Biomass Crop Assistance Program

Program Basics

The Biomass Crop Assistance Program (BCAP) was established by the 2008 Farm Bill as a new Title IX energy program. The goal of the new program is to promote the cultivation of bioenergy crops that show exceptional promise for producing highly energy-efficient bioenergy or biofuels, and to develop those new crops and cropping systems in a manner that preserves natural resources. In addition, BCAP crops are not to be those that are primarily grown for food or animal feed.

Farmers participating in a BCAP project will be eligible to enter into a 5-year agreement with USDA for annual or perennial crops or a 15-year agreement for woody biomass that provides:

2008 Farm Bill Changes

This is a new farm bill program established by the 2008 Farm Bill.

Legislative Authority

Section 9001 of the Food, Conservation and Energy Act of 2008 amends Title IX of the Farm Security and Rural Investment Act of 2002 to include a new section 2011 authorizing the Biomass Crop Assistance Program, to be codified at 7 U.S.C. Section 8111.

Key Aspects of BCAP

Eligible Land — Land within a BCAP project area that is eligible for funding includes agricultural land and non-industrial private forest lands, except:

Eligible Crops – In general, the term ‘eligible crop’ means a crop of renewable biomass, which includes agricultural commodities and renewable plant material from other plants and trees. However, the following crops are not included:

Project Sponsors — A proposal for a BCAP project is submitted to the USDA by a project “sponsor,” defined as either a biomass conversion facility or group of producers who own or operate acreage within a specified project area.

Project Proposal Requirements – A proposal must include the following:

  1. A specified project area with specified geographic boundaries that are within an economically practicable distance from the biomass conversion facility;
  2. A description of the eligible land and eligible crops of each producer that will participate in the project;
  3. A letter of commitment from the biomass conversion facility that the facility will use the eligible crops intended to be produced in the proposed project area;
  4. Evidence that the biomass conversion facility has sufficient equity available if the biomass conversion facility is not operational at the time the proposal is submitted; and
  5. Any other information about the biomass conversion facility or proposed biomass conversion facility that gives USDA a reasonable assurance that the plant will be in operation by the time that the eligible crops are ready for harvest.

Project Selection Criteria – Project selection is a competitive process. The farm bill provides the following set of criteria that USDA must consider in selecting projects:

Volume of Eligible Crops

The volume of the eligible crops proposed to be produced in the proposed project area and the probability that those crops will be used for the purposes of BCAP

Volume of Other Renewable Biomass

The volume of renewable biomass projected to be available from sources other than the eligible crops grown on contract acres

Anticipated Economic Impact

The anticipated economic impact in the proposed project area

Opportunity for Producers and Local Investors

The opportunity for producers and local investors to participate in the ownership of the biomass conversion facility in the proposed area

Beg./Socially Disadvantaged Farmer/Rancher Participation

The participation rate in project by beginning farmers or ranchers or socially disadvantaged farmers or ranchers

Impact on Natural Resource Conservation

The impact on soil, water, and related resources including wildlife-related concerns

Variety of Production Approaches

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

Range of Eligible Crops

The range of eligible crops among project areas

Other

Any additional criteria as determined by USDA

Producer Contracts — Eligible producers in a BCAP project area may enter directly into a contract with USDA for payments related to the production of eligible crops. The contracts will run 5 years for annual or perennial crops and up to 15 years for the production of woody biomass.

Participating farmers must also be in compliance with the farm bill’s highly erodible land and wetland conservation requirements and implement a conservation plan or a forest stewardship plan. The nature of the conservation or forest stewardship plan is left up to USDA to determine.

Participating farmers must also agree to make available information gleaned from their participation in the program to USDA to help promote the production of eligible crops and the development of biomass conversion technology.

BCAP Payments for crop establishment and production – Under the contract with USDA, producers participating in a BCAP project are eligible to receive the following payments:

Annual Payments – The intent of the 5-year contract term is to encourage farmers to try new crops that may need a few years to become established before providing any economic return. USDA has been given discretion in setting the annual payment levels, with the Managers Statement expressing the intent that USDA should consider “the costs of the activity being funded and the need for the biomass conversion facility to bear some costs of producing the feed stock.”

Reduction in Annual Payments – USDA has the discretion to reduce an annual payment, if:

Collection, Harvest, Storage and Transportation Payments — USDA has the discretion to make collection, harvest, storage and transportation payments to a producer of an eligible crop on land under a BCAP contract or to a person with the right to collect or harvest material eligible for BCAP. The payments are to be provided on a matching basis at a rate of $1 for each $1 per ton provided by the biomass conversion facility, up to an amount not to exceed $45 per ton, for a period of two years.

Report to Congress – By not later than the spring of 2012, USDA is required to submit to Congress a report on best practice data and other information gathered from BCAP projects and participants.

Funding

BCAP received mandatory funding in the Farm Bill in “such sums as are necessary for each of the fiscal years 2008-2012.” The Congressional Budget Office estimates a cost for this program at $70 million over the life of the farm bill. The ultimate cost of the program will be determined by how many projects are awarded, how many farmers choose to participate, and what the actual payment levels will be.

Biomass Crop Assistance Program Mandatory Funding Estimate

2008

2009

2010

2011

2012

5 year cost

10 yr cost

0

$14 M

$14 M

$21 M

$21 M

$70 M

$70 M

Based on the Congressional Budget Office’s estimation of how many farmers will participate in BCAP each year.

Implementation Basics

The USDA Secretary has designated the Farm Service Agency to administer BCAP. FSA plans to issue a regulation for most of the BCAP provisions and is preparing an Environmental Impact Statement for the proposed regulation. With this implementation course, FSA would likely be taking the first proposals for BCAP in the Fall of 2009 or early 2010. FSA has made one exception to this implementation process. In June 2009, FSA issued a Notice of Funding Availability for the BCAP matching payments for harvest, collection, storage and transportation of biomass.

USDA Contact Information and Online Resources

A placeholder for BCAP is on the Farm Service Agency conservation program website at http://www.fsa.usda.gov/FSA/webapp?area=home&subject=copr&topic=landing.

Lead contact: Mike Linsenbigler, Acting Director, Conservation and Environmental Program Division, USDA Farm Service Agency, mike.linsenbigler@wdc.usda.gov, 202-720-6221.

Additional Contact: Paul Harte, Conservation and Environmental Program Divisions, USDA Farm Service Agency, paul.harte@kcc.usda.gov, 816-926-6104.