FAQ: Apply To FSA For Biomass Crop Assistance Program

USDA Farm Service Agency is accepting applications for new program providing incentive payments for collecting and delivering biomass to qualified facilities.

Published on: Sep 22, 2009

FAQ: I’ve heard USDA is accepting applications from farmers for a new program that provide incentive payments for collecting and hauling corn cobs, stalks, switchgrass and other biomass to approved facilities. Please explain.

Answer: Provided by John Whitaker, executive director of USDA’s Farm Service Agency in Iowa.

The Farm Service Agency has announced that interested parties can now sign up to participate in USDA’s new Biomass Crop Assistance Program or BCAP, which will help increase production of renewable energy. The program, authorized in the 2008 Farm Bill, provides financial assistance to producers who deliver eligible material to biomass conversion facilities. FSA will provide financial assistance to collect, harvest, store and transport eligible materials.

This program will benefit producers, the developing biomass industry, the general public and the environment as we continue working to expand production and availability of renewable energy. Owners of eligible material can receive financial assistance for delivering qualified biomass to conversion facilities that use biomass for production of heat, power, bio-based products or advanced biofuels.

Contact your local FSA office for information

Biomass conversion facilities and material owners or producers should contact their FSA state offices or visit Farm Service Agency for more information. FSA will begin accepting applications from biomass facilities interested in participating in the Biomass Crop Assistance Program.

Once an agreement is signed between FSA and a facility and funding through the program is provided, the facilities can begin accepting materials. Producers who sell these materials can apply for matching payments under the collection, harvest, storage and transportation (CHST) component of BCAP.

The matching CHST payments are paid at a rate of $1 for $1 per dry-ton equivalent received from a qualified biomass conversion facility, not to exceed $45 per dry-ton equivalent. A biomass owner is eligible to receive payments for two years. Purpose of the matching payments is to assist biomass producers with the CHST cost of delivering biomass to a qualified biomass conversion facility.

How USDA payments for biomass will work

For example, if a qualified biomass conversion facility pays a producer $30 per dry ton for biomass, the material owner or producer would be eligible for a matching payment of $30 per dry ton from FSA. This payment will help offset the costs of collection,

Biomass conversion facilities may become "qualified" by submitting a Memorandum of Understanding (MOU) to the FSA state office in Des Moines. The MOU generally provides the requirements for becoming a qualified biomass conversion facility. Once a facility becomes qualified, eligible material owners or producers who deliver biomass to that facility may be eligible to receive CHST payments.

Eligible material owners or producers, who market eligible material to a qualified biomass conversion facility, may apply for the matching CHST payment at their FSA county office. An application must be submitted before the eligible material is sold and delivered to a qualified biomass conversion facility.

After the product is delivered, a producer must provide FSA with documentation of product quantity, quality and payment rate. County FSA offices will validate payment requests with information in the county office and information provided under the terms of MOUs with the qualified biomass conversion facilities. CHST payments will not be authorized until after an appropriate environmental analysis has been conducted.

If you have specific questions or need details regarding USDA farm programs, contact your local USDA Farm Service Agency office. You can also get news and information about DCP, ACRE and other USDA programs at www.fsa.usda.gov.

Two Iowa State University Extension Web sites have farm program information and analysis. They are ISU's Ag Decision Maker site at www.extension.iastate.edu/agdm and ISU Extension Specialist Steve Johnson's site at www.extension.iastate.edu/polk/farmmanagement.htm.

And be sure to read the regular column "Frequently Asked Questions about the Farm Program" that appears in each issue of Wallaces Farmer magazine and at www.WallacesFarmer.com