Archive for June 2008
Biodiesel & subsidies

I have just returned from a business trip this week in and around Peoria, Illinois. Tuesday and Wednesday we spent most of our time listening to guest speakers brought in by our hosts, GROWMARK Inc. Some of these speakers were motivational in nature and others addressed improving our marketing and communications skills. Thursday we visited two locations of Illini FS, a member co-operative of GROWMARK who is an agricultural retailer located near Champaign, Illinois. We reviewed some of the latest technology they are using such as global positioning systems to enhance productivity in agronomy services for farmers. By utilizing this new technology they are able to track all of their rolling stock equipment across five counties and direct drivers more efficiently to farmers fields increasing response times and productivity of their people.
Our last stop was to visit a large biodiesel manufacturing plant called Incobrasa, located at Gilman, Illinois. This company originally began operations more than 50 years ago in Brazil and in 1982 started purchasing land in the United States. In 1995 Incobrasa began construction of a new crushing facility with the capacity to process 2000 tons of soybeans a day. Major products that they produce at the plant are biodiesel, soybean meal, crude soybean oil and soy hulls used for animal feed. In 2003 they built a bottling and packaging facility and are now supply all the schools in the United States with soybean oil or more commonly known by consumers as “vegetable oil.”
Incobrasa currently owns more than 22,000 acres of land which is in soybean production. The plant is running at full capacity with three shifts and the 22,000 acres of soybeans they are growing only represents only one week of production supply! This plant has the ability to produce 30 million gallons of biodiesel annually. Strategically positioned close to main railroad lines and major expressways, this allows Incobrasa to receive and ship product from across the United States. Incobrasa receives one dollar for every gallon of biodiesel they produce form the United States government. Otherwise production of the biodiesel fuel from soybeans would not make economical sense and they would lose money. As mentioned earlier this plant is running at full capacity.
During a question and answer session with Douglas Santos, an Incobrasa company representative, I asked him if they had any plans to expand the current operation. His response to me was an emphatic, “no.” It makes me wonder that despite the enormous success the biodiesel plant is experiencing, if they feel the one dollar subsidy they receive could be discontinued at any time? It is no secret that other country’s and organizations are calling for the end of government incentives to produce biofuels and instead divert crop production back to food, helping reduce costs and increase global supply. This begs the question whether or not governments should be involved in subsidizing companies to produce environmentally friendly fuels from row crops like soybeans and corn? There does not appear to be an easy answer to this question, except maybe at Incobrasa, where they believe it is the right thing to do!
Junk science
Back in January of this year our University of Guelph, Agricultural Communications class talked at great length about the pending implementation of the Ontario government’s retail pesticide legislation this fall. Almost all of us expressed concern at the time that this initial pesticide ban aimed primarily at the consumer market, could eventually lead to possible prohibitive restrictions for Ontario farmers. Most people don’t know that unlike the consumer pesticide market, Ontario farmers are among the most knowledgeable and highly trained users of crop protection products. Regular testing and licensing by farmers is standard practice for use of these products. So comparing the retail consumer market to the agriculture industry in my mind is like trying to compare apples to oranges.
Putting aside that argument for the moment, I came across an excellent column, “The pesticide report that nobody read,” written in the National Post by Terence Corcoran, from the Financial Post. In his column Mr. Corcoran writes about this misrepresentation that has occurred on the whole pesticide issue. In it he refers to the “junk science” activists use to get their point across to the public. I have enclosed the link below to Mr. Corcoran’s column.
http://www.nationalpost.com/opinion/columnists/story.html?id=592236&p=1
It is easy to see how the truth about safe and sensible use of pesticides can distorted by activists using “junk science.”
