Agriculture Secretary Vilsack Announces Missouri Conversion Facility First with BCAP Producer Payments

FSA and Show Me Energy Pay Producers for Biomass Materials

CENTERVIEW, Mo., Aug. 31, 2009 – Agriculture Secretary Tom Vilsack today announced that USDA's Farm Service Agency (FSA) made the first matching payment under the new Biomass Crop Assistance Program (BCAP). Show Me Energy Cooperative of Missouri was the first biomass conversion facility that became qualified under BCAP, a 2008 Farm Bill Program, and less than a month later, was paying producers for biomass materials that FSA matched with BCAP collection, harvest, storage and transportation (CHST) program funds.

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"As the Obama Administration continues laying the foundation for a stronger, revitalized economy, biomass has great potential to create new, green jobs for American workers," said Vilsack. "Biomass also has important environmental benefits to produce cleaner energy and reduce greenhouse gases."

"Show Me Energy completed an agreement soon after our July 29th announcement and had biomass producers waiting," said FSA Administrator Jonathan Coppess. "Agriculture Secretary Vilsack had a chance to see first hand the company's successful operation during a recent visit to Missouri. He was impressed and excited about the opportunities that BCAP presents for agriculture, the environment and the nation."

According to Show Me Energy Cooperative CEO Kurt Herman, "Our plant produces fuel pellets from agricultural waste products, but could expand to produce cellulosic liquid fuels."

Herman also says pellets produced by Show Me Energy are used to heat houses and livestock facilities. Kansas Power & Light Company's Sibley plant is testing pellets to determine if the biomass fuel could supplement coal for generating electricity.

Action on BCAP stems from President Barack Obama's directive issued May 5, 2009, to Secretary Tom Vilsack to aggressively accelerate the investment in and production of biofuels. In early June, Secretary Vilsack announced that USDA had met the president's 30-day deadline by introducing the Biomass Crop Assistance Program, saying, "President Obama and I are committed to advancing clean and renewable energy." In less than three months, producers are receiving benefits.

The BCAP program encourages biomass conversion facilities to sign agreements with FSA. The agreement can be downloaded from www.fsa.usda.gov . Once signed up, FSA confirms qualifications and assigns facilities identification numbers. Producers who sell eligible materials to qualified biomass conversion facilities can then apply for FSA payments that match the amount received from the facility. The payments are authorized under the CHST component of BCAP.

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. 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.

Show Me Energy submitted its agreement to the Missouri FSA State Office on Aug. 6, 2009. The firm has over 500 biomass producers supplying materials such as switchgrass, straw, corn stover, sawdust, woodchips and other biomass materials.

A Notice of Funds Availability published earlier this summer made the first matching payment available. A proposed rule on matching payments, available for public comment, and another BCAP component, Establishment and Annual Payments, available in a project area in the vicinity of a biomass conversion facility, is expected to be published this fall.

For more information on FSA's Biomass Crop Assistance Program go to www.fsa.usda.gov/FSA/webapp?area=home&subject=ener&topic=bcap .

The economic and environmental benefits of increasing America's use of clean, renewable biomass power include:

* Creating Green Jobs: A strong mandate for renewable energy will spur investment in the biomass power industry and create thousands of green jobs all across the United States, and especially in small rural communities.
* Reducing Greenhouse Gases: Biomass power reduces carbon dioxide emissions by 30 million tons annually when accounting for the displaced fossil fuels. The biomass electricity generating process eliminates the harmful methane gas and greatly reduces carbon emissions.
* Improving Forest Health: The biomass power industry removes 68.8 million tons of forest waste annually. Cleaning this debris from the forest floor improves forest health and dramatically reduces the risk of forest fires.

Source: USDA