CALGARY – Alberta’s agriculture minister says he worries that the province’s biofuel industry will be taken over by big corporations, which will muscle out small producers, just like in the cattle slaughter industry.
“If there’s a dollar to be made it doesn’t take long for the big boys, so to speak, to come in and make it pretty tough for the primary producers,” George Groeneveld told delegates at the Agricore United annual meeting Feb. 7-8.
Groeneveld said Alberta has potential to become a world leader in the development of biodiesel and ethanol, which could create a windfall for farmers who produce crops needed by the biofuel plants.
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“I’m determined, and I hope the rest of the government is, to keep the primary producers involved in this. We always seem to have the trickle effect on the bottom. It’s so important you people get into the value-added part of it,” said Groeneveld.
Before Cargill built its beef processing plant in High River, Alta., and Tyson bought a beef plant in Brooks, Alta., small packing plants were located across the Prairies, he said. Now only a handful remain, he added.
“Being a cowboy as well, 15 years ago I was probably one of them that thought when Cargill and Tyson came in this would be great for our cattle industry. But I think I have to choke back on those words right now. I don’t like to see that happen in the grain industry right now. I certainly see some similarities showing up.”
In an interview later, Groeneveld said he had nothing against Cargill and Tyson, but their size has forced smaller packing plants out of business because they couldn’t produce as cheaply.
“What they did with the size and scope, they drove virtually all our small processing facilities out of business. We only have one left in Calgary (XL Beef) and I’m sure they’re struggling,” said Groeneveld.
He said he has heard that biofuel project supporters are meeting with government and looking to set up in Alberta.
“These are the big boys I was talking about,” Groeneveld said.
“My understanding is they’re quite willing to move in here and set up shop. They have unlimited amounts of money, they’re not looking for government money to get set up here. We certainly don’t want to see that happen with the grain sector,” he said.
Barb Isman, president of the Canola Council of Canada isn’t worried about big corporations taking over the industry.
“This is such a bogus argument. Canola used to be $5.50 a year ago and now it’s $8.50. That difference, almost a billion dollars, is benefiting every single farmer that grows canola. The biofuels revolution benefits every grower. We shouldn’t forget that.”
Isman said she knows of four potential biodiesel projects, and at least three intend to involve grower equity.
“These are decent scale plants, so they’re not going to go broke, and they have the technical expertise they need so they aren’t going to run into quality problems,” she said.
Lionel LaBelle, past-president of the Saskatchewan Ethanol Development Council, said if the Alberta government wants to limit large biofuel players, it must implement appropriate policies.
The Alberta government has a $239 million biofuel program, but critics say it lacks clear guidelines.
“I’d like to kick the Alberta government in the knees. They’re missing the mark,” said LaBelle.
They say if government wants to ensure farmers involvement it needs to put a cap on how much one project can get and then show a bias for producer plants.
“If they don’t cap it, one producer could get $112 million. That’s a crazy program,” said LaBelle.
