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Time to review ethanol requirement

November 26, 2012
The Journal

For years, critics of so-called "renewable energy" subsidies have noted federal mandates for use of ethanol in gasoline are pushing up food prices. That affects every American, including low-income families.

Federal law requires that 13.2 billion gallons of ethanol be produced this year, going up to 15 billion gallons by 2015. That requires an enormous amount of the corn from which the fuel additive is manufactured.

This year, prolonged drought in corn-producing states have put extra pressure on the corn supply. Nine governors have asked the Environmental Protection Agency to grant a waiver of those production requirements. The governors, along with several members of Congress, point out that higher corn prices resulting from the ethanol mandate are hurting livestock farmers and, as a result, consumers.

No dice, the EPA responded. The ethanol requirements will stay in place.

That could send prices for some food products skyrocketing, at least temporarily. It could drive some livestock farmers out of business and it is likely to hit the pocketbooks of millions of American families.

We know that ethanol mandates have been a boon to corn farmers, giving them another market for their product and giving them the opportunity to earn a decent profit for their labors, for once.

But the mandates have consequences. It would behoove the government to review the impact of these mandates on other parts of the economy.



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