Posted on 01/19/2007 7:28:38 AM PST by Red Badger
#1, "we" don't own the corn; initially the farmer does and he should be free to sell to whomever he pleases at whatever price the market will bear.
#2, distilling ethanol from corn leaves all nutition intact except for sugar. The very same corn which is used as distillery feedstock can also be used as animal feed.
It should not be mandated by government, subsidized by tax payers, paid for by tax oil companies to fund competition and, the problem still remains, I can get oil from the ocean floor but cannot grow corn there. It is a smaller, non renewable resource now used for something else and there will be less of it and cost more.
...and, by the way, there are no subsidies to grow corn. The ethanol boom has eliminated corn price supports.
"there are no subsidies to grow corn. The ethanol boom has eliminated corn price supports."
So there were 'price supports' (a.k.a., subsidies) for growing corn, but now the price has risen on the back of subsidies for ethanol production, which have produced a boom in ethanol... - Did I get that right?
The USDA has had a "loan" program whereby it would lend money to a farmer (subject to a bunch of government imposed conditions and restrictions) based upon its target price for corn. The target price was always higher than the market price and the loans were without recourse. The farmer could simply elect not to repay the loan and when the corn was sold, the government would receive only the market price. The total bill last year for loan deficiency payments was, I believe, about $7,000,000,000. The surge in corn prices has raised the market price for corn above target prices, eliminating the expense of the program.
While there is no federal subsidy for ethanol production, these is a blenders' credit (paid to oil companies) which probably raises the market price for ethanol (but only to the extent more ethanol is sold than is mandated by clean air regulations). Even if the blenders' credit given oil companies were considered a production subsidy to farmers, the net result has been a reduction of total production subsidies in the range of $5,000,000,000 for this year.
interesting.... Saves about $2bn, then. Still seems a shame that the money is going to credit blenders rather than producers of ethanol - more money for Big Oil's refinery operations.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.