Agriculture Calls for Rethinking Indirect Land Use Rules

Experts say farmers and ethanol producers would benefit from a risk-based ILUC system that protects forests without relying on speculative modeling.

upper midwest_fall landscape_adobe stock.png

Adobe Stock

LUBBOCK, Texas (RFD-TV) — A long-running debate over indirect land-use change — often called ILUC — is resurfacing as biofuel policy again weighs carbon penalties tied to theoretical global land-use impacts. John Duff of Serō Ag Strategies says ILUC began as a reasonable idea meant to prevent deforestation overseas.

Still, the system that grew around it quickly crossed into modeling assumptions that cannot be seen or measured. The result is a policy structure in which U.S. farmers and biofuel producers are penalized for land clearing that may not actually be happening, while fuels from regions with real deforestation concerns sometimes receive more favorable treatment.

Duff explains that large economic forecasting models mainly drive today’s ILUC penalties. These models aim to predict how farmers worldwide might respond if more U.S. grain is used for ethanol. Because they rely on assumptions about human behavior and international markets, the models often disagree and can drift far from real-world conditions. Still, their projections were built into federal and state carbon rules more than a decade ago, giving hypothetical outcomes the weight of law.

This mismatch has created uneven carbon scores, competitive disadvantages for U.S. ethanol, and a system that can punish farm efficiency rather than rewarding it. Duff says a better approach already exists: a risk-based framework used in Canada and parts of Europe. Instead of assigning blanket penalties, regulators verify whether feedstocks come from established cropland and whether local practices pose any real risk of land conversion.

Duff argues that such an approach keeps the focus on preventing deforestation while grounding policy in observable, verifiable facts —not in global economic guesses.

Farm-Level Takeaway: Duff says farmers and ethanol producers would benefit from a risk-based ILUC system that protects forests without relying on speculative modeling.
Tony St. James, RFD-TV Markets Specialist
Related Stories
The U.S. Supreme Court ruled on Friday that imposing duties without Congressional authorization exceeds presidential powers. RealAg Radio host Shaun Haney joins us to discuss the potential trade and agriculture implications of the recent ruling.
The USDA Agricultural Outlook Forum highlights modest price support from tighter supplies across cotton, grains, dairy, livestock, and sugar into 2026.
Farm Bureau Economist Faith Parum discusses the latest Farm Bill proposal and the path ahead for Congress and U.S. agriculture.
Small Business Administration Deputy Administrator Bill Briggs joined us with an update on how the SBA is working to support rural communities and small businesses across the country.
President Donald Trump signed an executive order this week to accelerate domestic production of phosphorus and glyphosate, signaling that farm input availability is now treated as a national security risk.
Federal aid helps, but producers will bear most of the losses. Balance sheets may look stable, but margins remain fragile without policy support.

Tony St. James joined the RFD-TV talent team in August 2024, bringing a wealth of experience and a fresh perspective to RFD-TV and Rural Radio Channel 147 Sirius XM. In addition to his role as Market Specialist (collaborating with Scott “The Cow Guy” Shellady to provide radio and TV audiences with the latest updates on ag commodity markets), he hosts “Rural America Live” and serves as talent for trade shows.

LATEST STORIES BY THIS AUTHOR:

Agriculture avoided major disruptions, but trade uncertainty remains elevated.
The debate now matters as much as the policy — market rules and regulatory clarity depend on whether Congress can finish the bill this year.
Domestic beef demand remains solid, with the strongest growth occurring through retail channels, according to consumers surveyed in the latest K-State Meat Demand Monitor.
Stronger fuel demand supports corn usage despite a steady production pace.
Fertilizer still consumes an unusually large share of crop value.
Pollination costs remain volatile, raising planning risk for specialty crop producers.