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The Institute for Agriculture and Trade Policy (IATP) received a grant from the North American Fund for Environmental Cooperation (NAFEC) in October 2002. The purpose of the grant was to identify renewable energy markets for perennial crops grown by farmers in the Blue Earth River Basin in south central Minnesota. This work is part of a larger collaboration to increase crop diversity in order to address the environmental concerns caused by the basin's dominant corn and soybean rotation—in other words, to add a "third crop" to the current rotation. This report summarizes activities that occurred under this grant.
Participating organizations
IATP led this project in collaboration with the Blue Earth River Basin Initiative in south central Minnesota. Other collaborating partners included Don Wyse, Dean Current and Sue White of the University of Minnesota faculty, the Minnesota Office of Environmental Assistance, the Aveda Corporation, University of Minnesota Cooperative Extension and the Land Stewardship Project. The project took place in the Blue Earth River Basin of south central Minnesota.
Background
The entire Midwest Corn Belt is in a time of crisis. Low commodity prices and the changing structure of US agriculture have devastated rural agricultural communities. More than 90 percent of the crop acreage in many counties is dedicated to just two crops: corn and soybeans. The lack of economic diversity has left Midwest farmers with little opportunity to manage risk.
Description of the project
This project addressed the lack of economic opportunity by fostering new markets for sustainable production. Renewable energy production has the most potential for providing farmers with new economic opportunities. IATP hosted a series of workshops and meetings to explore new markets that provide environmental benefits and diversified production practices. IATP also conducted a survey of local businesses to explore available local markets. Three barriers were continually cited as inhibiting the growth of renewable energy production and other alternative markets:
- Lack of knowledge about potential opportunities;
- Lack of infrastructure to get products to market; and
- Lack of investment capital.
Outcomes and follow-up
The most important outcome from this project was the growth in interest and knowledge among farmers and other agricultural professionals in southern Minnesota. Through our events and documents, we reached several hundred people, many who are actively pursuing renewable energy initiatives. Project products included:
Several follow-up initiatives remain active. The Bioindustrial Development Coalition, a coalition of workshop attendees and other interested parties, has emerged as a catalyst for promoting a biobased materials economy. We also continue to gather data for a survey of renewable energy and biobased materials opportunities in southern Minnesota.
Successes
1) Converting row crop agriculture to perennial crops
A broad and expanding coalition of farmers, nongovernmental organizations (NGOs), business leaders, agency personnel and university faculty has been gathering regularly to discuss opportunities for crop diversification in the Minnesota River basin. IATP has been a lead organization in this effort to promote third crops. We have created a web site <http://www.thirdcrop.org> and two monthly newsletters, Third Crop and Market Power, in support of this project. (Both publications are available on the web site.) We also organized two third crop workshops in Fairmont, MN. The workshops have been tremendously successful, with dozens of farmers participating and expressing interest in exploring new opportunities.
As a result of these workshops, a Bioindustrial Development Coalition (BDC) has been established. Many leaders in the agricultural and environmental communities in the Midwest recognize that sustainably produced renewable resources will provide the foundation to the emerging "bio-based" economy. The coalition, led by IATP, is capitalizing on the region's inherent agricultural, forest and renewable energy resources to foster multiple value-added benefits to the region.
One result of the BDC meetings has been connecting farmers to potential buyers of alternative products. IATP has had several meetings with Aveda Corporation, a Minnesota-based manufacturer of hair and skin care products. Aveda is extremely environmentally conscientious and buys as many of its products as possible from local, sustainably producing farmers. Mary Tkach from Aveda was a presenter at the second workshop and described a variety of crops that Aveda would like to buy locally, including many perennial crops.
IATP has also met with several small food companies interested in procuring from local farmers. In addition, IATP has joined the Minnesota Best Advisory Group, a support group for small food companies that provides information about marketing, procurement and other difficulties they face.
2) Promoting renewable energy
Farmers and landowners in south central Minnesota have expressed tremendous interest in participating in renewable energy production, particularly wind energy. Renewable energy production has been an important topic in the workshops described above. Lisa Daniels of IATP's Windustry Project presented information at the workshops about the technical aspects of contracting a wind turbine and selling electricity to utilities. Additionally, IATP has organized three wind energy information meetings in Windom, Fairmont and Austin—all located in the Blue Earth River basin. These events have had tremendous turnout, with several state legislators in attendance. More information about these meetings will soon be available on our Windustry web site at <http://www.windustry.org>.
Regarding possibilities in biomass-to-energy production, IATP has met with an official from Market Street Energy Company, the company responsible for a recently completed St. Paul cogeneration facility. The facility will be powered almost exclusively by locally produced biomass products. They see a tremendous opportunity to utilize waste wood in the metro area but are also permitted to burn agricultural products and byproducts. IATP is exploring the feasibility of delivering the biomass from perennial crops to this facility.
3) Market survey
IATP has joined forces with Triple Rivers Producers (TRP), a new group of small farmers in Mankato, MN, who are growing or are interested in growing alternative crops. IATP conducted a market survey with TRP to identify businesses that are interested in shifting their purchasing to locally grown, sustainable products. Simultaneously, TRP will identify what products and services are available.
IATP has targeted areas with priority for marketing due to their closeness to producers and economic activity and has found areas with significant business opportunities. In this process, IATP has identified many potential end users of specialty products. IATP has conducted phone interviews with potential end users in each area. We have also conducted 15 interviews with selected businesses. The survey has received a tremendously positive response from the TRP farmers. IATP's President Mark Ritchie recently gave the keynote speech at a dinner provided by TRP farmers for potential buyers of their products.
Challenges
Our greatest challenge has been to "close the deal" and get agreements between farmers and buyers. Naturally, the farmers prefer to wait until a market and infrastructure have been developed for a new product, while potential buyers like to see an adequate supply before making an investment. It appears that this is a process that requires time and trust between parties.
Lessons learned
The multiple conversations we have had with farmers and buyers have made it clear that increased monocultural practices are by no means inevitable. Corn and soybeans dominate the midwestern landscape not because they are the most profitable, but because the markets exist and the farmers' financial risk is low. Farm operations can easily be diversified into alternative crops—particularly biomass crops—if markets are developed and financial risks are reduced.
What next?
We believe that the Bioindustrial Development Coalition we have developed is an ideal forum for bringing farmers and buyers together. Fostering agreements between these parties is one of our top priorities for the coming year. The coalition will also provide the technical assistance and other needed resources to interested farmers. Providing technical assistance for the expansion of wind energy in southern Minnesota is also a priority.
Institute for Agriculture and Trade Policy (IATP)
, United States
http://www.iatp.org
For more information about this grant, please contact the CEC Secretariat.
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United States