NPPC: Say No to Ethanol Subsidy Extension
By Pork news source  |  Monday, July 19, 2010

NPPC joined several other food-animal organizations in asking the Senate not to extend a tax credit and import tariff for the ethanol industry. Both expire at the end of the year.

The Senate Finance Committee now is considering whether to extend the 45-cent per gallon ethanol blender’s credit and the 54-cent per gallon tariff on imported ethanol.

The National Pork Producers Council joined the American Meat Institute, the National Turkey Federation, the National Chicken Council, the National Cattlemen’s Beef Association, and the National Meat Association in the letter noting that the Congressional Budget Office this month issued a report, showing that the ethanol subsidies cost taxpayers $5.2 billion annually.

Among other findings, the CBO reported:

• The biofuels tax credit costs taxpayers $6 billion in 2009; $5.2 billion was allocated to corn-ethanol production.
• The taxpayers’ cost to replace one gallon of gasoline with one of corn ethanol is estimated to be $1.78. 
• Corn producers receive 73 cents to produce the ethanol equivalent of a gallon of gasoline.
• The benefit of the tax credit to blenders ultimately is passed to corn producers in the form of higher prices received for their corn. This, in turn, increases the price livestock producers must pay to compete with blenders for feed corn.
• If the biofuels subsidies were reduced, corn-ethanol consumption would decrease by 32 percent. This would free around 1.44 billion bushels of corn for other uses, such as animal feed.
  

Source: NPPC