Political lesson: You should never let a bailout actually get called a bailout. Call it a rescue package, or a recovery scheme. Anything, but a bailout! Politicians in Washington learned this lesson already, although sometimes they go off their talking points and slip up.
In areas outside of the media glare, they’re a little late on the lesson. Secretary of Agriculture Ed Schafer wants you to know that that ethanol bailout we discussed earlier this week is not actually a bailout. What is it? A “Guaranteed loan-type program for operating capital.” It still sounds like the USDA could snaz that up a bit, but it’s a start. And Schafer wants you to know that it’s part of an ongoing thing, not something new that was just developed (that’s a fair point to consider).
Schafer’s comments come after media reports (like ours) as well as complaints from livestock producers:
Eight major livestock organisation leaders wrote to the secretary this week protesting what they view as preferential treatment for the ethanol plants. “Many of our producer and processor members also took long positions on corn and soybeans and are paying above-market rates right now,” they wrote. “We in animal agriculture are particularly concerned that you would consider adding one more level of support for the corn-based ethanol industry.”
C’mon livestock producers, tell ’em how you really feel, that you should get a bailout too.
Meanwhile, we’ll stick with our original view. A bailout is a bailout is a bailout. If the loans are meant to help ethanol producers that got stuck on some bad corn bets, preventing them from turning a profit, that sounds like they’re getting bailed out.