Thursday, November 02, 2006
Environment - "As Investors Covet Ethanol, Farmers Resist "
A fascinating front-page story in the NY Times today, headed "As Investors Covet Ethanol, Farmers Resist." Here is how it begins:
MALTA BEND, Mo. — Farmers do not see fast money very often. But with big profits gushing forth from ethanol plants, dozens of Wall Street bankers, in loafers and suits, have been descending on the cornfields of the Midwest promising to make thousands of farmers rich overnight.
Most of them, though, are proving surprisingly reluctant to cash in.
In this sleepy town of 250, for example, people have lived on the edge of despair for decades, dreaming of a way to make their corn worth more than $2 a bushel. Seeking a way out, a group of farmers from here and surrounding communities scoured the state three years ago to raise the money for a $60 million plant that would turn some of their corn into ethanol for cars and lift their incomes.
When ethanol prices soared to more than $4 a gallon this summer, the plant became a roaring success.
And that is when the big money types came knocking. New offers — some as high as $275 million — have rolled in just about every week from an investment bank or hedge fund seeking to buy the plant. For the farmers, particularly those who borrowed part of their investment, a sale could have meant a profit of as much as 10 times what they put in.
So far, however, the plant owners have said no. To them — and to many other farmers who have invested in ethanol around the country — the ethanol plants represent more than a winning lottery ticket. Instead, they signify an emotional investment in the future of their farms and communities, a chance for greater independence and a sense of pride that they are helping make America less dependent on foreign oil.