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Waiting for USDA FSA

By Staff | Jan 17, 2011

Jeff Berkland looks over a few of his 4,500 bales of corn stover that are ready for delivery to POET's Project LIBERTY in Emmetsburg. Many of his bales were contracted for December delivery. A delay in getting qualified stover supplier status to producers by USDA has held up the delivery to the ethanol plant. More than 80 producers in the Palo Alto County region are similarly affected.

CYLINDER – Jeff Berkland looks over a dozen of his 4,500 round bales of corn stover on Jan. 11 wondering when he will be able to deliver them to POET’s Project Liberty.

His bales were initially scheduled for December delivery. He is among 80 other producers throughout the Palo Alto County area contracted for delivering the bales, each weighing roughly a ton.

A similar scenario is being played out in 15 other counties around the country.

Berkland, who is in partnership with the bales with two other producers, are in limbo until the U.S. Department of Agriculture Farm Services Agency can get qualified under the USDA’s federal Biomass Crop Assistance Program in order to get in on a $40 per ton matching fund for participating in Project Liberty.

Berkland’s contract with POET shows that he is to deliver 700 tons of bone dry stover to Project Liberty. In exchange, he’ll receive payment of $40.24 per ton from POET, plus a matching amount from BCAP and an additional $7.23 per ton through a Department of Energy program, a total of $87.11 per ton.

"I don't know that any of us are mad at POET. We're just disappointed it hasn't worked out better." Jeff berkland, Cylinder-area farmer, stover supplier for POET's Project LIBERTY

But a delay in BCAP processing has kept Berkland and other producers from delivering their bales and drawing full payment as contracted — revenue that was anticipated, which led Berkland and his partners to purchase a new tractor, a Vermeer round baler and two flatbed trailers.

In a Jan. 5 letter to contracted stover providers, POET offered its contracted $40.24 per ton, plus an additional $15 per ton if producers wanted to get some cash flow going.

The problem with that, however, Berkland said, is that every ton delivered would not qualify for BCAP matching funds, so a provider would stand to lose upward to $25 per ton.

“I don’t know that any of us are mad at POET,” Berkland said. “We’re just disappointed it hasn’t worked out better.”

There is an estimated $2.3 million in BCAP funds that are tied up in the administrative delays and unavailable to the local rural economy, Berkland noted.

Software still needed

According to Jim Book, program specialist for the state FSA office, BCAP funds were released by the USDA to states, but the delay in releasing the money has been two-fold – the USDA is now requiring participating producers to have a conservation plan and the needed software for processing applications from producers has not yet been received by state offices.

“I think I can add a little hope here,” Book told Farm News .

First, he said, the conservation plan requirement will be temporarily waived so farmers can apply. “They’ll still have to get a conservation plan, but they won’t need the plan before they apply.”

Second, FSA offices were informed that they can expect the needed software to be delivered this week. “So by Wednesday we could be approving applications,” Book said. “And because of the waivers, we’ll be able to process applications more quickly.”

Book stressed that producers have to prove ownership of the stover and none of it can be delivered to the plant before application.

Once applications are approved, producers like Berkland can begin delivering their bales to POET and qualify for BCAP matching funds.

Delay still possible

Book said there are still two things that could slow up the application approval process – if USDA fails to get the software to state offices as promised and producers have to bring a copy of their contracts with POET.

“That contract has to have the same name on the contract as what appears on FSA’s records,” Book said. For instance, he said if a producer is listed under an incorporated farm name on FSA’s record, but the POET contract is issued to an individually named producer, that won’t work for BCAP funding.

“I already told POET about that,” Book said.

According to Jim Sturdevant, POET’s director of Project LIBERTY, “BCAP is an important tool to help overcome the challenges of establishing a new biomass market. USDA approved POET Project LIBERTY as a qualified biomass conversion facility, and some Emmetsburg-area farmers are now waiting for USDA approval as eligible biomass suppliers so they can take advantage of the BCAP incentive.

“We have maintained regular contact with USDA throughout the process.

“Due to the BCAP delay, POET has offered farmers a special, one-time incentive of $15 per ton for those who do not want to wait for BCAP approval this season. We share the farmers’ frustration with the delay, but we’re hopeful that USDA will remedy the situation soon.”

Contact Larry Kershner at (515) 573-2141, Ext. 453 or kersh@farm-news.com.

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