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NCGA decries Cargill ethanol outsourcing plan
DES MOINES (DTN)--The National Corn Growers Association Sept. 7 expressed disappointment in Cargill's decision to proceed with investment plans for an ethanol dehydration plant in El Salvador. The decision undermines the relationship Cargill has established with U.S. corn growers and circumvents the intended purpose of the Caribbean Basin Initiative (CBI), according to a letter sent by NCGA to Cargill President and Chief Operating Officer Greg Page and a NCGA news release.
"NCGA believes Cargill's decision is not in the best interest of the company or the ethanol industry in the United States," NCGA President Dee Vaughan said in the letter. "We reiterate our desire for Cargill to look closer to home when increasing its investment in the ethanol industry."
Despite widespread opposition voiced by U.S. farmers and members of Congress, Cargill recently announced it would move forward with plans to proceed with the dehydration plant. NCGA and other groups say Cargill is exploiting a loophole in the CBI legislation that was designed to promote economic development in Caribbean Basin trading partners.
The CBI allows an amount of ethanol equivalent to 7 percent of total U.S. production to come into the United States duty-free. Cargill's El Salvador plant would take the water out of Brazilian ethanol, which would then be shipped to the United States duty-free.
"The Caribbean Basin Initiative should benefit farmers in that region and spur economic development in the basin," the letter states. "It should not be used as a method to trans-ship Brazilian ethanol."
In response to Cargill's actions, Senate Finance Committee Chairman Charles Grassley, R-IA introduced legislation that would prevent an increasing amount of imported ethanol from bypassing the standard import tariff. Other lawmakers have proposed legislation that would allow only ethanol produced in the United States to qualify for incentives under the pending Renewable Fuels Standard (RFS). Vaughan said Cargill's plans undercut the spirit of the RFS.
"The United States is on the verge of enacting the Renewable Fuels Standard, and the domestic ethanol industry is uniquely poised to contribute to the fuel security of our nation while injecting critical investment capital into the Corn Belt," the letter says.
Vaughan said U.S. corn growers would appreciate the opportunity to work with Cargill to advance the domestic ethanol industry. "While we understand Cargill is a global company, farmers in the United States would welcome new opportunities to work with the company to expand the rural economy and increase U.S. agriculture exports," the letter says.
Date: 9/23/04
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