As they have for the past several years, directors of the Seaway Valley Farmers Energy Co-Operative are expected to present a do-or-die ethanol plant scenario to members during the 2002 annual meeting to be held Oct. 8, 7:30 pm, at Kemptville College’s W.B. George Centre.
Only this time, it looks serious.
Not that directors haven’t been serious in the past, but members always felt the board would find a way to keep the dream for a $50 million corn-into-ethanol distillery at Cornwall alive.
And it always did. Not this time, says perennial co-op president Bud Atkins.
As proof of the enormity of the situation, Atkins said he has presented the project’s future to both Deputy Prime Minister John Manley and to the office of Ontario Premier Ernie Eves.
It’s time, he said, for the senior governments to adopt the U.S. ethanol model and come on board with loan guarantees and other support; one obvious agency that could get involved at the federal level would be the Farm Credit Corporation.
Atkins suggested senior politicians might be wise to consider the political ramifications of letting the project slide and risk alienating 3,000 Eastern Ontario farmers and other investors counting on the plant to one day become a major economic generator.
That position will be placed before the annual meeting.
"You can only beat your head against the wall for so long," said the Moose Creek cash cropper who has steered the tumultuous pursuit of the plant since Day 1. He noted that both he and the 12 directors are running out of steam.
"I’m supposed to retire in a year and I have a farm to run," Atkins said. "I pay people to take care of some of the work, but it’s never the same when you’re not there."
Not counting special sessions, directors have attended 202 regular board meetings over the years, with no remuneration, paying their own mileage and even kicking in to cover some co-op expenses.
Should the project not move forward within 60-90 days after the annual meeting, Atkins said it could very well be shut down. Asked if investors would get their money back should the worst case scenario kick in, Atkins said they can only hope to recoup part of it.
"We’ve totalled $6-$7 million in expenses in trying to launch the plant. All of that has come out of the community investment pot because that’s the only pot that was open to us."
In a more positive vein, Atkins said both the provincial and federal governments appear more interested in the project than they have been in the past, in part because of the influence of the Kyoto Accord and the general push to produce environmentally friendly fuels.
What happened to the funding package Seaway Valley had in place? The latest one crashed after a Spanish company operating out of the U.S. pulled out of a plan to invest $8 million into the Cornwall project, deciding it was safer to spend its money south of the border. Before that, the closest Seaway had come was with a German-based bank; that deal fell through when the bank was absorbed in a takeover.
One problem has been the reluctance of mainstream lenders to confidently entrust their money to the fluctuating price of corn, something they don’t fully understand.
Seaway’s bad breaks over the years have become the stuff of legend. At the bottom of it all, Atkins told The AgriNews, has been his group’s lack of credibility to large investors: "It’s not easy for a farm co-op which has never done something like this before to get everybody on side."
From the Archives:
News, October 2002
