Farmers are being short-sighted when they use this year’s high grain prices as a reason to pull back from plans to invest in biofuel, says federal agriculture minister Gerry Ritz.
Farmer investments in biofuel projects are limited in some communities because grain and oilseed markets are suddenly returning a profit, he told the House of Commons agriculture committee studying a bill that would allow the government to require at least five percent ethanol in fuel by 2010 and two percent biodiesel content by 2012.
It is putting some ethanol plant projects in jeopardy for lack of investment.
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“Their farmers are saying, ‘the marketplace is paying. I’m going to Arizona. Don’t bother me with that,’ ” Ritz said.
“I condemn them for that. I hope the media put that in their papers because it is just so short-sighted of these producers to think that one year of good prices is going to be the be-all-and-end-all.”
Ritz said farmers must become better long-term thinkers.
“I’ve heard this directly from producers that were interested in investing in small plants now saying, ‘I don’t need to do that, the cash flow is there,’ ” he said.
“But in the next breath they condemn us for not jumping all over the cost of inputs. Here’s your opportunity, guys, to broaden your scope, to diversify your operation and have a different door to deliver to, that you own.”
He said too few farmers look at the big picture and recognize that high commodity prices cannot be counted on to continue.
Ritz was speaking Feb. 7 as the Commons agriculture committee opened hearings into government legislation, C-33, that would offer incentives for producer investment in renewable fuel plants.
He said he did not want farmers coming to government in two or three years to ask for another chance to invest because they had missed the first opportunity.
“The window is closing very, very quickly,” Ritz said.
“If we don’t have shovels in the ground and plants going up this calendar year, the window closes even more and it starts to close faster and faster as we back this off.”
Earlier, Ritz told MPs that even with the Conservative legislation to amend the laws to require a minimum renewable fuel requirement in Canada’s gasoline, Canada remains far behind competitors such as Brazil and the United States in developing a biofuel industry.
He said Canada has been too slow to react to the opportunity and producers now have to compete with readily available cheap imports.
“There is a concern amongst investors out there that it may be too late to buy market share. Investors are fickle creatures,” Ritz said.
“To get them on board to put their dollars on the line, they have to be assured there is a future, a three-year, five-year, 10-year or 20-year window of opportunity. They see that as shrinking in that we’re late off the mark.”
He said government rules are biased in favour of farmer investment and ownership in the industry, although it is possible “big oil” will be the dominant player if farmers don’t respond.
“I’m throwing down the challenge to producers to roll up their sleeves and make this happen,” he said. “We’re here to backstop them. We’re here to help. We’re here to make this work. I don’t know what else we can do other than sit back and wait for producers to take up that challenge.”
