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A proposed international trade agreement could lead to a huge increase in ethanol imports, which in turn could prevent no-tillers from capitalizing on the growing use of corn-based ethanol for fuel, according to a group critical of the trade proposal.
Ethanol holds promise as a financial boon to no-tillers who could find greater demand for their corn crops — and possibly for their crop residue, as work progresses on the technology needed to convert the residue to ethanol.
The U.S. ethanol market has grown rapidly over the past several years. There are now 84 ethanol plants in the U.S., with another 18 scheduled to come online in the next year. More than half of the plants are farmer-owned. Currently, a 54 cent per gallon tariff on ethanol imports promotes the national ethanol industry. The U.S. Senate has approved a national energy bill that would require oil refineries to use 8 million gallons of ethanol a year, while a House of Representatives bill would require the use of 5 million gallons annually.
With demand rising, the Central America Free Trade Agreement (CAFTA) would allow an unlimited amount of foreign ethanol into the U.S. tariff-free, according to the Institute for Agriculture and Trade Policy.
President Bush is expected to send the proposal to Congress within the next few weeks. Congress then will have 90 days to ratify or reject the agreement.
A report from the Minneapolis-based IATP — an organization that says it promotes resilient family farms, communities and ecosystems — says…