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Provisions boost value added ag products, renewable energy

For many years researchers have developed very promising value-added and renewable energy products made from agricultural crops including waste byproducts. But the transition to commercialization has been slow.

The USDA and the federal government have given lip service for many years to the idea of value-added products and alternative energy, says Bruce Crain, Crain Consulting Inc., Jackson. But when businesses have made an investment in commercializing the new technology, it has been tough getting government support even in the form of purchasing the products.

Crain, who works as a consultant to help companies commercialize value- added and alternative energy products, says the new farm bill contains provisions that could make a critical difference by providing funding for research and energy audits, and providing flexibility in government guarantee and direct loans for renewable alternative energy developments. Most importantly, the farm bill requires that the government purchase the value added products when they are cost competitive and available.

“This whole value added mandate is huge,” Crain said. “I can’t express to you how significant it is. It’s been a long time and it is way overdue.”

Crain recently attended a briefing in Washington, D.C., on Title IX of the new farm bill, which deals with value-added product development. Representatives from 15 agricultural trade associations were represented at the briefing

“I think what makes a difference is that Title IX will provide money for farmers, ranchers and small business people who are interested in creating renewable energy from agricultural materials,” Crain said. “The government, based on what is included in Title IX of the farm bill, is authorized to pay for energy audit tests to determine if it is a worthwhile use of that material.”

For example, if someone proposed to sell woods chips to a commercial facility to burn for fuel, funding would be available to do an energy audit to determine the BTU value of the fuel. The USDA has also authorized funding for development of hydrogen from agricultural products for use in fuel cells.

Crain said since the government is such a major purchaser of goods, the mandate that the government must purchase value-added agricultural products could make a major difference in the success of commercializing value-added products. In 1996 the language in the farm bill gave companies producing value -added products preferential treatment in the government procurement process.

“But that language had no teeth in it,” he said. “There was no mandate, and no provisions for testing. Now you have a provision that says if a manufacturer can produce a value-added product that is competitively priced and readily available, then the government has to buy it. The farm bill also requires third-party testing to confirm the validity of a product and technology. If a company’s products receive this verification, then the government will provide a USDA seal to prove to government agencies and potential private sources that the product indeed is bio-based and has the support of the government.

“It just makes sense for the government that invests so much in agricultural research to be able to assist companies that are commercializing viable products from what are often times agricultural wastes. That previously hasn’t been done by U.S. government, and probably made the difference between success and failure in a lot of companies in the past.”

A Mississippi-based company that stands to gain from the new procurement requirements is Product Services Company based in Jackson. The company has taken a waste material, cottonseed lint, and mixed it with microbes to produce an oil absorbent product called Oil Gator that can be used to absorb oil spills on the land or water.

Because the lint has a very low ph, it could be considered hazardous waste if not further processed. Oil Gator turns a potential environmental problem into a valuable asset. But while the company has had good success selling it both domestically and overseas, the government has yet to purchase any.

“Here is someone who has created a value-added product that can eliminate problems associated with oil spills,” Crain said. “But to date the company hasn’t been able to sell one ounce of this material to the federal or state government. This new requirement for government purchasing of value-added products could be a huge boom for this Mississippi company, creating jobs here in Jackson, Valley Park and Hollandale, while at the same time helping eliminate a serious waste problem.”

Ted Dickerson, president of Product Services Company, said the new farm bill’s renewable energy and bio-based product provisions are not only good for companies like his. They are good for the country because they encourage reducing waste and reliance on foreign oil.

“I think we have to recognize the fact that one day fossil fuels will not be the answer,” said Dickerson, whose company also produces renewable energy products. “The answer is in the preservation of our raw materials. It all gets down to agriculture. That is the ultimate answer. We have to stop putting everything in landfills, and find ways to conserve our resources. I think it is very important that we do that. We must make a more conscious effort to use agricultural and biomass products to resolve some of the energy problems we have.”

Dickerson said thus far his company has seen more interest in Oil Gator from outside of the U.S. than from within the country. “But every day we are getting more acceptance here,” he said.

A little known fact is that at the turn of the century, a group of scientists and investors advocated a “carbohydrate economy” where materials and energy were produced from agricultural products. An example is the Henry Ford car body made from soybeans that can be viewed at the Ford Museum. Then World War II came along, and the country needed energy quickly. There was a shift to oil, and after the war the country stayed with oil instead of the alternatives. But now, with serious questions about dependence on foreign oil, and commodity prices at the lowest levels seen in decades due to a glut in supply, the time may be ripe for the U.S. to shift back towards a carbohydrate economy.

Contact MBJ contributing writer Becky Gillette at mullein@datasync.com or (228) 872-3457.


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