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Obama’s New Ag Budget: Energy-Friendly

Tuesday, February 15th, 2011

(Feb. 15) This week the President launched the first round in the FY2012 budget process with a proposed budget that cuts Ag funding over prior years but retains most clean energy priorities, albeit at slightly lower levels.

 For Agriculture, the Administration proposes to reduce total discretionary spending by over $3 billion from FY2010 levels. (Congress has not yet passed a final FY2011 budget; a Continuing Resolution based on 2010 levels is funding the government at least until March 4).

The President’s budget emphasizes clean energy development. Specific clean energy development funding proposals  include:

  • Rural Energy for America Program (REAP) – $106.8 million. Includes $36.8 million in proposed discretionary funding plus $70 million mandatory funding from the 2008 Farm Bill. Total program funding is a small increase over current funding levels ($99.34 in FY2010).
  • Biomass Crop Assistance Program (BCAP) – $198 million. To refocus this important program on its primary purpose of encouraging new energy crop development, the Administration proposes to cap funding for the Collection, Harvest, Storage and Transport component at $70 million, which would leave most of the funding ($128 million) for establishing and growing energy crops.
  • Rural Utilities Service loans – $6 billion for low-interest Federal Financing Bank loans. As in FY2011, the Administration commendably wants most of these loans to finance new clean energy projects, and proposes that:
    • Not less than $4 billion shall be used for renewable energy plants or for fossil fueled plants with carbon sequestration;
    • Funding may be used for fossil peaking units operating in conjunction with wind and solar power; and
    • Not more than $2 billion may be used for projects to reduce pollution from fossil fueled plants. 

Next steps include House and Senate committee hearings on its budget proposals, and intense jockeying in Congress over the future of these and other programs. Stay tuned for more developments. And you can visit here for current information on the unsettled 2011 budget picture.