US farmers see ethanol as substitute to foreign oil --------------------------------------------------- Story by Randy Fobi, Reuters News Servive
USA: February 28, 2003
CHARLOTTE, N.C. - As oil prices continue to rise, legislation that would triple U.S. ethanol production was expected to dominate this week's meeting of two major farm groups.
Some 3,000 members of the National Corn Growers and the American Soybean Association will gather yesterday for an annual meeting focused on U.S. renewable fuels as well as traditional topics such as corn and soybean prices.
Ethanol is distilled mostly from corn and used as an additive for cleaner-burning automotive fuel. It is also seen by some lawmakers as a way to stretch U.S. oil supplies at a time when crude has jumped above $36 a barrel and headed higher in the event of a U.S.-led war against Iraq.
Fred Yoder, president of the National Corn Growers Association, said ethanol, biodiesel and other cleaner-burning fuels were the best fix for the country's dependency on foreign oil. The United States imports more than half of its oil supplies.
"With recent oil price spikes and high gas prices, we think this is a good opportunity for Congress to pass the renewable fuels standard," Yoder said in an interview.
ETHANOL LEGISLATION
U.S. farmers want Congress to pass legislation boosting corn-based ethanol use to 5 billion gallons by 2012, more than double last year's 2.13 billion gallons.
The industry, which is dominated by Archer Daniels Midland Co. (ADM.N), was expected this year to use about 1 billion bushels of corn for ethanol.
Senate Minority Leader Tom Daschle, along with a dozen U.S. farm state senators, earlier this month reintroduced a renewable fuels bill. The Senate passed similar legislation last year with 69 votes, but it ultimately died when Congress failed to pass a comprehensive energy bill.
U.S. President George W. Bush has also endorsed legislation boosting the use of ethanol.
Soybean growers say their crop could also be used for fuel, if tax incentives were offered to help develop the industry.
Biodiesel can be used in its pure form or blended with petroleum diesel to power heavy trucks and other vehicles.
Dwain Ford, president of the American Soybean Association, said any "meaningful renewable fuels legislation" in Congress must contain tax incentives for soy-based biodiesel fuel similar to those given to the ethanol industry.
EU BIOTECH DISPUTE
Farmers at the conference will also hear from the chief U.S. agriculture trade negotiator, Allen Johnson, who is expected to discuss the European Union's ban on new biotech crops.
The Bush administration is mulling whether to file a formal trade complaint against the EU for refusing to approve new genetically modified foods.
There is broad support among agriculture groups for filing such a complaint as U.S. farmers claim to be losing $300 million a year in sales to the EU because of its policy.
About 70 percent of U.S. soybeans and one-third of U.S. corn are grown from genetically modified seeds.
The National Corn Growers will also review its position on the use of bioengineered corn to manufacture components for industrial or medical uses. Both farm groups support tougher federal regulations for these experimental crops to prevent accidental contamination of corn used for human or livestock food.
The U.S. Agriculture Department and the Food and Drug Administration were expected to soon issue industry guidelines on planting pharmaceutical crops.
ProdiGene Inc., a Texas biotech firm, agreed to pay about $3 million last year after USDA accused it of mishandling its bio-pharmaceutical corn crop and contaminating other crops.
REUTERS NEWS SERVICE ===========================================================================================
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