The new gold rush: how farmers are set to fuel America's future

Rush to grow corn for ethanol - but is it the best solution for environment? Ed Pilkington in Churdan, IowaFriday January 26, 2007The Guardian A farmer at the Tall Corn Ethanol plant in Iowa. Photo: Charlie Neibergall/AP
George Naylor's farm occupies 470 acres of some of the richest agricultural land in the world, alluvial loam deposited by the Wisconsin glacier 10,000 years ago. At this time of year it is a great white void. For miles around there is nothing but snow broken only by the occasional copse or lonely farmstead.
His grandfather, an English migrant from Derbyshire, bought the farm in 1918. Over the years the dictates of the market pushed farmers towards mass production of fewer crops. When George inherited the land in 1976 he had plans for an organic oats farm, but soon found the sums didn't work out.


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So, like all his neighbours, he tore down the fences to make way for tractors and harvesting equipment. He doubled his holding to 470 acres by renting a neighbour's land to add economies of scale. Many farmsteads were razed as their owners drifted into the towns and all that was left was row upon row of corn and soya bean. And that's how George's farm came to look as it does today: a flat mattress of green and gold in summer, a great white void in winter.
Recently George has heard his neighbours say they are taking the final step to turn this heartland of the Mid-West into the Cornbelt of America, ending the rotation of corn and soya bean that has become the norm over the past 30 years.
What is motivating George's neighbours is the rising demand for ethanol, a biofuel that is mixed with petrol to bring down prices at the pump and, though not without controversy, to help reduce carbon dioxide emissions that contribute to global warming.
Even before this week, this was a big growth area. Production of ethanol doubled between 2001 and 2005. The chief economist of the US department of agriculture has called it "the most stunning development in agricultural markets today".
Then, on Tuesday night, George Bush placed a rocket beneath the alluvial plains of Iowa. In his state of the union address he announced, as part of his plan to move away from dependence on Middle Eastern oil, an unexpectedly dramatic goal of cutting the use of petrol by 20% over the next decade. To do so, he ramped up the target for production of alternative fuels to 35bn gallons a year by 2017. That's a fivefold increase on present targets, and would require alternative fuel producers to increase by seven times their current output.
In America the alternative fuel that dwarfs any other is ethanol; the plant used most often to produce it is corn; and the state that grows the most corn is Iowa. Corn prices have already started to rise, and the expectation after this week's blast from Washington is that they can only keep rising. So the economic logic for George's neighbours is simple.
Iowa produces almost half the entire output of ethanol in the US. It has 21 ethanol-producing plants and many more are in the pipeline. If three-quarters of those are built, the projection is that the state that exports corn throughout America and around the world will soon begin importing it.
"Bush set out a pretty lofty goal," said Bill Couser, president of Lincolnway Energy, which runs one of the state's largest ethanol plants. "But the group that will make it happen is the American farmer, and throughout history they have always exceeded the challenge."
Ron Litterer is one of those farmers Mr Bush will depend on. He was the president's guest at the White House on Tuesday as a leader of the National Corn Growers Association. He now grows half corn, half soya bean, but next year will grow two-thirds corn to meet the ethanol demand. "This is going to be good for the economy of Iowa. Demand for our crops for energy is bound to grow," he says.
But the sudden rush to corn-based ethanol, which some liken to a new gold rush, is causing jitters among environmentalists at national and local level. Friends of the Earth US reckons that at best ethanol reduces emissions of global warming gasses by 13% compared with petrol, and if production plants use coal to heat the corn in the process of extracting its sugars, as many now do, there is no net benefit.
A preferable solution, the group says, would be cellulosic ethanol fermented from sugars extracted from native perennial plants such as switchgrass. It could reduce emissions by as much as 90% with fewer environmental costs, though the technology required to mass produce it is in its infancy. The organisation's expert on biofuels, David Waskow, says what is being lost amid the ethanol hype is a real debate about how to use energy more efficiently. "It is critically important that we don't replace a system of waste of fossil fuels with a similar waste of biofuels," he says.
On the ground in Iowa, environmentalists are also worried about the impact of the final push to corn. With rising prices for the crop, marginal land which is susceptible to erosion is coming under pressure to be put back into cultivation. With 260m tonnes of soil being washed into the rivers every year, an existing problem could turn into a crisis.
The Iowa Environmental Council points out that corn uses more fertiliser than soya bean and so further dependence on the crop will increase the nitrate pollutants seeping into rivers. Levels are so high that Des Moines, the capital of Iowa, has had to build the world's largest extraction system for nitrates to clean its drinking water. The effects are being felt as far away as the Gulf of Mexico, where every summer an aquatic dead zone develops caused in part by the flow of nitrate-rich water from Iowa down the Mississippi.
Another anxiety is that continuous corn crops are more susceptible to weeds and diseases such as western bean cutworms, a moth caterpillar that attacks the ears of the plant. To control them farmers will have to use more pesticides or turn to genetically modified strains that are insect resistant.
For a farmer like George Naylor, scraping a living from tight margins in an increasingly competitive market, the potential downsides are all too evident. But though he's reflected deeply on the causes of the inevitable drift to industrial farming, and believes passionately in the need for intervention from the centre to tame the anarchy of the marketplace, he knows what he'll do should the scramble for corn continue. "Farmers do what they do too much of the time based on greed or fear, which is not a good recipe for anything," he says. "If the emphasis is on corn to produce ethanol, then that's the way it will be. Everybody will pile in, and I'll be among them."