Iowa Energy Leaders Want Congress To Allow Loans To Non-Farmers

Leaders in Iowa’s renewable energy field are asking Congressional leaders to change federal law so Farm Credit would be allowed to make loans to build ethanol and biodiesel plants that do not have a majority of farmer-stockholders as owners.

harkin.jpgThis story in Wallaces Farmer says they’ve sent a letter to both of Iowa’s U.S. Senators, Chuck Grassley and Tom Harkin, and to other senators asking for support of the change to Farm Credit’s lending authority because of the problems expanding the renewable fuels industry and maintaining its profitability. The new farm bill, currently under debate, has an amendment with the change:grassley.jpg

The current economic climate is challenging, to say the least,” says Sam Cogdill, president of Amaizing Energy LLC, an ethanol plant at Denison in western Iowa. He is one of eight people representing ethanol and biodiesel plants across the state who signed the letter.

“We understand the struggles of expanding the ethanol and biodiesel industry and trying to keep it profitable in changing economic times,” he adds. “Rising input costs and other factors are creating increasingly smaller margins for ethanol and biodiesel producers.”

But bankers are balking at the idea:

The Farm Credit System was created under a federal charter years ago and operates as a cooperative. “As a government-sponsored lender, they have certain advantages we don’t have,” says Jim Schipper, president of American State Bank at Osceola and current chairman of the Iowa Bankers Association.

Domestic Fuel (Alternative Fuel News), Nov. 13, 2007