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Prices trip up purchases of crop-based products
Washington, D.C. - Employees at the National Park Service did not wait for Congress to tell them to buy lubricants, fuels and other products made from crops like soybeans or corn, rather than petroleum. A soybean-derived lubricant for chain saws is particularly popular. It seems the soy oil clings to the saw bars better than traditional oil-based lubricants. To curb pollution, the Park Service has started using soy-based biodiesel both for boats and in buses at congested sites like Harpers Ferry, W. Va. However, even the Park Service strains to increase its purchases of bio-based products, either because of government inertia, the lack of availability, or the higher cost, often 5 to 10 percent, but sometimes as much as 40 percent more. Those could turn out to be major obstacles for bio-based products, despite a provision in the 2002 farm bill that will force government agencies to start buying the products. The farm bill requires federal agencies to give a preference to buying bio-based products, which are available as solvents, carpeting, plastic cups and packaging, as well as lubricants and fuel. The U.S. Agriculture Department was assigned to develop the regulations. The department will soon issue the first list of approved products for government purchasing. The initial list is expected to include hydraulic fluids, roof coatings and biodiesel, according to Iowa Sen. Tom Harkin's staff. Items on the list will get to carry the label: "USDA Certified Bio-based Product." Manufacturers can then claim preferred status for their products when approaching government purchasing managers. The provision contains a significant loophole, however: Agencies need not buy the bio-based alternatives if the products are significantly more expensive than conventional products. There also are no penalties for agency managers who do not comply. The biggest threat they probably face is a congressional oversight hearing. "We're not going to back down," Harkin, D-Ia., declared at a Capitol Hill event last week, where he invited company representatives to display their products. Harkin acknowledged the cost problem, however. Reducing the price of the products is the whole point of trying to create a market for them in the federal government, he said. "By having the federal government buy them . . . it gets the price down for everybody," Harkin said. At Harkin's event, Cargill Inc. had on display the plastic cups and food packaging that it makes out of corn. Those products have received a good deal of media attention. Company representatives say the products have sold well in Japan, but not, alas, in the United States. Why? The higher cost. Terry Brennan, energy coordinator for the National Park Service, said some agency managers have been hesitant to buy bio-based products in part because of the paperwork that is required. Anti-waste rules require agencies to buy products off a federally approved list unless they provide a written justification for purchasing something else. The new law should do away with that problem. But price and availability also are issues, especially in buying biodiesel, Brennan said. Many products cost 5 to 10 percent more than conventional products. Biodiesel can cost as much as 40 percent more, he said. For now, it is not clear how agencies will decide whether to accept or reject a bio-based product based on cost. The USDA is still in the process of developing a model procurement policy that will set out that criteria. "I think it's reasonable to assume that a program like this will start off reasonably slowly and build tempo over time," said Marv Duncan of the USDA's office of energy policy. As the market builds, and prices of the products fall, consumer demand will grow too, he says. The USDA has received inquiries from state and local governments interested in starting similar programs. "It's the kind of program that could spread across the economy," Duncan said. "Certainly, Joseph and Jane Consumer are going to be watching this." The government has being trying at least since Jimmy Carter's presidency to get Americans to use oil substitutes without much success, or not without heavy subsidies anyway. A chain saw oil that works better than conventional oil and does not cost much more could be a different matter.
MGR Archive 12.6.2005
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Region Type Price  
Russia Rapan $ 700
USA Jupiter Rice $630
USA Calrose #1 $830
USA Calrose #1 Paddy $480
EU Prices Baldo €660
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