WASHINGTON, Feb. 15, 2012- The Senate Committee on Agriculture held its first Farm Bill hearing of 2012 today, which focused on the benefits of  energy programs in rural America, as well as strategies to addressing economic development programs for the next Farm Bill.  

“The Farm Bill is a Jobs Bill, and that is why it’s so critical that we pass a bill this spring,” said Senator Debbie Stabenow (D-Mich.). “The bio-based plastic and chemical products industry could create over 100,000 American jobs – and many in rural America.”

Agriculture Secretary Tom Vilsack testified at the Senate Committee on Agriculture hearing this morning regarding the future of the Farm Bill’s energy title and economic development programs. 

“As you consider the next Farm Bill, I would like to suggest you consider two key themes: streamlining and flexibility,” Vilsack said before the Committee.  

He noted that 40 Rural Development programs exist, many with overlapping goals.  Stabenow also questioned the need for 40 different programs and emphasized the goal to combine those in a flexible way.   

“I hope we can look at streamlining USDA's grant and loan authority to reduce the number of programs while maintaining the flexibility to continue to serve rural communities and businesses in an effective and comprehensive way,” Vilsack added. 

Director of Regional Planning and Community Development at the Northwest Michigan Council of Governments Matt McCauley discussed the importance of rural development programs in his community.

“To be successful in the modern economy, rural entrepreneurs and communities must be connected to global and domestic markets,” he said. “This will take a new level of sophistication and capacity within our rural regions and at USDA Rural Development.”

Several witness also testified specifically on the energy programs in the Farm Bill, expressing support for an Energy Title that includes “robust” funding for the Rural Energy for American Program (REAP), Biomass Crop Assistance Program (BCAP) and the Biorefinery Assistance Program. 

“Renewable energy is the future of rural America,” said Chairman of Show Me Energy Cooperative in Missouri and National Farmers Union member, Steve Flick. “There are obvious constraints on the budget. However, programs like BCAP, REAP and Biorefinery Assistance should not be seen as a handout, but rather a hand up that will change the way we live in rural America.” 

While discussing rural America’s success with renewable energy, Vilsack and several committee members noted the popularity of REAP, which helps producers reduce their energy costs through renewable or efficiency measures. Stabenow said the program has “created or saved” more than 14,000 rural jobs. 

In President Obama’s fiscal year (FY) 2013 budget proposal, $4.6 million is offered for discretionary funds for guaranteed loans under REAP. While no authorization is available for BCAP, the USDA budget notes that contracts of up to 15 years have been entered under the program, and outlays needed to meet those agreements are included in the 2013 USDA baseline numbers.

Elsewhere, USDA said it is asking Congress for some $200 million through a variety of business loan and research programs for advanced biofuel development. The President’s USDA budget would also provide $4 billion in direct loans to electric cooperatives to support renewable energy generation, transmission and distribution activities across the country.

“Whatever programs you decide to fund, we need to make sure they provide enough flexibility for us to use them creatively,” Vilsack said to the Committee members. “We’re currently using REAP for blender pumps, but there has been some resistance to that in Congress. We wanted to put 10,000 blender pumps out in the marketplace, but it’s hard to do with restrictions on what we can do with REAP dollars.”

He also discussed last year’s 96 percent reduction to BCAP, leaving the program with $17 million dollars. The program administrators are working with limited resources to fund projects, but it will impossible to expand projects for collection, harvest and storage without more funding, he said. 

“We do have to diversify away from corn-based ethanol,” he said. “If BCAP is worth keeping, it has to be with adequate resources.”

Stabenow asked the energy panel witnesses which programs they would prioritize in a tight budget environment. 

Virent President Lee Edwards said the Biorefinery Assistance Program is vital for his operation and also that BCAP is essential to mitigate feedstock risks. Flick also mentioned BCAP as the most important program for his operation. Other witnesses, Energy Program Coordinator at Ag Energy Resources LLC Bennie Hutchins and Kansas sorghum farmer William Greving, focused on REAP as the most essential energy program.