Farmer Knowledge and Risk

Bioenergy feedstock production involves risk.  Agricultural production of biomass perhaps involves more risk than forest-based production because of seasonal weather uncertainties (e.g., flood, drought and hail), pest infestations (e.g., weeds, insects and disease), and fluctuating yields (i.e., interannual variation in yield) and rapidly fluctuating prices.  Farm profitability is directly related to how well these risks can be minimized or absorbed, although the same is true of forest operations even though the risks may be less.  The USDA’s Risk Management Agency has identified five primary sources of risks in agriculture: production, marketing, financial, legal and human resources.  Agricultural production of biomass crops presents acute challenges in each of these categories.

Traditional strategies for managing risks include crop insurance, revenue insurance, production contracting and investments in technology.  These strategies are not yet applicable in bioenergy crop production, particularly in the case of cellulosic biofuel production.

Cellulosic biofuel conversion remains largely at pilot scales.  Three situations are necessary in order for cellulosic biofuel conversion to become commercially viable:

  1. consistent, reliable markets for biomass producers,
  2. production contracting to assure supply meets demand,
  3. supportive policy environment.

For producers, knowledge is perhaps the most viable tool currently available for managing risk associated with perennial biomass crop production.   However, information about crop varieties and cultivars, crop suitability, agronomic practices and associated technologies, and opportunities for value-added pre-processing is either unknown, or not yet widely distributed.  That is, farmer knowledge regarding agronomic and financial management of bioenergy cropping is limited.  Nonetheless, in some areas farmers are expressing an interest in bioenergy cropping and are encouraging development of government and academic research and outreach networks to overcome current limitations in farmer knowledge.