Coming soon to Minnesota: perennial landscapes that can be used to produce fuel, energy and green chemicals while protecting our water quality and boosting farm profits.
House file: HF 2881 Author: Rep. Johnson, C; Rarick; Bly
Senate file: SF 2711 Author: Sen. Schmidt
FMR, in concert with a diverse group of allies, successfully advanced legislation to create a powerful new incentive for Minnesota farmers to plant perennial crops: the Working Lands Watershed Restoration Program.
Rather than pay farmers to take land out of production, a common and expensive conservation strategy, Working Lands will provide a market-based incentive for farm operators to replace "leaky" annual crops like corn and soybeans with profitable perennial crops. These longer-lived plants will be suitable for use as feedstock for next-generation biofuels, green chemicals, and sustainable energy facilities across our state.
Why we needed this new approach
Despite decades of cost-share efforts and voluntary conservation programs — paying farmers to take lands out of production — agricultural pollution has not decreased and remains the largest source of pollution to Minnesota’s surface waters. Despite our admirable conservation efforts, state research has made it clear that we cannot achieve our clean water goals in agricultural areas without widespread conversion from annual crops like corn and soybeans to perennial landscape cover.
Corn and soybean crops dominate Minnesota's agricultural landscape and are inherently prone to runoff pollution and erosion, i.e. "leaky." With their deeper roots, perennials help hold soil in place and filter out pollutants. Perennials, which live for multiple years rather than a single growing season, also provide pollinator and wildlife habitat, build soil health, and clean our air by grabbing or sequestering carbon.
Sadly, the state has lost more than 700,000 acres of conservation lands to the plow since 2007, with another 300,000 anticipated to be lost in the next five years. With more than 23,000,000 acres of agricultural lands in Minnesota (most of which are planted with annual crops), taxpayers cannot possibly afford to pay landowners to "retire" enough crop land to acheive our water quality goals. That's why we needed market-based solutions that incentivize landowners to plant profitable perennial crops suitable for harvest and sale.
Markets: Driving crop system change for good
The Working Lands Watershed Restoration Program bill provides $594,000 in fiscal year 2017 for the Minnesota Board of Water and Soil Resources to prepare a plan for creating a state-funded biofuels incentive program.
The incentive program will establish long-term contract payments for farm operations that grow perennial crops for biomass processing facilities, and prioritize those contracts in the areas where a transition to perennial crops will most benefit water quality.
By establishing a program that promotes the development of perennial-based cropping systems, we can achieve the state's long-term renewable fuel and water-quality goals simultaneously, while also enhancing habitat, soil health and climate resiliency throughout the state.
Building on 2015 legislation
During the 2015 session, FMR teamed up with our environmental allies and a coalition of bio-energy, agriculture and biofuel groups to pass an innovative biofuels production incentive program. That program aims to catalyze a new, more sustainable biofuels industry in Minnesota by providing a state subsidy to refineries producing advanced biofuels.
While other states are welcoming new biofuel facilities, those facilities use mostly corn stover — the stalks, leaves and stems left over after the corn is harvested. Removing this stover from fields leaves them barren for months at a time, resulting in fields that leach agricultural pollutants and lose soil to erosion. The lack of cover also impacts soil organic matter and overall soil health, which can impair crop health and reduce the soil's ability to retain water and prevent runoff.
Minnesota's biofuels incentive program is unique in that it requires all participating refineries to source 50% of their biofuel feedstock from perennial or cover crops by the fifth year of production. This 50% rule balances corn stover harvest with perennial crops and cover crops that produce profitable fuels while protecting our natural resources.
However, few Minnesota farmers currently grow perennial or cover crops. Meaning new, advanced refineries won't actually be built here until they can be assured of a sufficient supply. That's where the 2016 bill and program comes in to play.
By creating a powerful incentive for farm operations to grow perennial crops, these advanced biofuel facilities can move to Minnesota and participate in the state incentive program secure in the knowledge that local landowners can profitably plant the perennial crops their facilities need to meet the 50% threshold.
As a result, this program is a win-win for everyone.
- Farms can diversify their cropping systems to include perennial crops while maintaining profitability;
- Perennial crops become economically viable, incentivizing more living cover on the land;
- Minnesota's nascent green chemical and biofuels industry gets a jumpstart, helping Minnesota become a world leader in advanced perennial biofuel production;
- Minnesota's fuel mix gets cleaner, greener, and more sustainable; and
- We work together to significantly water quality in our state using a market-based approach rather than regulation.
FMR has been proud to be a part of this effort.