Skip to comments.Ethanol Boom Helps Cut $31 Billion From Farm Subsidies
Posted on 01/24/2007 12:59:25 PM PST by kellynla
WASHINGTON -- The fuel ethanol boom and high crop prices will cut U.S. farm subsidy spending by $31 billion through 2016, a dramatic drop in the cost of the farm program, the Congressional Budget Office said on Wednesday.
In a semiannual report, CBO estimated farm subsidies would cost $10 billion this year and the annual cost "will range between $8 billion and $10 billion over the next decade."
The forecasts are expected to constrain this year's overhaul of farm policy by Congress. The 2002 farm law, which allocates about $20 billion a year on farm supports, expires in the fall.
Large U.S. farm groups want to maintain the current crop support system. The American Farm Bureau Federation asked on Dec. 6 that Congress and the Bush administration assure that funding "be sustained at levels authorized in the 2002 farm bill with adjustment for inflation."
Congress has a target of agreeing by April 15 on a spending outline. Leaders of the House and Senate Agriculture committees say they will not begin work on farm subsidy programs until it is clear how much money will be available.
"Projected spending . . . has declined by $31 billion for the 2007-2016 period," said the CBO report. "That reduction primarily reflects lower income-support payments to farmers for major crops because commodity prices are now expected to be higher than previously anticipated.
"In particular, CBO has reduced its estimates of support payments to corn producers as a result of stronger demand for ethanol."
Corn prices have doubled since last fall and are the highest in a decade. Soybean and wheat prices rose as well, pulled up by corn.
--I wonder why we have to wonder about it. Seems like they ought to be telling us up front.--
Sometimes the info is not automatically pushed to you. You have to actually type a few words into google.
Are you off in your own little world there?
Ethanol is inefficient. Instead of mandating it and driving up prices artificially, we should be drilling for our own gas.
But keep dreaming that ethanol is the answer to any question except "how do we line the pockets of our campaign contributers AND pander towards the iowa primaries????"
It just peeves me to pay good money to get told half truths.
I trust the free market to determine prices much more than I trust the government doing so.
"drilling for our own gas?"
uhhhhhhh...we drill oil and refine gasoline.
And I thought you were just naive.
gezzzzzzzzz the I.Q. level gets lower by the minute around here. LMAO
But, at your request I got past all the stuff about Clintonistas being slobs to the part about ethanol.
He makes up his facts.
For instance, the ethanol blending credit is $.53 per gallon, not $.053; it is paid to oil companies, not farmers or ethanol producers; the increase in corn prices has eliminated the price support subsidies; his numbers have no support; and so forth.
Look at some other grains, it is not just corn. It must be more than ethanol.
Yep, we just need to drill our oil like they did.
"54 cents per gallon."
That tax credit has actually dropped to 51 cents a gallon now, and that's for each gallon of pure ethanol blended with gasoline. So the blender gets a 5.1 cent tax credit for each gallon of E10 he blends. The farmers don't get this "blender's credit," and in most cases the ethanol producers don't get it either because they generally aren't the ones blending the ethanol in with gasoline. The blender is generally going to be the gasoline/oil company that provides your gas station with gasoline. No doubt the tax credit does help lower the price at the pump so the farmers and ethanol producers do benefit from this tax credit in a 'round about way.
hmmm-coke with real sugar. I've forgotten what that used to taste like.
You are in your own little world with your clever quips.
Wow, I wrote down gas instead of oil while I was busy working on something else at the same time. I guess that proves all your points correct and everyone else wrong! Tell your teacher you get a gold star tomorrow!
Another great feature of the ethanol lobby. Avoid science. Avoid facts. Avoid market forces. Ignore consumer preference. Boil it down to soundbites and fearmongering.
I do believe it's mexico. Maybe some of our guest workers could smuggle some of the good stuff across the border.
On another thread where illegal workers are complaining about the work disappearing after crops were frozen, it was mentioned it's too bad the workers didn't stay in Mexico and grow corn.
They could be making a fortune right about now making tortillas.
This is actually a subsidy that makes some sense then. Since the infrastructure for current refining is useless for Ethanol. It has to be blended at the terminal not at the refinery which at least temporarily screwed up the distribution of gasoline in the US. But until cellulosic ethanol achieves widespread production, ethanol will be a loser on a purely economic basis.