By Christopher Doering and Charles Abbott
WASHINGTON (Reuters) - U.S. Agriculture Secretary Ed Schafer assured meat, dairy and poultry groups on Monday that a loan guarantee program for rural businesses was not being used as a special bailout for struggling ethanol makers.
Schafer met industry representatives in response to a letter last week in which the groups said it would be unfair to provide federal loan guarantees to ethanol makers because they agreed to pay high prices for corn, the feedstock used by ethanol plants, before recent market declines.
The letter was signed by the American Meat Institute, National Cattlemen's Beef Association, National Chicken Council and five others.
"We assured them that this was a long-standing program they could use to help finance rural America. Some of those may be ethanol facilities," Schafer told reporters.
USDA has said any rural business, including ethanol plants, are eligible to receive up to $25 million in loan guarantees as long as they meet certain financial requirements.
The company that wants a loan under the 35-year-old program must find a local bank willing to make the loan, which is then guaranteed by the government.
Schafer said 48 ethanol facilities have been given loans under this program, including 13 in the last two years. He told the industry members the loans were also available to many of their members as well.
A spokesman for one of the industries represented at the 30-minute meeting welcomed the visit with the secretary.
"It was a good meeting, open and honest," said a representative from the poultry industry.
"(Schafer) said they were not proposing some specific programs for ethanol," he added.
The poultry official said the groups talked about higher feed costs impacting the industry. Despite being large users of grain and facing high feed costs, they have been told to expect no aid.
(Reporting by Christopher Doering and Charles Abbott; editing by Jim Marshall)
