Tag Archives: agriculture
Certification Uncertainty
By Anna Simet | May 06, 2013 Sustainably sourcing biomass fuel isn’t something that’s taken lightly in the U.K., and the country is proving it by developing the first nationwide mandatory biomass sustainability standards. As its Renewables Obligation continues to ramp up, the amount of biomass that power utilities will require may significantly increase, and the U.K. is determined to ensure that feedstocks are sourced responsibly. The RO, a policy mechanism similar to a state renewable portfolio standard in the U.S., requires licensed electricity suppliers in the U.K. to source an increasing amount of electricity from renewable sources. Biomass, particularly imported wood pellets, are an attractive replacement for facilities using coal, and imports from North America are increasing at a rapid rate. Currently, the country sets general restrictions for biomass materials sourced from land with high biodiversity value or high carbon stock, including primary forest, peatland and wetlands. But this approach has proven untenable over the past two years, according to Suz-Anne Kinney of Forest2Market, as there has been some disagreement over definitions, and because current forest certification schemes alone are not sufficient to meet the criteria. The U.K. Department of Energy and Climate Change proposed new sustainability criteria last September and a comment period wrapped up at the end of November, but the official standards are yet to be released. As proposed, a biomass power facility would have to demonstrate that 70 percent of the wood used to manufacture the pellets it procures has chain-of-custody (COC) certification, from the forest of origin to the final user. “In order to demonstrate compliance, a supplier must provide independent COC certification of the timber or timber products by one of the major certification schemes,” explains Kinney. “In the U.S., especially in the South where the majority of industrial pellet mills are or will be located, widespread certification of this type is not common. As mills purchase wood from dozens of different dealers, brokers or loggers who buy the timber from hundreds of landowners, the scope of any project to increase certification will require significant resources.” So the big question is: will part of the criteria include this requirement of third-party verification of raw material? While it may sound suitable on the exterior, such a requirement may pose significant challenges to U.S. biomass exporters, and some believe sets unachievable expectations. Certification and Ownership “The problem is that there is a very low percentage of timberland that is actually certified, so it would be very difficult to procure 70 percent of material from certified forests,” explains Seth Walker, RISI bioenergy economist. “In the U.S., less than 25 percent is certified, and in the South, it’s 22 percent. Actively managed and harvested timber, less than a quarter of it is certified.” According to Robert Simpson, senior vice president of Sustainable Forests & Forest Product Certification at GreenWood Global Consulting, sourcing 70 percent of pellet feedstock from certified sources “will be impossible, unless you have a very large supplying force nearby,” he says. “If you’re depending on many ma and pop forest owners, it’ll be very difficult.” And that’s largely the case for biomass sourcing in the Southeast, where about 67 percent of commercial-value forests are privately owned. The forest industry owns another small portion, Simpson says, and the federal government an equal portion. “Interestingly, out of the 134 million acres of procurable and useable forestland in the Southeast, only 3 percent have long-term management plans,” says Simpson. Furthermore, only 13 percent have formal management advice. That’s very minimal compared to Europe, according to Simpson, where 77 percent have some type of professional forest management advice. That leads buyers in the European Union to wonder why forest owners in the U.S. aren’t certified, when the forests of Europe are regulated and strictly managed. In the U.K, about two-thirds of land is privately owned—very close to the portion that is privately-owned in the U.S.—but both countries differ from the norm, as it is estimated that of the 3.9 billion hectares of the world’s forests, 86 percent are publicly owned. If the U.K. policy comes through as proposed—requiring forest certification—or if an end user demands a high percentage of certified material anyway, it just won’t be found, says Simpson. “It’s not there, especially for the larger facilities.” He recommends smaller family forestland owners contemplating certification to look into group certification, which goes fairly quickly and is less expensive, as it allows multiple forest owners to become certified as a group and share financial costs. Essentially, the motivation behind the standards stems from the carbon accounting question. “If you cut down trees and don’t replant, the carbon story is very different [than if trees are replanted],” says Walker. “There are really two reasons why the U.K. likes certification and sees it as ideal, but at the same time, they know the forests in North America are managed pretty well, and there aren’t any major issues with deforestation or bad practices.” That’s evidenced by the increasing/stable forest area cover in most U.S. regions. “We have growth exceeding removals, so it’s a pretty good story, but it’s tough to put that [sustainable] stamp on it,” Walker says. One of the main reasons for that is there is a great history of family-owned forests, especially in the Northeast and the Southeast; in the Pacific Northwest there is more federal, state and consolidated land. “So, the Smith family in Virginia has 50 acres of forest and a forester comes in every 10 years and maybe cuts 12 of the 50 acres, in 20 years a thinning, then in 40 years do a clear cut and then replant,” explains Walker. “Someone like that isn’t going to have any incentive to go through all of the red tape to get that land certified. The biggest indicator of whether land will be certified sustainable, in the U.S., is whether it is owned by a large land owner or financial landowner.” Looking Ahead If forest certification isn’t required, what might be the alternative? “Right now, each of the utilities have to audit their own supply chain, so there might just be some due-diligence requirements, as far as the forest stock around the areas they’re procuring fiber from for wood pellets,” suggests Walker. There could also be group certification [requirements] where an entire state would become certified to meet necessary standards. “That hasn’t happened on a big scale yet, but it has happened on smaller scales,” says Walker. For example, FSC worked with a large group of Wisconsin landowners for certification and brought 31,000 new participants into the certification program, more than 2 million acres of privately owned land. “The major conservancy and the SFI (Sustainability Forestry Initiative) are working together to find gaps in the certification program and see if they can fix them,” Walker adds, one of which is the small landowner problem. The National Wildlife Federation is one of those groups working to recruit smaller forest owners to get certified under FSC, and suggests one way to alleviate the cost to smaller landowners is by sharing the cost with the buyer. “We know that in the Southeast and other regions of the country, not all forest owners can afford to get certified, and so we believe that pellet manufacturers and other bioenergy facilities could help cover the cost of assuring regulators and the public at large that their bioenergy sources are truly sustainable,” says F.G. Beauregard, NWF Southeast Sustainable Bioenergy manager. So whether forest certification will ultimately be required is unclear, but in the meantime, what can pellet exporters be doing to prepare for what might potentially be enforced? The first thing is getting chain of custody under these certification schemes, according to Walker. COC verifies company systems for tracking and handling materials used in FSC-certified forest products within the company’s operations. Another major preparation measure is securing a supply contract with a large landowner, particularly a financial landowner. “Despite the majority of the actively managed timberland being owned by smaller landowners, there still are very large tracks owned by financial landowners, and those are mostly certified,” says Walker. “So, it is possible to get most or all of your timber from a certified source, if you’re located in the right place and can set up the right agreement.” So, are the standards likely to remain as proposed? “My hunch is no, because there has been so much invested…it would really almost halt the industry, a strict standard like that,” says Walker. “Again, part of the issue is the whole carbon balance, carbon is actually the main issue; they [utilities] have to show a net reduction of carbon over coal. They’re concerned about sustainability on one hand, not wanting to promote any sort of bad forestry practices, but they also want that stamp that says whichever forest the wood came from is managed and has a plan to be replanted.” Author: Anna Simet Managing Editor, Biomass Magazine 701-751-2756 asimet@bbiinternational.com Continue reading
Agricultural Insights From The Southeastern U.S.
The following writing by Teri Gafford was published by the Federal Reserve Bank of Atlanta today. Her summary of their Birmingham Branch’s recent agricultural meeting is insightful and points to a few emerging trends, some of which apply to areas other than the Southeastern U.S., too.—K.M. Food for Thought I admit it. No matter how much I try, I do not have a green thumb, and woe to any houseplant (or outdoor plant, for that matter) that makes its way into my care. With that said, you might be surprised to learn that I serve as the Atlanta Fed’s lead agriculture analyst. My duties include meeting with some pretty savvy folks in the field of agriculture. The Birmingham Branch of the Federal Reserve Bank of Atlanta hosts the Sixth District’s Agriculture Advisory Council and we recently convened the first of our two meetings of 2013. Here are some of the meeting’s highlights: High commodity prices have resulted in many producers having record revenues although increasing input costs continue to challenge margins. Agriculture producers are turning more and more to technology and other capital investments to improve production and reduce the need for manual labor. As an example, the cost to plant Miscanthus giganteus (a large, perennial grass hybrid used for biofuel production) can fall from $1,400 to $400 per acre by using a newly developed mechanical planter. Other contacts report that more advanced equipment entering the market is twice as productive as older versions, thus reducing both labor and fuel costs. The two most prevalent labor topics discussed were the continued importance of the guest worker program and the uncertainty associated with the costs and effects of the Affordable Care Act. Council members were heartened that the current immigration bill being debated recognizes the agriculture sector’s need for migrant labor. One of the biggest surprises in the conversation is that there is a real increase in the number of young people entering the field of agriculture. “They are coming back to the farm” with college degrees and enthusiasm, one Council member said, adding that these young people are “well educated, globally market savvy, and ready to take calculated risks.” When the discussion turned to productivity, it was enthusiastically agreed that there are still significant productivity gains to be had in agriculture. “What robotics did for manufacturing will be replicated in agriculture,” was a comment supported by all members. Farmland values continue to rise, supported by both low interest rates and high commodity prices. Council members noted that nonfarming investors are purchasing farmland and farmers are buying adjacent properties to expand. Because of continued uncertainties (commodity prices, low interest rates, and government agricultural policy) typical land leases, which used to be three to five years in duration, are now being let for one-year contracts. Overseas markets are driving up global demand for protein products, which in turn increase prices for U.S. consumers. Reduced supply may also be affecting beef prices as many cattle producers reduced their herd size because of the combination of last year’s drought and high feed prices. (Because it was so expensive to feed them, more head went to market.) The effect of citrus greening, a deadly disease that has done great harm to the Florida citrus industry, continues to concern Florida orange and grapefruit growers. A lot of ongoing research is dedicated to finding a genetic solution for this problem. Lumber prices are approaching 2004–05 levels as a result of growing demand (improving housing market and the demand for new homes) and tight supplies. Cotton producers are watching China’s large cotton inventory; releasing that supply into the market could have adverse effects on cotton prices. Issues surrounding both the use of genetically modified organisms globally and labeling requirements continue to be discussed, and resolutions to both issues will be economically important. We will continue to reach out to our contacts in the agriculture sector, especially our Advisory Council, for their continued insight. And I’ll continue to watch, like all of you, how agriculture prices move. There’s a lot to that story. By Teri Gafford, a Regional Economic Information Network director in the Atlanta Fed’s Birmingham Branch Continue reading
‘Romania, The New Eldorado For Buying Agricultural Land"
Author: Istvan Deak May 7, 2013 – 2:21 p.m. View Gallery Pledge of land, a solution for supporting small fermentation, influenced by the Ministry of Agriculture Soil quality, good price and can get help attract investors to a new Eldorado: Romania, through his fields, notes journaldujura.ch of Switzerland. phenomenon of media attention in the West, who are wondering how to get here, not without a finding that there is the reverse: Romanian peasants denounced by multinationals seizing the growing areas of our country. “Romanian peasants complain that Austrian investors in possession of agricultural land in Romania at ruinous prices, which then turns them into monocultures with funds. 40% of Romania’s agricultural territories are cultivated.Conflicts around land start growing, “writes Austrian daily Der Standard in an article entitled” Stealing land in Romania “.Austrian journalists story revolves around a Romanian farmer, Dan Cismas. The same character who is the interlocutor French journalists from Le Figaro, which they take to record in an article “Romanian peasants, united against land hoarding” that the land grabbing and Europe, especially Romania, which is the fifth country to agricultural area of the continent. “state has two faces. He makes laws to prevent the sale of land to foreign investors, but at the same time as a prostitute, ‘sleeps’ with their money, “says Cismas, owning 35 acres of land near a village in Transylvania. He runs a dairy farm, goats and pigs. Thus he was able to convince people of the region to focus on the production of bio roses, using manure from farm animals. Agricultural Association Small farmers in the area have joined an association called Ecoruralis and have elected Vice-President. “No other issue affects them more than the Romanian farmers territorial losses for speculators. Hundreds of thousands of hectares have been converted into agricultural lands and were intended for export, taking advantage of cheap labor and soil fertility. 2,000 euro you buy a hectare of land in Romania. In Austria would cost four times more. Romanian monthly salary of a worker in agriculture is 160 euros, “says Cismas the source. Since 2014 land purchase by foreign investors will become legal. But until then, a company registered in Romania for 150 euros can solve the problem. Role speculators Roman speculators bought land plot with plot pressured the population who many times did not last.Puzzle was completed at a time, and the land was eventually sold at a price 10 times higher by an international firm. They already have 6% of the Romanian territory. “Our countrymen are not nationalists. I call on the European non-profit organizations to pay attention to their initiatives. Hungry for maximum profit, they fail to seize million subsidies from Brussels. Amounts you drop the small farmers, most often due to bureaucratic barriers “, said Cismas. Imports 70% Products are no longer competitive regional farmers. “Importing food amounts to almost 70%. All this happens in a country that was considered the breadbasket of Europe. An unimaginable situation. In politics there is no interest Romanian regional structures. Agricultural markets are chaotic and unregulated.Consequently, many young people trying to escape the poverty spiral cheap working in gathering crops in Western Europe, “wrote the Austrians. They noted that Austrian investors are strongly represented in Romania. But there are exceptions. “Gerald Scheighofer Industrial Group faces the most powerful local resistance. He is accused of large areas grubbed and eliminates small producers in the area. The same group experiencing and Esterhazy, processing timber on 10,000 acres in Romania and try to export at a price three times higher. ” Open to investors Honorary Consul in Romania, Austrian Count Andreas Bardal, president of a holding company that owns 21,000 hectares Romanian, it supports Austrian investors who buy land in our country. “Romania is one of the few countries that are open to investors. 40% of agricultural land is cultivated. We may not be put in the same pot with speculators. We created 200 jobs and I did not land anyone. Profit is always reinvested, “says Bård that receives 3 million in grants. “This amount is needed to cover losses from poor harvest and high costs. Addiction blame for wearing the Romanian import. The fact that many agricultural projects is not made due to lack of funding. The problem is the banks “concluded Bardi. A practice originating in Africa and Asia Situation in Romania is symptomatic of the whole of Europe, a phenomenon already called “Land Grabbing”. “When there are big ones, small ones trying to hide in agriculture. Potent investors against financial networks, small farmers have no chance. Lose their land even when he does not want to give up. Large corporations controlling local agriculture. The practice is called Land-Grabbing and come mainly from Africa and Asia, “says Wiener Zeitung. According to a report released in late April by the Alliance “Hands off the Land” and the European association of small farmers “Via Campesina”, 3% of large corporations own more than 50% of all agricultural land in Europe. “Firms investor buys Austrian Andreas Barn massive earth in Arad and Timis, already exceeding 27,000 hectares. BARD is in the top four foreign investors in Romania. Many owners had lost his business, so there are some complaints against him. BARD Holding Romania has 16 companies that are specialized in animal husbandry. Small farmers have no chance against “claims for WZ, Attila Szöcs from Ecoruralis. “To avoid legal barriers in official documents appears the original owner, but the land is controlled by the big players. In other cases, national holdings are set to enter into possession of the lands, but there are cases where land is bought illegally. If any farmer who is neighbor plot with great concern, refuse to sell their land simply is sown in the land of plenty with the rest. Small farmers are not helped. Whether we are talking about Romania, Ukraine and France, the money goes to large corporations, “notes Christina Plank Professor at the University of Vienna. Grants European Union accuses the authors of the report noted that finances and encourages this by awarding grants. “In 2009, in Spain 16% of agricultural producers have received 75% of all subsidies. In Hungary, nearly 93% of local farmers are excluded from the subsidy scheme. Basically, to survive, they have to sell their land, “concludes Wiener Zeitung. Paradox French site atlantico.fr asked a specialist who is the explanation of this new “Eldorado” and the answer came quickly: “First, it clear that land prices are lower than in Western Europe. Suddenly it attracts a number of future owners. The second important argument: agricultural prices have an upward trend. That gives the impression that prospective investors can make money.Report quality land / purchase price is interesting. Thirdly, there is some disruption in these countries (Romania, Bulgaria, Poland etc) that make land available there. In these countries, a proportion of land not subject to individual peasant important properties. When collectivization of land, a large number of farmers has been removed from the policy. Therefore, the return is more difficult. “However, something is paradoxical. “More than half the farms in the Europe of 27 states are in these three countries. In other words, the 12 million agricultural holdings in Europe, 6 million are in these countries. The problem is that they are below 10% of total production, “notes atlantico.fr.__________________________________ Land sales to foreigners may be restricted At the end of 2012, the Minister of Agriculture, Daniel Constantin announce that this year the state will take measures to limit purchases agricultural land by foreigners, after market liberalization on 1 January 2014 as stipulated in the Treaty of Accession to the EU. official said in a recent interview for business24.ro that this topic is very sensitive and there is debate ample on the subject. “Many say we should extend the prohibition to sell land to foreigners. I must say that now foreigners, whether they are a company in Romania, can buy land and can work. Already pretty much bought and paid taxes here in Romania. From Legally, the Accession Treaty, it may extend the ban. To change it, would be a ratification in all Member States and Croatia this year. Which seems impossible and will be in a time beyond January 2014, the impossible at the moment, “said Constantin. Facilities for farmers Minister explained that he wanted to come up with a range of facilities for farmers, carrying the discussions with the banks in this regard. “We discussed with the banks to put farmland pledge that we want to buy it as it was before the real estate loan. So far, this allowed banks did not accept land as collateral, but now they accept it. Pledge of agricultural land would be an very beneficial for Romanian farmers, “said Constantine. Romania We have 11 million hectares of arable land of which 10 million were required to be paid this year, so 10 million of them were grown according to Agerpres.According to official data, the total area of arable land in Romania, about 10% is held by foreign firms through Romanian. ( Elena Stan ) Continue reading
