Data from Minnesota show that the cost of building a
dry-milling plant producing ethanol is, on average, about
0.5 $1 -~ annual production capacity. The annual federal and
state subsidies for small-scale ethanol plants in Minnesota in
1996 amount to 20 $ cents 1-1, whereas the ethanol price in
the 1990s has been around 0.35 $1 -~ (Fruin et al., 1996).
These data clearly illustrate the political economy of ethanol
production, bioethanol is not competitive without substantial
subsidies (see also Gardner, 1996 and Vollebergh, 1997 this
volume).