Chapter 4: Social Sustainability
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Beyond their environmental impacts, the attraction of biofuels for many is the promise of increased opportunities for small farmers and businesses.
The ethanol industry in this country has already developed a split personality. About 40% of US ethanol plants are farmer owned, with a capacity to produce 1.6 billion gallons of ethanol of the 5 billion or so produced this year.53 Yet a handful of large companies, like ADM and Cargill, own an increasing share of the market and are aggressively expanding. The increase in the size and complexity of ethanol plants from 40 to 100 million gallons per year and up is making it more and more difficult for farmers’ co-ops to compete. Similarly, while biodiesel is largely a small-scale local industry, the building of the first 100 million gallons per year plant in Washington, which will be importing much of its feedstock, and the entry into the market of big oil refiners producing hydrogenation-derived renewable diesel, heralds a similar direction in the biodiesel industry.
Brazil has seen a similar development with the ethanol industry, with sugarcane production highly concentrated in the hands of a few players. As their biodiesel industry has developed they have created an innovative program to support local farmers. The Social Fuel Stamp provides tax breaks to biodiesel producers who source their feedstocks from family farms growing appropriate crops in underdeveloped parts of the country. The producer is then allowed to use the Social Fuel Stamp when marketing their product.
For the biofuels industry to provide as much advantage to Oregon farmers as possible, farmers need to be partners in the profits of the industry, not merely suppliers of commodity crops for biofuels production. Co-owned mobile processing units, such as mobile oilseed crushers, are examples of potential value-added enterprises for farmers. Mobile processing units will also increase the efficiency of operations. And local communities will retain more of a consumer’s fuel dollar by producing biofuels as well as biofuel feedstocks. In the long-term, small-scale biofuel plants are likely to be a vital part of a more decentralized and robust energy system.
