Excluded producers now eligible for funding

By Luke Geiver
Posted Sept. 1, 2010

The USDA has issued an amendment for advanced biofuel producer requirements necessary for the Advanced Biofuel Payment Program, now allowing both nonrural and foreign-owned producers to qualify for the program. In March, the USDA issued a notice seeking requests for eligible advanced biofuel producers, but at that time, according to the USDA, "to receive payment, eligible advanced biofuels must have been produced in a biofuel facility located in a rural area and whose owners met U.S. citizenship requirements."

After receiving several comments questioning the eligibility requirements, the USDA issued the change, stating, "…the Agency has decided that, under this interim rule, nonrural and foreign-owned biofuel producers of advanced biofuels will be eligible for the Program to the same extent as rural, domestically owned producers of advanced biofuels." One of the groups contesting the initial requirements was the Indiana Soybean Alliance, speaking in particular for the nation's largest biodiesel production facility in Claypool, Ind. Along with comments from the ISA, Louis Dreyfus Agricultural Industries LLC, owner of the Claypool LD Biodiesel and Soybean Processing Plant, also filed in the District Court of Columbia, claiming the USDA unconstitutionally denied the Claypool facility funding due to the plant's percentage of foreign ownership.

Robert Conley, Kosciusko County Commissioner, said the county has already set aside a half-mile space on either side of the plant for further growth, and with the USDA's amendment to the producer requirements, that expansion may happen. "This is a huge victory for Indiana soybean farmers, we worked hard to get this facility located in rural Indiana to increase the profitability of the farmers in that area," said Mike Beard, ISA membership and policy committee chairman. "Louis Dreyfus has not only benefited the farmers delivering soybeans to its facility, but also the economy of the rural community of Claypool."

In order to provide assistance to the advanced biofuels industry, the USDA said, "the agency will provide an advance FY 2009 supplement payment to those producers who submitted eligible requests under the March 12, 2010, notice." The advanced supplemental payment will equal 25 percent of the payment the applicant would have received pursuant to that notice. USDA is also canceling the May 6, 2010, Notice of Contract Proposal that established the terms for those seeking these payments, and the change making nonrural and foreign-owned producers eligible for funding will become official sometime this fall.

Beard said, "This is a step in the right direction, but we still have a large issue lingering out there regarding the biodiesel production tax credit, but we appreciate the efforts of ISA members in having our voices heard at USDA."
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