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When road tax, red diesel, organic food and bio-fuels meet, Part 3

an image of heavy traffic on a motorway in BritainDiversify or die! Sound advice. The kind of advice many farmers have taken to heart. But are bio-fuels the way forward, or are the farmers just sewing the seeds of their own demise?

In the first installment, I looked at the proposed ‘pay as you drive’ scheme and what such a scheme means to the average motorist.

In the second installment, I looked at what forces might shape a different route going forward, but still manage to please both the government and the consumer alike .. but maybe not the petrochemical industry, or the tax man.

In this installment, I’ll be looking at how new ways of doing old things can be disruptive and affect good changes in a bad way.

Bio-fuels are the new red diesel

Over here in Britain, farmers use agricultural diesel for their vehicles. It’s dyed red so that customs & excise can make the right call if they suspect someone of using red diesel for anything other than strictly agricultural purposes.

This diesel is hugely subsidized, so it’s easy to see why some people will steal it and sell it on.

However, what if all of this was to change? What if farmers no longer needed regular diesel? What if they could grow their own fuel? Imagine that!

Well, this morning, my dad and me watched Countryfile on BBC 1 which featured farmers looking to alternate crops that are used as the principle ingredient in bio-fuels.

In the second installment, I said: “I’ll be looking at what forces might shape a different route going forward, but still manage to please both the government and the consumer alike.” Well, the thing is, while the government and the motorist sort of get what they want, there are forces at work that might set in motion social changes that might create an environment not entirely conducive to either the petrochemical industry, or the major supermarkets.

In the Countryfile feature, one farmer hinted at something that caught my attention because for me, this was what I’ve been waiting to hear for years. She mentioned how her grandfather grew wheat and hay for the horses for ‘horse power’ while now she’s having to consider growing crops to fuel the machines that replaced them.

What she said is the very keystone of my vision of the future, one of a massive decentralization of the sale of food and energy production.

Wind farms and red diesel be damned! I’m talkin’ bio-diesel, baby!

Already, many farms are under massive pressure from the major supermarket chains to reduce costs. In addition, consumer awareness is forcing farmers to follow the pound and take on ethical farming practices to produce organic food.

Many farms produce goods that no longer serve the rural community which their fields surround. However, we’ve all seen those signs outside the gates to farms selling fresh eggs and potatoes among other things. What if the some entrepreneurial farmer decides to do a deal with local butchers, a local fruit & vegetable stalls in the local market and supply them with fresh, organic produce?

This is no stretch of the imagination.

Right now, the major supermarkets are feeling the sting of their own greed. By forcing local shops out of business with cheap out-of-town supermarkets, they’ve now realized that they’ve ostracized an entire section of the public who can’t travel to them.

So they’re considering smaller, mini-markets as a means of reaching this low-hanging fruit.

The idea of the farmer selling direct would be a huge slap across the face, but it’s not something they can really do anything about. The major supermarkets can’t under-cut the farmers because that would be suicidal to their own business model.

So what to do?

Local mini-markets from the major supermarkets arranging favorable deals with the farmers. The benefits being that the consumer gets day-fresh, organic, local produce.

That’s the first part of the puzzle. As an added bonus, both the farmer and the supermarkets save because they’re paying less for the transportation of produce from the farms to the stores.

But there’s more!

The farmers are diversifying, and it’s a diversification that will draw them even closer to the supermarkets at the expense of contracts with the likes of Esso, BP, Shell et al.

Here in Britain, over the past five years, the major supermarkets have started selling petrol. So almost every supermarket has a petrol station at the end of the car park.

Because of the taxation on fuel, their profits are razor-thin, but because of their bulk purchasing power, they make more money than the petrol station on the roadside.

Well, what do you think might happen if the farmers begin to produce their own bio-diesel? Food for thought, wouldn’t you agree? Certainly enough to fuel yet more speculation…

By Wayne Smallman

Wayne is the man behind the Blah, Blah! Technology website, and the creator of the Under Cloud, a digital research assistant for journalists and academics.

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