The U.S. Department of Agriculture established the Commodity Credit Corporation (CCC) Bioenergy Program in Fiscal Year 2001. Under the program, the CCC makes payments to eligible bioenergy producers to encourage increased purchases of agricultural commodities for the purpose of expanding production of bioenergy (ethanol and biodiesel) and to encourage the construction of new production capacity. The 2002 Farm Bill continued the program through Fiscal Year 2006, providing $150 million annually.


Bioenergy producers apply to CCC to participate in this program. Eligible commodities include barley, corn, grain sorghum, wheat, oats, rice, soybeans, canola, sunflower seed, rapeseed, safflower, flaxseed, mustard, crambe, sesame seed and cottonseed; fats, oils and greases; and cellulosic commodities such as switch grass and hybrid poplars.

To be eligible, ethanol producers must produce and sell ethanol commercially and have authority from the Bureau of Alcohol, Tobacco, Firearms, and Explosives to produce ethanol for fuel or sell denatured ethanol rendered unfit for beverage use.

Payments are based on the increase in bioenergy production compared to the previous year's production. The program is structured to encourage participation by smaller producers. Producers with less than 65 million gallons of annual production capacity are reimbursed on a ratio of one feedstock unit for every 2.5 feedstocks used, while larger facilities are reimbursed on a ratio of one to 3.5. Additionally, a payment limitation restricts the amount of funds any single producer may obtain annually under the program to 5% of the total funds available.

Producers wishing to enroll in the program should obtain a Bioenergy Program Agreement via the internet or by calling 816-926-6525. For additional information, contact James Goff at 202-720-5396.


The CCC Bioenergy Program has encouraged the increased production of bioenergy and the construction of new production capacity, which has helped the ethanol industry double in size since the creation of the program in 2001.

Profitability is difficult in the first year of production for any company, and the margins in the first few years of production for new ethanol and biodiesel facilities are exceedingly tight. The CCC Bioenergy Program provides valuable financial assistance to ensure the success of these new companies.