“It is not often that a stroke of a pen can quickly undo the ravages of nature, but federal regulators now have an opportunity to do just that,” noted University of California Agriculture Professor Colin Carter and Hoover Institute fellow Henry I. Miller in the Los Angeles Times recently. “Americans’ food budgets will be hit hard by the ongoing Midwestern drought, the worst since 1956. Food bills will rise and many farmers will go bust.”
But they don’t have to.
“By suspending renewable-fuel standards that were unwise from the start, the Environmental Protection Agency could divert vast amounts of corn from inefficient ethanol production back into the food chain, where market forces and common sense dictate it should go,” they wrote.
But Congress continues to debate the exact wrong part of the Farm Bill. By focusing on food stamps (which no one doubts are vital to many families after years of economic hard times), instead of ridiculous ethanol subsides, the House and the Senate are unlikely to come to any useful agreement.
Indeed, in June the Senate resoundingly defeated an amendment that would have ended the ethanol subsidies.
Both the ethanol subsidies and the ethanol standards should go. We have far better uses for the corn we produce.
“Federal renewable-fuel standards require the blending of 13.2 billion gallons of corn ethanol with gasoline this year,” Carter and Miller explain. “This will require 4.7 billion bushels of corn, 40 percent of this year’s crop.”
“The price of corn is a critical variable in the world food equation, and food markets are on edge because American corn supplies are plummeting,” the authors say. “The combination of the drought and American ethanol policy will lead in many parts of the world to widespread inflation, more hunger, less food security, slower economic growth and political instability, especially in poor countries.”
Now, this shouldn’t even be an issue. Ethanol doesn’t make sense, either economically or environmentally.
First, it takes more energy to produce ethanol than the ethanol product yields. There’s no net reduction in carbon emissions. It’s not making us any less dependent on foreign oil — we use more petroleum in planting, fertilizing, harvesting and processing the corn than we could ever derive in ethanol.
We should mention that ethanol is a bipartisan boondoggle — the Energy Independence and Security Act and the renewable-fuel standards are products of the Bush administration. And their preservation in the Senate’s Farm Bill vote was also bipartisan. Democrats, loath to cut any government program, we joined by Republicans who worried that ending a government subsidy (in the form of a tax credit) is the same thing as increasing taxes. That’s silly; it’s not. Instead, it’s the correction of an embarrassing example of cronyism.
Carter and Miller note. “Reducing the renewable-fuel standard by a mere 20 percent — equivalent to about a billion bushels of corn — would offset nearly half of the expected crop loss due to the drought.”
The solution is obvious, and the action is simple.