Ethanol Gets More Government Support
By Rick Jordahl
| Thursday, October 30, 2008
Just when you thought the ethanol industry had received more than its share of government support, USDA Secretary Ed Schafer has other ideas. He believes the government should extend loans to ethanol plants that bought corn at the higher prices that prevailed earlier this year.
After all, without more government aid, how can the ethanol industry expect to succeed when forced to pay such high prices for corn?
This latest proposed support for the ethanol industry comes on top of the government-mandated production levels, blender’s credit and tariff on ethanol imports. One would think these already-existing supports would be enough to get the nascent ethanol industry up and running.
The National Pork Producers Council was quick to remind Secretary Schafer that the ethanol industry was not the only one challenged by high corn prices and to point out the economic land-mine that confronts the pork industry due to ethanol’s seemingly endless government support.
In a letter to Schafer signed by the NPPC, the American Meat Institute, National Cattlemen's Beef Association, National Chicken Council, National Meat Association, National Milk Producers Federation, National Turkey Federation and the United Egg Producers, the groups summarized animal agriculture's continuing challenge posed by additional government aid to the ethanol industry.
“We in animal agriculture are particularly concerned that you would consider adding one more level of support for the corn-based ethanol industry,” the groups told Schafer.
The letter says that high corn prices have already caused animal agriculture real pain. The three legs of support for domestic ethanol have already had serious impact on those who produce meat for Americans and the world.
“High commodity prices have been wreaking havoc in animal agriculture for almost two years. Yet no one at USDA has suggested that the government could provide loan funds to cover our members’ losses in the corn market,” the letter says.
The letter also cites the ethanol industry's excess capacity. The industry has over 13 billion gallons of annual capacity existing or under construction while the Renewable Fuel Standard's mandated demand is only 10.5 billion gallons.
“We urge you to rethink your intention of selectively lending taxpayer funds to private facilities that are having difficulty with the price of commodities. Despite numerous requests to create a task force to address the negative consequences of ethanol mandates in feed prices, USDA did nothing. It is not clear to us why now USDA would be so inclined to provide assistance to one particular segment of the industry in dealing with a problem that affects us all,” the letter concludes.
Perhaps this united voice will convince Washington to be more equitable in doling out taxpayer dollars and bring them face-to-face with the extraordinary pressure they place on animal agriculture with policies that place ethanol above all things agriculture.
