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Jun 3, 2008

The bad oil on ethanol, and a little something on the side.

Despite all of the evidence that biofuels are causing massive disruption to food supplies and massive increases in costs for consumers, has if anything a very negative impact on the environment governments are insisting on ramming more of it down our necks.

An article in the “Australian”, “The bad oil on ethanol.” States some interesting facts.

Like other ethanol producers, a new Dalby plant will receive a commonwealth subsidy to compensate for a 38.14c-a-litre fuel excise, about $34 million for its annual production of 90 million litres, and will need about 250,000 tonnes of grain a year.

Higher feedgrain prices mean higher prices for beef, pork and poultry. What has been overlooked in the debate over alternative fuels in Australia is that food supply and prices - and the battle against inflation - are entwined with the fate of ethanol. (Of course this also means higher prices for all consumer grain products.)

With expanding areas of productive agricultural land being utilized for biofuels - global production doubled to 61 billion litres between 2000 and 2007 - calls are mounting for an end to the government subsidies and mandates that are essential to their production. Former UN reporter on food Jean Ziegler went so far as to describe biofuels as "a crime against humanity".

Now, biofuels are blamed for accelerating food prices and shortages, which have sparked riots in several countries and forced millions deeper into poverty.

World Vision Australia policy director Paul Reynolds says biofuels account for as much as 30 per cent of a 57 per cent hike over the past 12 months in food prices, which have pushed 100 million more people into poverty.

"Biofuels have distorted food production, and the heaviest burden has fallen on the world's poor," Reynolds says.

Conservationists have changed from some of the industry's most vocal supporters to its harshest critics. Greenpeace Asia-Pacific forests campaigner Tiy Chung says Indonesia will destroy four million hectares of rainforest by 2015 for oil palms used for biodiesel. Says Chung: "Carbon being released by deforestation is exceeding levels from gasoline use."

In NSW, the 2 per cent mandate will need 125 million tonnes of ethanol a year to be produced at the Manildra Group's flour plant at Nowra in southern NSW. The Iemma Government insists that Manildra is using only waste products for ethanol.

But Inquirer has established that in addition to waste, the plant is using substantial quantities of wholegrain and commercial-grade starch - a key ingredient in many food, beverage and industrial products - for ethanol production, with inevitable upward pressure on the cost of making those products.

In the face of mounting evidence against any conceived benefits from this action, state governments are continuing to mandate higher levels of biofuels in fuel blends, are they stupid? Well maybe a little but there is another aspect to be factored into the equasion.

Honan the Manildra chief has emerged as Australia's biggest corporate donor, giving $561,300 to the ALP and $389,100 to the Coalition parties in the previous financial year. Before the 2007 poll, Honan gave $50,000 to independent federal MP Tony Windsor, a vocal ethanol advocate.

Prime Minister John Howard was forced to retract a claim he had not met Honan, who had donated $300,000 to the Liberal Party, before the approval an ethanol assistance package.

Honan has since mended fences with much of the ALP and is close to the ruling NSW Right faction, including Premier Morris Iemma, who affirmed his support for ethanol at a conference last month.

"Biofuels are good for the environment, they create jobs, they help farmers, they improve security," Iemma declared.

OK so in return for political ‘donations’ to both sides we are placed by law in the position of being forced to buy a product manufactured by the ‘donor’ whether we like or not. This is reprehensible enough on its own, but we are then told to pay more tax so that the government can pay massive subsidies to the ‘donor’ to produce the stuff.

On top of this we then suffer inflation owing to higher prices for all food products because of a massive increase in demand, then of course the Reserve Bank will, to ‘dampen’ it down increase interest rates.

In return for ‘donations’ we the people are being subjected to little better than a form of slavery to the ‘donor’.

Note; The donations are made to both major parties and a prominent independent. This is a normal business practice.

Those who become heads of such companies are given the following advice on the way up the ladder: -

"Don’t put all your eggs in the same bastard."

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