The House and Senate Ag Committees are considering adding incentives to the energy and conservations portions of the 2007 farm bill that have to do with cellulosic-based feedstocks for ethanol, says Sen. Saxby Chambliss (R-GA), as quoted in Delta Farm Press.

"There are a lot of ideas that are being thrown around on the table, and I have no idea at this point where we will wind up," he says. "But ... we want to give some incentives out there for that additional stream of income from a cellulosic-based ethanol and biofuels standpoint." Two bills recently introduced include the Farm-to-Fuel Investment Act and the Biofuels Innovation Program Act (BIP).

The Farm-to-Fuel Investment Act aims to reduce U.S. dependence on foreign oil by encouraging American farmers to produce cellulosic energy crops. Senators Amy Klobuchar (D-MN), Tom Harkin (D-IA) and Kent Conrad (D-ND) drafted the bill. It would provide transition assistance for farmers to grow dedicated energy crops like switchgrass in an area 50 miles around biorefineries that will produce fuels like cellulosic ethanol. To participate, farmers would have to agree to adopt conservation practices for soil and water quality and wildlife habitat. This legislation also allows for an additional incentive to farmers who produce native perennial energy crops, such as prairie grass mixtures, because of the conservation benefits those crops provide.

The Biofuels Innovation Program Act, unveiled by senators John Thune (R-SD) and Ben Nelson (D-NE), would also help farmers and ranchers transition to biofuels production. It allows for feasibility studies to evaluate the likelihood of building a future biorefinery; the local potential for production of biomass resources, such as switchgrass and fast-growing trees; the number of interested producers; and the economic impact a future biorefinery would have on the local community.

Once a BIP proposal is approved by USDA, participating producers could enroll eligible land in the BIP program. They would receive a cost share for planting energy-dedicated crops and a per-acre rental payment. Once the biorefinery is operational, the rental payment would end and the producer would receive a matching payment up to $45/ton of biomass delivered to the biorefinery for up to two years. This legislation also authorizes matching payments on a per-ton basis to producers anywhere in the U.S. who sell crop byproducts and residues such as corn stover and straw to biofuels facilities for ethanol or other alternative energy production. These matching payments may be made for up to two years and are also capped at $45/ton.

"If cellulosic ethanol is to achieve its potential," says Thune, "it is critical that Congress help this industry overcome initial market barriers." The legislation would spur the construction of biorefineries across the country and provide incentives to farmers in surrounding areas to grow energy-dedicated crops, he adds.