It is hard to believe, but Congress will soon begin another Farm Bill writing cycle. It seems like only yesterday that we wrapped up the last Farm Bill, but the fact of the matter is that this critical piece of legislation that underpins U.S. farm policy expires every five years, and we are coming up on that deadline quickly.
The Farm Bill is critical to the hardwood sector as our two key export programs — Market Access and Foreign Market Development — receive not only their funding, but their authority to continue operating under this bill. Obviously making sure these two programs not only are reauthorized, but receive their full allotment of mandatory funding, will be key deliverables for the Hardwood Federation team here in Washington, D.C.
What is not so obvious is that there are other parts of this massive legislative package that can be helpful to our facilities and our customers. Take the Energy Title, for example. When one thinks about the Farm Bill, energy is not the first topic that comes to mind. But similar to the Nutrition Title, energy programs historically have been included as sweeteners to attract support from states where row crop agriculture or dairy is not huge. The Farm Bill is a unique animal in that support or opposition typically breaks down on regional, and not political, lines. So the inclusion of these two titles helps bridge those regional differences.
The energy portion of the Farm Bill has a number of positive programs for forest-based biomass. One of these programs — called the Bioenergy Program for Advanced Biofuels — has been helpful to densified biomass fuel (wood pellet) producers that serve the domestic market. Under this program, pellets typically sold into the bag market (which consumers buy to run pellet stoves, for example) that are made from our residuals (sawdust) qualify as an “advanced biofuel.” The rationale behind the program is to make biomass a more-attractive heating option, particularly in areas of the country that rely on fossil fuels like heating oil or propane to heat their homes and businesses. The bottom line is that qualifying as an “advanced biofuel” allows solid biomass fuel producers to receive direct payments from the U.S. Department of Agriculture (USDA).
There is another program called REAP — Rural Energy for America Program — that also provides funding for installation of wood heating systems in rural communities. These systems run on pellets or chips and typically are installed in rural hospitals, schools and, in some cases, heat entire towns.
A third program, known as the Community Wood Energy Program, or CWEP, seeks to accelerate deployment of highly efficient wood heating equipment. CWEP is a competitive grant program that assists local governments with the capital costs of installing high-efficiency, biomass-fueled heating systems. CWEP provides states, counties, and municipalities with matching grants through the USDA to offset the costs of installing heating systems that utilize locally available biomass resources, such as wood chips, wood pellets, or other biomass energy feedstocks.
These programs are worth highlighting in part because they might be helpful in addressing mill residuals issues that are surfacing for our members in certain regions of the country. Last year’s warm winter and relatively low fossil fuel prices have been tough on pellet producers that serve domestic markets — the same pellet producers that depend on our sawdust to make their product. Programs that can help this sector have the potential to revitalize demand for our sawdust and alleviate at least some of our accumulating residuals concerns.
And there are potentially other areas in the Farm Bill that could benefit hardwood manufacturing facilities. We have been working with our colleagues in the softwood sector in advancing the Timber Innovation Act, which would establish a new performance driven research and development program to advance tall wood building construction in the United States. The Farm Bill is the expected vehicle to make that bill a reality.
The good news is that we are very early in the process and have some time to think and strategize about other policy provisions that we could advocate for in this next Farm Bill that benefit our hardwood facilities directly or indirectly through our value chain. We look forward to working with hardwood companies from all sectors, including the flooring sector, on additional ideas for the Farm Bill. Please feel free to share.
Dana Cole is Executive Director at the Hardwood Federation, a Washington D.C.-based hardwood industry trade association that represents thousands of hardwood businesses in every state in the U.S. and acts as the industry’s advocacy voice on Capitol Hill. She can be reached at firstname.lastname@example.org.