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May 08, 2003   Email to Friend 

Debra Davis
(334) 613-4686
May 08, 2003

WASHINGTON, D.C. -- Agriculture Secretary Ann M. Veneman has announced key revisions to the Bioenergy Program to expand industrial consumption of agricultural commodities by promoting their use in the production of ethanol and biodiesel.

Veneman also announced that sign-up for the program began May 7 and will end June 6. Output of both products beginning Oct. 1, 2002 will be eligible for payments this fiscal year.

"Bioenergy reduces U.S. dependence on traditional energy sources, a key element of President Bush's energy plan, while providing alternative market opportunities for producers," Veneman said. "This program will promote sustained increases in bioenergy production and related industrial agricultural commodities, as well as help improve the environment through the production and use of cleaner burning fuels."

Under the program, the Secretary of Agriculture makes payments through the Commodity Credit Corporation to eligible producers to encourage increased purchases of eligible commodities (energy feedstocks) for the purpose of expanding production of bioenergy and supporting new production capacity. Payments to eligible producers are based on the increase in quantity of bioenergy they produce during a fiscal year over the quantity they produced during the preceding fiscal year.

The 2002 Farm Bill reauthorized the program and broadened the list of eligible feedstocks to include animal byproducts and fats, oils and greases (including recycled fats, oils, and greases). The Secretary can use up to $115.5 million for FY 2003 and up to $150 million annually for FY's 2004-06. The level of benefits paid for base production will be gradually phased down from 50 percent in 2003, to 30 percent in 2004, 15 percent in 2005 and eliminated in 2006. USDA has increased the payment levels on production of biodiesel from animal fats and oils and maintained the payment levels for production from soybeans.

Any bioenergy producer who expects to have eligible production between Oct. 1, 2002, and Sept. 30, 2003, must enroll in the program during this sign-up period. For example, a bioenergy producer with a new plant that is expected to become operational in July 2003 must enroll that plant in the program by June 6, to be eligible to receive payments on that new production during FY 2003. Bioenergy producers who will begin production after Sept. 30, 2003, (FY 2004) may either enroll during this sign-up period or wait until the applicable fiscal year's sign-up period.

Producers wishing to enroll in the program should obtain a Bioenergy Program Agreement, Form CCC-850, (Agreement), a Bioenergy Program Annual Production Information Form CCC-850 Supplement, and related instructions from either the Kansas City Commodity Office, Contract Reconciliation Division, P.O. Box 419205, STOP 8758, Kansas City, MO 64141-6205, telephone 816-926-6525; or via the Internet at www.fsa.usda.gov/daco/bio_daco.htm.

Additional terms and conditions are available in the applicable regulatiFollowing the sign-up period, USDA will announce sign-up results and any payment adjustments necessary to keep program expenditures within the $115.5 million authorized for FY03.

The Final Rule implementing the program was published in today's Federal Register and is codified at 7 CFR Part 1424.

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