Sugar industry pleads for continued biofuels subsidy scheme

The Queensland Farmers Federation is calling on the federal government to give special consideration to the sugar industry before scrapping a biofuels subsidy program. A review of the subsidy program has been ordered, but there are concerns the government will not continue the A$40 million (US$38.16 million) a year scheme. Fuel ethanol is currently made from sugarcane and grain, but there is concern the use of grain for fuel is pushing up food prices. Chief Executive John Cherry says he is not confident the program will be included in the upcoming budget. “We can understand the government would see problems, with the government seeing ethanol subsidies going into the grains industry, but the argument for putting ethanol subsidies in the sugar industry are completely different,” he said. “They’re not distorting the food prices, they produce much better greenhouse gas outcomes and they’re also very, very good from the point of view of rural industry in Queensland.” (May 2, 2008)