Farmers Defend Ethanol In Washington

[Rage for Order]

http://www.cnn.com/2008/POLITICS/04/30/ethanol.defense....

"While we do have some role in higher corn prices, we're closer to a Little Bo Peep than an ax murderer," said Rick Tolman, President of the National Corn Growers Association at the National Press Club. But there is little agreement on just how much impact biofuels like ethanol have had on food prices. The ethanol industry puts the cost increase at 4 percent, while the Department of Agriculture says the figure is closer to 20 percent. International aid groups, including the World Bank, say ethanol accounts for a much larger chunk of the price surge.

"All the crises we're facing have one common denominator: the ever-tightening oil market," said Renewable Fuels Association President Bob Dinneen. "We cannot afford to jettison the promise of biofuels due to this manufactured hysteria over a fight between food versus fuel." The association represents ethanol producers, including Archer Daniels Midland Co. and Pacific Ethanol Inc.

In December (2007) Congress passed an energy bill that mandates a fivefold increase in ethanol production by 2022 to decrease the nation's dependence on oil. But, despite a vigorous defense by farmers and ethanol firms Wednesday, there were signs in both parties and both chambers that Washington's love affair with ethanol may have just been a fling.

Rep. Jeff Flake, an Arizona Republican, on Wednesday called for a repeal of government incentives designed to boost ethanol production, calling them "a classic case of the law of unintended consequences." "Congress surely did not intend to raise food prices by incentivizing ethanol, but that's precisely what's happened," Flake said in a statement. Earlier in the week Sen. Kay Bailey Hutchison, a Texas Republican, proposed freezing the ethanol production mandate at current levels.

Senate Democrats are expected to call for similar measures Thursday at a hearing on food prices before Congress' Joint Economic Committee. Options under consideration include suspending the tariff on imported ethanol, which would allow U.S. firms to import Brazilian ethanol at much lower costs. Brazilian ethanol is made from sugar and costs about a third as much to produce as the corn-based version.

More at the link

I prefer all of the options mentioned: repeal the gov't incentives, freeze (or repeal) the production mandates, AND lift the tariff on imported ethanol.


edited to "prefer all" from "prefer both"