House Appropriators Make Significant Cuts to Farm Energy Programs in FY18 Agriculture Spending Bill

On June 29, the House Agriculture Appropriations Subcommittee approved a spending bill for FY2018 providing $144.0 billion to the U.S. Department of Agriculture (USDA), $876 million lower than FY2017 and $4.64 billion above President Trump’s budget request. The popular Rural Energy for America Program (Sec. 9007), as well as the Biomass Crop Assistance Program (Sec. 9010) and the Biorefinery Assistance Program (Sec. 9003) funding levels are significantly reduced by the appropriations bill. These three programs are part of the Farm Bill’s Energy Title (IX). 

The Farm Bill’s Energy Title provides loans and grants to farmers, ranchers and small businesses to encourage investment in renewable energy, energy efficiency and the production of renewable bioproducts such as fuels and chemicals. Despite its strong bipartisan roots in the 2002 Farm Bill, the Energy Title has long had a target on its back. When the 2014 Farm Bill was signed into law, it contained $694 million in mandatory funding for the Energy Title, less than 1 percent of overall Farm Bill spending.  Since then, appropriators and special interest groups have successfully sought to cut the Energy Title, despite its importance to rural America.  

Sec. 9003 – Biorefinery Assistance Program

The Biorefinery Assistance Program was expanded in the 2014 Farm Bill to include biobased chemicals and products. Sec. 9003 provides loan guarantees for the development of facilities that produce advanced biofuels, renewable chemicals and biobased products. The program was front-loaded, with the bulk of funding awarded in 2014. Beginning in 2015, appropriators began to cut mandatory funding through an obscure, but increasingly common practice, Changes in Mandatory Spending (CHIMPs).  CHIMPs is a way for appropriators to change policy in previously authorized legislation.  The CHIMPs in the Farm Bill have undermined the bipartisan agreements made through the 2014 Farm Bill. In the FY2018 appropriations bill, Sec. 9003 receives $31 million, but any remaining authorized funds in the program are “permanently cancelled”.   

Sec. 9007 – Rural Energy for America Program (REAP)

REAP provides grants and loan guarantees to farmers, ranchers and small businesses to install renewable energy and energy efficiency programs. Despite the popularity of the program, REAP also has been subject to CHIMPs. In the 2018 appropriations bill, the program is cut more than 80 percent, with $9 million in grants and $291,000 in loan guarantees. Under the 2014 Farm Bill, REAP was to receive $50 million in mandatory funding (both loans and grants) for FY2018.

Sec. 9010 – Biomass Crop Assistance Program (BCAP)

BCAP provides cost-shares of expenses for perennial cultivation and utilization  of woody biomass for as heat, power, biobased products or advanced biofuels. Of all the Energy Title Programs, BCAP has been the most drastically cut, or “CHIMPed” over the course of the 2014 Farm Bill.  For FY2018, House appropriators go one step further and permanently cancel funds for the program.

The bill will now pass to the full House Appropriations Committee for consideration, the Senate has yet to take up any appropriations bills. While this is only the first step on the road to a spending bill, cutting funding levels in committee has implications for the 2018 Farm Bill, as 2018 program levels will be used to create the Farm Bill’s budget baseline. While lawmakers have acknowledged the likelihood of a Continuing Resolution (CR), which would fund the government at 2017 levels past October 30, the deep cuts to these programs are a disturbing signal for the Energy Title in the upcoming Farm Bill.

The chart below illustrates how much the original 2014 Farm Bill’s Energy Title provisions differ from funding levels provided by House appropriators. 

For more information see:

Appropriations Committee Releases the Fiscal Year 2018 Agriculture Appropriations Bill, House Appropriations  

Subcommittee Draft of the FY 2018 Agriculture Appropriations bill, House Appropriations