Farmers supplying the nation's largest biofuels producer with corn crop residue that can be converted to cellulosic ethanol can double their income under a program approved recently by the U.S. Department of Agriculture.

The USDA has finalized the pilot Biomass Crop Assistance Program, which will help farmers get matching payments for delivering nonfood feedstocks to cellulosic ethanol plants.

Sioux Falls-based Poet plans to build an advanced biofuels plant next to its corn ethanol facility in Emmetsburg, Iowa. The cellulosic plant, set to open in 2012, will produce 25 million gallons of fuel each year from plant waste typically left behind in farmers' fields.

Privately held Poet has been testing the feedstock delivery system this fall, paying farmers about $40 a bone-dry ton for round bales containing corn cobs, leaves and husks, said Jim Sturdevant, director of Poet's Project Liberty.

Farmers can then take their scale tickets to a Farm Service Agency office and double their money, which Sturdevant said is a great incentive to help early adopters who are doing commercial level biomass harvesting for the first time.

"This is a great boost to kind of push those early adopters over the finish line and provide them with additional revenue early on o they can do things like get the equipment they need," he said.

Some 85 farmers will deliver 56,000 tons of bailed corn cobs and light stover to the plant in Emmetsburg during the harvest season.

The payments help offset the cost of collection, harvest, storage and transportation of renewable biomass delivered to local plants.

From Emmetsburg, the bales will then go to either Poet's research center in Scotland, S.D., or to Chancellor, where it will be burned in a solid waste boiler that helps power its ethanol plant.

The Biomass Crop Assistance Program had operated as a pilot since 2009 pending last month's publication of the final rule.

The matching payments help offset the cost of collection, harvest, storage and transportation of renewable biomass delivered to local plants.

It can also help farmers who enter into contracts with payments of up to 75 percent of the cost of establishing eligible perennial crops. They can also receive payments for up to five years for annual or non-woody perennial crops and up to 15 years for woody perennial crops.

Under the final rule, the USDA will resume making payments to eligible producers.

Sen. John Thune, R-S.D., who authored the program that was part of the 2008 Farm Bill, said it will create jobs and lead to energy independence.

"It is essential that the United States break its dependence on foreign oil and that can only be done through the domestic development of advanced biofuels, which includes the tapping of the homegrown energy resources of the American prairie," Thune said.

Cellulosic biofuels have long been touted as the future of the ethanol industry, but the transition from corn to nonfood feedstocks has been slow.

Chuck West, an agronomist at the University of Arkansas-Fayetteville who studies switchgrass, said incentives will be necessary to get the industry off the ground.

"The demand's not there," West said. "I've got research plots in various locations around the state where I'm growing switchgrass to do these studies, and there's no place for me to send the stuff," he said.

Poet plans to start construction on the Emmetsburg plant, which will take 15 to 16 months to build, sometime next year after it gets a loan guarantee from the U.S. Department of Energy.

"When we clear that hurdle, we'll be set to go," he said.