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USDA plans to help farmers with renewable energy funding process

by Leslie Schichtel
Apr 16, 2013


Medill file photo

Streamlined proposals for grants would help farmers adopt renewable energy alternatives. The proposal is part of the revamped farm bill that is before Congress. 

Randy Dreher’s approach to farming has always focused on minimizing “off-farm input” items he must purchase by increasing output. And that includes energy.

As a member of the Iowa Farm Bureau and lifelong farmer in Audubon, Dreher understands the financial trials many farmers face in updating their technology to become more energy efficient.

For example, Dreher has considered buying a new cattle waterer after realizing how much he was spending each winter to prevent the old one from freezing.

“The only way to keep my old cattle waterer from freezing is to keep a heater going or put propane to it,” Dreher said. He said he is spending approximately $200 per winter on propane alone. In comparison, a breed cattle waterer is designed so it won’t freeze. The catch is that the new technology, including installation fees, would amount to $600 upfront.

“If I bought the breed cattle waterer, it would be a three-year pay-back period,” Dreher said. Since his old cattle waterer still works, like many other farmers, Dreher is hesitant to spend the extra money.

“People may not look closely at energy efficiency to run current operations as is,” Dreher said.

The U.S. Department of Agriculture announced plans Monday to increase energy efficiency on farms and help farmers update their technology with a proposal for streamlined applications for renewable energy funding. The grants would flow through USDA Rural Development's Rural Energy for America Program (REAP), including reducing paperwork for projects under $80,000.

Adam Nielsen, the director of national legislation and policy development at the Illinois Farm Bureau, said he predicts this would support the agriculture business.

“It helps address some of their costs of production,” Nielsen said. “The energy component is a big part of the cost and it’s reflected in everything they buy—in particular the electricity in the field.”

Nielsen said the program was designed to assist farmers in rural communities in addressing energy efficiency.

“A lot of the grants that have been made over the years have gone to farmers who have outdated equipment,” Nielsen said. The goal is to help farmers pay for a portion of the cost in installing new equipment, which will allow them to reduce their costs and be more equipped for the future, he said.

The REAP program is a small piece of the revamped farm bill, which has been in the works for the past three years and now awaits a vote in Congress, Nielsen said.

“In Iowa, we burn a lot of biodiesel for our tractors, so utilizing these types of grants will support the industry,” said Matt Dolch, a fourth generation corn and soybean farmer and a sales representative for Syngenta Seeds in Nebraska. Dolch said this could be a great return on investments for wind turbines, increasing energy efficiency in terms of wind energy.

Other farmers worry that the USDA may not target the farmers they need to reach with the new energy funding proposal.

Most farmers read promotional information, but it’s sometimes hard to come across programs unless you have neighbors who already use it, Dreher said. “People don’t just call the USDA out of the blue asking about grants and loans.”

The mindset of the farmer makes it a challenge to encourage energy efficiency, Dreher said. “Farmers haven’t really spent their resources to become more efficient—they spend to increase total output,” he said.

Having an easier application for grants and loans is great, Dreher said, but farmers don’t think in terms of efficiency, they think in terms of output. “There still needs to be some education to inform and educate farmers in what things they can do to increase efficiency and help farming operations - there’s a difference between the technology they had installed ten years ago and what’s available now,” he said.

What the USDA is trying to push isn’t necessarily at the forefront of the farmer’s mind, Dreher said. “If they’re not meeting the needs of the farmer with the proposal and don’t get the information out, the dollars will go wasted or unused.”