John Block Reports from Washington

It's such a pleasure harvesting a great corn crop. I love to watch hose golden kernels fill the combine hopper. Before you know it the truck is full and headed for the grain terminal to be processed and exported all over the world. Yet I still have something bothering me.

Ten percent of my corn will be processed into ethanol and that fuel demand is adding 30 to 40 cents on each bushel I sell. That is huge!

What concerns me is this. Cargill, one of the nation's largest ethanol producers in the U.S. plans to begin exporting ethanol from Brazil to EI Salvador where Cargill will dehydrate it and then export into the U.S. And since EI Salvador is a member of the Caribbean Basin Imitative, products from EI Salvador can enter the U.S. duty free. We are facing some tough and unexpected competition. There are also reports that Chevron Texaco may build a plant in Panama to ship in to the U.S. duty free also.

And now we hear that a Caribbean liquor company is building an alcohol dehydration plant in Trinidad to ship products to the U.S. duty free. You see normally ethanol from Brazil would have a fifty four cent tariff attached; detouring Brazilian ethanol into the U.S. through Caribbean duty free countries circumvents the spirit of the CBI.

Now I don't want to suggest these imports would be the death of the

U.S. corn into fuel business. In fact, the Cargill plant would produce only 63 million gallons which is less than two percent of what we use. But how many more companies and plants have similar plans on the drawing board? Are we looking at a stampede?

You can bet that the U.S. Congress will review these creative trade initiatives with a very critical eye. And they should.

Until next week, I am Jack Block from Washington.