September 21, 2006

Biofuels could benefit farm preservation

RICHMOND—The recent boom in demand for biofuels could mean more than just new markets for Virginia farmers. It could also help keep farmland in agricultural production and slow the pace of suburban development.

“This whole situation creates an opportunity to produce more corn for ethanol,” said Andrew Smith, senior assistant director of governmental relations for the Virginia Farm Bureau Federation. “We have to see this as an opportunity to keep more agriculture land in production. That would be good news for our farm families and good news for the environment, since sprawl contributes to pollution problems.”

There has been tremendous growth in the U.S. ethanol market, according to Dr. Keith Collins, chief economist of the U.S. Department of Agriculture. In a Sept. 6 report to the Senate Committee on the Environment and Public Works, Collins noted that in the year 2000, 1.6 billion gallons of ethanol were produced in the U.S. By 2005, production had expanded to 4 billion gallons of ethanol. This year that number was expected to jump to nearly 5 billion gallons, almost a 20-percent increase in just a year. More ethanol plants are under construction, spurred in part by recent high oil prices.

Corn for grain production in Virginia amounted to about 10 percent of farm income in 2004, according to the state office of USDA’s National Agricultural Statistics Service. Virginia corn growers received almost $95 million for their crop that year, and it represented less than 1 percent of the nation’s total corn crop. But corn had the third-largest acreage, 360,000, of all the state’s crops planted that year.

Biodiesel production is also expected to grow, Collins reported. Virginia does not have an ethanol plant, but there is one biodiesel refinery in the Old Dominion and interest in building others is high, Smith said.

While Virginia is not a major corn producer, soybeans are the top cash crop and the most popular feedstock for biodiesel production. The Virginia General Assembly passed a package of financial incentives for both biodiesel and ethanol production plants this year to promote both industries.

“Farm Bureau favors increased biofuels production because it’s a win-win for agriculture, the environment and the consumer,” Smith said. “It will mean change for farmers and change for the fuel industry, but we can adapt. We’ve been waiting for this for a long time.”

Contact Smith at 804-290-1021 or Norm Hyde, VFBF video producer, at 804-290-1146.