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Ag Secretary's idea for ethanol bailout draws protests
Dateline: Washington, D.C.
October 22, 2008-Saying that the U.S. ethanol industry is already over-protected and over-built, animal agriculture groups today protested the Agriculture Secretary's suggestion that ethanol plants in financial difficulty because of the high price of corn could apply for loan guarantees from the U.S. government for "operating capital."

Secretary of Agriculture Ed Schafer, in Des Moines last week, commented on plans for USDA to extend rural development loans to ethanol plants that bought corn at the higher prices that prevailed earlier this year. According to news reports, Secretary Schafer said the ethanol industry is too important to be allowed "to fall into more financial difficulty" and must be supported by the U.S. government.

Such a program would be a startling new development that discriminates in favor of one segment of American agriculture, said animal agriculture groups that joined in a letter to Secretary of Agriculture Ed Schafer.

Groups representing producers and processors of meat, cattle, chickens, milk, pork, turkeys and eggs said that many of their members have also paid high prices for corn and that singling out ethanol plants for assistance is unjustified.

In a letter to Secretary Schafer, the groups expressed concern that the government would consider adding additional support for the corn-based ethanol industry. "The federal government already supports ethanol producers through the Renewable Fuel Standard mandate; the blender's credit for fuel companies that utilize ethanol; and a tariff on imported ethanol. The three legs of support for domestic ethanol have already had a serious impact on animal agriculture," the letter read.

The letter reminded the Secretary that that the high price of corn has caused "real pain in animal agriculture" with poultry companies having been forced to close several plants, and more than 3,000 jobs having been lost.

"High commodity prices have been wreaking havoc in animal agriculture for almost two years," the groups wrote. "Yet no one at USDA has suggested that the government could provide loan funds to cover our members' losses in the corn market."

Joining in the letter were the American Meat Institute, National Cattlemen's Beef Assn., National Chicken Council, National Meat Association, National Milk Producers Federation, National Pork Producers Council, National Turkey Federation and United Egg Producers.
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