend or repeal the RFS or maintain the status quo.

Date of Report: November 27, 2013
Number of Pages: 11
Order Number: R43325
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Renewable Fuel Standard (RFS): Overview and Issues - R40155

Randy Schnepf
Specialist in Agricultural Policy

Brent D. Yacobucci
Section Research Manager

Federal policy has played a key role in the emergence of the U.S. biofuels industry. Policy measures have included minimum renewable fuel usage requirements, blending and production tax credits, an import tariff, loans and loan guarantees, and research grants. One of the more prominent forms of federal policy support is the Renewable Fuel Standard (RFS)—whereby a minimum volume of biofuels is to be used in the national transportation fuel supply each year. This report describes the general nature of the RFS mandate and its implementation, and outlines some emerging issues related to the continued growth of U.S. biofuels production needed to fulfill the expanding RFS mandate, the potential inability of the domestic market to absorb ethanol above a 10% share of domestic gasoline fuels (a problem known as the “blend wall”), and the emergence of potential unintended consequences of this rapid expansion.

Congress first established the RFS with the enactment of the Energy Policy Act of 2005 (EPAct, P.L. 109-58). This initial RFS (referred to as RFS1) mandated that a minimum of 4 billion gallons be used in 2006, rising to 7.5 billion gallons by 2012. Two years later, the Energy Independence and Security Act of 2007 (EISA, P.L. 110-140) greatly expanded the biofuel mandate volumes and extended the ramp-up through 2022. The expanded RFS (referred to as RFS2) required the annual use of 9 billion gallons of biofuels in 2008, rising to 36 billion gallons in 2022, with at least 16 billion gallons from cellulosic biofuels, and a cap of 15 billion gallons for corn-starch ethanol.

In addition to the expanded volumes and extended date, RFS2 has three important distinctions from RFS1. First, the total renewable fuel requirement is divided into four separate, but nested categories—total renewable fuels, advanced biofuels, biomass-based diesel, and cellulosic biofuels—each with its own volume requirement. Second, biofuels qualifying under each category must achieve certain minimum thresholds of lifecycle greenhouse gas (GHG) emission reductions, with certain exceptions applicable to existing facilities. Third, all renewable fuel must be made from feedstocks that meet an amended definition of renewable biomass, including certain land use restrictions.

The Environmental Protection Agency (EPA) is responsible for establishing and implementing regulations to ensure that the nation’s transportation fuel supply contains the mandated biofuels volumes. EPA’s initial regulations for administering RFS1 (issued in April 2007) established detailed compliance standards for fuel suppliers, a tracking system based on renewable identification numbers (RINs) with credit verification and trading, special treatment of small refineries, and general waiver provisions. EPA rules for administering RFS2 (issued in February 2010) built upon the earlier RFS1 regulations and include specific deadlines for announcing annual standards, as well as greater specificity on potential waiver requests and RIN oversight.

Over the long term, the RFS is likely to play a dominant role in the development of the U.S. biofuels sector. However, emerging resource constraints related to the rapid expansion of U.S. corn ethanol production have provoked questions about its long-run sustainability and the possibility of unintended consequences in other markets as well as on the environment. Questions also exist about the ability of the U.S. biofuels industry to meet the expanding mandate for biofuels from non-corn sources such as cellulosic biomass materials, whose production capacity has been slow to develop, or biomass-based biodiesel, which remains expensive to produce owing to the relatively high prices of its feedstocks. Finally, considerable uncertainty remains regarding the development of the infrastructure capacity (e.g., trucks, pipelines, retail pumps, etc.) needed to deliver the expanding biofuels mandate to consumers.

Date of Report: November 22, 2013
Number of Pages: 39
Order Number: R40155
Price: $29.95


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