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New Insurance Pilot Program for Biofuel-Friendly Oilseed Crop

New Insurance Pilot Program for Biofuel-Friendly Oilseed Crop
USDA announces that beginning in 2012 camelina will have an insurance program.

The USDA's Risk Management Agency has announced a new pilot program of insurance for camelina beginning with the 2012 crop year. Camelina is an oilseed crop with the potential to create new renewable energy markets in the United States, generate rural jobs here at home, and decrease America's dependence on foreign oil. The new pilot program will be available in selected counties in Montana and North Dakota for the 2012 crop year, with a sales closing date of Feb. 1, 2012.

"The Obama Administration is committed to building new income opportunities for America's farmers and ranchers, and by producing biofuels from a wide range of agricultural products, we can help promote economic opportunity in rural America," said Agriculture Secretary Tom Vilsack. "This pilot program will help our farmers produce biomass which will be converted to renewable fuel and increase America's energy independence, creating jobs and stimulating rural economies across the nation."

The camelina plan of insurance is Actual Production History, which insures a grower's yield. The pilot product for camelina was developed through the 508(h) process and submitted by Great Plains Oil and Exploration, LLC – The Camelina Company and Crop Insurance Systems, Inc.

Only spring-planted camelina grown under contract with a processor will be eligible for coverage. To be eligible, the contract must state: 1) the producer's commitment to plant and grow camelina and to deliver the production to the processor, 2) the processor's commitment to purchase all production stated in the processor contract, and 3) a base contract price not to exceed an amount specified in the Special Provisions. A single basic unit will be offered; multiple basic units or optional units are not available.

Insurable causes of loss will include: adverse weather, fire, wildlife, earthquake, volcanic eruption, and insect and plant disease but not damage due to insufficient or improper application of pest or disease control measures.

Neither written agreements nor prevented planting will be available for camelina. Coverage levels offered will be from the catastrophic level to 65%.

Camelina, an oilseed, is a rotation crop for wheat that can be established on marginally productive land. It is an annual, short season plant. Biofuel from camelina is an ideal jet fuel substitute. USDA's Agricultural Research Service scientists have long-term studies underway to examine ways to use camelina as a bioenergy crop for producing jet fuel for the military and the aviation industry. In addition, earlier this year USDA announced two Biomass Crop Assistance Program project areas devoted to developing camelina as biofuel in several states, including Montana. USDA is also part of several partnerships to develop oilseeds and native and perennial grasses as a biofuels, including:

  • In 2010, USDA partnered with the Boeing Corporation and the Air Transportation Association on an initiative to bring sustainable and renewable aviation fuels to the marketplace.
  • In January, USDA and the Department of the Navy signed a memorandum of understanding to encourage development and use of aviation biofuels.
  • In August, USDA, Navy and the Department of Energy announced a partnership to invest up to $510 million during the next three years in partnership with the private sector to produce advanced drop-in aviation and marine biofuels to power military and commercial transportation. The initiative responds to a directive from President Obama issued in March 2011 as part of his Blueprint for A Secure Energy Future, the Administration's framework for reducing dependence on foreign oil.
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