Energy Provisions of the Farm Bill: Comparison of the New Law with Previous Law and House and Senate Bills

Publication Date: January 2003

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Agriculture, forestry and fishing; Energy

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Abstract:

On May 13, 2002, President Bush signed a new farm bill The Farm Security and Rural Investment Act of 2002 (P.L. 107-171). The new farm bill contains many energy-related provisions. The previous farm bill was the Federal Agriculture Improvement and Reform Act of 1996 (P.L. 104-127), popularly called the FAIR Act. Most of the authorities of the FAIR Act expired at the end of FY2002.

Increased concerns about energy security, greenhouse gas emissions, and pollution have led to an increase in congressional interest in energy policy. In that general context, there is growing interest in biofuels (including ethanol and biodiesel), bioenergy, and biobased products as a strategy to improve domestic energy security and increase farm income. Further, open spaces used for agricultural production are seen by some as ideal places to install renewable energy systems such as wind turbines and solar cells. In addition, farmers have been concerned with high energy costs because energy can be a major production cost. Although there were no energy provisions in the FAIR Act, the final version of the farm bill contains several provisions on renewable energy, biomass and biofuels, carbon sequestration, and other energy issues.

This report provides a side-by-side comparison of the energy provisions of the new law with previously existing law, as well as the versions engrossed by the House and Senate in the 107th Congress. While the energy provisions in the House version were spread throughout the bill, the Senate version consolidated most of its energy provisions into Title IX - Energy. Both bills provided for the use of reserve land for renewable energy production. The House version also allowed for loans to farmers in response to high energy prices, while the Senate version did not. The Senate version created several new grant and/or loan programs for biorefineries, biodiesel fuel education, renewable energy systems, energy audits, rural energy systems, hydrogen and fuel cells, and technical assistance. Among these topics, the House version addressed grants for biobased product research and loans for renewable energy systems, and instead of creating new programs, expanded or extended existing programs. Further, the Senate version created new programs for carbon sequestration research and demonstration, while the House version extended the authority of an existing research program.

The final version generally follows the Senate provisions, although there are some key differences, including the addition of funding for the Commodity Credit Corporation Bioenergy Program (which supports ethanol and biodiesel production), and reductions in funding for several other programs. CBO estimates that the new law will require $366 million in mandatory spending between FY2002 and FY2006.