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Release No. 0005.05
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USDA Announces Final Rule To Implement Federal Biobased Products Preferred Procurement Program

Declares All Major Elements of 2002 Farm Bill Now Implemented

CHARLOTTE, N.C., Jan. 9, 2005 - Agriculture Secretary Ann M. Veneman today announced the publication of a final rule to implement a program of preferred procurement of biobased products by federal agencies. This final rule establishes provisions for the Federal Biobased Products Preferred Procurement Program. This program, authorized by section 9002 of the 2002 Farm Bill, requires all federal agencies to preferentially purchase biobased products that have been designated by USDA as eligible under this program.

"The Federal Biobased Products Preferred Procurement Program creates a preference across the entire federal government to purchase biobased products, when practical, based on price, availability and performance," Veneman said during remarks at the 2005 American Farm Bureau Federation Annual Meeting. "This rule promotes energy independence and the use of environmentally sustainable energy from biological sources, while at the same time creating new demand for agricultural commodities and new business investment and job growth in rural America."

The new rule establishes the process by which the Department of Agriculture will designate "items" for preferred procurement by federal agencies. Items are generic groupings of biobased products, such as biobased greases, biodiesel and ethanol when used as additives, hydraulic fluids, biobased polymers, industrial solvents, biobased fertilizers and cutting oils. Federal agencies must assure within one year after the publication of this final rule that their procurement specifications require the preference of biobased products consistent with this rule. The rule is scheduled to be in the January 11, 2005, issue of the Federal Register and will be posted at www.biobased.oce.usda.gov when available.

USDA plans to soon begin issuing a series of proposed rules that will designate specific items for program eligibility. After considering public comments, final rules will be promulgated. This process of designating items by rulemaking is expected to extend over the next three years. Once an item is designated, all manufacturers with products that fall within that item may claim preferred procurement status for their products when marketing to federal agencies as long as the biobased content of their products is consistent with the statutory definition and meets the minimum levels specified in the designation rule. While this program is still being implemented, many federal agencies are already incorporating biobased products in their acquisition orders.

To date, USDA has identified 83 items on which it is developing test information to support designation by rulemaking and are available for viewing at: http://www.biobased.oce.usda.gov. Interested parties can obtain further information on the Federal Biobased Products Preferred Procurement Program at the web site noted above or may contact Marvin Duncan, Office of Energy Policy and New Uses, at (202) 401-0532, or at mduncan@oce.usda.gov.

With the announcement today, Veneman said that all major elements of the 2002 Farm Bill have been implemented and have contributed to the strong economic position of U.S. farmers today. What remains, with minor exceptions, are follow-on requirements to continue to carry out programs.

"Our goal has been to implement the Farm Bill's nearly 500 provisions as quickly and efficiently as possible," Veneman said. "Our staff throughout the country has been up to the challenge, working tirelessly and aggressively to ensure the estimated $180 billion in Farm Bill program benefits over a 10- year period is flowing to producers and other program participants."

Highlights include:

Commodity provisions. USDA implemented the commodity title provisions in a matter of months so that producers could receive the benefits of these programs on a timely basis. To date, over $20 billion in commodity program payments, e.g., direct, countercyclical, loan deficiency, peanut quota buyout, and milk income loss payments, have been issued under this Farm Bill.

Conservation title. USDA has implemented the largest conservation effort in history under this Farm Bill. This includes implementing: the Environmental Quality Incentives Program, the Farm and Ranch Lands Protection Program, the Grassland Reserve Program, the Conservation Reserve Program and the Conservation Security Program.

Rural development. USDA awarded a substantial amount of loans and grants for water and waste disposal projects as well as broadband projects in rural areas. Value-added producer grants were also made for a wide-range of projects that will provide additional income opportunities for producers and contribute to rural economies. Grants were also made to 10 Agriculture Innovation Centers. USDA worked with the Small Business Administration to establish the Rural Business Investment Program.

Energy. USDA awarded grants along with the Department of Energy (DOE) under the joint USDA/DOE Biomass and Development Program and grants under the Renewable Energy Systems and Energy Efficiency Improvements Program, and the Biodiesel Fuel Education Program. The Commodity Credit Corporation Bioenergy Program was implemented to encourage ethanol and bio-diesel production.

Trade. USDA implemented the McGovern-Dole International Food for Education and Child Nutrition Program and allocated $100 million in FY 2003 funding and $48 million in 2004. For 2005, a program level of $87 million has been established and allocations are expected to be announced in the near future. USDA also has made available the increased farm bill funding for the market development cooperator programs such as the Market Access Program, the Foreign Market Development Program and the Technical Assistance for Specialty Crops.

In addition, President Bush appointed the first Assistant Secretary for Civil Rights and USDA established the Commission on payments limits which issued its report to Congress; restored food stamp eligibility to legal immigrants; established the Senior Scientific Service; implemented the Forest Land Enhancement Program and Country of Origin Labeling; issued reports on the Conservation Reserve Program, the dairy program, marketing of value-added products, geographically disadvantaged farmers and socially disadvantaged farmers; reviewed programs pertaining to tribal lands; and issued guidelines for reforming the county committee election process.