Examine ethanol with eyes open

By Gene Lucht

Iowa Farmer Today

Gary Lamb has farmed for 55 years near Chelsea. He has served as president of the Iowa Farmers Union, chairman of the Iowa State Committee of the Farm Service Agency and agricultural liaison for Sen. Tom Harkin, D-Iowa.

IFT: Ethanol has been the hot topic of the year in farm circles. But,you sound like you have some concerns about the trend.

Lamb: IÂ’m a supporter of ethanol and biodiesel and other renewable fuels. But, IÂ’ve farmed for 55 years, and in that time IÂ’ve come to the conclusion farmers as a group tend to have two strong characteristics: WeÂ’re optimists and we think short term. And, right now IÂ’m just afraid that might be where weÂ’re at.

I know the situation isnÂ’t identical, but to me there seem to be a few too many similarities to the late-1970s. At that time, exports were going to be our economic salvation.

And, when there was a problem the bottom fell out of our farm economy. Land values fell 60 percent. Today, it seems to me there is at least the possibility ethanol has replaced exports in that equation.

Look, IÂ’m not trying to throw cold water on ethanol. I think it is a wonderful product. But, I want people to be going into this with their eyes open. And, I want them to think long term.

IFT: Even if the bottom doesn’t fall out of this market and ­ if I understand you rightly ­ you are not necessarily predicting it will, are there other clouds in the silver lining that is ethanol?

Lamb: Of course. ThereÂ’s always a downside to every good trend, and ethanol is no different. Right now, weÂ’re focusing on the good. The rising demand for corn to feed the 63 current or planned ethanol plants in the state has brought the price of corn to nearly $4 a bushel. Grain farmers are getting more of their income from the market, rather than the mailbox. There is more investment in rural Iowa. ThatÂ’s all good. But, the need for more corn means more marginal land will probably be coming into row-crop production.

That could lead to environmental problems down the road. The move to put hay or soybean ground into corn could mean higher fertilizer applications, and that could also have environmental impacts.

And, letÂ’s not forget about water needs. Iowa is the largest ethanol-producing state, but Nebraska is second. Yet, a large percentage of NebraskaÂ’s corn is irrigated with the water coming out of the Ogallala Aquifer.

The water level in that aquifer is already dropping. At what point does that become a major problem?

IFT: What about the effects of higher land prices?

Lamb: I believe land values rose 16.5 percent in Iowa last year and they are going up faster this year. Fifty percent of our land is farmed by tenants or renters, and cash rents in many areas have risen to between $250 and $300 an acre.

That effectively pushes young farmers out of the picture in many cases.

IFT: Any other concerns related to the price surge?

Lamb: I hope this doesnÂ’t push too many people out of the livestock industry. Iowa State University did a study saying a 100-million-gallon ethanol plant would use 37 million bushels of corn and would directly create about 80 jobs.

If we would use that same 37 million bushels of corn to expand the livestock industry, it would create more than 1,300 jobs.

On the plus side, I believe one of the reasons large investor owned CAFOs (confined animal feeding operations) took over a large part of the hog industry is grain was so cheap they could buy it for less than an Iowa farmer could grow it. This grain price jump might slow that trend toward investor-owned livestock operations and give some advantage back to farmers who feed the grain they grow.

IFT: Are there government or policy changes that would affect all this or address these concerns?

Lamb: If we are really serious about reducing our fossil-fuel dependency, we must spend equal time, energy, thought and research dollars on other types of renewable energy in addition to corn-based ethanol. These could include cellulosic ethanol, biomass, wind, solar, geothermal, methane, and even gasification or clean coal technology.

We could also keep funding levels up for the CRP and work to expand the Conservation Security Program (CSP). We could promote energy-savings programs. We could target more of our farm program spending toward beginning farmers.

IFT: Despite all these concerns, you seem fairly upbeat.

Lamb: I firmly believe biofuels like corn ethanol and soy diesel can and should be a vital part of our renewable fuels future. IÂ’m simply encouraging us all to think long-term and do this right while we have the chance. LetÂ’s not get so caught up in the short-term situation that we create problems for future generations on the land.

You know, allowing ourselves to be convinced we cannot only feed our nation and a big part of the world, but also fuel it is a very noble idea. But, it may be about as realistic as believing we can conduct a pre-emptive war in a nation like Iraq, where three cultures have been at each otherÂ’s throats for 1,400 years, and establish an American type of Democracy. LetÂ’s think this through.

Copyright © 2007 Iowa Farmer Today