Ethanol aid has feedlot farmers up in arms By MARK DAVIS Australia's feedlot industry has attacked the federal government's subsidies for ethanol production, arguing they will hurt rural beef and pork producers by driving up the price of feed grains. The executive director of the Australian Lot Feeders Association, Rob Sewell, said the ethanol indus try would be competing directly against the graindependent live- stock industry for wheat and other grains. 'We don't object to any industry taking up the opportunity to buy feed grain, but if the ethanol pro ducers are subsidised it will intro duce signicant distortions into the market,' Mr Sewell said. 'This government intervention is discrim- inating against businesses compet ing for a common input.' A report commissioned by ALFA from consultants Macarthur Agribusiness estimates that the government's 38 a litre ethanol production grant is equivalent to a subsidy on the industry's grain and molasses inputs of $152 per tonne of sorghum and $98 per tonne of molasses. The report said the intensive livestock industry's demand for feed grains already outstripped supply and the proposed new ethanol plants in ueensland and northern NSW would compete directly with the feedlot sector. Australian Pork's general man- ager, policy, Kathleen Plowman, said pork producers had already beer ' hard hit by the impact of the drought on grain prices. 'This subsidy will generate fur- ther competition for feed grain. It is like the last nail in the cofn,' she said. The rural backlash is politically embarrassing to the government, which has argued that assisting the ethanol industry will boost economic activity in regional Australia and pro- vide new demand for wheat an: sugar growers. But the feedlot sector argues that in helping one regionally basec industry, the government is distort- ing markets and hurting other rura producers. Australian Financial Review