Video: CommonGround Perspective on Biotechnology (via National Corn Growers Association)

The CommonGround program has been developed to increase awareness among urban and suburban consumers of the value of modern production agriculture in their lives.  As the name implies, the program emphasizes that urban and farm families share the same values and concerns and that urban consumers can trust the process and the people that provide their food.

With more Americans growing up in urban and suburban areas, miles from farm life, there is an increasing disconnect between consumers and the people who grow their food.  CommonGround is an effort to tell the truth about modern agriculture – that thanks to modern American farmers, U.S. families enjoy the safest, healthiest and most affordable food choices in the world.

CommonGround is a shared collaboration between the United Soybean Board and the National Corn Growers Association.  It is built upon broad messages that promote modern agriculture of all kinds.  It does not focus on corn or soy issues necessarily, but rather works to promote the importance of our country’s efficient and effective system of agriculture.

The video can be accessed by visiting http://www.youtube.com/watch?v=gnsmul_0RSM#t=13

Advertisements

American Farm Bureau Tells Members to ‘Ditch’ EPA Water Rule

WASHINGTON, D.C., April 22, 2014 – The American Farm Bureau Federation today asked its members to resist a proposed rule from the Environmental Protection Agency that it says will impose unworkable regulations on the nation’s farms.

Published Monday in the Federal Register, the more-than-111,000-word “Waters of the U.S.” proposed rule reflects the EPA’s latest interpretation of the 1972 Clean Water Act. The rule could ultimately lead to the unlawful expansion of federal regulation to cover routine farming and ranching practices as well as other common private land uses, such as building homes.

“This rule is an end run around congressional intent and rulings by the U.S. Supreme Court, alike,” AFBF President Bob Stallman says. “Congress and the courts have both said that the 50 states, not EPA, have power to decide how farming and other land uses should be restricted. It’s time to ditch this rule.”

Among other things, the rule would expand federal control over land features such as ditches and areas of agricultural land that are wet only during storms.

EPA says its new rule clarifies the scope of the Clean Water Act. However, EPA’s “clarification” is achieved by categorically classifying most water features and even dry land as “waters of the United States.”

If carried out, Farm Bureau says, ordinary field work, fence construction or even planting could require a federal permit. The result will be a wave of new regulation or outright prohibitions on routine farming practices and other land uses.

“Congress, not federal agencies, writes the laws of the land,” Stallman said. “When Congress wrote the Clean Water Act, it clearly intended for the law to apply to navigable waters. Is a small ditch navigable? Is a stock pond navigable? We really don’t think so, and Farm Bureau members are going to be sending that message.”

EPA contends that an entire set of exemptions will protect many farmers from the burdensome new rule. But Stallman counters that those exemptions will only apply to farming that has been ongoing since the 1970s, not new or expanded farms. Even for those farms, the exemptions do not cover weed control, fertilizer use or other common farm practices. The already narrow exemptions, Stallman says, have existed for years but have been further narrowed by EPA guidance issued simultaneously with the proposed rule.

“The EPA exemptions offer no meaningful protection for the hundreds of thousands of farmers and ranchers whose operations and livelihoods are threatened by this expansion of EPA’s regulatory reach,” Stallman says.

“EPA and the Army Corps of Engineers have said the WOTUS rule provides clarity and certainty. The only thing that is clear and certain is that, under this rule, it will be more difficult for private landowners to farm and ranch, build homes or make changes to the land – even if the changes that landowners propose would benefit the environment. This is pure and simply wrong, and it is why we need to ditch the rule.”

-30-

Commentary: Why Must the EPA Regulate Everything in Sight? (Dave Ladd, RDL & Associates)

Time and again the agriculture sector is witness the executive branch “going around” Congress in order to advance an intrusive regulatory agenda that an agency cannot achieve via the legislative process.  Not only are such maneuvers a stark reminder of the regulatory gauntlet that must be navigated by the agricultural and business sectors, but they are clear examples of a government that chooses to regulate rather than legislate.

The most recent example of regulatory overreach run amuck is the attempt by the Environmental Protection Agency – via regulations and guidance – to expand its authority in relation to the Clean Water Act beyond the limits approved by Congress.

Although the Clean Water Act clearly limits federal jurisdiction to “navigable” waters of the United States – limits that have twice been reaffirmed by the United States Supreme Court – the Environmental Protection Agency continues to have its sights set on regulatory control over virtually all waters.

In the event they are successful, the Agency would have the authority to regulate any or all waters found within a state – regardless of traditional state prerogatives relating to land use planning and economic growth or how unconnected those waters are to the federal interest or interstate commerce.

The Clean Water Act, enacted in 1972, limits federal jurisdiction to “navigable” waters of the United States. The U.S. Supreme Court, in 2001 and 2007, reaffirmed those limits.  The Environmental Protection Agency, through regulations, guidance and other means, is seeking to expand its authority beyond the limits approved by Congress.

Over the past two decades Supreme Court decisions have reaffirmed that “navigable waters” under the CWA does not extend to all waters. Legislation to overturn those decisions – despite aggressive lobbying campaigns by environmental groups – has failed to reach a vote on the floor of either the House or the Senate.

Congress should not permit the agency to move forward with expanding their regulatory overreach.  Expanding jurisdiction of the federal government to intrastate waters, including groundwater, ditches, culverts, pipes, desert washes, sheet flow, erosional features, farm and stock ponds, and prior converted cropland was not the intent of the framers of the 1972 legislation.

Efforts to change the meaning of “navigable waters” – either via legislation or regulation – would fundamentally change the Clean Water Act, legislative authority that should remain limited to navigable streams and flowing waterways that have continuous flow.

The key to holding government agencies such as the Environmental Protection Agency accountable is for Congress to exercise the fundamental role of oversight of the executive branch.  Unfortunately, this is a role members of congress have not fully embraced and an authority that has not been fully utilized.

Dave Ladd served as a Policy Advisor to former United States Senator Rod Grams.  His company, RDL & Associates, assists clients in achieving their legislative and policy objectives via strategic communications, message development and navigation of complex matters of public policy.

Copyright © 2014 RDL & Associates, LLC.  All rights reserved.

Client Spotlight: Al-Corn Clean Fuel

Al-Corn Clean Fuel is a farmer-owned ethanol production cooperative in Claremont, MN. Al-Corn’s 500 members invest in the company financially and agree to deliver a quantity of corn to the plant determined by their investment. The “corn commitment” has been a key contributor to Al-Corn’s success. Annually Al-Corn grinds 17.5 million bushels of corn and produces 50 million gallons of ethanol. In addition, the plant produces 132,000 tons of high protein livestock feed and 12 million pounds of corn oil, we also capture 70,000 tons of beverage grade carbon dioxide, all of which are resold.

The cooperative model allows members and their communities to benefit from a secure local market and the co-op’s earnings and investments.

To learn more about Al-Corn Clean Fuel, please visit their homepage at http://www.al-corn.com/ or follow the cooperative’s LinkedIn company page at https://www.linkedin.com/company/al-corn-clean-fuel?trk=company_name

Agricultural Act of 2014: Beginning Farmers and Ranchers in Agriculture (via ERS)

Support to beginning farmers and ranchers in agriculture is included in the following titles:

  • Conservation (Title II)
  • Credit (Title V)
  • Rural Development (Title VI)
  • Research (Title VII)
  • Crop Insurance (Title XI)
  • Miscellaneous (Title XII)

Assistance is provided by increasing funding for beginning farmer development, facilitating farmland transition to the next generation of farmers, and improving outreach and communication to military veterans about farming and ranching opportunities.

Highlights

  • Reauthorizes and increases funding to $33 million (available until expended) during 2014-18 for the Conservation Reserve Program Transition Incentives Program to assist retired or retiring farmers when they transfer land to certain farmers, including beginning farmers or ranchers.
  • Reauthorizes and increases funding to $100 million (cumulative) during 2014-18 for the Beginning Farmer and Rancher Development Program.
  • Establishes a Military Veterans Agricultural Liaison to provide information to returning veterans about, and to connect returning veterans with, beginning farmer training programs.
  • Substantially changes the acreage limit in the definition of a “qualified beginning farmer or rancher”; under the new definition more producers will qualify as beginning farmers and ranchers for the USDA Farm Service Agency’s (FSA’s) Direct Farm Ownership loan program.

New Programs and Provisions

Beginning Farmer or Rancher Access to Crop Insurance (Title XI)—Adds the term “beginning farmer or rancher,” defined as a farmer or rancher who has no more than 5 years of experience, to the Federal Crop Insurance Act. Improves beginning farmers’ and ranchers’ access to crop insurance by providing a 10 percentage point reduction in their insurance premiums and exempting beginning farmers and ranchers from paying the $300 administrative fee for catastrophic level policies. Authorizes an increase, from 60 to 80 percent of transitional yield, as a substitute for low actual yields resulting from naturally occurring causes of loss.

Noninsured Crop Disaster Assistance Program(Title XII)—Enhances the provision of catastrophic-level risk protection for beginning farmers who are producers of commodities that do not have an insurance product available, including specialty crop producers and producers who grow a more diverse set of crops on smaller acreage. Specifically, the 2014 Farm Act reduces the premiums on buy-up level coverage by 50 percent for new farmers and waives the application fee.

Beginning Farmer and Rancher Development Program (Title VII)—Funds training, education, outreach, and technical assistance to beginning farmers and ranchers, with priority given to partnerships and collaborations led by or including non-governmental and community-based organizations. Total mandatory funding is continued for the program and increases from $75 million to $100 million (cumulative) for 2014-2018.

Facilitate Land Transfers through the Conservation Reserve Program Transition Incentives Program (Title II)—Total funding for the entire Farm Act period is increased from $25 million to $33 million to facilitate transfers of CRP land enrolled in an expiring contract from retired or retiring famers to beginning or socially disadvantaged farmers and ranchers who plan to return the land to production.

Managed Haying and Grazing of Conservation Reserve Program Lands(Title II)—Waives, for beginning farmers, the 25-percent payment reduction under the 2014 Farm Act.

Conservation Loan and Loan Guarantee Program (Title V)—Increases the maximum conservation loan guarantee amount from 75 percent to 90 percent of the total loan amount for producers qualifying as beginning farmers or ranchers.

Microloans to Beginning Farmers and Ranchers (Title V)—Makes permanent the USDA’s Farm Service Agency microloan program. Microloans made to beginning and veteran farmers will be exempt from the term limits that otherwise apply on direct operating loans.

Beginning Farmer and Rancher Development Initiative (Title V)—The Development Account pilot program is extended through fiscal year 2018 for a Beginning Farmer Individual.

Definition of a Qualified Beginning Farmer or Rancher—For Direct Farm Ownership Loans (Title V)—In the definition of a qualified beginning farmer, the ownership limitation now reads “does not exceed 30% of the average county acreage.” This change from “median” to “average” could expand eligibility to more beginning farmers if the average exceeds the median, such as when small farms outnumber larger farms and a few large farms raise the average.

Down Payment Loan Assistance (Title V)—Expands assistance to beginning farmers and ranchers seeking to purchase real property by increasing the maximum loan made under the program to $300,000.

Expanded Opportunities for Value-Added Agricultural Producers (Title VI)—Increases funding for Value-Added Agricultural Product Market Development Grants from $15 million to $63 million (available until expended) during 2014-18. Beginning farmers and ranchers who produce value-added products will be given priority consideration for grants.

Outreach to Military Veterans (Title XII)—Establishes the position of Military Veterans Agricultural Liaison within USDA to provide information about, and to connect returning veterans with, beginning farmer training programs and agricultural vocational and rehabilitation programs appropriate for the needs and interests of returning veterans. Such needs include assistance with using Federal veterans’ educational benefits to prepare for a career in farming or ranching.

See other ERS Farm Bill pages for more information about programs that will provide funding and market access for beginning farmers and ranchers.

Economic Implications

  • The largest impact in terms of funding ($261 million over 10 years) for beginning farmers and ranchers is the new Federal crop insurance premium assistance. Historically, beginning farmers have been less likely than their established counterparts to participate in Federal crop insurance programs. While they accounted for nearly 11 percent of land in all U.S. farms in 2011, beginning farmers operated only 7 percent of the acres enrolled in crop insurance. The new premium assistance provision could encourage more beginning farmers and ranchers to enroll in the program or to enroll more acres if they already participate.
  • In FY2012, USDA’s Farm Service Agency made 13,384 direct loans to beginning farmers for a total of $1.1 billion in obligations. FSA guaranteed another 2,659 loans to beginning farmers for a total of $639 million. The two programs combined made 50 percent of their loans and 42 percent of their loan obligations in FY 2011 to beginning farmers. The 2014 Farm Act will make even more beginning farmers and ranchers eligible for loans by loosening the acreage limitation threshold. Eligible farmers will be able to own a farm that has 30 percent or less of the acreage of an average county farm, whereas the previous limit was based on median acreage. In 2013, the national average farm size was 418 acres, while the median acreage was only 80 acres.
  • The 2014 Farm Act authorizes $33 million for USDA’s Transition Incentives Program, up from $25 million authorized under the 2008 Farm Act. The program encourages enrolled CRP participants to transfer land enrolled under expiring CRP contracts to beginning (or socially disadvantaged) farmers and ranchers engaged in sustainable production practices. The increased authorization under the 2014 Farm Act could facilitate the transfer of land coming out of the CRP to beginning farmers as CRP acreage declines to satisfy its new CRP acreage cap.

Agricultural Act of 2014: Energy (via ERS)

The Energy Title (Title IX) encourages investments in alternative energy technology and production of renewable biomass for biofuels through education, research, and financial assistance programs; encourages the manufacture and production of other renewable biochemical and bio-based products through Federal procurement and financial assistance programs.

Highlights

  • The Biobased Markets Program (also known as BioPreferred) is expanded to require biobased-only procurement targets for supplies and services in Federal agencies, reporting of biobased products by procuring agencies, audits to ensure compliance, and a study of the economic impacts of the program.
  • The Biobased Markets Program now includes forest products and will assist landowners in determining whether products are eligible for the “USDA Certified Biobased Product” label.
  • The Biorefinery Assistance Program is now the Biorefinery, Renewable Chemical, and Biobased Product Assistance Program and adds coverage for the production of renewable chemicals, manufactured biobased products, and other biorefinery byproducts.
  • The Rural Energy for America Program (REAP) now includes a three-tiered loan and grant application process that sorts proposed projects according to the cost of the proposed activity.
  • In addition, REAP can no longer provide funding for feasibility study grants, nor for blender pumps due to the exclusion of retail energy-delivery mechanisms in the modified definition of “renewable energy system.”
  • Eligible materials under the Biomass Crop Assistance Program (BCAP) now include material collected or harvested directly from the National Forest System, Bureau of Land Management land, non-Federal land, and tribal lands in a manner that is consistent with conservation stewardship plans. Eligible materials also include woody material that is a byproduct of preventative treatment on non-contract acreage or harvested from Federal land in accordance with the Healthy Forests Restoration Act of 2003.
  • BCAP now allows enrollment of land under Conservation Reserve Program (CRP) or Agricultural Conservation Easement Program contracts that are set to expire in any given fiscal year.
  • The Community Wood Energy Program now promotes biomass consumer cooperatives, and offers grants to these cooperatives to assist consumers with services and provide discounts for the purchase of woody biomass heating systems, heating products, as well as the delivery and storage of heating products.

New Programs and Provisions

An Energy Efficiency Report for USDA Facilities will require analysis of energy use in USDA headquarters and major facilities, documentation of energy audits and efficiency projects conducted, and identification of potential energy savings projects.

Repealed Programs and Provisions

Rural Energy Self-Sufficiency Initiative; all program funding expired after fiscal year 2013.

Forest Biomass for Energy Program is repealed.

Economic Implications

  • Funding mandated in the 2014 Agricultural Act will allow the Biobased Markets Program (also known as BioPreferred) to continue promoting the use of biobased products.  Mandatory funding of $3 million per year is provided for 2014-2018, up from $2 million per year under the 2008 Farm Act.  Discretionary funding of $2 million per year is also authorized. BioPreferred is expanded to include mandatory reporting, auditing, impact assessment, and technical assistance for the procurement of biobased products by Federal agencies and their contractors. Funding increases will help with implementation of these additional program requirements.
  • Explicit inclusion of renewable chemicals and biobased products in the Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program aims to enhance USDA’s efforts to increase demand for renewable commodities, expand manufacturing in rural communities, and support green jobs by encouraging advanced cellulosic biofuel technologies and renewable chemical/biobased product manufacturing.  In addition, USDA is required to ensure that a wide range of technologies, products, and approaches are assisted through the program. Mandatory funding of $100 million for fiscal year 2014, and $50 million for fiscal years 2015 and 2016 is provided.  Discretionary funding of $75 million is authorized for each fiscal year from 2014 to 2018. However, grants for demonstration projects are eliminated. Mandatory funding of biobased products manufacturing is limited to no more than 15 percent of funding made available in fiscal years 2014 and 2015. The program will take advantage of biorefinery byproducts by promoting the commercial-scale processing and manufacturing of secondary products such as construction materials, lubricants, and cleaners.
  • The Rural Energy for America Program (REAP) now organizes the grant process for renewable energy systems and energy efficiency improvements into three tiers by cost of activity: 1) $80,000 and below, 2) between $80,001 and $199,999, and 3) $200,000 and above. The application, evaluation, and oversight processes become more comprehensive with each subsequent tier. Blender pumps and feasibility studies are no longer eligible for REAP funding. Councils (i.e. non-profit entities or affiliates) are now eligible to apply for energy audit and renewable energy development assistance grants. REAP expenditures have declined since funding peaked at $361 million in fiscal year 2010.  Although program funding is reduced to $50 million in mandatory funding and $20 million in discretionary funding per fiscal year from 2014 through 2018, the program continues to provide assistance to agricultural producers and small businesses in rural America for adopting renewable energy and improving energy efficiency.
  • The Biomass Crop Assistance Program (BCAP) promotes the production of cellulosic biofuels to meet Renewable Fuel Standard (RFS) mandates. BCAP provides funding for crop and woody biomass production; and collection, harvest, storage, and transportation (CHST), as well as the establishment of crop and forest lands for biomass production. Expanding the types and sites of biomass production could help ensure a continual supply of feedstock. In the 2008 Farm Act, BCAP was authorized “such sums as necessary,” funded through the Commodity Credit Corporation (CCC). However, starting in fiscal year 2010 after a $248-million outlay, congressional action capped program funding well below projected demand, and suspended the CHST component entirely. As a result, program outlays totaled $24 million in fiscal year 2011 and $16 million in fiscal year 2012. BCAP will receive mandatory funding of $25 million annually for fiscal years 2014 through 2018.  The Secretary is required to spend between 10 and 50 percent of these funds on CHST and technical assistance.
  • The Community Wood Energy Program creates Biomass Consumer Cooperatives, and provides matching-funds grants up to $50,000 for establishing or expanding these consumer membership organizations.  The cooperatives will help incorporate woody biomass energy systems into public facilities owned and operated by State and local governments. Funding is authorized at $5 million each fiscal year through 2018.

Agricultural Act of 2014: Research, Extension, and Related Matters (via ERS)

The Research, Extension, and Related Matters Title (Title VII) authorizes funding for research, extension, and education—including competitive grants and capacity funding (i.e., awarded by formula) to Land Grant institutions and State agricultural experiment stations, and intramural funding for USDA research agencies; identifies high-priority research areas and new research initiatives.

Highlights

  • The Foundation for Food and Agriculture Research is a new nonprofit institution to foster research and technology transfer through public-private collaborations. The Act mandates $200 million in initial funding for the foundation, to be matched with outside funds.
  • The 2014 Farm Act broadens support for animal health and disease research and veterinary services, and sets aside $5 million per year for capacity and infrastructure grants.
  • Mandatory funding for specialty crops research and extension will increase to $80 million per year, including at least $25 million for emergency citrus disease research.
  • High-priority research areas include pulses, coffee plants, corn and soy meal and other grain byproducts, and food safety training. Pollinator research is expandedto include health and population surveillance and a broader definition of pollinator disorders.

New Programs and Provisions

The Foundation for Food and Agricultural Research is established to encourage public-private partnerships in research. The foundation can raise funds for agricultural research and align them with public research plans and priorities.

The Act reauthorizes the Beginning Farmer and Rancher Development Program, with funding raised from $15 million to $20 million per fiscal year.  The mandatory funding is now open to community- and school-based agriculture education organizations.  New provisions set aside 5 percent of these funds for veterans and another 5 percent for limited-resource farmers and ranchers.

The Forestry Products Advanced Utilization Research Initiative is authorized at $7 million per fiscal year for wood quality improvement, new products and renewable energy, management of timberlands, and “green products” from forest products.

A matching requirement for competitive grants changes existing provisions to make matching funds or in-kind resources a condition for awards except for Land Grant institutions, other USDA research agencies, and certain other institutions.  The requirement can also be waived for priority research areas.

Agricultural and food law research is authorized at $5 million per fiscal year.

Repealed Programs and Provisions

The Act eliminates high-priority designation for dozens of research areas, although many of these areas are eligible to receive funding through new initiatives (e.g., the expanded animal health and disease research initiative could support research on animal ticks or brucellosis) or through other competitive and formula funding programs.

The Act repeals authorities for a number of research initiatives (Human Nutrition Intervention, Health Promotion Research, and others); research centers (National Swine Research Center, Red Meat Safety Center); and congressionally mandated studies (research, extension, and education; food deserts).

Economic Implications

Errata: On March 14, 2014, corrections were made to this section. An erroneous statement regarding limits on USDA administrative fees and overhead was deleted. While the House version of the bill included a numerical limit on such fees, the limit was removed before the Agricultural Act of 2014 was signed into law.

  • The 2014 Farm Act largely retains the existing system of research, extension, and education that supports projects at Land Grant institutions and Federal intramural research facilities. The Act does make some adjustments to research funding, some of which are intended to encourage investment of new resources into the public agricultural research system. Although the productivity growth of U.S. agriculture is strongly linked with public investment in research growth in public agricultural research and development has been sluggishrelative to that of the private sector (see figure).
    Download higher resolution chart (1306 pixels by 1046 pixels, 220 dpi)

  • The creation of the Foundation for Food and Agriculture Research combines new potential sources of research funds with a governance structure that coordinates projects across public and private institutions. The foundation can pursue fundraising from individuals, corporations, charitable foundations, and other sources. The foundation’s Board and other elements of its governance structure will seek to complement existing research plans in USDA science agencies   with projects that benefit from new research funds. Public and private research entities often focus on different subject areas (see figure), but private institutions and consumers benefit from the long-term studies, multi-disciplinary teams, and specialized facilities supported by public research. The foundation could also coordinate public-private interaction around technology transfer and the translation of scientific discoveries into useful applications.
  • New requirements for competitive grants are also intended to increase public-private coordination and attract new funding into agricultural research. Projects funded under the Specialty Crops Research Initiative will undergoadditional review for industry relevance, and State commodity boards will be able to propose competitively awarded research with industry matching funds. A matching fundsrequirement for competitive awards could draw in additional non-Federal funding, although most competitively awarded funds in recent years would have fallen outside the scope of the policy.  Formula funding programs alreadyrequire matching funds: State Agricultural Experiment Stations received significant funding from State ($1.1 billion) and industry sources ($273 million) in 2012.
    Download higher resolution chart (1281 pixels by 1026 pixels, 220 dpi)

Agricultural Act of 2014: Rural Development (via ERS)

The Rural Development Title (Title VI) provides for rural community and economic development program planning, coordination, and implementation; covers rural broadband investments, including distance learning and telemedicine; water and waste water treatment facilities; collaborative organizations, including community colleges and regional authorities such as the Delta Regional Authority; value-added agricultural activities, including renewable energy and locally and regionally produced agricultural products; general business assistance; chronically underserved rural communities; National Oceanic and Atmospheric Administration weather radio transmitter grants; and financing for essential community facilities, including schools, hospitals, and public safety.

Highlights

  • Extends most rural development programs, but with generally reduced funding authorization levels; provides limited mandatory funds, and increases funding authorization for some programs.
  • Extends rural electrification and telephone loan programs, with minor changes.
  • Introduces or replaces a number of programs in rural business development, energy, and broadband Internet.  Broader use of the Internet in rural communities is encouraged via funding for integration of Internet processes into specific business practices.
  • Provides new authority to prioritize applications and projects that are more integrated into long-term regional development strategies; addresses the effectiveness of existing programs through streamlining application processes and better data collection.
  • Makes minor eligibility changes in some programs, including refinements in the definition of rural for some programs.

New Programs and Provisions

Value-Added Agricultural Product Market Development Grants—Program is extended with mandatory funding increased from $15 million to $63 million per fiscal year.  Identifies veteran farmers and ranchers as eligible for priority and requires the Secretary to give priority to projects that best contribute to creating or increasing marketing opportunities for certain operators, farmers, and ranchers.

Access to rural broadband telecommunication services—Programs are extended with new instructions and definitions covering eligibility requirements for loans, follow-up on loans granted, data collection metrics, and studies of loan program effectiveness.  Broadband is redefined as transmission capacities of 4-Mbps downstream and 1-Mbps upstream.  The new Rural Gigabit Network Pilot Program aims to bring ultra-high-speed Internet service to rural areas.

Integration of information technologies (Internet)—Funding is authorized in some programs for integrating Internet processes into specific business practices.  The Rural Business Development Grants program, for instance, may be used directly for establishing centers to provide training to rural businesses in interactive technology.  The program may also be used to back projects that support the development of enterprises, where those projects facilitate the operation of rural distance learning networks and the development of rural learning programs.

Rural Energy Savings Program—Program is created to help families and small businesses in rural areas achieve cost-effective energy efficiency.  Funding is authorized at $75 million per fiscal year.

Rural Business Development Grants—Program is authorized at $65 million per fiscal year and replaces the Rural Business Enterprise Grant program, which had been authorized at $50 million per fiscal year and the Rural Business Opportunity Grant program, which was limited to $1.5 million per fiscal year.

Rural Microentrepreneur Assistance Program—Program is extended with mandatory funding of $3 million per fiscal year, versus $10 million over the 5 years of the previous farm bill (funds were available until expended).

Accessibility, accountability, and effectiveness of existing programs—Provisions are designed to make it easier for program participants, improve the selection process, and increase integration of programs into designated service areas.  These provisions include simplifying application forms for program participants, prioritizing applications that meet strategic eligibility requirements within some existing programs, and developing a coordinated rural college strategy to meet local needs when making investments in community and technical colleges. The Secretary of Agriculture is directed to collect data on economic activities created through rural development grants and loan programs.  Data are to be collected from recipients both during the award period and for 2 years after the award period has ended.

Rural transportation issues—The Secretaries of Agriculture and Transportation are mandated to complete within 1 year an updated study on rural transportation issues (freight transportation of agricultural products, renewable fuels, and other issues of importance to rural community economies).

Eligibility for Rural Housing Service programs authorized under the 1949 Housing Act—Title VI modifies eligibility for certain Rural Housing Service programs so that eligibility is consistent through the 2020 Census.

User fee for baseload generation—An upfront fee can now be charged for baseload generation.  The fee will offset the risk from the subsidy rate set under USDA Rural Development’s Electric Program, allowing the program to finance new baseload generation.

Economic Implications

The 2014 Farm Act reduces authorized funding for many Title VI programs, including:

  • Rural Water Circuit Rider Program—reduced from $25 million to $20 million per fiscal year.
  • Solid Waste Management Grant—limited to $10 million per fiscal year; previous authorization did not set a limit.
  • Household Water Well System—reduced from $10 million to $5 million per fiscal year.
  • Rural Cooperative Development Grant—reduced from $50 million to $40 million per fiscal year.
  • Rural Business Investment Program—reduced from $50 million to $20 million per fiscal year.
  • Distance Learning and Telemedicine Program—reduced from $100 million to $75 million per fiscal year.
  • Agriculture Innovation Center Demonstration Program—reduced from $6 million to $1 million per fiscal year.

In addition, programs that remain at the same nominal funding level have, effectively, less money in real dollars.  As many programs had not received appropriations at fully authorized funding levels, the effect of these real and nominal cuts in authorized funding may be mitigated.  In addition, Title VI refinements in requirements and reportage may result in greater efficiency in the use of funds.

Specific to the rural development program area is the inclusion of the digital economy, or broadband technology use, in new and existing programs.  These provisions are aimed at improving the economic effect of the programs and should help mitigate the impact of funding decreases.  They all may improve individual enterprise viability and encourage best practices.

The new Rural Gigabit Network Pilot Program provides $10 million per fiscal year for ultra-high-speed Internet service in rural areas.  While its geographic scope will be very small out of necessity, the pilot program will elicit new data on the need for, and the economic effect of, ultra-high-speed Internet technologies in rural settings.

USDA, Rural Utilities Service’s Rural Broadband Loan Program continues as an ongoing source of funding for rural broadband networks, with improved reporting and data collection requirements.

Download higher resolution chart (1431 pixels by 1146 pixels, 220 dpi)

Rail Companies to Report Fertilizer Delivery Plans (via Associated Press)

A federal oversight board told Canadian Pacific Railway and BNSF Railway that they have until Friday to report their plans to ensure delivery of fertilizer shipments for spring planting of U.S. crops.

The Surface Transportation Board’s decision Tuesday comes in response to a hearing it held last week on recent service problems in the nation’s rail network. Farmers and representatives of agriculture producers told the board that delays in fertilizer delivery could disrupt planting.

Increased crude oil and freight shipments have largely been blamed for causing the rail delays. BNSF has also said that rail service has been backlogged because of bad winter weather.

The board also ordered the railroads to provide weekly status reports on fertilizer delivery for the next six weeks, beginning April 25.

U.S. Senator John Thune of South Dakota issued a statement calling the board’s decision “a step in the right direction.”

“I am pleased that they acted so quickly after last week’s hearing to address some of the ongoing rail service issues in South Dakota and the surrounding region,” he said. “Continued rail service disruptions are not only having a direct impact on agriculture producers, grain handlers, and the ethanol industry, but also on manufacturers and main street businesses across our state.”

On Monday, BNSF promised to add more trains to ensure delivery of fertilizer, according to U.S. Sen. John Hoeven.

The North Dakota Republican said BNSF Executive Chairman Matt Rose told him over the weekend that the railroad “will dedicate additional resources and crews to get fertilizer to North Dakota producers faster.”

GAO: Delays in issuing annual RFS hurt refiners (via The Hill)

A Government Accountability Office (GAO) report released Monday said when the Environmental Protection Agency’s (EPA) is late in issuing its annual Renewable Fuel Standards it increases costs for refiners.

The Renewable Fuel Standards (RFS) each year sets the amount of biofuels refiners must blend into the nation’s fuel supply. The standards have contributed to declining petroleum consumption while increasing costs, according to the report.

The GAO report looked at three major changes that have affected the domestic petroleum, or gasoline, refining industry, a crucial one being the EPA’s renewable fuel mandate.

The RFS has contributed to increased costs for some refiners, specifically in the first half of 2013. Those costs have relatively declined for refiners since last year.

Still, the GAO said the EPA should identify delays in issuing yearly renewable fuel levels and implement a plan to get them out on time.

Since 2009 the EPA has missed its deadline to issue regulations for the renewable fuel mandate, the report states. This year has been no exception. However, the agency did retreat on the amount of ethanol it is requiring refiners to mix into the fuel supply for the first time since the standards were established in 2007.

There has been some indication from stakeholders that the EPA may flip-flop on this latest move.

Still, the GAO reports that late renewable fuel regulations add to industry uncertainty.

“A late [Renewable Fuel Standard] contributes to industry uncertainty, which can increase costs because industry cannot plan and budget effectively, according to some stakeholders,” the watchdog said.
The report also identified the administration’s greenhouse gas standards for vehicles as a main factor behind a decrease in gasoline consumption.

Increased production of U.S. and Canadian crude oil have lowered the cost of oil for some refiners and also contribute to the markets recent changes.

The GAO notes that future consumption of petroleum products may increase through 2020 but will not return to past levels. If the EPA continues to issue the fuel standards late costs may be incurred by refiners or passed onto consumer through higher gasoline prices.