uploaded from pacres on flickr.
PetroSun is paying catfish farmers in Mississippi to convert their ponds to algae production.
Here's the deal, according to Terri Chiang, an authorized agent for PetroSun BioFuels
"initially, we have arranged for the landowner to receive $50 per water acre signed into the program as a sign-up, one-time payment. Additionally, the landlord will receive advance base rent payments at the beginning of every year of $100 (per acre)."
AP says
The real money for farmers would be the monthly royalties. For Barret and Jordan, who own 744 water acres, royalties could mean between $744,000 and $892,800 a year, based on PetroSun's formula.
Nice work if you can get it. But what's it going to do to catfish prices?
Comments (2)
100 $/year/acre translates to 247.1 $/ha/year, which over a 20 year period is ~4942 $/ha. Land costs do not seem to be a problem, but:
1. CO2: Where does PetroSun plan get CO2 from?
2. Farmer compensation: In Mississippi last year, 90,300 acres of water surface produced catfish valued at 229,385,000 $. This is equivalent to ~6288 $/hectare (ha)/year.
I assume that the royalties would depend on how much algal biofuel/ha/year are produced. The royalty figure cited (892800 $/744 acres) is equivalent to 2970 $/ha/year, which at 3 $/gallon biofuel price is 990.1 gal/ha/year.
How will this be a better deal for the farmer? Of course, farming the land on their own would mean incurring operational expenses, but given that they are already farming, I would expect these to be atleast semi-optimized. On the other hand, not farming catfish would result in a loss of 3318 $/ha/year. On a 744 acre farm, this means a a loss of 997311 $/year. Does anyone know what operational expenses are involved in catfish production?
Posted by Pradeep | March 13, 2009 2:26 PM
Posted on March 13, 2009 14:26
I correct myself:
According to this , the net returns on catfish production (8-acre scale) is ~684 $/water-acre/year, which is ~1693 $/water-hectare/year.
PetroSun royalties to the farmers for not growing catfish are: 2970 $/water-hectare/year.
Posted by Pradeep | March 17, 2009 3:56 PM
Posted on March 17, 2009 15:56