Biodiesel Production Subsidized ---------------------------------------------------------------------------- ----
Story Filed: Tuesday, October 31, 2000 9:32 PM EST WASHINGTON (AP) -- Companies that make ethanol, biodiesel and other fuels from farm products will be offered direct government subsidies to buy crops such as corn and soybeans. Payments will be capped at $7.5 million per company, under the two-year program announced Tuesday by the Agriculture Department. The subsidies will range from 29 percent to 40 percent of the cost of the crops, depending on the size of the company. ``This program will help us tap into a huge domestic energy reserve, our family farmers,'' said Agriculture Secretary Dan Glickman. ``Encouraging the use of bioenergy benefits America's farmers, while improving our energy security and helping to protect the environment.'' Although the payments would be aimed at small firms, any farmer-owned cooperative or company would be eligible for the payments, including ethanol industry giant Archer Daniels Midland Co., USDA officials said. Ethanol production is concentrated in a handful of Midwestern states that are being closely contested in next week's presidential election. Among them is Minnesota, where Glickman will be campaigning for Democratic candidates this week. Ethanol production, which already is subsidized by a 5.4 cent-a-gallon federal tax break, currently consumes about 600 million of the more than 9 billion bushels of corn grown annually in the United States. Production of biodiesel, which is made from soybeans, does not have a similar tax break. The new program, which could help as many as 58 facilities in 18 states, is set to last two years at an annual cost to taxpayers of $150 million. Among the plants that could benefit is one near Albert Lea, Minn., owned by Agra Resources Cooperative. The plant, which opened last year, is tripling its capacity at a cost of $18 million to about 45 million gallons annually, said Charles Pyatt, an Iowa corn grower who helped found the farmer-owned cooperative. ``Our goal and our purpose in building this was primarily to help us weather these downturns in the market cycle, when corn gets exceedingly low-priced. Ethanol becomes profitable when corn is as cheap as it is now,'' said Pyatt. Sen. Tom Harkin, D-Iowa, said the program ``will encourage smaller plants and farmer-owned co-ops that produce ethanol and other renewable fuels to expand production.'' The Agriculture Department also is soliciting proposals for pilot projects that will use harvested vegetation to produce energy. Grass and other plants can be burned and converted into combustible gas or used to produce liquid fuels. The pilot projects will be limited to vegetation from land enrolled in the government's Conservation Reserve Program, which pays farmers to take acreage out of production. None of the projects will be allowed to exceed 50,000 acres. On the Net: Farm Service Agency: http://www.fsa.usda.gov/daco/bioenergy/bioenergy.htm Steve Spence Subscribe to the Renewable Energy Newsletter: http://www.webconx.com/subscribe.htm Renewable Energy Pages - http://www.webconx.com Palm Pilot Pages - http://www.webconx.com/palm X10 Home Automation - http://www.webconx.com/x10 [EMAIL PROTECTED] (212) 894-3704 x3154 - voicemail/fax We do not inherit the earth from our ancestors, we borrow it from our children. -- -------------------------- eGroups Sponsor -------------------------~-~> Receive 500 minutes of Personal Conferencing FREE. Go to Sprintbiz.com. http://click.egroups.com/1/9786/5/_/837408/_/973253748/ ---------------------------------------------------------------------_-> Biofuel at Journey to Forever: http://journeytoforever.org/biofuel.html To unsubscribe, send an email to: [EMAIL PROTECTED]
