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Community Food Systems and Cooperatives Nebraska Sustainability Leadership Workshop April 30, 2009 Norfolk, NE Michael Heavrin Center for Rural Affairs – Lyons, NE Value-Added Programs ► In 2002, Value-Added Agricultural Product Market Development Grant was known as the Value-Added Development Grant (VADG) Program ► In 2003, the grant program became known as the Value- Added Producer Grant (VAPG) program. Community Food Systems The food and agricultural systems in the US has changed a great deal through the last half of the 20th Century: Trend toward industrialization of agriculture Trend toward centralization of production and processing operatives Farmer control over production, marketing and labor is being replaced by corporate control The farmer share of the consumer food dollar was 41% in 1920, while in 1990, it had dropped to 9%. The number is now only about 4%. Community Food Systems The food and agricultural systems in the US has changed a great deal through the last half of the 20th Century: The nation is losing thousands of farmers annually. Fewer farmers result in the deterioration of rural communities – both socially and economically. Today, few consumers really know where their food comes from In many areas of the country – especially in poverty areas – people are not able to access fresh, locally grown food Community Food Systems According to Washington State University, a “community food system” is one in which sustainable food production, processing, distribution and consumption are integrated to enhance the environmental, economic and the social and nutritional health of a particular location. Community Food Systems Today, food system issues include: Improving access to an adequate, affordable, good tasting, fresh and nutritious diet. Supporting a stable base of family farms and ranches that can and will supply local food to a specific area. Most consumers prefer to buy from producers who use fewer chemicals and less energy, and who emphasize local inputs where possible. Community Food Systems Other issues include: Finding marketing and processing techniques that create more direct and beneficial links between farmers and consumers. Development of food and agriculture-related businesses that create jobs, re-circulate money in the community, and provide for community economic development. Value-Added Producer Grant program Farmers Market Promotion Program grants Creating food and agricultural policies that promote local food production, processing and consumption. Community Food Systems It is essential that “community food systems” be established using a collaborative approach: Local participation and support is necessary. Relevant stakeholders throughout the food system need to participate in organizational activities: Local elected officials Farmers, ranchers or their associations Public health personnel and nutritionists Food processors and food retailers Food and agricultural agency representatives Small businesses and lending institutions Cooperative Extension, Non-Profits and Universities Area transportation, storage, labeling and packaging businesses Community Food Systems Funding Resources are important to the successful formation of a community food system – some potential resources include: USDA programs – VAPG, FMPP, CFP Community, regional or national private foundations (i.e. Kellogg, Kraft, Noyes) Churches – national and local Civic Groups (i.e. Chamber, Rotary, Elks) Local, state or federal government programs including CDBG; SARE; EPA and DOE Sustainable Futures Individual donations, including fund raisers Community Food Systems Due to the fact that farmers and ranchers will need to drastically revise the way they work, it is essential that funds be available to them in order to transition their farms from being “producers of feed” to being “producers of food.” One such USDA grant program is especially valuable – the Value- Added Producer Grant program. Value-Added Producer Grant Program ► Program Description ► Projected status of this year’s program Newest funding amount is uncertain at this point, but USDA expects the Notice to be released at any time. ► Grant Purpose, eligibility, terms, & application process ► Opportunities for projects ► Funding; How & when to apply, preparing your application. Value-Added Producer Grant Program Philosophy of the Program ► Help producers expand the customer base (by opening EMERGING markets) for their products or commodities, and ensure that a greater portion of the revenues derived from the value-added activity is available to the producer – to allow farmers and ranchers capture a larger percentage of the consumer food dollar; and assist producers in their efforts to diversify their operations Value-Added Producer Grant ► Program designed to assist eligible agriculture producers or groups of producers add value to their commodity production. ► This program provides grants for planning activities or for working capital to implement a value added venture. ► Created via the 2002 Farm Bill, Reauthorized in 2008 Farm Bill What is an emerging market? ► An emerging market is a new or developing market for the applicant. That is, a market the applicant has not traditionally supplied. The venture must be focused on this new or developing market. ► An example of this emerging market is the “community food system.” Farmers and ranchers are encouraged by this grant program to diversify their operations and enable them to supply fresh, healthy and safe food products to their own area. Value-Added Producer Grant Program ► Nationwide Allocation Funded in Nebraska ► FY02 $37.0MM $1.6MM 13 projects ► FY03 $28.7MM $3.7MM 18 projects ► FY04 $13.2MM $1.3MM 7 projects ► FY05 $14.3MM $1.1MM 16 projects ► FY06 $19.7MM $1.2MM 18 projects ► FY07 $19.5MM $681,176 8 projects ► FY08 $18.4MM $123,000 4 projects Value-Added Producer Grant Program ► Three Categories of Eligibility Applicant Eligibility Product Eligibility Purpose (value-added activity) Eligibility Value-Added Producer Grant Program ► Applicant Eligibility (4 Categories) Independent Producers Farmer or Rancher Cooperative Agriculture Producer Group Majority-Controlled Producer Based Business Ventures (Producers have 51% or greater ownership and control) Value-Added Producer Grant Program 1. Independent Producer An individual producer of agricultural commodities or products (including products from aquaculture, fish harvesting, and wood lot enterprises). An association of producers such as a producer owned corporation, LLC, or LLP solely owned by producers. Value-Added Producer Grant Program 1. Independent Producer (continued) A steering committee composed of agricultural producers in the process of organizing an association to operate a value-added venture. ► An independent producer can not produce under contract or joint ownership with any organization other than their own. Value-Added Producer Grant Program 2. Farmer or Rancher Cooperative A business incorporated under state cooperative or corporation statutes that is farmer or rancher owned, farmer or rancher controlled, and benefits are returned to the farmer or rancher owner on the basis of patronage of the cooperative. Farmer or rancher owned cooperatives must propose ventures that are entering into emerging markets. Value-Added Producer Grant Program 3. Agricultural Producer Groups Any organization that represents independent producers such as a producer trade association or a state or national commodity group. Agricultural Producer Groups must propose ventures that are entering emerging markets. Corn Growers Association; Hog Producers Association; Cattlemen; and Grange are examples. Value-Added Producer Grant Program 4. Majority-Controlled Producer Based Business Ventures ►A corporation, LLC, LLP, or other type of business structures where producers have 51% or greater ownership and control of the entity. Majority-Controlled Producer Based Business Ventures must propose project activities that are entering emerging markets. * No more than 10 percent of the grant funds will be awarded to these ventures. Value-Added Producer Grant Program ►Value-Added Products Four distinct categories are considered value-added. ►A Value-Added Product Must: Expand the customer base for the product or commodity, AND Result in a greater portion of the revenues derived from the value-added activity that is available to the producer. Value-Added Producer Grant Program ► Value Added Product Eligibility 1.The changing of the physical state or form of the product to the extent that it cannot be returned to its original state. Examples include processing wheat into flour, corn into ethanol, slaughtering livestock or poultry, or slicing tomatoes. Value-Added Producer Grant Program ►Value Added Product Eligibility 2. A product produced in a manner that enhances its value, as demonstrated through a business plan. An example is organically produced products. This category is not eligible for PLANNING funds. Value-Added Producer Grant Program ►Value Added Product Eligibility 3. The physical segregation of an agricultural commodity or product in a manner that results in the enhancement of the value of that commodity or product. Examples: include an identity preservation system for a variety or quality of grain desired by an identified end-user or the traceability of hormone-free livestock to the retailer. Value-Added Producer Grant Program ►Value Added Product Eligibility 4. The term “value-added agricultural product” includes any agricultural commodity or product that is used to produce renewable energy on a farm or ranch. Examples: collecting and converting methane from animal waste to generate energy Value-Added Producer Grant Program ► Planning a defined program of economic activities to determine the viability of a potential value- added venture including feasibility studies, marketing plans, business plans and legal evaluations. ► Working Capital Funds which are used to operate the venture and pay the normal expenses associated with the operation of the venture. ► Completed feasibility study & business plan on specific venture required. Value-Added Producer Grant Program Costs that are Not Eligible include: ► Plan, repair, rehabilitate, acquire, or construct a facility ► Purchase, rent, or install processing equipment ► Pay for the preparation of the grant activity ► Pay expenses not directly related to the funded venture ► Pay costs incurred prior to receiving the grant ► Fund political and lobbying activities ► Pay any expenses related to agricultural production Value-Added Producer Grant Program ► Maximum Planning Grant Amount $100,000 Priority points for smaller requests ► Maximum Working Capital Grant is $300,000 - Priority points for smaller requests ► Applicants must provide matching non-federal funds at least equal to the grant Matching funds must also meet the purpose eligibility ► NOSA can be downloaded from web-site. VAPG Application Process ► An Application consists of these things: SF-424 “Application for Federal Assistance” SF-424A “Budget Information - Non-Construction Programs” SF 424 B “Assurances - Non-Construction Programs” Table of Contents Proposal Summary Eligibility Statement Proposal Narrative ► Project Title ► Information Sheet ► Goals of the Project ► Evaluation Criteria Verification of Matching Funds VAPG Opportunities/Scenarios/Examples ► Goat producers initiating a feasibility study. ► Meat Cooperative requesting funds to complete a business plan and marketing plan. ► Cooperative requesting funds to hire a marketing manager. ► Producer requesting funds for advertising costs and office equipment. ► Cooperative requesting funds to pay for attorney fees. VAPG Future Funding Periods ► Callfor applications once a year ► Application announced via NOFA ► Information can be found on USDA RD website or can be mailed to you by contacting the Center for Rural Affairs or USDA RD: --firstname.lastname@example.org --email@example.com ► Template based on this year’s NOFA found at: http://fpc.unl.edu/marketing/grant.htm Other USDA Rural Development Funding Resources ► Business & Industry Guaranteed loan program ► Business & Industry Cooperative Stock Purchase Program ► Rural Business Opportunity Grant (RBOG) ► Rural Business Enterprise Grant (RBEG) ► Rural Cooperative Development Grant Program Center for Rural Affairs Rural Opportunities & Stewardship Program Kathie Starkweather, Director Cooperative Marketing Nebraska Sustainability Leadership Workshop Madison County Extension Office April 30, 2009 Norfolk, Nebraska What is a Cooperative? ► Cooperatives are owned and controlled by the people who use them. ► Cooperatives operate for the benefit of members, rather than earn profits for investors. ► Cooperatives are incorporated under State Law. What are the differences between a cooperative and other businesses? ►Differences can be expressed in three basic principles: ►the User-Owner Principle ►the User-Control Principle ►the User-Benefit Principle ► Cooperatives are a form of corporation, and as such, have some protection from risk Why organize as a marketing cooperative? ► Increase supply for larger markets ► Improve bargaining position ► Reduce costs ► Expand new and existing market opportunities ► Improve product or service quality ► Increase income ► Enhance the local economy ► Efficient management of risk Cooperatives involve: ► Member-Ownership and Control ► Risk Management advantages ► Benefits (Common marketer) ► Opportunity for larger markets ► Quality and production standards are uniform ► Connections (Market and Production) Nebraska Food Cooperative Our Mission: To foster a local food community and promote a culture of stewardship by cultivating farmer- consumer relationships, promoting the enjoyment of healthful food, increasing food security through diversity, and enhancing overall rural sustainability. Join the Co-op Join the Co-op as a Shopper Click here to join so you can purchase from the cooperative. Join the Co-op and register to sell Want to buy and sell through the Co-op? First complete this membership form. Then you will have the opportunity to continue to the producer application. Current members register to sell (you will need to login first) Click here if you have products you would like to offer for sale and you're already a member. Gift Memberships Click here if you would like to purchase a membership for someone. (You don't need to be a Food Co-op member to purchase a gift membership.) If you've already registered If you've registered as a member but haven't yet paid for your membership, click here. Steps in Organizing a Marketing Cooperative ► Identifya market, product or project ► Form a leadership group of potential members (steering committee) ► Authorize Feasibility Study ► Prepare a Business Plan ► Secure Legal Assistance ►Organizational structure ►Liabilityissues ►Articles of Incorporation Steps in Organizing a Marketing Cooperative ► Contact CPA for financial advice ► Contact resource persons for advice regarding risk management ►Insurance coverage ►Farm Liability ►Product Liability ►Risk analysis ► Holda meeting of potential members to determine interest in forming a marketing cooperative Steps in Organizing a Marketing Cooperative ► Conduct a survey of producers to determine feasibility of forming a marketing cooperative ► Raise start-up capital ►Seed Contribution from members ►Grant Funding ► USDA Value-Added Producer Grants ► Nebraska Cooperative Development Center ► Foundations ►Loans ►Investors Steps in Organizing a Marketing Cooperative ► Compile an inventory of current and future product availability and supply ► Present a financial analysis to potential members (CPA) ► Develop a marketing plan ► Hold a general membership meeting to discuss current plan and determine whether or not to proceed. Steps in Organizing a Marketing Cooperative ► Prepare Articles of Incorporation ► File the Articles of Incorporation with the Nebraska Secretary of State Office in Lincoln ► Establish membership standards ► Prepare Cooperative Bylaws ► Hold a general membership meeting ►Adopt Cooperative Bylaws ►Elect Board of Directors ►Board will elect officers of the Board Steps in Organizing a Marketing Cooperative ► Callfirst meeting of the Cooperative Board of Directors ► Board of Directors should elect officers ► Secure working capital as outlined in the Business Plan: ►Membership / Stock Certificate ►Grant Funding ►Loan Funding ►Investor Funding Steps in Organizing a Marketing Cooperative necessary staff (Complete with ► Hire compensation package and job descriptions): ►Manager of the Cooperative ►Marketing Representative ►CPA ►Attorney ►Logistical Coordinator ► Transportation / Shipping ► Storage ► Distribution of products ►CertifyingOfficer (Farms/Feed Facilities) ►Quality Assurance / Control Officer (Meat) Steps in Organizing a Marketing Cooperative ► Contract with buyers ► Contract with distributors ► Contract with shippers ► Contract with Cold Storage facilities where necessary ► Acquire facilities (if necessary) ► Begin operations Potential Problems Pitfalls ► Lack of rewarding market ► Lack of a clearly identified mission ► Inadequate planning ►It is not enough for the cooperative to decide WHAT SHOULD be done -- it must also determine HOW THINGS should be done ►Detailed plans must be adopted to achieve the goals of the cooperative, and to accomplish the Co-op’s Mission Pitfalls ► Lack of “Member” Leadership: ►Input and prospective of producers is critical to the success of a cooperative. ►Role of producers should include contributing their knowledge and expertise. ► Lack of “Member” Commitment: ►A cooperative MUST have broad base support -- not just support of “leaders.” ►If members are not totally committed to the project, it will probably not succeed. Pitfalls ► Failure to use outside professionals: ►Advisors and/or consultants. ►Farmers are experts at producing their products, but usually not experts in forming and operating a new cooperative. ►It is essential for a new cooperative to put together a team of outside experts: ► Attorney ► CPA / Accountant ► Financial Institution / Lender ► Insurance Agent ► Consultant familiar with the industry Pitfalls ► Failure to supply the demand of markets being tapped. ► Failure to identify and minimize risk: ►Liability ►Competitors ►Governmental regulations ►Environmental issues ►Industry trends ►Unproven technology/methods ►Employing competent staff Pitfalls ► Inadequate staff: ►Farmers are usually engaged in the full-time business of farming. ►Farmers generally do not have the time, interest or expertise to manage a cooperative business. ►A competent manager MUST be hired to coordinate staff functions and direct business activities of the cooperative. ►Staff persons generally should NOT be active members of the cooperative. Pitfalls ► Not having enough capital: ►The first few months in the life of a cooperative are very rough -- too many bills and not enough income. ►It takes time to turn a profit, so members should be ready to step in and cover the legitimate expenses of the cooperative. ►Operations will probably not show a profit for at least four to seven years (IRS figures an average of five years). ►A financing plan should be adopted early to be sure the cooperative can “weather the storm.” Pitfalls ► Ineffective or inadequate communication: ►Communication is critical to the success of a cooperative venture ►Learn these points quickly: ► Who should know ► What should be communicated ► How should the message be communicated ► When the message should be communicated ► Overly Optimistic Assumptions ► Failure to be a COOPERATIVE member of the group Center for Rural Affairs Cooperative Marketing Assistance Available from the Center for Rural Affairs Marketing Alliances Project Partnership Work ► Center for Rural Affairs ► College of Saint Mary ► Creighton University School of Law Community Economic Development Law Clinic ► Rural Community Advancement Project ► Nebraska Cooperative Development Center ► University of Nebraska Marketing Alliances Project ► Articlesof Incorporation - Draft to be reviewed by an attorney ► Cooperative Bylaws ► Labeling assistance ►USDA FSIS Approval assistance ►Form preparation assistance ►Linkage to personnel at USDA when necessary ►Linkage to label expediters when necessary Marketing Alliances Project ► Risk Management Assistance ►Limitingliability of individual members ►Insurance explanation ► Farm Liability ► Product Liability ►Legal structure ► Limited Liability Company ► Limited Liability Partnership ► Corporation ► S-Corporation ► Communication assistance ► Facilitation of meetings Marketing Alliances Project ► Linkage to funding sources ►USDA Value-Added Development Grants ►USDA RBEG ►USDA Renewable Energy Grants ►USDA FMPP ►North Central Region SARE Nebraska Cooperative Development Center ►Private foundations ►Other USDA Grant programs ►Government grant sources Marketing Alliances Project Linkage to other collaborators USDA Rural Development College of Saint Mary Creighton University School of Law Community Economic Development Clinic Rural Community Advancement Project University of Nebraska Cooperative Extension Nebraska Cooperative Development Center Nebraska Department of Agriculture Nebraska Rural Development Commission Nebraska Department of Economic Development RC&D Districts Marketing Alliances Project ► Marketing assistance & training ► Feasibility/Pre-Feasibility Studies ► Market identification ► Business Plan Development ► Market Plan Development ► Linkage to existing professionals: ►Attorneys ►Insurancecompanies ►Accountants / CPA’s ►Lenders Other Center Projects ► Land Link Project ►Michael Heavrin and Wyatt Fraas ► Beginning farmer assistance ► Linkage between retiring farmers and new farmers ► Family Farm Sustainable Agriculture Project ►Wyatt Fraas ►Martin Kleinschmit ► Farming and ranching practices demonstration ► Farming and ranching education ► Technical assistance for farmers and ranchers Other Center Projects ► Rural Enterprise Assistance Program Reynolds ►Jeff ►Peggy Mahaney Eugene Rahn -- NC Nebraska Adriana Dungan – NE Nebraska & Hispanic BD Dena Beck -- SW and SC Nebraska Nancy Flock – SW and SC Nebraska Janelle Moran -- SE Nebraska Jerry Terwilliger – Panhandle Monica Braun – Women's Business Development Center ► Business plan assistance ► Technical assistance on all aspects of small business formation ► Linkage to other small business ► Meeting facilitation ► Loan assistance Other Center Projects ► Executive Director ►Chuck Hassebrook ► Rural Opportunities and Stewardship Program Director ►Kathie Starkweather ► Rural Research and Analysis Program Director ►Jon Bailey ► Rural Policy Program Director ►Chuck Hassebrook (Interim) ► Rural Enterprise Assistance Program Director ►Jeff Reynolds Any Questions? Center for Rural Affairs Rural Opportunities and Stewardship Program Michael Heavrin (402) 687-2100, Ext 1008 firstname.lastname@example.org Renewable Energy and Energy Efficiency Program Energy Programs USDA RURAL DEVELOPMENT The Food, Conservation, and Energy Act of 2008 Renewable Energy for America Program (Section 9007) Biorefinery Assistance (Section 9003) Repowering Assistance (Section 9004) Bioenergy Program for Advanced Fuels (Section 9005) Biomass Research and Development (Section 9008) Rural Energy Self-Sufficiency Initiative (Section 9009) What is the Section 9007 Program? ► Designed to assist farmers, ranchers and rural small businesses with energy projects What is the Section 9007 Program? ► Provides Grants & Loan Guarantees for: Renewable Energy Projects and Energy Efficiency Projects What is the Section 9007 Program? ► Plus NOW provides Grant funding for: Energy Audits & Renewable Energy Development Assistance and Feasibility Study Funding What is the Section 9007 Program? ► USDA has funded approximately 1,248 loan & grant projects worth $93,853,183 since the Program began in FY 2003. ► For FY 2008, 1,157 applications nationwide were filed, requesting $1,205,714,554 ► Nebraska received 207 applications in FY08, 170 received funding including 4 Combination Grant/Guaranteed Loans. Who is Eligible? ► Agriculturalproducers and rural small businesses can apply What Projects are Eligible? ► Any renewable energy and energy efficiency project as defined in the law. What Projects are Eligible? ► Renewable Energy – Energy derived from: wind solar renewable biomass ocean (including tidal, wave, current & thermal) geothermal hydroelectric source hydrogen derived from renewable biomass or water using one of the above energy sources What Projects are Eligible? ► Renewable Biomass – any organic material that is available on a renewable or recurring basis. Includes: Renewable plant material, including ► Feed grains ► Other agricultural commodities ► Other plants and trees ► Algae Waste material, including ► Crop residue ► Other vegetative waste material (including wood waste & wood residues) ► Animal waste and byproducts (including fats, oils, greases, & manure) ► Food waste and yard waste Materials, pre-commercial thinnings, or invasive species from National Forest System land & public lands (See Section 9001 for further definition) What Projects are Eligible? ►Energy efficiency projects typically involve installing or upgrading equipment to significantly reduce energy (BTU) use. What Projects are Eligible? • Pre-commercial or commercially available and replicable technology Grant requests $200,000 or less, commercially available technology only • Projects must be technically feasible • Must have sufficient revenues to provide for O&M What Projects are Eligible? ► Energy Efficiency Projects Energy Audit Required showing BTU Savings ► Renewable Energy Projects Business Level Feasibility Study Required If TPC $200,000+ Business Level Feasibility Study An acceptable feasibility study, completed by an independent third party, should include, but not be limited to, a discussion of the project’s: 1. Economic feasibility 2. Market feasibility 3. Technical feasibility 4. Financial feasibility 5. Management feasibility Grant Program Grant Request cannot exceed 25% of project costs Maximum grant request $500,000 for Renewable Energy $250,000 for Energy Efficiency Minimum grant request: $2,500 for Renewable Energy $1,500 for Energy Efficiency Grant Program Applicant must demonstrate financial need Competitive funding process- awarded only once a year! Guaranteed Loan Program Guaranteed Loan cannot exceed 75% of total eligible project costs. Minimum Guaranteed Loan = $5,000 Maximum Guaranteed Loan = $25MM Simplified Application process for loans $600,000 or less Guaranteed Loan Program Maximum Percentage of Guarantee $600,000 or less = 85% $600,001 to $5 million = 80% $5 million to $10 million = 70% $10 million to $25 million = 60% Interest Rate set by Lender Guarantee fee = 1% of guaranteed portion, with annual renewal fee of ¼ of 1% of the guaranteed portion. No Prepayment Penalty Combination Grant/Guaranteed Loan Combination requests cannot exceed 75% of total eligible project cost Combo requests funded bi-weekly 100% of eligible combo’s funded to date (One state has rec’d 88 combo awards for $6.8MM to date in FY2008) By making an application for a guaranteed loan you help ensure yourself funding from a grant! Guaranteed Loan Program ► Guaranteed Loan Terms Real Estate ►30 years maximum Machinery and Equipment ►20 years or the useful life Working Capital ►7 years maximum ►Term W.C. Only, No Lines of Credit Guaranteed Loan Program ► Equity $600,000 or less = 15% Cash equity injection $600,000 - $25MM = 25% Cash equity injection Grant funds can be used as equity for Combo’s Real Property can be substituted for equity if pledged as collateral Guaranteed Loan Program ► Collateral Documented collateral value must be sufficient to protect the interest of the lender & the Agency. Discounted collateral value normally equal to loan amount. Collateral should be discounted with sound loan- to-value policies. Loans must have at least a parity position with any unguaranteed loans. Guaranteed Loan Program ► Appraisals $600,000 or less = Summary Appraisal in accordance with USPAP $600,000 + = Self-Contained appraisal BENEFITS OF COMBO’S Reduce competition among grant only funding! Quicker notification of award! Lenders can assist existing customers or attract new via combination application! Assist with Increasing Energy Independence! Contact Information Grants assurance for local businesses & farmers via Combination applications….. Quicker notification of funding….. Economic develop partnering with a local lender…. Partner with USDA RURAL DEVELOPMENT Deb Yocum-Renewable Energy Coordinator Ph. 402-437-5554 email@example.com Energy & Community Food Systems As the cost of energy continues to rise, it will become more and more important to reduce the amount of energy needed to grow, raise, process, package, label, store, ship and sell food products. Community Food Systems would dramatically reduce the amount of energy required to feed people in this country. Energy & Community Food Systems Nebraska, being a rural state with many miles of roads between food producers and food consumers, is blessed with an amazing resource that can be used for economic development and the production of an incredible amount of renewable energy that can assist the nation in providing enough clean, affordable energy from within our own borders – that resource is WIND. Energy & Community Food Systems Wind – clean, renewable, inexhaustible, safe, and low cost energy. According to the American Wind Energy Association, the United States now generates 28,206 mega- watts (MW) of electricity (March, 2009) – that makes the USA Number 1 in the amount of electricity generated from wind. Wind Energy ► The potential wind energy generation capacity, however, is estimated at 10,777 billion kilowatts (kWh) – more than twice the electricity generated in the United States today. Wind can generate electricity without consuming any natural resources or emitting any pollution or greenhouse gases. Wind Energy ► Nebraska has the potential of generating 868,000,000,000 kWh of electricity – 8.05% of the nation’s wind generation capacity and approximately 16.1% of the current total electricity generated in the United States. ► Nebraska ranks 6th among the states when it comes to wind generation potential. ► The state, however, now produces only 153 MW or 150,000,000 kWh of electricity from wind power Wind Energy Currently, the installed wind power state “gigawatt” club includes the following nine states (in order): Texas 7,907 MW Iowa 2,883 MW California 2,653 MW Minnesota 1,804 MW Washington 1,479 MW Oregon 1,363 MW New York 1,261 MW Colorado 1,068 MW Kansas 1,014 MW Wind Energy Wind Energy Indiana keeps its title as fastest growing state with the large 400.3-MW project that was brought online. States tallying the most rapid growth in wind capacity in the first quarter include: Indiana 75% Maine 55% Nebraska 53% Idaho 49% New York 34% Wind Energy and Economic Development In Nebraska Nebraska Wind Energy Conference Eric Lantz Energy Analyst NREL October 5, 2012 A few prefacing points ►Economic Development Theory ►Economic development is driven by spending and investment ►Economic impacts cascade through the economy providing direct, indirect, and induced impacts ►The rural nature of wind projects can increase the benefit to rural regions but project ownership and business involvement is critical to ensuring benefits remain local. ►Analysis Themes ►Building wind power provides economic development to Nebraska and the country ►Local manufacturing is the single largest factor that can influence the outcome of economic development impacts, but project ownership also matters. Projects currently under development are expected to have direct impacts in Nebraska Elkhorn Ridge Wind Energy Project – 82 MW Bloomfield, Nebraska ►15% of the total $140 million investment is expected to go to Nebraska goods and services ►Lifetime property tax payments: $5.7 million ►Land lease payments in excess of $325,000 per year ►Work for more than 100 construction workers over the 9-month construction period ►Project revenue payments to Nebraska individuals and businesses that are at least 33% of gross power production revenues Projects currently under development are expected to have direct impacts in Nebraska Crofton Hills Wind Farm – 42 MW Crofton, Nebraska ►Lifetime property tax payments: $3.2 million ►Work for 50 construction workers ►4 permanent jobs ►Landowner lease and project revenue payments in excess of $300,000 per year ►Project revenue payments to Nebraska individuals and businesses that are at least 33% of gross power production revenues Building 1,000 MW supports thousands of FTEs in Nebraska Total Full Time Equivalents Supported by Construction, Manufacturing, and Related Activities 4,500 Induced Impacts 4,000 Indirect Impacts Full Time Equivalents 3,500 Direct Impacts 3,000 2,500 2,000 1,500 1,000 500 0 CBED High Trad High CBED Low Trad Low Total GDP Contribution: $260 million to $514 million Operating 1,000 MW supports hundreds of long-term jobs in Nebraska Wind and Related Industry Jobs Supported by Wind Plant Operations 600 Induced Impacts 500 Indirect Impacts Long-term Jobs 400 Direct Impacts 300 200 100 0 CBED High CBED Low Trad High Trad Low Annual GDP Contribution: $30 million to $55 million Lifetime* Results Summary Lowest Highest Scenario Scenario Total FTE Jobs 64,000 117,000 Total Economic Output (millions) $7,800 $14,100 7,800 MW Total Land Lease Payment (millions) $547 $641 Total property tax payments (millions) $570 Total FTE Jobs 7,600 14,500 Total Economic Output (millions) $870 $1,640 1,000 MW Total Land Lease Payment (millions) $70 $82 Total property tax payments (millions) $73 *Based on construction period and 20 years of operations Conclusions ►Across all scenarios, the economic development impact of utility-scale wind power is large. ►Present trends suggest that the C- BED development trajectory will remain popular and may dominate wind development in Nebraska. ►The greatest economic development benefits to Nebraskans are derived under conditions where local ownership is high and manufacturers are located in Nebraska
"Community Food Systems and Cooperatives Nebraska"