Thursday, April 06, 2006

Ethanol industry touted as cure

Will this make a difference?

Ethanol industry touted as cure
Gasoline with 5-per-cent renewable matter would ease farm-income crisis, Tories say
OTTAWA -- The Conservative government will soon unveil a plan to promote a domestic ethanol industry as a long-term solution to the financial troubles of Canadian farmers.
Agriculture Minister Chuck Strahl said yesterday that he and Environment Minister Rona Ambrose are preparing to announce how they will implement a campaign promise to require that all gasoline be made up of at least 5 per cent renewable materials.
Mr. Strahl said his plan is to have farmers who grow corn and other crops from which ethanol is made also be involved in its production, so their incomes are not entirely based on selling low-priced crops. Those in the farm industry say that would mean a U.S.-style co-op system.
"The real answer in the long run is not government subsidies. Farmers don't want subsidies. They don't want handouts. They don't want to farm the mailboxes, as they say," said Mr. Strahl, who was responding to a rally on Parliament Hill by a few thousand farmers who blocked traffic for most of the day with their tractors and transport trucks.
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"The solutions that we will bring forward in the days ahead will continue to develop programming and strategies that are going to address things like access to capital and getting farmers more involved in the production chain so they can get more value out of it."
The farmers said it makes little difference whether their crops are sold as food or to produce gas as long as they continue to lose money each year because they cannot compete with U.S. farms. Some farm groups blame U.S. and European farm subsidies for driving down the prices for agricultural products to historic lows. Canadian egg and dairy producers are also protected from foreign competition by the government.
Bob Friesen, president of the Canadian Federation of Agriculture, held a news conference yesterday with other farming leaders, who painted a picture of a shrinking Canadian farm industry where credit-card debts are dividing families and forcing them to sell their farms.
Mr. Friesen said farmers need more than $6-billion to stay in business. Ottawa has promised $2.5-billion over five years, but the farmers say it is not clear whether it is above, or instead of, the billions of dollars in emergency funds received in the past two years.
Prime Minister Stephen Harper responded yesterday to Liberal members of Parliament who urged him to commit more money for farmers.
"In the last [election] campaign, we did commit to increase -- significantly increase -- agricultural funding. We intend to follow through on those commitments. It's a little late for the Liberals to now say they'd like to increase agricultural funding. They had their chance and they've left farmers with the mess we do have today," he said.
Doug Eadie of the Ontario Corn Producers said any push toward more ethanol plants will simply lead Canadian ethanol producers to buy U.S. corn, unless the subsidy issue is addressed to make it financially worthwhile for Canadian farmers.
He said there are only a handful of plants producing ethanol in Canada while the industry booms south of the border as the U.S. seeks to decrease its reliance on oil. The production boom is being tied to an energy bill signed by President George W. Bush that encourages the use of ethanol in gasoline.
The Conservatives promised during the election campaign that they would require all gasoline to be composed of 5-per-cent renewable materials by 2010. Mr. Strahl said yesterday the government will have to act soon to make sure the capacity is in place to meet that target.
"We are going to have to start aggressively this year on a biofuel strategy that will give farmers . . . the crushing plants and the other processing plants in place that should give us enough time by 2010 to meet that target.
"[For] too long they have been the lowest-cost providers, to value-added people who take the money and run, so to speak, and farmers want to be part of this and we are keen to make sure that farmers are part of the biofuel strategy."

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