What will it take to convince farmers to plant energy crops when corn and soybean prices are at or near all-time highs? Nationally, all eyes will be on Washington this winter as USDA begins the process of implementing the Biomass Crop Assistance Program initiated in the 2008 Farm Bill. In Minnesota, policy-makers are waiting to piggyback their Reinvest in Minnesota-Clean Energy program onto the new USDA program. Minnesotans have given serious thought to what it will take to get farmers to make the switch from planting corn and soybeans to grass on productive land. They’ve found that it’s not going to be cheap. In southeastern Iowa, the Natural Resource Conservation Service has had some success signing farmers up for a unique application of the USDA Environmental Quality Improvement Program.

Waiting for BCAP to Unfold
BCAP was designed to help farmers located near biomass facilities switch part of their acreage to dedicated energy crops. John Moore, a senior attorney with the nonprofit Environmental Law and Policy Center, expects it will be a couple of years before USDA will be signing up acres in the program. Farm Service Agency regulations call for an environmental impact study on any new programs, which could take from nine to 18 months, in addition to the rule-making process, which includes public hearings. The environmental law and policy nonprofit had hoped USDA would fast-track the implementation of BCAP, possibly even signing up acres in 2009 under a Notice of Funding Availability, which allows a program to be implemented while the rules are being written. ”As long as it takes to get energy crops going—a couple of years at least—and given that the next Farm Bill comes up in 2012, we need to get those dedicated energy crops in the ground soon,” Moore says.

The BCAP language in the 2008 Farm Bill provides a framework of the program, but also gives USDA a fair amount of flexibility. The program calls for an application that can be initiated by a group of individuals or a biomass conversion facility. A biomass conversion facility is rather broadly defined to include any facility that will use the biomass to make biobased products or energy—heat, power or advanced biofuels. The application must include a commitment from at least one biomass conversion facility in the area defined in the application to use the biomass in the facility. Moore expects that in practice, the biomass conversion facility will apply and then get farmers to sign up, although in a few well-organized states, farmers or economic development groups may take the lead. Biomass crop producers, however, will sign contracts directly with the USDA. Moore expects the first applications to come from projects that are well underway, especially those targeting corn stover and other crop residues as feedstocks, although the incentives for producers utilizing crop residues will probably be lower than for those planting dedicated energy crops.

Details of BCAP implementation will unfold as USDA goes through the rule-making process. In the meantime, there are a number of provisions contained in the legislation including:

Production Incentives
Ag producers in project areas will receive a payment for up to 75 percent of establishment costs to plant energy crops. Incentives also include an annual payment intended to compensate the producer for the opportunity cost associated with growing an energy crop. Land that was formerly planted to row crops will likely garner a larger annual incentive than land that was fallow, or pasture, the ELPC says. The annual payments can continue for up to five years for producers growing perennial grasses and up to 15 years for tree crops.

Ag producers are required to implement a conservation plan on the enrolled land and to provide information to USDA for research purposes.

Logistics
Anyone collecting and selling biomass crops or agricultural or forest waste for energy is entitled to receive the harvest, transport, processing and storage payment. The payment is structured to match the amount of money the biomass collector, which doesn’t have to be a farmer, receives from the biomass user. USDA will match dollar for dollar, up to $45 per dry ton. Materials not eligible for this payment include animal waste and byproducts, food and yard waste, and algae.

Criteria and Eligibility
All biomass production must occur on either agricultural land or industrial private forest land. BCAP excludes all land in federal land protection programs and native sod. BCAP also excludes any crops otherwise eligible for USDA commodity programs covered in Title I of the Farm Bill, along with noxious and invasive species.

USDA will determine whether projects meet the minimum threshold for selection, based on criteria in the statute and others to be determined by USDA. The statutory criteria include:

› The amount of crops to be produced and the likelihood that those crops will actually be used to produce energy

	1   2   3	Next Page -->
View Entire Article