Thursday, January 31, 2008

Are rural communities really cashing in on ethanol?

Advocates for ethanol say the industry is producing thousands of jobs for Iowans as more plants are built. While ethanol has meant more jobs for Iowa, the industry does not quite live up to the hype for rural communities, Bill Bishop reports for the Daily Yonder.

"The gains to rural communities are real (from ethanol), but they're not as big as folks have made them out to be," Iowa State University economist David Swenson said at a North Dakota Grain Dealers Association meeting in Fargo. Swenson said plants have created many jobs but nowhere near the 47,000 jobs some groups claim. Ethanol has driven up the price of food and farmland — two clear benefits for farmers — but rural communities are not cashing in all that much, according to Swenson.

"The economist writes that these new plants and their employees will stimulate other economic activity — they will have 'multiplier' effects in the economy," Bishop writes. "But even when these are counted, the average plant will support a total of 133 jobs — not bad, but not a savior for rural Iowa's economy. At most, 5,400 jobs in Iowa can be attributed to ethanol production." (Read more)

At the Iowa Renewable Fuels Summit today, another economist, John Urbanchuk, will unveil his study that shows biofuels are worth $12.7 billion to the state, reports the Des Moines Register. "The study shows that Iowa's biofuels industry, the largest in the nation, generated $2.9 billion in income for Iowa households, created more than 96,000 jobs in the Iowa economy and led to about $790 million in state tax revenues," writes Jerry Perkins. (Read more) Register map shows ethanol and other biofuel plants in Iowa. An interactive version is here.

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