Proposal: Encourage biomass ethanol in farm bill

Paying for new programs could prove difficult as congressional committees begin work on the legislation.

The next farm bill could provide subsidies and loan guarantees to start production of fuel ethanol from corn-field residue and other sources of biomass.

Congressional pay-as-they-go rules are limiting the size of the programs, and lawmakers still must find a way to pay for them.

The House Agriculture Committee started drafting its version of the farm bill Tuesday and included a proposal to spend $1.5billion during the next five years to subsidize the production of biomass ethanol as well as traditional biodiesel, which is made from soybean oil and animal fats. Conventional corn ethanol would not qualify for the subsidies.

Developing cellulosic ethanol