November 3, 2000

The National Corn Growers Association (NCGA) applauded Wednesday's announcement by USDA of a two-year, $300 million incentive program to increase production of biofuels such as ethanol. Under the program the Commodity Credit Corp. will pay cash incentives to bioenergy producers who increase their purchases of eligible agricultural commodities such as corn and convert that commodity to ethanol or other biofuels. Most of the incentives will be to farmer-owned cooperatives and small energy plants.

"This has the potential to help the ethanol industry use more corn to increase production and boost corn prices. However, this is only half of the issue; the other necessary element is the development of incentives or other programs to increase the demand for ethanol," said Lee Klein, NCGA president, of Battle Creek, NE. "We'll have to look at the program's details before we can accurately assess the potential benefit for ethanol production and corn prices. However, this appears to be tremendous progress on bioenergy and biobased products."

The NCGA, which represents 32,000 dues paying members nationwide, has supported the incentive concept to boost both the purchase of commodities such as corn and the production of ethanol. "We've always upheld the idea of using more renewable resources to make fuels and products that are now made from non-renewable, imported oil," Klein noted. USDA is providing up to $150 million for the program this fiscal year and another $150 million in fiscal 2002.