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27.7.06

Odom again puts self-interest ahead of Louisiana's

We’ve known for a long time that Agriculture Secretary Bob Odom, when making policy, does so on the basis of what’s best for Odom’s political fortunes, not what’s best for Louisiana. This week carried more disheartening confirmation of that.

A couple of days ago, Odom got approval from the Louisiana Agricultural Finance Authority to guarantee even more state money to a group that is supposed to lease the Lacassine sugar mill, built mostly by state employees whose job descriptions don’t include anything about construction work with $45 million of taxpayers’ money backed by money that is supposed to go to treat boll weevil infestations. This is on top of another $7 million loan guaranteed by another state agency.

Odom sometimes claims he’s actually got a sale pending on it all for $60 million, which could be to the cooperative that intends to lease, or maybe to a billionaire of Willie Nelson which then the lease agreement would have to go with. He can’t say for sure, but he does know that “This thing here is fixing to pop open so much.” Even better, there’s supposed to be an ethanol plant built next to it encouraged by the new state law that will force consumers to subsidize producers if the price is competitive (whether that condition actually holds true is another matter) – even though the original investor backed out inviting a state lawsuit.


Except that a nonpolitical, academic review of the situation shows little hope that an efficient process to convert sugar cane in any form into ethanol is in the offing. This certainly would complicate Odom’s muddy scenario further, since he said he wants any sale to include the adjacent property and the building of an ethanol plant. There aren’t going to be any buyers (if there really have been any) if he keeps that stipulation in.

(Too bad he’s not talking about other forms of bio-fuels. When the new law looked certain to pass, which includes bio-fuels generally, a subsidiary of the Shaw Group announced it would embark on building such a facility. The parent’s founder Jim Bernhard is a close confidant of Gov. Kathleen Blanco, and, until he found he was in over his head, led the state Democrats.)

Naturally, this doesn’t dissuade the direct beneficiaries (and loyal supporters of Odom) of the tactic, sugar cane growers. It’s not enough that they have applied enough pressure on the federal government to get it to match sugar subsidies doled out by the European Union (which in part caused the suspension of the most recent round of World Trade Organization talks the success of which would have brought lower prices to U.S. consumers). Now they want to create yet another layer of subsidization for ethanol production, as was pursued by Brazil since the 1970s to make it the world’s largest producer of sugar-based ethanol.

Of course, Brazil has much lower labor costs and, combined with the higher gasoline costs there, makes this kind of ethanol competitive – so much more than the U.S. kind that Washington maintains higher tariffs on it. And so just how much more of a handout do sugar cane farmers want at the expense of the taxpayer?

Odom’s secrecy and throwing more and more money at this boondoggle must end, and not be repeated. A good first step would be to change the law regarding boll weevil eradication that allows Odom the $12 million or so a year to play around with, which could be directed to so many better uses. Even with three sessions in the past nine months the Legislature never got around to doing this. Let’s hope it doesn’t miss its chance in the 2007 election-year session.

2 comments:

John Harris said...

Prof,
Do you have your scorecards on a pdf or word doc for downloading? I was hoping there was a single document with a brief explanation of the bills you used, the weightings, and how each legislator voted.

Nick said...

The only politician in the state w/ seemingly unchecked power, the legislature is scared to death of him.