Farm Bill Renewable Energy Cuts in Administration’s Budget

Carol Werner, Executive Director of the Environmental and Energy Study Institute (EESI), today issued the following statement on the release of the president’s FY2005 budget for the U.S. Department of Agriculture:

“In his most recent State of the Union address, the president urged Congress to ‘make America less dependent on foreign sources of energy.’  This is an admirable goal, but there is a disconnect between the president’s words and the funding priorities he has laid out in his fiscal year 2005 budget.  The president’s proposed budget provides drastic funding cuts to programs contained in the Energy Title of the 2002 Farm Bill, a piece of legislation designed to lessen our dependence on foreign oil, spur economic development, and improve environmental quality.

“Passage of the Energy Title was a bipartisan victory for renewable energy and for rural America.  We call on the president and Congress to fulfill their promise to rural America by fully funding these vitally important programs.

• $12 million cut: Renewable Energy System and Energy Efficiency Improvements “Congress provided $23 million a year in mandatory funds, under section 9006 of the Farm Bill, to provide grants, loans, and loan guarantees to farmers, ranchers, and rural small businesses for the development of renewable energy projects and energy efficiency improvements.  Regrettably, the administration’s proposed FY2005 budget provides only $10.77 million for section 9006, breaking a promise to rural America and ignoring Congressional intent.  In August 2003, USDA announced the selection of 113 applications for renewable energy systems and energy efficiency improvement grants in 24 states totaling $21,207,233. 
• $25 million cut: Value-Added Producer Grants (VAPG)
  “The Farm Bill allocated $40 million in mandatory funding for this program, which was created to spur development of new uses for agricultural products, and the 2002 Farm Bill amended the program to include renewable energy.  The president’s budget provides $15.5 million for FY2005, representing a $25 million cut.  USDA received nearly 800 applications for fiscal year 2003, and funded 184 of them for a total of $28.7 million.
• $50 million cut: Commodity Credit Corporation (CCC) Bioenergy Program

“Sec. 9010 provided up to $150 million annually for FY's 2004-06 to continue the work of the Commodity Credit Corporation (CCC) Bioenergy Program, which reimburses ethanol and biodiesel producers for the purchase of commodities to expand existing production.  A total of 1,994 respondents commented on the Bioenergy Program Proposed Rule published in 2002.  The president’s budget limits spending on this program to $100 million, $50 million less than allocated by Congress in the 2002 Farm Bill.”

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