The Farm Bill, the 5-year, comprehensive legislation that governs everything from forestry to row crop and dairy price supports to nutrition programs to trade, expires in 2018. Although 2017 has just begun, the process of crafting new authorizing legislation is well underway. Several hearings have already been held in the House Agriculture Committee, including one focused on forestry components. On the Senate side, we expect hearings to be scheduled sometime beginning in the second quarter. The upper chamber is on a bit of a slower track as other issues, such as the nomination process for a new Secretary of Agriculture, in further up in the queue. However, in talking to Chairman Pat Roberts’ staff on the committee, it was signaled that the Chairman wants to have a bill crafted sooner rather than later so we expect focus to turn to Farm Bill shortly.
For the hardwood industry, there are a few areas of focus that are critical to our sector and upon which we target our lobbying activity. First and foremost is trade. Both the Market Access (MAP) and Foreign Market Development (FMD) programs are authorized and funded by the Farm Bill. These two programs have a successful, proven track record of helping us open up markets for U.S. made hardwood forest products overseas, particularly in the Pacific Rim. The American Hardwood Export Council derives its funding from these two programs.
While MAP and FMD enjoy broad support, they are not without their detractors. The Heritage Foundation is a regular critic, arguing that these two programs smack of corporate welfare and crony capitalism. Every year legislation is introduced in Congress to eliminate or defund MAP and FMD. The Hardwood Federation and other groups have successfully beaten back attempts to kill these programs, arguing that they represent an excellent return on investment and help U.S. producers keep up with considerable resources competing nations spend promoting their own exports.
Our lobbying efforts in support of MAP and FMD are two-pronged. Not only are we advocating reauthorization, but also mandatory funding. This latter aspect is critical as mandatory funding provides the highest level of certainty that programs will be sustained throughout the life of the 5 year Farm Bill. If a program is only authorized without having mandatory funds, it forces supporters into the unenviable position of having to work the Congressional appropriations process to seek funding. Given the unpredictability and dysfunction of the appropriations process over the last few Congressional sessions, this is an outcome we are trying to avoid.
On the forestry side, the Farm Bill offers woodland owners a number of incentives to keep their forests as forests. Programs include those that offer landowners payments on an annual basis to encourage conservation activities on the land or one-time payments for specific projects or for a long-term easement. Programs in the Farm Bill Forestry Title include the Environmental Quality Incentives Program known as EQIP and the Conservation Stewardship Program. For our sector though, a priority issue that will likely be addressed in the next Farm Bill is the growing crisis that on our federally owned forestlands. Some form of the federal forest reform legislation that was almost enacted by Congress the last two years will likely find its way into the Farm Bill, assuming that Congress does not act before next year. Federal timber sales need to be executed more efficiently so that project work can keep up with the forest management needs of our increasingly overgrown federal forest tracts. This needs to be coupled with a fire borrowing fix that will end the current practice at the Forest Service where leadership drains funds from every other budget line item to supplement its wildfire suppression budget.
One other area that will be our focus is in the Energy Title. Several initiatives are authorized in the Farm Bill that promote biomass energy and deployment of heating and power systems that rely on wood-based biomass fuel. An emerging issue for our industry is declining markets for our wood residuals at wood products manufacturing facilities. Warm winters and relatively low fossil fuel prices have reduced demand for biomass heating fuels which represent a sizable share of the market for our mill residuals. That is why we are taking a good look at some of these biomass programs in the Farm Bill and discussing ways they may be altered to better address our needs going forward. One of these programs is the Community Wood Energy Program or CWEP. The policy goal of this program is to encourage schools, hospitals, community centers and other institutions primarily in rural areas to convert to heating with highly efficient biomass thermal systems that rely on either wood pellets or wood chips. Right now the program is in place holder mode, with an authorization but no mandatory funding. A proposal is on the table which would seed this program with considerable mandatory money with the objective of accelerating deployment of biomass systems around the country.
The Hardwood Federation is leveraging our lobbying capacity on our issue set by collaborating with the Forests in the Farm Bill Coalition, a diverse group of landowners, industry and conservation groups that are advocating for a Farm Bill that will bring robust markets to rural America with the goal of keeping working forests working and the forest products value chain thriving. We serve on a subgroup of this coalition that is now discussing policies to promote markets. Your Hardwood Federation team welcomes your input and of course will keep you regularly apprised of our progress on this critical area of our advocacy efforts.