Skip to comments.The Hawkeye Handouts
Posted on 12/13/2010 9:07:13 AM PST by Hojczyk
The public choice school of economics describes how the government and special interests collude against the public good, and it's hard to think of a better model than the ethanol industry. Despite opposition from an emerging left-right anti-boondoggle coalition, the Senate version of the White House-GOP tax deal preserves the corn fuel's multiple subsidies.
One measure of ethanol's political clout is that reformers merely hoped to cut the tax credit for blending ethanol into gasoline to 36 cents per gallon from the current 45 cents that was due to expire at the end of the year. Instead, the deal keeps the full subsidy in place for another year, at a cost to taxpayers of $4.9 billion, and it retains the 54-cent per gallon tariff on ethanol imports that was also expiring.
(Excerpt) Read more at online.wsj.com ...
The ethanol subsidy and mandates are just a symptom of the real problem: crappy farm and energy policy. Killing the subsidy won’t solve the problem.
We need a better and more focused added-value ag in this country. Not focused necessarily on ethanol. Farmers need better markets for their crops than shipping them overseas in barges. We could deal with a lot overproduction by helping farmers diversify into other profitable crops, which would solve the need to brew ethanol as a market for an oversupply on corn.
Farmers need to try to produce food, and get away from producing commodities.
Most of the food value chain is added by people other than farmers.
It could be different. Blue Bunny in NW Iowa is one small example of doing it better. Niman Pork is also doing some good things.
There is much more potential in this state.
Ethanol is the worst thing possible for agriculture. I am afraid it is going to cause another ag crash when the gravy train gets yanked.
Unfortunately the govt incentivizes farmers to produce commodities and not food. If we focused more on added-value ag technology rather than just ethanol subsidies, farmers could bust out of the corn-bean rotation because their products would have local markets. We could also do a better job of making coops more of a financial incentive for farmers.
Mr. Ed (R-IA) will be pleased.
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