Document Type

Thesis - Open Access

Award Date

1984

Degree Name

Master of Science (MS)

Department / School

Economics

First Advisor

Thomas L. Dobbs

Abstract

Research on the economic feasibility of a cooperatively organized small-scale fuel alcohol plant is justified for several reasons. Policy makers could consult the results of this study as an aid in making decisions about public subsidies for fuel alcohol production. Investors concerned about the wisdom of allocating capital to this type of fuel alcohol production facility are also potential beneficiaries of this research. Perhaps most importantly, this information would be valuable to farmers in eastern South Dakota. Alcohol plants organized on a cooperative basis could reduce the individual financial risk of farmers involved--by spreading commitments among all the cooperative's members. A cooperative fuel alcohol plant could ensure a reliable supply of farm fuel to its members. In addition, farmers producing corn in eastern South Dakota would have an alternative market for their crop if fuel alcohol plants were viable. Communities would benefit from such operations, as increased property taxes could be generated and local employment opportunities expanded. Tax provisions directed toward the cooperative type of business may increase the prospects for economic feasibility of small-scale fuel alcohol plants. Also, capital requirements, while considerable, would be decidedly less than for a large-scale facility. Local ownership and management could help assure consideration of community interests in decision making procedures. A very important aspect of fuel alcohol production is the feed byproduct which is generated by the fermentation and distillation process. This residue is suitable as a protein supplement for ruminant animals. The convenience of nearby utilization of this distiller’s wet grain (DWG) byproduct could be a strong advantage of a community scale alcohol plant. The pragmatic merits of a small-scale cooperative fuel alcohol production plant could be quite substantial. Grain producers, local workers, livestock feed users, and ultimately, the community economy could potentially benefit from such a facility. The purpose of this study then, is to determine the economic feasibility of a small-scale cooperative fuel alcohol operation. Since South Dakota State University operates a small-scale pilot fuel alcohol plant, data from that operation will be used for this study.

Library of Congress Subject Headings

Alcohol fuel industry -- South Dakota
Agriculture, Cooperative -- South Dakota

Format

application/pdf

Number of Pages

169

Publisher

South Dakota State University

Rights

No Copyright - United State
http://rightsstatements.org/vocab/NoC-US/1.0/

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