Iowa ethanol producers may face competition from Brazil

Iowa’s corn and ethanol producers may be facing a new threat to their livlihood from exports of Brazilian sugar-based ethanol that would be brought into the U-S via El Salvador under a plan being considered by agricultural conglomerate Cargill. Iowa Senator Tom Harkin is urging passage of legislation that would stop the plans before they go any further — and before a single gallon of foreign ethanol is brought into the U-S. Harkin says Minneapolis-based Cargill proposes to build a plant in El Salvador that would process the Brazilian ethanol for shipment to the U-S, since it can’t be sent directly to the U-S from Brazil without facing large tariffs. Harkin says the plan may disrupt domestic ethanol producers’ long-term plans for expansion and “ultimately outsource Midwestern jobs to Brazil and El Salvador to supply the U-S ethanol market.” Harkin says “Smart lawyers for Cargill obviously found this loophole. What we’ve gotta’ do is plug it up.” Harkin adds, Cargill isn’t breaking the law, “but they’re skirting it.” He says legislative action is needed immediately. Harkin says “What Cargill wants to do is to drive a tank trunk through what has (until) now been a pretty small loophole. This would deny American farmers the ability to benefit from additional corn demand from domestic ethanol that would otherwise be produced. It would also cost us jobs.” Harkin says “The ethanol industry has been one shining star in an otherwise gloomy economic sky in rural America. To allow Cargill to undermine the progress we have made with regard to ethanol production and use would be a disservice to farmers, ethanol producers and all of rural America.”