12.16.2010 0

Food to Fuel Special Interests

By Rebekah Rast –

About 80 million acres of land in the U.S. are devoted to corn.

The U.S. is a major player in the world corn trade market, with approximately 20 percent of the corn crop exported to other countries and it is also the most widely used feed grain in the U.S.

The U.S. government has plans to beef up this industry. Not for the interest of world hunger, but for its own interest.

Included in the tax deal package is the Volumetric Ethanol Excise Tax Credit (VEETC). The Senate voted in favor of extending ethanol subsidies for another year at its current level of $.45 cents per gallon.

The bill has now been sent to the House of Representatives for a vote before it is signed into law by Obama.

The food industry, animal agriculture groups, environmentalists and budget watchdog groups are realizing that ethanol is not the environmentally friendly, sound form of energy many thought it once was.

An article in the National Review points out that, “Ethanol is so uneconomical that Congress supports it three different ways — with a mandate for its use, a tax credit to subsidize it, and a tariff to keep out competitors. Rarely are so many levers of government used to prop up one woeful product.”

Aside from ethanol being uneconomical, it also doesn’t make sense as a solution to help American’s foreign oil dependency. Oil is still essential to running the engines of today’s automobiles. In fact, according to research by the Institute for Energy Research (IER), the use of ethanol actually reduces a vehicle’s mileage per gallon average.

Ethanol is also not environmentally friendly. Even Al Gore, once Vice President and forever a proponent of “green” ideas, has flip-flopped on his support of ethanol. “It is not a good policy to have these massive subsidies for first-generation ethanol,” he is quoted as saying in a Wall Street Journal article. He even admitted in the article, “One of the reasons I made that mistake is that I paid particular attention to the farmers in my home state of Tennessee, and I had a certain fondness for the farmers in the state of Iowa because I was about to run for President.”

Gore admitted that the backing of the ethanol subsidy was a favor to him and that it has no real other benefits.

Many environmental groups picked up on this truth long ago and are coming out against the encouraged use of ethanol.

“For one, it’s corn and it uses a lot of fertilizers so there is a lot of runoff that contaminates the water and soil,” says Kate McMahon, spokesperson for Friends of the Earth (FOE), an advocacy group that works to protect the environment. “Corn also takes up a lot of land and, due to the subsidy, it competes with food production.”

ActionAid USA is concerned about just that: food production. The organization works to end extreme poverty and hunger and comes out strongly against ethanol subsidies. In a joint press release with other groups against the use of ethanol and ethanol subsidies, Marie Brill, senior policy analyst for ActionAid USA, said, “With predictions of another food price crisis on the horizon in 2011, Congress should be re-evaluating the costs and benefits of converting food to fuel, instead of approving a $6 billion giveaway to the biofuel industry through VEETC. Adding an ethanol subsidy to the tax package will help break the budget, and it won’t give hungry people the break they need. We cannot afford to spend billions fueling hunger by throwing good taxpayer money after bad biofuels.”

The National Review article echoed that concern, “So much corn — about 40 percent of the U.S. crop — is feeding into the maw of government-created demand for the fuel, that it could be increasing worldwide food prices. In short, in exchange for not reducing greenhouse emissions, ethanol reduces the availability of food to the poor.”

The damage that is done to the environment and food supply by using ethanol is enough evidence to realize that it is not a viable product. But what maybe the most important factor in this ethanol debate is its $6 billion price tag.

“The $6 billion ethanol subsidy is nothing more than a slap in the face to Americans who voted for a more fiscally responsible Congress,” says Bill Wilson, president of Americans for Limited Government (ALG). “This is yet more corporate welfare in an era where the American people are fed up with ‘business as usual’ in Washington with handouts, kickbacks and other favors.”

But Congress doesn’t get it. Senator Chuck Grassley from Iowa, “fought tooth and nail to secure the inclusion of both the ethanol and biodiesel provisions in the new legislative proposal,” he stated in a news alert. And it is obvious why. These subsidies will provide a great payday for corn farmers in Iowa.

There doesn’t seem to be a concern coming from Washington that as a result of the ethanol subsidies food prices will rise worldwide and Third World countries will starve.

The only explanation is that the ethanol industry is nothing more than a special interest that caught the eye of Washington.

Rebekah Rast is a contributing editor to the Americans for Limited Government (ALG) News Bureau.

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