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
Beginning Farmers and Ranchers, Crop Insurance, and a Business Planning Complication
Beal joined us on Friday’s Market Day Report to discuss her election to NASDA’s presidency, challenges facing American agriculture, and her background as a Mainer and dairy farmer.
RFD-TV Farm Legal and Taxation expert Roger McEowen joined us Friday to break down the executive order and what it means for farmers and ranchers.
Potash has seen the most significant decline, falling 11 percent over the same five-year period.
China’s buying decisions continue to be a critical factor in shaping cotton prices and export opportunities worldwide.
Secretary Rollins’ plan targets high costs, labor challenges, and export growth, delivering relief at home while building markets abroad.

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:

USDA’s report shows wheat strength overall, with winter wheat yields setting records, while spring wheat and rye saw declines. Oats and barley remain constrained by record-low acreage despite stable or rising yields.
Together, these markets highlight the diverse forces shaping industrial inputs and safe-haven assets.
Farmers face tighter barge capacity and higher freight costs during peak harvest.
Bigger-than-expected corn and wheat stocks are bearish for prices, while soybean figures were neutral. Farmers may face additional price pressure as harvest accelerates.
Taiwan’s pledge to expand imports strengthens export prospects for U.S. row crops, livestock products, and specialty commodities, while the USDA’s broader trade push seeks to diversify farm markets globally.
Farmers will need to closely monitor forecasts if the regulatory changes are implemented, as temperature cutoffs will replace fixed spray dates.