Farm bill biofuel subsidy could balloon in cost

GreenBayPressGazette
By PHILIP BRASHER • Gannett Washington Bureau • November 1, 2009

Program originally expected to pay out $70M over 5 years

WASHINGTON — A new farm subsidy program created to spur the development of next-generation biofuels could turn out to be a cash cow for a decidedly old business — paper mills and their suppliers.

The 2008 farm bill created the program to subsidize the harvesting, storing and shipping of biomass, including corn cobs, grasses and wood waste, that could be used to make fuel or generate electricity.

The program was originally estimated to cost taxpayers $70 million over five years, but is now expected to pay out hundreds of millions of dollars just over the next year because of demand from paper companies and wood-burning power plants.

It's "bad policy and it's taking the money from what we desperately need, which is to help farmers get going with biomass crops," said Loni Kemp, a consultant who advises agricultural and environmental groups on bioenergy programs.

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