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Budget slash dashes plans for farmer wind energy co-op, some farm bill energy title incentives in jeopardy

(Thursday, Feb. 6, 2003 -- CropChoice news) -- Melita Marie Garza, Chicago Tribune, 02/04/03: Quincy, Ill. grain farmer Jim Carlock's plan to start a wind farm to generate electricity suffered a potential setback Monday when the Bush administration slashed funds for such renewable energy projects. Carlock and his 21 neighboring wheat and soybean farmers in Adams County are among ranchers and rural businessmen who could be hard pressed without federal funding to come up with all the money necessary to develop such projects.

At issue is $115 million that Congress approved for such projects over a five-year period. For 2003, the Bush administration proposes reducing the $23 million Congress mandated to $18 million and eliminating $23 million set aside for 2004.

Part of the problem is that such projects are capital intensive, and would be even more challenging for farmers without access to loans, loan guarantees and grants that were included in the 2002 Farm Bill. Carlock's wind farm would require at least $15 million in start-up costs, including the cost of wind turbines to produce a minimum of 10 megawatts of generation.

Under the Farm Bill, Carlock could have applied for up to 50 percent funding.

So far, Carlock has committed $50,000 of his own money to the project. "The administration talks about entrepreneuers and small business," said Carlock, 69. "They talk the talk, but they don't walk the walk. We are trying to do what we can and make some more money. The price of wheat is just exactly what it was 30 years ago."

The unchanged commodity prices make it harder every year to stay profitable, he said. Carlock estimated that at a minimum the cooperative could earn $2.4 million selling electricity.

Environmental groups who oppose the cuts say it drives a stake through one of the meatiest provisions of the energy component of the Farm Bill. Until last year, no farm bill contained a so-called Energy Title, a move that was seen as establishing energy as a vital aspect of agriculture. In addition to wind power projects, the money was to assist farmers who want to develop solar energy and biomass projects, as well as for energy efficiency improvements.

Howard Learner, executive director of the Chicago-based Environmental Law and Policy Center, said: "This is a step in the wrong direction. We should not sacrifice renewable energy technologies that farmers need and could use today. This is an opportunity to produce a new income stream for farmers through clean energy cash crops, create jobs and enhance rural economic development and provide environmental quality benefits," he said.

Environmentalists said the current cuts suggest that the last three years of the program will not be funded either.

"It's unlikely the administration would come back and fund a program it has largely decimated," said Jeremy Ames, policy analyst with the Washington, D.C.-based Environmental and Energy Study Institute. Keith Collins, chief economist for the U.S. Department of Agriculture, said, "I would argue that with $18 million this year, they could still do a lot." Collins suggested that the projects undertaken in 2003 could be studied for effectiveness, with the result that funding beyond 2004, were it to be made available, would be better earmarked.

"We are jumping in with both feet in a very large-scale new program and we are not really sure how these things are going to work out," Collins said. "The money is for energy efficiency and renewable projects. Which should we be focusing on? Should we be spending more money on insulating farmers' barns?" Collins asked.

John Ferry, 65, a corn and soybean farmer in Boone County, is among a group of farmers working with Enxco, a Danish company, to build a wind farm in Boone County.

Though that project is not being funded by the farmers, Ferry said the funding cut sent a bad message to small farmers. "I am greatly disturbed," Ferry said. "Our whole crisis with the Mideast is due to our failure to have a comprehensive energy policy." Carlock, the Quincy farmer, envisioned himself building windmills, though lately he feels he's simply tilting at them.

The lack of access to federal funding is just one hurdle. Carlock's group is applying for a $2.7 million state grant to undertake a wind study. And before the project could get off the ground the farmers would have to sign a contract with the local utility, Ameren/CIPS.

"Though the project would only be 10 megawatts of generation, we hope that the government will look at this funding again in a different vein," Carlock said. "We are just small potatoes. It could hurt a lot not to have this kind of assistance. One of our biggest hurdles will be getting loans at a reasonable rate."

Budget plan nixes farm energy title: Incentives to adopt clean energy sources are in jeopardy

(Thursday, Feb. 6, 2003 -- CropChoice news) --Steve Tarter, Journal Star, 02/04/03: PEORIA - Energy independence was one of the items President Bush championed in his State of the Union address last week. But the administration's proposed 2004 budget eliminates all funding for the energy title in the farm bill.

Environmental groups charge that would eliminate incentives for farmers and rural small businesses to make energy efficient improvements. The energy title - section 9006 of the farm bill - was a popular feature of the bill, gaining support from both Democrats and Republicans, said Howard Learner, executive director of the Environmental Law and Policy Center in Chicago.

"Section 9006 is a 'win-win-win' for farmers, economic development and the environment because it helps farmers diversify their income with clean energy 'cash crops,' and promotes rural economic development, while making the environment cleaner for everyone," he said. One of the programs impacted by a possible funding cut would be alternative energy programs such as wind farms that offer benefits to farmers throughout the country, Learner said.

Jim Clebaugh is a Quincy farmer who's concerned about the proposed lack of funding for the energy title. He heads a group of 26 farmers in Adams and Pike counties who want to develop a wind farm cooperative in that area of western Illinois.

The wind farm concept would allow farmers to place wind turbines on their ground to produce energy that could sold back to a utility. "A lot of farmers don't understand how valuable air rights are," he said. "We want that (energy) section of the farm bill to stay in there. We also need to have the renewable resource portfolio passed by the state." The portfolio proposal is a bill requiring utility companies to purchase a mounting percentage of renewable energy, said Hans Detweiler, a spokesman for the Environmental Law & Policy Center.

The energy title makes it easier for farmers to find another source of income, said Clebaugh.

"It's tough enough to make a good living off cropping. If the farming community could get organized and look at these projects that are doable, it would be a benefit both to the landowner and the community," he said. A spokesman for U.S. Rep. Ray LaHood, R-Peoria, said the Administration's proposed budget was far from being enacted. "There will be a lot of comments on various aspects of the budget. It's far from a done deal," said spokesman Tim Butler.