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The economic stimulus bill: What's in it for ag?

Agriculture.com Staff 02/16/2009 @ 2:44pm

The $787 billion economic stimulus bill passed by Congress last week increases spending at USDA, but most of the money won't go directly to farmers. Still, the bill should help rural America, says Katy Ziegler Thomas, a lobbyist for National Farmers Union.

The bill increases spending on USDA's nutrition programs, including food stamps, by up to $20 billion.

"It's not direct dollars for our producers but it's creating demand for our products," Ziegler Thomas says.

The USDA also gets more money for making loans and grants to rural businesses and for housing. It will have more money for improvements in rural water systems, waste disposal and rural hospitals and health clinics.

The bill also extends tax credits for three more years for energy from wind, biomass and solar cells. The credits would have expired in 2010 without that.

"To have that three-year extension is going to be a benefit to farmers and ranchers," she says.

Many ag economists believe the new permanent disaster program and ACRE (average crop revenue election) program will stretch the resources of the Farm Service Agency. The USDA under the Bush administration thought more money -- to the tune of around $200 million -- would be needed to upgrade its computers. And the new Agriculture Secretary, Tom Vilsack, has said that USDA's agencies need new computers to communicate better. At the last minute, $245 million for a USDA technology upgrade was cut to $50 million.

All-in-all, the increased USDA funds should help farmers, ranchers and others in rural America, Ziegler Thomas believes. "I think it's a positive for rural America," she says. "Is it going to solve all their problem? Absolutely not. But it is a positive."

Senate Agriculture Committee chairman Tom Harkin (D-IA) was upset when $250 million for increased spending by USDA on bioenergy was cut from February's $787 billion economic stimulus bill at the last minute. Harkin had tried to get more, but the Senate approved just $50 million for a USDA program that helps farmers get grants and loans to produce energy on farms. Another $200 million was slated to help existing ethanol plants retrofit to add in cellulosic ethanol production.

Instead, when the House and Senate put together the final bill for President Barack Obama's signature, the $250 million was cut. The Department of Energy got $1.6 billion for research on energy, including biofuels.

"The Department of Energy really has no idea how to do this," Harkin said of developing cellulosic ethanol. The stimulus bill's support for other green energy -- weatherizing buildings and tax breaks for wind and solar -- is big, amounting to $45 billion.

The $787 billion economic stimulus bill passed by Congress last week increases spending at USDA, but most of the money won't go directly to farmers. Still, the bill should help rural America, says Katy Ziegler Thomas, a lobbyist for National Farmers Union.

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