NSAC's Blog

Funding Available for Turning Biomass Material into Energy

June 11, 2014

On Tuesday, June 9, the U.S. Department of Agriculture (USDA) announced the availability of funding through the Biomass Crop Assistance Program (BCAP) for the collection and transport of biomass.  BCAP provides financial assistance to farmers and ranchers who establish and maintain new crops of energy biomass, or who harvest and deliver forest or agricultural residues to a qualifying energy facility.

BCAP was established by the 2008 Farm Bill as a new Title IX energy program, and the 2014 Farm Bill authorizes $25 million per year for BCAP, of which up to 50 percent ($12.5 million) each year may go towards matching payments for the harvest and transportation of biomass residues, including corn stover.

The Notice of Funding Availability (NOFA) published in the Federal Register is limited to these matching payments for collection, harvest, storage, and transport (CHST) for Fiscal Year (FY) 2014.  These payments are now being referred to by USDA as “retrieval payments.”

A portion of the funding for FY 2014 will also ensure contract performance and acquire technical expertise for the conservation of natural resources on the land.  USDA’s Farm Service Agency (FSA) plans to use the technical assistance money to establish either interagency agreements or modify current contracts.

Crop incentives for establishing and maintaining new, perennial energy crops, a critical component of BCAP, provide annual payments to producers who enter into contracts with FSA to produce eligible biomass crops on contract areas within BCAP project areas.   The National Sustainable Agriculture Coalition (NSAC) believes these are the more important part of the BCAP and should consume the bulk of the farm bill funding for the program.  In announcing the $12.5 million being made available for retrieval payments, USDA indicated that crop incentives will not begin until FY 2015.

The crop incentives component of BCAP provides funding to farmers and landowners who establish crops and trees that are suitable for use as biomass feedstock on land included in biomass project areas.  Payments are made for the establishment of annual crops and perennial crops including trees, with additional maintenance payments for perennial crops.  This component of the program has the potential to improve farming operations and can help ensure sound conservation plans on these lands.

With regard to the matching payments component of the program, following the posting of qualified biomass conversion facilities (BCFs) in late July, the suppliers of those facilities may enter into a contract with FSA for BCAP matching payments for the collection, harvest, storage, and transportation (CHST) at the rate of up to $1 for each $1 ton provided to the BCF in an amount not to exceed $20 per dry ton for a period of two years.

Eligible material includes dead or diseased trees from public lands as well as agricultural or crop residues, including woody orchard waste, collected or harvested directly from agricultural lands.  Eligible material owners can apply for an FSA contract following the qualified BCFs posting in July through August 25, 2014, or until there is no more available funding, whichever occurs first.

The designation of up to 50 percent of the BCAP funding to CHST matching funds is concerning, because it encourages wasteful payments and the implementation of the CHST component has been very problematic in the past.  While some improvements have been made to limit abuse, it remains very concerning to see so much of a limited amount of farm bill funding be set-aside for this low priority purpose.

NSAC is also concerned about the potential unintended environmental consequences of BCAP.  In order to protect against increased soil erosion, decreased soil quality, and increased nutrient runoff that can result from the removal of crop residue from agricultural land, the conservation planning required  from BCAP participants must be robust.  The level of conservation planning required of participants by the Natural Resource Conservation Service (NRCS) still needs to be clarified and communicated.

The House Agriculture Appropriations bill for FY 2015, which the full House began working on today, cuts mandatory funding for BCAP by 40 percent.  The counterpart bill in the Senate does not include any cuts to BCAP.  NSAC opposes the cut, though if it does occur supports taking the cut entirely from the CHST matching grant portion of the program.

Find more information on BCAP from the FSA BCAP webpage and in this FSA BCAP fact sheet.

Categories: Conservation, Energy & Environment

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