Lotfeeding

Qld ethanol mandate will increase food and fuel prices, livestock industries warn

Beef Central, 18/05/2015

AN ‘Alliance against ethanol mandates’ says the recent Queensland Parliamentary motion in support of an ethanol mandate indicated that the two major political parties in the state were willing to sacrifice consumers in order to support their flawed policy.

don-mackay

Don Mackay

Alliance spokesman and Australian Lot Feeders Association president Don Mackay said the group had called on the Queensland Government to explain to the general public why it is pursuing an ethanol mandate when “consumers don’t want the product, mandates increase food and fuel prices, the policy costs outweigh any purported benefit and the ethanol sector is uneconomic without such Government support.”

“Mandates force service stations to blend regular unleaded petrol with ethanol, a product that consumers don’t want as demonstrated by the twenty three per cent decline in national sales over the last four years,” Mr Mackay said.

“Ethanol is corrosive, has moisture attraction properties and is not compatible with small engines, motorbikes and around fifteen percent of cars. Consumers are also increasingly purchasing vehicles which require diesel and premium unleaded petrol.”

“As 57 percent of Queensland’s ethanol production is derived from grain, an ethanol mandate would impose an inflexible demand for ethanol (and hence grain) meaning that during dry and hence low grain production years, a considerable portion of the Qld grain crop will be diverted to fuel and not food production,” Mr Mackay said.

Independent research had determined a 10pc mandate (as proposed by the Katter United Party) would lead to a 50pc increase in demand and 22pc increase in the price of sorghum during drought years.

“With grain the biggest or second biggest cost in a kilogram of beef, pork, dairy and chicken, an ethanol mandate will place significant inflationary pressure on food prices during such times,” Mr Mackay said.

“More than 80pc of Qld is currently in drought (the largest area on record) and the Bureau of Meteorology has confirmed that a substantial El Nino event will occur, thereby aggravating and extending the impacts of a mandate.”

“Accordingly, the food production and price impact from the proposed mandate could have a severe impact on every Queenslander,” he said.

The reasons why ethanol mandates are opposed are many, and are essentially due to the large number of unintended negative consequences, with the costs from the policy significantly outweighing any purported benefit, Mr Mackay said.

“The debate over the impact of ethanol mandates on food availability and price has been raging internationally for years. We need to learn from the ‘food versus fuel’ mistakes made by Governments in other states and countries.”

“No industry should have a Government imposed demand for its product, particularly when consumers don’t want it, it increases food and fuel prices, the policy costs outweigh any purported benefit and the ethanol sector is uneconomic without such support.”

 

  • The ‘Alliance Against Ethanol Mandates’ comprises organisations that represent the marine industry, stock feed manufacturers, and the dairy, grainfed beef, pork, chicken and egg industries. This list is set to grow in coming days, supporters say.

 

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