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manufacturing renewable materials while environmental regulations 

 are increasing the cost of hydrocarbon-based products. Moreover, 

 the growing environmental consciousness has prompted many customers 

 to willingly pay a "green" premium for carbohydrate-derived, 

 environmentally benign products. - ....•■;- 



CAPACITY SITUATION 



According to information presented to the New Uses Council last 

 month by Pat O'Brien of the USDA Economic Research Service -- the 

 U.S. has a well developed land base, with over 400 million acres 

 currently being cropped on a regular basis and another 3 0-40 

 million acres readily available for conversion from less intensive 

 uses such as pasture to intensive cropping. This resource base has 

 changed little over time; the land currently in use is well 

 developed, often at considerable capital expense, and there are few 

 alternative uses. Conversely, bringing new land into use beyond 

 the 3 0-40 million acres readily available for conversion would 

 generally require significant capital investment. Hence, without 

 a sharp and prolonged upturn or down turn in prices and returns to 

 warrant acreage expctnsion or abandonment, this 400 million acre 

 base will be used -- unless farmers are paid to idle it. 



The U.S. has invested heavily in "growing" markets for bulk 

 agricultural commodities -- the export market. The disappointing 

 news is that despite major efforts, exports have been declining for 

 major commodities. In the 80 's, the U.S. share of the world market 

 for com slipped to 66 percent from 77 percent, wheat fell to 



