Indiana biodiesel plant files suit against USDA

By Luke Geiver | July 13, 2010
Posted July 14, 2010

After several months of failed funding requests, Claypool, Ind.-based LD Biodiesel and Soybean Processing Plant has filed suit against the USDA. Louis Dreyfus Agricultural Industries LLC (LDAI), owner of the Claypool plant, filed in the District Court of Columbia, and claims that the USDA is unconstitutionally denying the Claypool facility funding due to the plant's percentage of foreign ownership. LDAI, located in Maryland, but owned by Geneva-based parent company Louis Dreyfus, states in their case that the USDA did not follow normal protocol before implementing a rule that requires biofuel companies to be a minimum of 51 percent American owned to be eligible for funding. The rule appears in a May 6, 2010, Notice of Contract Proposal for payments to eligible advanced biofuel producers form.

Located in Kosciusko County, the 80 MMgy plant created roughly 105 jobs in a town whose population is only 250. Robert Conley, Kosciusko County Commissioner said the plant's employees would be in jeopardy if the facility was unable to produce at capacity. "The consensus from the farmers that use the plant have been nothing but positive," Conley said regarding the use of biodiesel in the region. "They save time and money, and repairs to their trucks have been cut."

The requested funds, from the Bioenergy Program for Advanced Biofuels established in the 2008 Farm Bill, do not "impose any requirement that an 'eligible producer' must be a United States citizen or at least 51 percent owned by a United States citizen," LDAI's complaint said. "LDAI is a 'producer of advanced biofuels' within the meaning of the Advanced Biofuels Statute." Also in the complaint, LDAI goes on to say, "USDA has acknowledged that 'this citizenship requirement is not required by the statute' but nonetheless chosen to impose it because 'it is consistent with the Agency's other programs.'"

Conley said Kosciusko County has already set aside a half-mile space on either side of the plant to allow for further growth. "The school in Claypool has been reopened and there has been more staff and support hired. People are looking to build homes near the school where their children will be going," Conley said. "I have telephoned Under Secretary of Agriculture Mr. Dallas Tonsager and invited him to Claypool to meet with me and take a tour of the facility and also meet with some of the farmers of the area." For now, Conley said they are still waiting to hear back, and will wait for the case to be resolved.
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