The report can be downloaded for free from the GSI's web site at www.globalsubsidies.org

Most family farms make a loss and they cannot go on any longer.

The children do not want to take over the farm to make an unviable income, so farms are closing.

Fix the farmers income and you will fix the food supply problem.

Ethanol would put a floor in the price for sugar and any other crops from which ethanol can be produced.

It is all very well to say ethanol is forcing up the price of food, but this is not correct.

The big companies are paying farmers a pittance and putting on huge mark ups, which is forcing up the price of food.

NOT THE FARMERS.

Farmers cannot ask a price, they take a price.

Cost of production cannot be passed on.

Farmers are becoming peasants in Australia.

It is time for the government to wake up before the family farm is a thing of the past.

What are the benefits?

The proposed E10 mandate in NSW will utilize at least 600 million litres of ethanol annually.

The 38.143c/litre excise relief provided by the Federal Government for domestically produced ethanol is subsidising the further development of a grain ethanol industry in NSW to supply this ethanol.

This arrangement is set to continue post 2011 at a stepped down level but still effectively subsidizing this industry.

The Brazilian Futures exchange currently prices ethanol 470BR/cubic metre which equates to A$0.30/litre.

Allowing for A$200/cubic metre for handling/shipping, Brazilian ethanol could feasibly be landed Australian port for A$0.50/litre.

At these prices our domestic grain ethanol producers will need all of this protection to be economic.

Because of the nature of a grain ethanol industry in NSW this protection will need to be in place for many years to come.

The 600 million litres of ethanol demanded by E10 multiplied by A$0.38143 excise relief means grain ethanol producers in NSW will be subsidized by federal taxpayers $230 million annually.

A national E10 mandate would mean a subsidy of $690 million per year.

A risk is that these grain ethanol plants could be redundant in a matter of a few years if cellulose ethanol comes on stream.

This is the cost, what are the benefits?

No clear benefits can be identified.

Humanitarian effects (check out the world debate) , lack of CO2 abatement, loss of comparative advantage of trade, unsuitable industry for NSW's variable harvests, and hindrance by an established grain ethanol industry to the development of competitive cellulose ethanol are just some of the problems with the establishment of a grain ethanol industry in NSW.

Rural and regional development may be the only realistic benefit.

If the Federal government has a lazy $230 million and is kind enough to donate it to NSW with a few investors clipping it bigtime on the way then keep in place the 38.143c/litre excise relief.

If you do think this is not such a good idea then spending this money directly on rural and regional development in NSW an option.

Perhaps you will consider spending this money you are keen to give away on improving public transport in NSW and decrease the use of fossil fuel that way.

Even better would be to put this spare $230 million towards research and development of the cellulose ethanol industry and be world leaders in combating climate change.

If we believe that cellulose ethanol has a future and that our infrastructure needs to be ready for when it comes on stream then instead of subsidizing an undesirable grain ethanol industry, we should be giving carbon credits to domestic sugar and true waste ethanol and topping up our requirements with imported sugar ethanol from Brazil, saving the $230 million.

Wake up Australia and realise the potential this crop has to offer.

On offer is ethanol, green power, bioplastics, eco-friendly paper and building materials, etc.

Governmental platforms and seed funding (not handouts) will enable the Australian cane industry to establish eco friendly industries.