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Although Cargill has long been an advocate for their large food and feed customers (remember, grain growers - you are their supplier, not their customer) by moving slowly on ethanol expansion, their recent call to build an "escape clause" into any RFS increase places them on a collision course politically with most corn growers.

The US is reviewing its federal Renewable Fuel Standard, which calls for the production of 7.5bn gallons a year of alternative fuels by 2012. This is expected to be reached well ahead of target, and the Bush administration has called for a benchmark of 35bn gallons by 2017, about half of it from ethanol.

Bill Veazey, Cargill's chief financial officer, said there needed to be "some kind of waiver" in any state-backed mandate. "There needs to be escape mechanisms so that you don't distort the food markets," he told the Financial Times.

But it gets more complicated than that simple premise, although it is certainly a concern. Cargill is in many businesses other than grain, and one of them is "asset management" Or more crudely put, owning stuff.

That part of their business, like most similar enterprises has seen recent financial turmoil dim the prospects for the future, especially should assets suddenly be devalued by deflating the real estate bubble. Guess which other branches of Cargill would have to pick up the slack?

Cargill said three of its five divisions delivered record results, and played down the importance of its asset management business, which has been the largest contributor to earnings in recent years.

"What we have is a broader and more diversified earnings' stream than last year," said Mr Veazey, pointing to the restructuring of the financial services business into two standalone entities, which have secured third-party investors to reduce Cargill's exposure.

However, Cargill's heavy investment programme - which it will continue to fund internally - and the potential volatility of financial services income have prompted ratings agencies to shift their outlooks for the group to negative in recent months. [More]

I have no criticism of the Cargill position. Their defense of animal agriculture should certainly commend them to many farmers. But even this laudable effort can get entangled with cross purposes of other divisions. It's one reason you seen the conglomeration strategy come and go in modern business management. Diversification contributes to a loss of clear purpose even while reducing risks.

The larger question though is the fallout from mandates. Mandate supporters think they can force the market to obey, but our species is far too devious to put up with those kinds of coercion forever. Ethanol needs to reduce its reliance on this barely legalized extortion methodology as soon as possible.

And the best way IMHO, is a carbon tax.