For Farm Bill Clean Energy Programs, Mandatory Funding Is Crucial

By Lloyd Ritter and Ryan Stroschein, Agriculture Energy Coalition

Now that both the U.S. House and Senate are moving toward a conference on the Farm Bill, it’s time to emphasize to both chambers the need for robust mandatory funding for energy title programs. These programs unlock significant private investment capital for renewable energy and energy efficiency projects; help farmers build markets for new energy crops, biobased products and renewable chemicals; and create new good paying jobs and other economic opportunities in rural communities. But their continued success depends on stable, predictable funding over the next five years.

The Farm Bill’s Energy Title

Ryan Stroschein

Lloyd Ritter

Although it’s one of the smaller titles in the Farm Bill, the agriculture energy programs produce huge benefits for rural communities. From 2008 to 2012, for instance, the Renewable Energy for America Program supported 7,600 U.S. projects that generated or saved more than 7.3 billion kilowatt hours of electricity – enough to power 680,000 U.S. homes annually. Those projects also created more than 18,000 new jobs. Since the program’s inception it has funded projects in every single state. BCAP is supporting 860 farmers in 188 counties across 12 states. The Biorefinery Assistance Program (BAP) is aiding efforts to build cutting-edge biorefineries to produce advanced biofuels in states from Florida to Michigan and New Mexico. And with important changes in the Senate-passed bill, the program would support promising renewable chemical projects across the country.

While we are thankful that the House Farm Bill has wisely re-authorized and provided discretionary funding for “core” energy title programs, even higher in some instances than the Senate, it lacks ANY mandatory funding, putting the effectiveness of the programs in great jeopardy. In fact, without real funding, if the House were to prevail, the programs’ very existence may continue in name only. This is an untenable situation for our nation’s farmers, rural citizens, clean energy entrepreneurs, and others.

Why mandatory funding matters

Mandatory funding is an important policy mechanism. In fact, in the current budget and political environment, it is vital. Authorization of mandatory funding helps ensure that the money will be budgeted and appropriated every year, unless Congress actively votes to change the appropriation. Discretionary authorization, by contrast, forces Congress to actively appropriate and authorize money for the programs every year. Mandatory funding also makes it easier for these programs to become part of the Congressional Budget Office’s spending baseline (currently, they are not). So discretionary funding forces Congress to find offsets during the appropriations process, creating an added hurdle for funding the programs.

In fact, since 2008, there have been only rare instances where the discretionary funds authorized for these energy programs were appropriated during the annual process. The likelihood of discretionary fund appropriations in the near future is lower than at any point since the title’s inception in 2002. The Farm Bill energy title programs were reauthorized for 2013 under the American Taxpayer Relief Act, adopted on January 3 – most without any funding and only two with discretionary funds. It is time to end this boom-and-bust cycle for the energy title and rural job creation.

To keep working, these programs must have mandatory funding and should also be included in the budget baseline. Stability in the programs will clear a path for investment in rural energy efficiency and renewable energy, help build new market opportunities for American agriculture and technology, and create jobs where they’re needed most. By contrast, uncertainty over the annual budget and appropriations process could bring these effective programs to a halt, no matter what dollar figure is inserted in the authorization today.