STOP SUBSIDIZING HAY WHILE THE SUN IS SHINING:

Midwest farms reap benefits of ethanol boom (Judy Keen, 10/02/06, USA TODAY)

Ethanol plants are changing farming across the Midwest. The last time there was such a dramatic shift in agriculture was "when electricity came to the rural people" in the 1930s and '40s, says Dave Hughes, president of the township board and a farmer who invested in the plant. [...]

Rising gas prices and the push for less dependence on foreign oil have increased demand for ethanol, which is made by converting the starch in corn into sugars that are fermented and distilled. When it's blended with gasoline, ethanol can reduce carbon monoxide emissions. Legislation signed by President Bush last year added urgency: It requires oil refiners to use 4 billion gallons of renewable fuel this year and 7.5 billion gallons by 2012.

Those factors have created a rapidly expanding industry that is centered in the rural Midwest.

There are 105 ethanol plants in operation; almost half are owned by local farmers, according to the Renewable Fuels Association, an industry group. Forty-one more are under construction, and seven are expanding. Capacity is 5 billion gallons a year. When the new plants are running, that number will grow to 7.9 billion.

Many small ethanol producers qualify for federal and state tax credits and loan guarantees.

"I think the boom will continue," says Bob Dinneen, president of the Renewable Fuels Association. "The nation needs to have more domestic renewable energy, and ethanol is going to satisfy a big part of that. ... Farmers ought to be re-evaluating what they are planting and responding to the market signals."

If we can make folks hate farmers as much as oil companies, maybe we can finally cut our agriculture subsidies.

Posted by Orrin Judd at October 2, 2006 7:57 AM