Farmers may be part of the long-term answer to California’s electrical power woes. And if they are part of the solution, it could solve some of agriculture’s woes as well.
Research by Daniel De La Torre Ugarte in the Agricultural Policy Analysis Center at the University of Tennessee has focused on the economic feasibility of growing biomass crops for energy production.
The analysis indicates that farmers could improve their situation by growing crops that can be burned by electrical power plants to generate electricity. The acreage devoted to the biomass crops would be acres not planted to crops that are in over-supply. As the over-supply dwindles, prices to farmers would improve.
"Of course, this plan supposes that we can develop co-fired electric power plants that can burn biomass as well as coal, oil and refuse-derived fuel," De La Torre Ugarte said. "And the potential emission problems would have to be solved."
If all of these were in place, could farmers survive by growing a crop such as switchgrass?
De La Torre Ugarte’s analysis suggests that if farmers could get a price of $40 a dry ton for switchgrass grown on 22.23 million acres, this bioenergy crop would be profitable. His analysis also showed that a reduction of acreage planted to the major crops could raise the price that farmers are now getting for their crops.
Corn prices would be 20 cents a bushel higher; soybeans would be 90 cents a bushel higher; wheat would be 48 cents a bushel higher; and cotton would be a nickel a pound higher.
In each case, the crop price would be above the level guaranteed by the federal government. Farmers would not need to depend on the government for a portion of their income.
So the government payment to farmers would drop to $39 million instead of an average annual expenditure of $1.888 billion. This would save the federal government an average of $1.849 billion per year.
If the government used this savings to buy biomass, they could sell it to the utilities at a 60 percent discount.
Had switchgrass been grown over the last five years, the returns on the eight major crops would have risen from $21.5 billion to $25.1 billion because of increased prices. In addition, producers would have received $657 million from the sale of bioenergy crops.
On the downside, switchgrass is a perennial that takes three years to reach full production.
De La Torre Ugarte’s study suggests that while we may not have all of the conditions in place right now to begin commercial production, bioenergy crops provide an option worth looking at. It also indicates that bioenergy crop production can figure into long-term agricultural policy.
"What is important about this analysis," De La Torre Ugarte said, "is that it shows what could happen if we could find a non-food crop that could profitably be planted on U.S. farmland. Rather than using a land-retirement program and paying farmers not to farm, farmers could use that land to produce energy crops."