Ag Leaders Challenge Ethanol Myths
Leaders of five major agricultural organizations and the head of the Renewable Fuels Association joined together Wednesday to try and dispel many of the accusations that have been levied against biofuels in recent months and emphasize the positive contributions of ethanol in particular.
“Instead of using ethanol as a scapegoat for increased food prices, we should be having a discussion about the business, economic and policy issues that are connected with the world of $130 plus per barrel oil,” said American Farm Bureau Federation president Bob Stallman. He said the country’s Renewable Fuels Standard passed by Congress in December was the “right thing to do and continues to be the right thing to do.”
Stallman was joined by Tom Buis of the National Farmers Union, in a rare show of unity for the two general farm organizations that are frequently at odds over policy issues. Buis listed his top six myths about higher prices being blamed on ethanol, including Mexican tortillas, pasta, rice, bagels, beer and movie theater tickets. “I’m tired of debating these myths,” said Buis. “The last thing we need to do on renewable energy is backslide again because 30 years from now we will be back talking again about our dependence on imported energy.”
Other farmer leaders from the National Corn Growers Association, National Association of Wheat Growers, and the National Sorghum Producers participated in the conference call with members of the news media, fielding questions from reporters at media outlets ranging from Reuters to the Capitol Press in Idaho.
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Greg
This ethanol mandate is an economic disaster. It is sad to see that selfish-interests are placed ahead of the overall good of the nation. There are several important economic principles that are being violated.
One, subsidies mostly lead to disaster because it becomes a political solution versus an economic/practical solution (I believe that is the case here). The government and selfish-interest groups will reference statistics and reports that support their position instead of sharing the true overall picture.
Two, if you increase demand beyond supply, you can create enormous pricing pressure even though it appears that demand was increased marginally. We now see huge price increased with food, fertilizer, and natural gas (used extensively in throughout the process). Pretending that this ethanol mandate has a minimal effect on food costs is wishful thinking.
Three, there is a tremendous hidden economic cost when mandates and subsidies are used to encourage malinvestment. All of these resources and dollars used in the ethanol process could have been used to support a practical solution to the energy crisis or any number of activities that would beneift society as a whole.
Instead, the general public is forced to pay higher food costs (poor people are especially hit hard) and higher taxes (farm subsidies, food programs, ethanol subsidies). In return we degrade the environment with more pollution and it is questionable if we achieve a net energy benefit.
All in all, this is a bad idea and when the government is forcing their solution on the public, it is almost always going to be wrong. Let the free market do its thing, that way you will find a real solution to our energy crisis. Please don’t insist that the government subsidize your life, it isn’t fair to the rest of us.
Cindy Zimmerman
Greg,
I challenge you to find any industry, person, city, state or even country that is not subsidized in some way – directly or indirectly – by our federal government. If we didn’t have government subsidies, those “poor people” you referenced wouldn’t have food stamps. If we didn’t have government subsidies, we probably wouldn’t have any agricultural production in the United States today – we would be importing food from other countries that subsidize their farmers (as virtually every country in the world does.)
The oil companies and countless other industries are subsidized - even environmental groups and other non-profits are subsidized if they receive tax incentives or tax exemptions.
People throw the word “subsidy” around like it is a dirty word – fact is, just about anything that the government funds is a subsidy. It can be in the form of programs, grants, tax credits, low-interest loans, or direct payments. The government subsidizes all of our lives.
As far as the “government is forcing their solution on the public” – that is also a fact of life. The government has forced its solutions to just about everything on the public. Every time there is a problem, the government has to step in and try to solve it. So, I don’t really see what your point is here.
Greg
Subsidy is a dirty word and just because other stupid subsidies are used doesn’t make another one okay. We have become so short-sighted that we cannot accept simple economic principles that in the long-run would improve everyone’s well-being.
Government intervention is bad news. The fact that the public is blind to the damage government solutions tend to cause is the reason our government has grown way past the limits envisioned by the Founding Fathers. We continue to re-elect officials that hurt our country, but they sure know how to bring home the bacon (of course Joe 6-pack doesn’t realize that this “free” money comes out of our own pockets). As a result, we live in an era that is significantly below our potential.
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