New Ethanol Group Lobbies President Obama

Last week, the biofuel industry joined with farm and financial groups to urge Congress to pass a nearly $1 trillion farm and food stamp bill. At the time, we warned conservatives to remain vigilant:

It may be August, but the facts regarding the farm and food bill remain the same. And to be clear, Farm Bill Now is offering nothing new; however, the group’s formation is proof-positive the Washington Establishment remains bound and determined to ram a massive, market-distorting bill through Congress before the election.

As it turns out, the Washington Establishment’s lobbying effort continues unabated. The Hill reports:

The Biofuels Producers Coordinating Council, a recently formed group meant to organize the biofuels industry’s messaging, sent a letter to Obama refuting arguments that waiving the RFS would provide relief for drought-stricken farmers.

Last month, livestock producers sent a letter to Environmental Protection Agency (EPA) Administrator Lisa Jackson, urging her to waive the federal renewable fuel standard (i.e., the ethanol mandate):

[T]he 15.2 billon gallon renewable fuel standard (“RFS”) in 2012 coupled with the prospect of a 16.55 billion gallon standard in 2013 will require the renewable fuels industry to utilize a major portion of the drought-limited available corn supply.  The drought-induced reductions in the corn supply means that the mandated utilization of corn for renewable fuels will so reduce the supply of corn and increase its price that livestock and poultry producers will be forced to reduce the size of their herds and flocks, causing some to go out of business and jobs to be lost.  In addition to this direct harm, these herd and flock reductions will ripple through the meat, milk and poultry sectors, causing severe harm in the form of more job and economic losses.

It’s not just livestock producers calling for a waiver, though.  One of the United Nation’s top food officials (yes, they have food officials) weighed in:

An immediate, temporary suspension of that mandate would give some respite to the market and allow more of the crop to be channeled towards food and feed uses.

This is nothing new, of course.  The impact of redirecting our nation’s corn supply toward transportation has been well documented and remains controversial.   In their letter to the EPA, livestock producers claim a one year waiver of the ethanol mandate could lower corn prices by 5% and save the industry $1 billion.  New research from the Farm Foundation and Purdue University puts the number much higher.  They say a large waiver could result in nearly a 25% reduction in corn prices.

Clearly, the ethanol industry is looking to keep its federal gravy train on the rails.  The effects of the drought – made worse by government policy – gives the Washington Establishment a chance to make the right policy decision and end the mandate once and for all.

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