WASHINGTON – In a recent letter sent to Cargill Corporation, the National Corn Growers Association strongly condemned plans by the company to import Brazilian ethanol through El Salvador as a means of circumventing U.S. tariffs on imported ethanol.
Going overseas. Cargill reportedly has plans to build a dehydration plant in El Salvador that will convert ethanol from Brazil into fuel grade ethanol.
Under Caribbean Basin Initiative provisions, the refined ethanol may then be sent to the United States duty-free.
“It is disheartening and curious why Cargill would decide to pursue an economic opportunity in Central America when farmers in Minnesota and throughout the Corn Belt are willing to invest their own capital to meet the domestic energy needs of our country,” said Dee Vaughan, NCGA president and a corn farmer from Dumas, Texas.
U.S. industry suffers. “While this may be a legitimate and legal use of the CBI, it runs counter to the intent and spirit of other U.S. legislation that is primarily responsible for the growth of the ethanol industry in the United States.”
Vaughan said Cargill is exploiting a loophole in the CBI to enhance its profits.
“All Cargill plans to do is remove any water left in the ethanol that wasn’t taken out in Brazil,” he said. “The company is taking advantage of provisions of the CBI that are designed to provide economic opportunity for those underdeveloped nations.”
All for naught. For the past 20 years, NCGA has worked side-by-side with farmers, industry and government to take ethanol production from a cottage industry into a vibrant, robust alternative fuels market. U.S. ethanol plants expect to produce more than 3 billion gallons in 2004, and ethanol now adds more than $15.3 billion of gross output to the U.S. economy.
The industry has also provided a boost to rural development, creating approximately 143,000 jobs across the United States.
Vaughan stated that Cargill is not investing in any of the 75 ethanol plants currently in operation or in the 13 additional plants under construction.
He expressed fears that Cargill’s actions will further erode support for the agricultural trade agenda in the United States.
Taking advantage. CBI and CAFTA were designed to promote economic development in regions that are depressed – not to serve as a vehicle for enhancing the bottom line of a multi-national companies like Cargill, Vaughan said.
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