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U. S. livestock groups see bias in ethanol aid

U. S. meat, dairy and poultry groups objected Oct. 22 to the possibility of federally guaranteed loans for ethanol makers to help pay for high-priced corn, calling it “the opposite of free enterprise.”

The U. S. Agriculture Department says there is no bailout for ethanol. It says rural businesses, including ethanol plants, are eligible for up to $25 million in loan guarantees (all figures US$).

Agriculture Secretary Ed Schafer told reporters USDA was not playing favourites and guarantees are broadly available for many types of business.

“But we do have financial programs that are available and we will use them to help businesses in rural America,” said Schafer.

Some ethanol companies have been stressed by high prices for corn, the U. S. feedstock of choice to make the alternative motor fuel.

In a letter to Schafer, the livestock groups, also major users of grain, said they have been told to expect no aid, although they are facing high feed costs.

“It seems the opposite of free enterprise to insure companies – and only some companies – against the possibility that their speculative commodity bets might go wrong,” the letter said.

The letter was signed by the American Meat Institute, National Cattlemen’s Beef Association, National Chicken Council, National Meat Association, National Milk Producers Federation, National Pork Producers Council, National Turkey Federation and United Egg Producers.

USDA offers guarantees on loans extended by pri -vate lenders to rural businesses through its business and industry loan guarantee program.

A USDA spokesman said, “USDA does not guarantee marginal or substandard loans through this program, nor does the program provide direct loans.”



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