£3/t US biofuel benefit

FARMERS IN the US have claimed its country‘s booming biofuel industry has bolstered crop prices by over £3/tonne.

Bioethanol from corn adds a total of £789m ($1.4 billion) to farming incomes every year, according to the American Coalition for Ethanol.

The success of the industry, which now feeds 100 ethanol plants across the US, with an estimated 2004 production of 3.5bn gallons, is detailed in the May 15 issue of Crops.

Many of these, such as the Watertown ethanol plant in South Dakota, are owned by the farmers who supply them, bringing in extra cash and adding value to the crop they sell.

Mark Maynard, farming 600ha in Clark, South Dakota, has supplied the co-operative plant since he bought 10,000 shares in 2001.

“The ethanol plant pays me a nice bonus on the market price of corn, plus a return on the investment of 80%, which is better then I could have made on the New York stock exchange,” he said.

If the market for ethanol did not exist, corn stocks would rise and net income to American corn farmers would be reduced by £3.38bn ($6 billion) over the next five years, or about 11%, said ACE.

Key to the US bioethanol success is the 1990 US Clean Air Act.

Congress forced states with a certain level of air pollution to include an additive in petrol to lower emissions of air polluting gasses.

Petrol in California, for example, must now contain 5.7% ethanol.

For the full story, and details of the booming US biofuel industry, see the May 15 issue of Crops.

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