ETHANOL. Is it a bonafide economic development rocket booster or a ship whose voyage will never reach shore?
The arguments on either side of the debate allow scant room for compromise, which makes key policy decisions difficult and hotly contested.
Yet difficult decisions are necessary to the long-term well-being of rural areas. Ethanol plans now being bandied about on the Prairies could provide part of the puzzle to rural economic development if they are properly carried out.
It will come down to the execution of sound business plans that weigh all the risks and that include built-in contingencies to deal with them.
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Promises in Saskatchewan and Manitoba to introduce legislation that would mandate ethanol content in gasoline have an ethanol industry on the cusp of expansion.
Those plans were delayed in Saskatchewan when the first in a series of anticipated plants failed to find enough investors. It was a disquieting sign and reason for caution, but the ethanol concept remains valid, as shown by the experience at Pound-Maker Agventures near Lanigan, Sask.
Ethanol opponents note potential obstacles that must be addressed. Some say it takes more energy to make ethanol than what is produced. Another argument has it that ethanol plants that use grain will create a feed shortage on the Prairies and threaten livestock industries. Increased grain needs could also force ethanol plants and livestock producers to import U.S. corn when local feed grain is difficult to find.
Those involved with ethanol production discount the first argument about production inefficiency because they say it is based on outdated models.
But the feed grain argument is not as easily refuted. It requires a leap of faith. There may not be enough feed grain now grown on the Prairies to satisfy both a robust ethanol industry and a growing livestock industry.
It is hoped that farmers will shift crop rotations in lock-step with ethanol expansion and grow more CPS wheats, winter wheats and other higher starch grains needed for ethanol production.
It might also allow farmers in fusarium-prone zones to grow resistant varieties not suited for other purposes. The grain byproduct of ethanol production is a high-value feed that should encourage more cattle feeding near plants.
If ethanol expansion is to avoid the rocky shoals of other diversification plans that have come and gone during the last 20 years, ethanol expansion must ensure farmers are closely involved and able to adjust seeding plans to meet the demands of the new markets. Expansion must also be co-ordinated on a prairie-wide scale to avoid overbuilding.
Governments should act not as long-term owners but as primers to ensure a healthy start.
