On September 15, USDA’s Farm Service Agency (FSA) issued an Interim Rule, effective immediately, that gives Biomass Crop Assistance Program (BCAP) “Projects” a funding priority over funding for “Collection, Harvest, Storage & Transportation” (CHST) activities.

The BCAP project component provides for establishment and annual payments to agricultural and forest landowners who are participating in BCAP projects to establish new crops or trees for bioenergy and bio-based products.  The CHST component provided matching payments to any entity with a right to remove biomass from agricultural or forest land to cover the costs of collection, harvest, storage and transport.

BCAP was authorized in the 2008 Farm Bill with mandatory funding for “such sums as necessary.”   But the Supplemental Appropriations Act of 2010 capped BCAP funding at $552 million in FY2010 and $432 million in FY 2011, with a subsequent appropriations bill further limiting BCAP to $112 million in FY2011.

In the preamble to the interim rule, FSA states that it is establishing a priority for funding establishment and annual payments for project area activities because these activities can produce the greatest long term good in BCAP by providing an ongoing supply of new biomass.  CHST activities will only be funded if resources are available after funding all eligible project area applications.

FSA also announced that rather than considering project area applications on first-come, first-serve basis, the agency will issue a notice inviting project area proposals by a specified deadline with at least 30 days notice for proposal preparation.  In addition, FSA will review these proposals as a batch with selection criteria that include, but are not limited to, the criteria for BCAP projects in the 2008 Farm Bill.  These include the following:

(1) The dry tons of the eligible crops proposed to be produced in the proposed project area and the probability that such crops will be used for BCAP purposes;

(2) The dry tons of renewable biomass projected to be available from sources other than the eligible crops grown on contract acres;

(3) The anticipated economic impact in the proposed project area;

(4) The opportunity for producers and local investors to participate in the ownership of the biomass conversion facility in the proposed project area;

(5) The participation rate by beginning or socially disadvantaged farmers or ranchers;

(6) The impact on soil, water, and related resources;

(7) The variety in biomass production approaches within a project area, including agronomic conditions, harvest and postharvest practices, and monoculture and polyculture crop mixes; and

(8) The range of eligible crops among project areas.

NSAC has worked for both the prioritization of BCAP funding for projects and the review of a batch of BCAP project applications against the statutory criteria for projects that NSAC championed in the 2008 Farm Bill.

FSA is taking comments on the Interim Rule until November 14, 2011.  Instructions on submitting comments are provided in the Federal Register announcement of the Interim Rule.