Food, Conservation, and Energy Act of 2008
Encyclopedia
The Food, Conservation, and Energy Act of 2008 was a $288 billion, five-year agricultural policy
bill that was passed into law by the United States Congress
on June 18, 2008. The bill was a continuation of the 2002 Farm Bill. It continues the United States' long history of agricultural subsidy
as well as pursuing areas such as energy, conservation, nutrition, and rural development. Some specific initiatives in the bill include increases in Food Stamp benefits, increased support for the production of cellulosic ethanol
, and money for the research of pests, diseases and other agricultural problems.
on July 27, 2007. Despite opposition from some senators, including a failed amendment proposal by Senator Richard Lugar and a veto threat by President Bush
, the Senate
version of the bill, called the Food and Energy Security Act, was passed by the Senate Agriculture Committee
on October 25, 2007 and later by the full Senate on December 14. In late April 2008, congressional negotiators finally reached a deal to reconcile the House and Senate bills. The deal
increased spending on food stamps and other food programs while mostly maintaining the current farm subsidies, despite record farm profits
.
On May 15, the House and Senate passed the bill, but President Bush issued a veto on May 21. The House voted to overturn the president's veto
shortly thereafter, and with the margins by which the bill was passed, a Senate override also occurred; so the Congress overrode the president's veto, passing the bill into law (Public Law 110-234, the Food and Energy Security Act of 2007). However, the veto override was moot, as a 34-page section of the bill was omitted in the version sent to the White House. In effect, the President vetoed a bill Congress never considered. The bill had to be re-passed by Congress.
The House passed the Farm Bill again on May 22, and the Senate shortly thereafter. President Bush again vetoed the measure, but this veto was overridden in both Houses on June 18, so the Farm Bill in its entirety became law. A similar situation occurred in 2005 with the Deficit Reduction Act
, where in the enrolling process certain mistakes were made changing the text of the bill. In that case, the bill was considered to be law even with the mistakes since the Speaker of the House and the President Pro Tem of the Senate attested that the language sent to the President was indeed the text that was passed by Congress.
The bill originally caused controversy because the "pay-as-you-go
" (Clause 10 of Rule XXI of the Rules of the United States House of Representatives
) rule was waived. That rule prohibits the consideration of bills that increase the deficit in either a six-year period or an eleven-year period. The bill itself did not cause such an increase if using a "baseline
," which is an estimate of future revenue and spending levels of the U.S. Government, that was issued in 2007. A more recent baseline, issued in 2008, showed a large increase in the deficit over the applicable time periods. While other points of order are waived under certain circumstances, the paygo point of order is rarely ignored.
s, including cellulosic ethanol
, encourage the production of biomass crops, and expand the current Renewable Energy and Energy Efficiency Program.
On April 29, 2008, the Farm Bill contained three major components:
s covering up to 30% of the cost of developing and building demonstration-scale biorefineries
for producing "advanced biofuels," which essentially includes all fuels that are not produced from corn kernel starch. It also allows for loan guarantees of up to $250 million for building commercial-scale biorefineries to produce advanced biofuels. The bill funds the biorefinery program by drawing $75 million in funds from the Commodity Credit Corporation
(CCC) for fiscal year (FY) 2009, increasing to $245 million by FY 2010. It also authorizes $150 million per year in discretionary funds for the program.
Section 15321 of the bill establishes a new tax credit
for producers of cellulosic biofuels, that is, biofuels produced from wood, grasses, or the non-edible parts of plants. The new cellulosic biofuel producer credit is set at $1.01 per gallon and applies only to fuel produced and used as fuel in the United States. In addition, Section 9005 of the bill provides $55 million in CCC funds in FY 2009 to support advanced biofuel production, increasing to $105 million by FY 2012. It also authorizes up to $25 million per year in discretionary funding.
The more crop-oriented measures include Section 9010 of the bill, which allows the CCC to buy sugar from U.S. producers and sell it to bioenergy producers, and Section 9011, which creates the Biomass Crop Assistance Program to support the establishment and production of biomass crops.
Section 9007 of the bill renames the U.S. Department of Agriculture's current Renewable Energy and Energy Efficiency Program as the "Rural Energy for America Program," providing $55 million in CCC funds for FY 2009, increasing to $70 million for FY 2011 and 2012, while authorizing another $25 million in discretionary funds. The program will provide grants of up to 25% of the cost of renewable energy systems and energy efficiency improvements for agricultural producers and rural small businesses, as well as guarantees for loans as large as $25 million.
Section 9009 of the bill creates a new "Rural Energy Self-Sufficiency Initiative," which will support efforts to develop community-wide renewable energy systems. The bill provides no firm funding for the initiative but authorizes up to $5 million per year in discretionary funds.
Likewise, Section 9013 authorizes up to $5 million per year to support community-wide wood-fueled energy systems.
(NIFA) which will consolidate federal sector agricultural research. In addition the bill mandates:
and the World Trade Organization
(WTO) in 2007 criticized the United States and other developed nations for their continued farm trade subsidies. Such subsidies, according to the reports, prevent fair competition from developing nations. Because of its continued refusal to conform to WTO guidelines, the United States may be the target of up to $4 billion of trade sanctions by Brazil
.
Other organizations have voiced opposition to the farm subsidy policy of the United States, such as the Cato Institute
's Center for Trade Policy Studies, the Union of Concerned Scientists
, the Center for Rural Affairs
, and Oxfam America.
President George W. Bush
also expressed opposition to the bill, and vetoed it because of its high cost and negative impact on poorer farmers; his veto threat enabled numerous Republican congressmen to attach pork to it, making the bill more expensive than it would have been otherwise, since Democratic leaders needed Republican votes to override the veto. while others argued that the bill should include more subsidies for renewable energy. In negotiations between Congressional legislators and the White House, President Bush indicated that the cap on payments to anyone making over $750,000 per year was still too high, and that if the cap were lowered to anyone making over $200,000, he would support the bill.
have been selected to receive $35 million in grants and loan guarantees for renewable energy systems and energy efficiency improvements. While many of the awards typically go towards more energy-efficient grain dryers, the USDA notes that a farm in Iowa
will use its grant to replace a propane
heating system with a geothermal
heating system, while a firm in Louisiana
will purchase energy-efficient electric motors for an irrigation well.
On January 16, 2009 the USDA also announced the first loan guarantee for a commercial-scale cellulosic ethanol plant. Cellulosic ethanol is derived from the non-food portion of plants. Cellulosic ethanol may be the fuel of the future because it does not require fertilizers and pesticides. Additionally, economic issues involving food and land demand are less likely to arise as a result of the production of cellulosic ethanol. While the production of Cellulosic ethanol is more complex than ethanol derived from corn, the net energy yield is higher.
Section 9003 allowed the USDA Rural Development office to approve this $80 million loan to Range Fuels Inc. Range Fuels produces low carbon bio fuels from any and all biomass. The $80 million loan is dedicated to building a facility that will produce cellulosic ethanol from wood chips. In 2010 the plant is expected to achieve an output level of 20 million gallons of ethanol per year. Other benefits of the plant include an estimated 63 jobs that will be created to build and operate the facility.
The grants and loans are awarded through the Renewable Energy Systems and Energy Efficiency Improvements Program of the USDA Rural Development office. The program was created by Section 9006 of the 2002 Farm Bill and expanded under the 2008 Farm Bill.
Agricultural policy
Agricultural policy describes a set of laws relating to domestic agriculture and imports of foreign agricultural products. Governments usually implement agricultural policies with the goal of achieving a specific outcome in the domestic agricultural product markets...
bill that was passed into law by the United States Congress
United States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
on June 18, 2008. The bill was a continuation of the 2002 Farm Bill. It continues the United States' long history of agricultural subsidy
Subsidy
A subsidy is an assistance paid to a business or economic sector. Most subsidies are made by the government to producers or distributors in an industry to prevent the decline of that industry or an increase in the prices of its products or simply to encourage it to hire more labor A subsidy (also...
as well as pursuing areas such as energy, conservation, nutrition, and rural development. Some specific initiatives in the bill include increases in Food Stamp benefits, increased support for the production of cellulosic ethanol
Ethanol fuel in the United States
The United States became the world's largest producer of ethanol fuel in 2005. The U.S. produced 13.2 billion U.S. liquid gallons of ethanol fuel in 2010, and together with Brazil, accounted for 88% of that year's global production...
, and money for the research of pests, diseases and other agricultural problems.
Legislative history
One version of this legislation, the Farm, Nutrition, and Bioenergy Act of 2007 was passed by the United States House of RepresentativesUnited States House of Representatives
The United States House of Representatives is one of the two Houses of the United States Congress, the bicameral legislature which also includes the Senate.The composition and powers of the House are established in Article One of the Constitution...
on July 27, 2007. Despite opposition from some senators, including a failed amendment proposal by Senator Richard Lugar and a veto threat by President Bush
George W. Bush
George Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....
, the Senate
United States Senate
The United States Senate is the upper house of the bicameral legislature of the United States, and together with the United States House of Representatives comprises the United States Congress. The composition and powers of the Senate are established in Article One of the U.S. Constitution. Each...
version of the bill, called the Food and Energy Security Act, was passed by the Senate Agriculture Committee
United States Senate Committee on Agriculture, Nutrition and Forestry
The Committee of Agriculture, Nutrition and Forestry is a committee of the United States Senate empowered with legislative oversight of all matters relating to the nation's agriculture industry, farming programs, forestry and logging, and legislation relating to nutrition and...
on October 25, 2007 and later by the full Senate on December 14. In late April 2008, congressional negotiators finally reached a deal to reconcile the House and Senate bills. The deal
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
increased spending on food stamps and other food programs while mostly maintaining the current farm subsidies, despite record farm profits
2007–2008 world food price crisis
World food prices increased dramatically in 2007 and the 1st and 2nd quarter of 2008 creating a global crisis and causing political and economical instability and social unrest in both poor and developed nations. Systemic causes for the worldwide increases in food prices continue to be the subject...
.
On May 15, the House and Senate passed the bill, but President Bush issued a veto on May 21. The House voted to overturn the president's veto
Veto override
A veto override is an action by legislators and decision-makers to override an act of veto by someone with such powers - thus forcing through a new decision. The power to override a veto varies greatly in tandem with the veto power itself. The U.S constitution gives a 2/3 majority Congress the...
shortly thereafter, and with the margins by which the bill was passed, a Senate override also occurred; so the Congress overrode the president's veto, passing the bill into law (Public Law 110-234, the Food and Energy Security Act of 2007). However, the veto override was moot, as a 34-page section of the bill was omitted in the version sent to the White House. In effect, the President vetoed a bill Congress never considered. The bill had to be re-passed by Congress.
The House passed the Farm Bill again on May 22, and the Senate shortly thereafter. President Bush again vetoed the measure, but this veto was overridden in both Houses on June 18, so the Farm Bill in its entirety became law. A similar situation occurred in 2005 with the Deficit Reduction Act
Deficit Reduction Act of 2005
The Deficit Reduction Act of 2005 is a United States Act of Congress concerning the budget, that became law in 2006.-Legislative history:The Senate's version passed after a tie-breaking vote was cast by Vice President Dick Cheney. The bill passed the chamber with no Democrats and five Republicans...
, where in the enrolling process certain mistakes were made changing the text of the bill. In that case, the bill was considered to be law even with the mistakes since the Speaker of the House and the President Pro Tem of the Senate attested that the language sent to the President was indeed the text that was passed by Congress.
The bill originally caused controversy because the "pay-as-you-go
PAYGO
PAYGO is the practice in the United States of financing expenditures with funds that are currently available rather than borrowed.-Budgeting:The PAYGO compels new spending or tax changes not to add to the federal deficit. Not to be confused with pay-as-you-go financing, which is when a government...
" (Clause 10 of Rule XXI of the Rules of the United States House of Representatives
United States House of Representatives
The United States House of Representatives is one of the two Houses of the United States Congress, the bicameral legislature which also includes the Senate.The composition and powers of the House are established in Article One of the Constitution...
) rule was waived. That rule prohibits the consideration of bills that increase the deficit in either a six-year period or an eleven-year period. The bill itself did not cause such an increase if using a "baseline
Baseline (Budgeting)
Baseline budgeting is a method of developing a budget which uses existing spending levels as the basis for establishing future funding requirements. The concept assumes that the organization is generally headed in the right direction and only minor changes in spending levels will be required...
," which is an estimate of future revenue and spending levels of the U.S. Government, that was issued in 2007. A more recent baseline, issued in 2008, showed a large increase in the deficit over the applicable time periods. While other points of order are waived under certain circumstances, the paygo point of order is rarely ignored.
Components
It accelerates the commercialization of advanced biofuelBiofuel
Biofuel is a type of fuel whose energy is derived from biological carbon fixation. Biofuels include fuels derived from biomass conversion, as well as solid biomass, liquid fuels and various biogases...
s, including cellulosic ethanol
Cellulosic ethanol
Cellulosic ethanol is a biofuel produced from wood, grasses, or the non-edible parts of plants.It is a type of biofuel produced from lignocellulose, a structural material that comprises much of the mass of plants. Lignocellulose is composed mainly of cellulose, hemicellulose and lignin...
, encourage the production of biomass crops, and expand the current Renewable Energy and Energy Efficiency Program.
On April 29, 2008, the Farm Bill contained three major components:
- The Average Crop Revenue Election (ACRE) program that will allow farmers to choose revenue-based, market oriented protection instead of subsidy payments based on politically set target prices;
- $4 billion over baseline funding for conservation and working lands programs;
- Funding for local food programs such as the Farmers Market Promotion Program, Community Food Project grants and the Healthy Food Enterprise Development Center—programs.
Main sections
Section 9003 of the Food, Conservation, and Energy Act of 2008 provides for grantGrant (money)
Grants are funds disbursed by one party , often a Government Department, Corporation, Foundation or Trust, to a recipient, often a nonprofit entity, educational institution, business or an individual. In order to receive a grant, some form of "Grant Writing" often referred to as either a proposal...
s covering up to 30% of the cost of developing and building demonstration-scale biorefineries
Biorefinery
A biorefinery is a facility that integrates biomass conversion processes and equipment to produce fuels, power, heat, and value-added chemicals from biomass...
for producing "advanced biofuels," which essentially includes all fuels that are not produced from corn kernel starch. It also allows for loan guarantees of up to $250 million for building commercial-scale biorefineries to produce advanced biofuels. The bill funds the biorefinery program by drawing $75 million in funds from the Commodity Credit Corporation
Commodity Credit Corporation
The Commodity Credit Corporation is a wholly owned government corporation created in 1933 to "stabilize, support, and protect farm income and prices"...
(CCC) for fiscal year (FY) 2009, increasing to $245 million by FY 2010. It also authorizes $150 million per year in discretionary funds for the program.
Section 15321 of the bill establishes a new tax credit
Tax credit
A tax credit is a sum deducted from the total amount a taxpayer owes to the state. A tax credit may be granted for various types of taxes, such as an income tax, property tax, or VAT. It may be granted in recognition of taxes already paid, as a subsidy, or to encourage investment or other behaviors...
for producers of cellulosic biofuels, that is, biofuels produced from wood, grasses, or the non-edible parts of plants. The new cellulosic biofuel producer credit is set at $1.01 per gallon and applies only to fuel produced and used as fuel in the United States. In addition, Section 9005 of the bill provides $55 million in CCC funds in FY 2009 to support advanced biofuel production, increasing to $105 million by FY 2012. It also authorizes up to $25 million per year in discretionary funding.
The more crop-oriented measures include Section 9010 of the bill, which allows the CCC to buy sugar from U.S. producers and sell it to bioenergy producers, and Section 9011, which creates the Biomass Crop Assistance Program to support the establishment and production of biomass crops.
Section 9007 of the bill renames the U.S. Department of Agriculture's current Renewable Energy and Energy Efficiency Program as the "Rural Energy for America Program," providing $55 million in CCC funds for FY 2009, increasing to $70 million for FY 2011 and 2012, while authorizing another $25 million in discretionary funds. The program will provide grants of up to 25% of the cost of renewable energy systems and energy efficiency improvements for agricultural producers and rural small businesses, as well as guarantees for loans as large as $25 million.
Section 9009 of the bill creates a new "Rural Energy Self-Sufficiency Initiative," which will support efforts to develop community-wide renewable energy systems. The bill provides no firm funding for the initiative but authorizes up to $5 million per year in discretionary funds.
Likewise, Section 9013 authorizes up to $5 million per year to support community-wide wood-fueled energy systems.
Research
The bill mandates the creation of a National Institute of Food and AgricultureNational Institute of Food and Agriculture
The National Institute of Food and Agriculture is a U.S. Federal government body whose creation was mandated in the Food, Conservation, and Energy Act of 2008. It is intended to consolidate all federally-funded agricultural research, and will be subordinate to the Department of Agriculture...
(NIFA) which will consolidate federal sector agricultural research. In addition the bill mandates:
- $78 million total for organic agriculture research, fiscal year (FY) 09-12 [+ $25 million/year authorized, subject to appropriations]
- $230 million total for specialty crops research, FY09-12 [+ $100 million/year authorized]
- $118 million total for biomass research and development, FY08-12 [+ $35 million/year authorized]
- IFAFS is still authorized, but the $200 million in mandatory funding per year was removed.
- All mandatory funds will be distributed by the new NIFA through competitive grants.
Opposition
Reports from the United NationsUnited Nations
The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...
and the World Trade Organization
World Trade Organization
The World Trade Organization is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade , which commenced in 1948...
(WTO) in 2007 criticized the United States and other developed nations for their continued farm trade subsidies. Such subsidies, according to the reports, prevent fair competition from developing nations. Because of its continued refusal to conform to WTO guidelines, the United States may be the target of up to $4 billion of trade sanctions by Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...
.
Other organizations have voiced opposition to the farm subsidy policy of the United States, such as the Cato Institute
Cato Institute
The Cato Institute is a libertarian think tank headquartered in Washington, D.C. It was founded in 1977 by Edward H. Crane, who remains president and CEO, and Charles Koch, chairman of the board and chief executive officer of the conglomerate Koch Industries, Inc., the largest privately held...
's Center for Trade Policy Studies, the Union of Concerned Scientists
Union of Concerned Scientists
The Union of Concerned Scientists is a nonprofit science advocacy group based in the United States. The UCS membership includes many private citizens in addition to professional scientists. James J...
, the Center for Rural Affairs
Center for Rural Affairs
The Center for Rural Affairs was established in 1973 as an unaffiliated nonprofit corporation under IRS code 5013. The Center for Rural Affairs was formed by rural Nebraskans concerned about family farms and rural communities, and was originally located in Walthill, Nebraska.The Center was moved...
, and Oxfam America.
President George W. Bush
George W. Bush
George Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....
also expressed opposition to the bill, and vetoed it because of its high cost and negative impact on poorer farmers; his veto threat enabled numerous Republican congressmen to attach pork to it, making the bill more expensive than it would have been otherwise, since Democratic leaders needed Republican votes to override the veto. while others argued that the bill should include more subsidies for renewable energy. In negotiations between Congressional legislators and the White House, President Bush indicated that the cap on payments to anyone making over $750,000 per year was still too high, and that if the cap were lowered to anyone making over $200,000, he would support the bill.
Energy efficiency, Renewable Energy and Progress
The USDA announced on 2008-08-27 that 639 farms and rural businesses in 43 states and the Virgin IslandsVirgin Islands
The Virgin Islands are the western island group of the Leeward Islands, which are the northern part of the Lesser Antilles, which form the border between the Caribbean Sea and the Atlantic Ocean...
have been selected to receive $35 million in grants and loan guarantees for renewable energy systems and energy efficiency improvements. While many of the awards typically go towards more energy-efficient grain dryers, the USDA notes that a farm in Iowa
Iowa
Iowa is a state located in the Midwestern United States, an area often referred to as the "American Heartland". It derives its name from the Ioway people, one of the many American Indian tribes that occupied the state at the time of European exploration. Iowa was a part of the French colony of New...
will use its grant to replace a propane
Propane
Propane is a three-carbon alkane with the molecular formula , normally a gas, but compressible to a transportable liquid. A by-product of natural gas processing and petroleum refining, it is commonly used as a fuel for engines, oxy-gas torches, barbecues, portable stoves, and residential central...
heating system with a geothermal
Geothermal
Geothermal is related to energy and may refer to:* The geothermal gradient and associated heat flows from within the Earth- Renewable technology :...
heating system, while a firm in Louisiana
Louisiana
Louisiana is a state located in the southern region of the United States of America. Its capital is Baton Rouge and largest city is New Orleans. Louisiana is the only state in the U.S. with political subdivisions termed parishes, which are local governments equivalent to counties...
will purchase energy-efficient electric motors for an irrigation well.
On January 16, 2009 the USDA also announced the first loan guarantee for a commercial-scale cellulosic ethanol plant. Cellulosic ethanol is derived from the non-food portion of plants. Cellulosic ethanol may be the fuel of the future because it does not require fertilizers and pesticides. Additionally, economic issues involving food and land demand are less likely to arise as a result of the production of cellulosic ethanol. While the production of Cellulosic ethanol is more complex than ethanol derived from corn, the net energy yield is higher.
Section 9003 allowed the USDA Rural Development office to approve this $80 million loan to Range Fuels Inc. Range Fuels produces low carbon bio fuels from any and all biomass. The $80 million loan is dedicated to building a facility that will produce cellulosic ethanol from wood chips. In 2010 the plant is expected to achieve an output level of 20 million gallons of ethanol per year. Other benefits of the plant include an estimated 63 jobs that will be created to build and operate the facility.
The grants and loans are awarded through the Renewable Energy Systems and Energy Efficiency Improvements Program of the USDA Rural Development office. The program was created by Section 9006 of the 2002 Farm Bill and expanded under the 2008 Farm Bill.
External links
- Food, Conservation, and Energy Act of 2008 Text (U.S. Government Printing Office), frwebgate.access.gpo.gov.
- "USDA Bets the Farm on Animal ID Program", from The Nation, thenation.com
- 2007 U.S. Farm Bill at Discourse DB, discoursedb.org
- 2007 Farm Bill Options, from Center for Rural Affairs, cfra.org
- 2007 Farm Bill Options from Farm Bureau, fb.org
- American Farmland Trust, Farm Bill Overview
- Link to house page for more information on research in 2007 Farm Bill, agriculture.house.gov