NCGA Condemns
Cargill’s Plan to Proceed with El Salvador Dehydration
Plant (9-7-04)
The National
Corn Growers Association (NCGA) today expressed disappointment
in Cargill’s decision to proceed
with investment plans for an ethanol dehydration plant in El
Salvador. The decision undermines
the relationship Cargill has established with U.S. corn growers
and circumvents the intended purpose of the Caribbean Basin Initiative
(CBI), according to a letter sent by NCGA to Cargill President
and Chief Operating Officer Greg Page.
“NCGA believes Cargill’s decision is not in the best
interest of the company or the ethanol industry in the United States,” NCGA
President Dee Vaughan said in the letter. “We reiterate our
desire for Cargill to look closer to home when increasing its investment
in the ethanol industry.”
Despite widespread opposition voiced by U.S. farmers and members
of Congress, Cargill recently announced it would move forward with
plans to proceed with the dehydration plant. NCGA and other groups
say Cargill is exploiting a loophole in the CBI legislation that
was designed to promote economic development in Caribbean Basin
trading partners.
The CBI allows
an amount of ethanol equivalent to 7 percent of total U.S. production
to come into the United
States duty-free.
Cargill’s El Salvador plant would take the water out of Brazilian
ethanol, which would then be shipped to the United States duty-free.
“The Caribbean Basin Initiative should benefit farmers in
that region and spur economic development in the basin,” the
letter states. “It should not be used as a method to trans-ship
Brazilian ethanol.”
In response
to Cargill’s actions, Senate Finance Committee
Chairman Charles Grassley (R-Iowa) introduced legislation that
would prevent an increasing amount of imported ethanol from bypassing
the standard import tariff. Other lawmakers have proposed legislation
that would allow only ethanol produced in the United States to
qualify for incentives under the pending Renewable Fuels Standard
(RFS). Vaughan said Cargill’s plans undercut the spirit of
the RFS.
“The United States is on the verge of enacting the Renewable
Fuels Standard, and the domestic ethanol industry is uniquely poised
to contribute to the fuel security of our nation while injecting
critical investment capital into the Corn Belt,” the letter
says.
Vaughan said
U.S. corn growers would appreciate the opportunity to work with
Cargill to advance the domestic
ethanol industry. “While
we understand Cargill is a global company, farmers in the United
States would welcome new opportunities to work with the company
to expand the rural economy and increase U.S. agriculture exports,” the
letter says.
To read the letter in its entirety, click here.