Ethanol demands may consume grain crops: farmers

Farmers say one fifth of New South Wales’ grain crop could be eaten up by changes to the proportion of ethanol in unleaded fuel.

The State Government announced last month it would quadruple the ethanol mandate within three years.

Unleaded petrol will contain 10 per cent ethanol from mid 2011.

Dougal Gordon, from the Australian Lot Feeders Association says the increased demand will cause food prices to rise.

“Based on the average quantity of grain produced over the last seven or eight years, about 21.5 per cent of the state’s average grain crop could be diverted away from food production to ethanol production,” he said.

“That’s going to have a significant impact on food prices, particularly during dry times and Australia invariably has dry periods where we have low production of grain.

Australian Broadcasting Corporation