Biofuel crop insurance targets Montana

The Montana biofuel industry got a jump start Wednesday from the U.S. Department of Agriculture, which selected 40 counties for a federally backed camelina insurance.

Camelina, an oilseed used to make biodiesel and jet fuel, has often been touted by Gov. Brian Schweitzer and others as an ideal Montana green energy crop. But without federally subsidized insurance, most farmers weren’t willing to gamble on camelina.

New crops rarely are insurable. U.S. Sen. Jon Tester, D-Mont, got camelina insurance included in the 2007 farm bill because he knew the crop wouldn’t take root in Montana unless it had a federal safety net. USDA’s announcement Wednesday means the insurance will be available for the 2012 crop year.

“There’s got to be a safety net,” Tester said after the announcement. “You don’t go into new crops unless you’re independently wealthy or you have a safety net. Most farmers aren’t independently wealthy.”

The insurance comes just as Congress begins authoring a new farm bill that’s likely to be at least $23 billion lighter than the 2007 version. Tester said he thinks camelina insurance has a future if the USDA is rolling it out now.

Forty Montana counties, all east of the Continental Divide, were selected for the insurance program, along with portions of North Dakota. The program will be shepherded by USDA’s Risk Management Agency.

Biofuel companies said the insurance was key to advancing camelina acres. They credited Tester and U.S. Sen. Max Baucus with securing the insurance.

“This is a critical step toward camelina becoming a major U.S. biofuel crop and a huge help for the farmers of Montana and North Dakota,” said Sam Huttenbauer, of Great Plains Oil and Exploration-The Camelina Co. “We greatly appreciate the assistance of the senators in Montana, in particular Jon Tester who paved the way for this crop with his work to get this program into the farm bill.”

Scott Johnson of Sustainable Oils said Great Plains did the heavy lifting getting making sure the details of the pilot insurance program were beneficial.

Both companies are contracting now for 2012 camelina.