USDA adds $300 million bioenergy program

WASHINGTON – A two-year, $300 million USDA program advocating increased production of bioenergy fuels is an effort to expand markets for agricultural commodities and promote biofuels like ethanol and soy-based biodiesel.



Bioenergy producers who increase their purchases of corn, soybeans and other commodities to expand production of ethanol, biodiesel or other biofuels will be eligible for cash payments.



“Once all the regulations are in place, we hope to have sign-ups for the program in December,” said Steve Gill, USDA official.



Bioenergy producers will apply to the Commodity Credit Corporation to participate in the program. Eligible commodities include barley, corn, grain, sorghum, oats, rice, wheat, soybeans, sunflower seed, canola, crambe, rapeseed, safflower, flaxseed, mustard seed, cellulosic crops and short rotation trees. These commodities should be grown on U.S. farms for the purpose of producing biofuels. Other commodities or commodity by-products as determined and announced by CCC may also be eligible.



Producers must provide CCC with evidence of increased purchase and utilization of agricultural commodities for the increased production of bioenergy.



CCC will make up to $150 million in cash payments in fiscal years 2001 and 2002 to bioenergy producers on a quarterly fiscal year to date basis. Payments will be based on the increase in bioenergy production compared to the previous year’s production and structured to encourage participation of producers with less than 65 million gallon annual production capacity.



“We weren’t sure if we needed a payment cap or not, but to be safe, we have,” said Gill. “No one producer can receive any more than 5 percent annually, which is $7.5 million.”



Corn growers across the nation have applauded this effort. Dwayne Siekman of the Ohio Corn Growers Association says this program will go hand-in-hand with a ethanol feasibility study that is being conducted in Ohio.



“Our study will completed in the next couple of weeks and that will give us the chance to see about bringing ethanol producers into Ohio,” said Siekman. “It will also allow our farmers another outlet for their commodities. It could really be a win-win situation.”



USDA says biofuels offer renewable, clean, domestic sources of fuel that can create new markets for American farmers. Ethanol accounts for 1.2 percent of the nation’s gasoline supply. Over 5 percent of U.S. corn production is now grown annually for use in biofuels.



“This move is backed by an executive order from the Clinton administration,” said Siekman. “We hope this will offer less reliance on foreign fuels and help farmers build a market for renewal commodities.”



USDA is also soliciting proposals for pilot projects that use harvested vegetation to produce energy. Biomass, plant materials containing cellulose and lignin, can be burned, converted into combustible gas or used to produce liquid fuels.



The land must be enrolled in USDA’s Conservation Reserve Program (CRP) and the vegetation cover, such as grass, must be approved cover for use in the conservation program. The acreage may not be harvested more than once every other year and no more than 25 percent of the total CRP acreage in any NASS crop reporting district may be harvested in any one year.



Pilot projects must be conducted for a minimum of 10 years. Call your local FSA office for further details. Projects applications must be submitted to the FSA state director by Dec. 19.



http://www.fsa.usda.gov/pas/publications/facts/html/biomass00.htm

http://www.fsa.usda.gov/pas/publications/facts/html/bioener00.htm

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