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2014 Farm Bill Includes Important Energy Title

2014 Farm Bill Includes Important Energy Title

Date: 2/18/2014

Source: Seanica Otterby, National Association of Farm Broadcasters

Audio with Andy Olsen, Environmental Law and Policy Center senior policy advocate. (MP3 2.1 MB). Download Windows Media Player. Time: 00:02:17.

Farm Bill discussions have taken place for at least 3 years, and finally the 2014 Farm Bill is completed. Environmental Law and Policy Center Senior Policy Advocate Andy Olsen said he is pleased the Energy Title survived in the bill.

This is the third Energy Title in a Farm Bill, Olsen says, and the overall annual funding for the entire title was reduced by nearly 47%. But some core programs were preserved.

"The top-funded program is the Rural Energy for America Program (REAP), which provides grants and loan guarantees to farmers, ranchers, and rural small businesses and rural electric cooperatives to install energy efficiency and also a wide range of renewable energy technologies. And that received $250 million in mandatory funding over 5 years. The next priority, in terms of funding, is the Biorefinery Systems Program, and that program provides loan guarantees for advanced biofuel production plants. This is an important program to get cellulosic biofuels, as well as other new biomass technologies, in place."

Olsen explains the difference between a grant and loan guarantee.

"A grant is actually a cost share from the federal government in a project. They may pick up, say, 25% of the cost for an activity. Whereas a loan guarantee basically says the banker wants to provide a loan to get a project built, then the federal government will cover a certain percentage of that loan in the event of a default."

REAP can serve every state and every agricultural sector, according to Olsen.

"The eligible recipients for that are agriculture producers of all sorts, urban and rural, as well as rural small businesses, and rural small businesses include rural electric cooperatives. And the technologies that are supported in this are pretty broad so that every ag sector can choose the technology that best meets their needs. This has been used for cutting energy bills for producers and boosting their profits in a wide range of uses for a wide range of sectors."

People can submit applications now for REAP funding and find information at FarmEnergy.org. Deadlines have yet to be announced, but Olsen says USDA staff are working on getting those notices out.

This information was last updated on February 18, 2014