Ethanol: How farmers get screwed and big Ag gets rich
Every industrial hemp discussion touches on ethanol. Every ethanol discussion touches on processing/refining capacity. Unfortunately, not every processing/refining discussion touches on farmer-owned facilities. The fact is that famers have been getting screwed out of the value--added processing that occurs after harvest. Capital intensive processing and refining facilities attract big business' deep pockets, and that means profit maximization. As HemperFi has already reported, farmer-owned processing plants are good, when executed properly, but as per recent experience in Manitoba, such plans can also lead astray.
Although it's a lengthy read, I've recently stumbled upon David Morris' excellent article Ownership Matters: Three Steps to Ensure a Biofuels Industry That Truly Benefits Rural America. In Ownership Matters, Morris lays out three governing principles to ensure an ethanol economy with the rural farmer as an active participant. Quoted directly from his work, the three principles are:
-- First, create an aggressive and broad national and even international educational effort focused on the importance of and benefits of farmer and local ownership.
-- Second, establish mechanisms to allow farmer-owners of ethanol facilities to get their equity out of the biorefinery while enabling continued local ownership.
--Third, change the federal ethanol incentive into a producer payment that favors local and farmer ownership.
According to Morris, John F. Kennedy once described Farming as " the only business where you buy everything retail and sell everything wholesale." Profitable rural farming hinges on equitable participation in profit margins enjoyed at the retail-end of agricultural output, not at the wholesale end.
As Morris states in The Carbohydrate Economy, Biofuels and the Net Energy Debate:
For farmers and rural areas to truly reap the rewards of a carbohydrate economy they must gain some of the value created by processing the agricultural raw materials into finished products. That can occur only if the farmer and rural residents own a share in the processing or manufacturing facility.