Local farmers had an opportunity Thursday evening to hear first hand from corporate officials and USDA/FSA personnel how producing biomass crops could benefit their poor, sandy land. In a series of informational meetings provided by Chemtex International, Sampson County farmers were given myriad amounts of information regarding biomass crops that could be grown and what Chemtex is planning to do with those crops.
Chemtex has proposed to build a plant in Sampson County, near Turkey.
The meeting was in partnership with the Biofuels Center of North Carolina and the Sampson County Cooperative Extension, an information session on upcoming energy crop-growing opportunities for local farmers.
With plans to construct the nation’s first cellulosic biofuels facility in Sampson County, Chemtex International was recently awarded support from the U.S. Department of Agriculture’s Biomass Crop Assistance Program (BCAP) to grow energy crops, including Switchgrass and Miscanthus, in Sampson and surrounding counties. The information session addressed the defined window of opportunity to take part in BCAP, as well as crop establishment budgets and revenues. Farmers and landowners were encouraged to sign up to connect with Chemtex and FSA for further supply discussions and contract negotiations.
Kent Wooten, Sampson Cooperative Extension director, stated, “Opportunity to bring some marginal land into production with energy crops that can provide a stable income with reduced inputs and management after establishment could prove to be a great thing for some of our farmers. The information provided tonight hopefully has many of our farmers considering the possibilities of getting involved.”
Sen. Brent Jackson, R-Sampson, addressed the group, noting that getting Chemtex to Sampson County would be of great benefit to the local economy and to farmers. “If we can ever get this nut cracked so our farmers understand how it will benefit them and the local economy, it will benefit the agricultural industry greatly,” asserted Jackson.
Officials from Chemtex International, including Delane Richardson, vice president of business development; Matt Harrod, director, Agro Supply Chain Development; and executive vice president Paolo Carollo provided information linking Chemtex’s investment in Sampson County to feedstock supply chain development.
The Chemtex officials explained that they were currently starting their first biofuel producing plant, the Crescentino Plant, in Italy. They want to build their second plant, they stressed, here in Sampson County. They have called the project Project Alpha.
The company is an American engineering company that has provided international technology transfer service for more than 60 years. Those technologies include: renewable technologies such as biofuels and bio-based chemical; fibers and polymers and petrochemical, energy, and environmental engineering. Chemtex has an annual revenue of approximately $300 million and total employment of 1,000 staff members globally, with operations in Tortona and Rivalta in Italy; Wilmington and Sharon Center in Ohio; Shanghai and Beijing in China; and Mumbai and Bangalore in India.
Chemtex, as explained by Wooten and others during their presentation, is seeking to get away from using a food source for biofuel production, such as corn that is used most frequently. The cellulosic ethanol that will be produced by Chemtex comes from feedstock, such as Miscanthus and Swicthgrass, which have been approved for production in North Carolina. What Chemtex needs, they said, is a viable source of these feedstocks and that would mean a commitment from local farmers in surrounding counties to produce it. As in all things related to crop production, there are costs involved in startup and putting in the perennial crops. That is where the USDA Biomass Crop Assistance Program (BCAP) comes in.
Tim Jones, farm program chief, USDA-FSA, and Matthew R. Flint, assistant state conservationist, NRCS, provided the information to the farmers, noting that nearly $4 million has been set aside to assist those wishing to participate. The BCAP project provides financial incentives to eligible landowners and farmers to establish and produce biomass crops for conversion to cellulosic ethanol and bio-based chemicals. The project can provide assistance up to 75 percent of the put in cost to the farmer.
Jones and Flint provided information that stated estimated costs for putting in the Giant Miscantus is $999 per acre and with the BCAP assistance funds the farmer would receive $749 to defray that cost. For the Switchgrass, the cost is estimated to run $271 per acre to put in and the BCAP project would provide $203 to help offset the costs of startup. In addition, the contract with BCAP would be for five years and a rental payment would also be available to the farmer based on the established soil value of the land being used for the crop.Flint shared that this project was an attempt to bridge the gap between putting the crop in and receiving income from production of the feedstock.
“Establishment costs are high but the FSA program (BCAP) can assist with 75 percent of the establishment cost plus provide a rental payment for five years to help offset limited production in the first three or four years while the crops are maturing,” Wooten emphasized. “To take advantage of BCAP, growers need to contact the FSA and Chemtex as soon as possible.”
In order to participate in the BCAP project, the landowner or farmer must sign up by Sept. 14, 2012. If the $4 million is not allocated by Sept. 30, then the funds will be lost.
Sam Brake, director of farming, Biofuels Center of North Carolina, said land that farmers are currently having difficulty making any profit on is the type land that these feedstocks do well on. “Switchgrass and Giant Miscantus will grow and produce well on deep, sandy soils … all farmers around this county have some on their farms. By converting to growing a biomass feedstock ,with a stable economic return, would be of great benefit to the landowner or farmer,” cited Brake.
The abundance of deep sandy soil in Sampson is one of the reasons the area has been targeted for the growth of energy crops.
Chemtex has already started the process of establishing a bio-energy plant here in Sampson County. Carollo stressed that what Chemtex needs now is a commitment from local farmers to provide the necessary feedstock for them to operate the plant 365 days per year.
The contract with Chemtex is for 10 years and provides the farmer with what his expected income will be from producing the feedstock. Once the crop is established, there is little care needed other than fertilization and maintaining weed control, particularly in the first two or three years of production. Chemtex even states in its contract that they will be responsible for harvesting and storage if the need arises. Carollo further shared that while the plant was being constructed, which would take between 18 and 22 months, the feedstock would be stored so the plant would have the necessary biomass to start producing the biofuels.
“For this to be successful, Chemtex must have a feedstock supply… the supply is not dependent on any one crop so there is flexibility in the supply chain which will assist in developing a dependable supply of materials for the facility and offer different opportunities for potential growers,” remarked Wooten. “As mentioned, a feedstock supply chain is critical in the success of the operation and securing financing for the facility which is linked to USDA loan guarantees. Like any new enterprise, there are challenges but as we move forward, challenges have the potential to create new opportunities for some of our underutilized land resources.”
Time is very limited for farmers to make a commitment to Chemtex and to the BCAP project, officials noted. For information regarding the contract with Chemtex email firstname.lastname@example.org or call 910-509-4303. For the BCAP project visit the FSA BCAP website at http://www.fas.usda.gov/bcap. Questions may also be directed to Wooten at the Sampson County Cooperative Extension Office at 592-7161.