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A vulnerable energy title could impact investors in ethanol and biodiesel plants.

P.J. Griekspoor 1, Editor

November 7, 2017

2 Min Read
ENERGY IN CROSSHAIRS: Washburn University Farm Bureau Professor of Ag Law and Taxation, Roger McEowen, said he believes the energy title of the Farm Bill could be an easy target. That, in turn, might impact those with investments in ethanol and biodiesel plants.

If you’ve been wondering what to brace for in attacks on the 2018 Farm Bill, get ready for an assault on the energy title. That’s the hunch of Roger McEowen, Kansas Farm Bureau professor of ag law and taxation at the Washburn University School of Law.

“I see the energy title as the most vulnerable,” McEowen said during an October forum at the 3i Show in Dodge City, Kan. “It’s an easy target for budget cuts or fund shifting as the administration pulls back from a commitment to renewable fuels.”

McEowen doesn’t see Congress going after the traditional farm safety net. His reason: the bill is being put together in a time of economic downturn. Farm bills are historically written in the context of the current economic conditions.

“Things are moving slow in Congress” McEowen said. “We can count on that throughout the whole process. There are a lot of things in play, from looking at Adjusted Gross Income limits, to ceilings on payments, changes in spousal limits and imposing limits on crop-sharing income. But I don’t think much is going to happen to change the traditional safety net just because we are writing in a time of pretty severe stress in the farm economy.”

McEowen does expect to see ag groups pushing to get a new focus on trade and trade expansion because there is little chance that the domestic market will see increased demand. And, there is backlash from the move to back off from free trade agreements.

New proposals to watch for

“When it comes to what to watch for, we’ll see new proposals for enhancing the risk protection offered by crop insurance,” McEowen said. “We’ll see a push to reduce spending and proposals for means testing. It’s also likely we’ll see a push for more conservation provisions in crop insurance.”

McEowen expects at least one or two efforts to separate the nutrition title, which pays for food stamps, from the Farm Bill.

“That isn’t likely to happen,” he said. “The Congressional committees understand the need to keep programs linked for political support.”

That basically leaves the energy title — already a football for EPA — as a place to turn to gain any money for enhancing other provisions, such as improving the dairy program or providing relief for cotton growers. They’re the two parts of the farm economy begging for safety net improvements.

It boils down to this: Farmers may see support for crop insurance to cover their corn crop from natural disaster or low market prices, but a pullback from the market incentives counted on to support local ethanol plant and biodiesel market investments.

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