09/11/08 Ethanol subsidy cuts

Ethanol producers today are getting government subsidies and often they are plugging that into their balance sheets. Its part of their annual revenue stream. Agriculture Secretary Ed Schafer has been traveling the country this past week talking about ethanol subsidies. SCHAFER "I believe it's very dangerous for producers to count on that to be permanent funding. If you build those into your operating costs you've got a real big problem because someday these should go away." Schafer says that subsidies are fine for any startup venture but when the industry reaches a point where it established the subsidies need to go. SCHAFER "Because they've been built in today I think we can't just shut them off. I think it's important to look and say here's the target, we are going to gradually reduce them so that you can adjust your operations to operate without them." That target should start happening when the ethanol industry is profitable and able to produce 34 billion gallons annually. SCHAFER "When that all gets in place we should remove the subsidies." Schafer says that will be 13 to 14 years from now. Pacific Ethanol in Burley and Idaho Ethanol in Caldwell are the only plants currently in production in Idaho. Voice of Idaho Agriculture Bill Scott