News / USA

Congress Considers Cutting Gasoline Makers' Ethanol Subsidy

Tax credit under fire from hunger advocates, food manufacturers

About 40 percent of the US corn (maize) crop goes to the production of ethanol.
About 40 percent of the US corn (maize) crop goes to the production of ethanol.

Multimedia

Audio

Ninety organizations are calling for an end to the $6 billion-dollar-a-year subsidy that encourages the production of ethanol biofuel from maize in the United States.

Ethanol makes up about 10 percent of the gasoline fueling cars in the United States, and almost all of it is made from maize.

"It’s renewable and domestic, home-grown," says Bob Dinneen, president of the Renewable Fuels Association, who adds that this home-grown source of energy is reducing the nation's dependence on foreign oil.

A 2007 U.S. law requires motor fuel to include renewable fuels. And - for blending in ethanol - gasoline makers get a tax credit that adds up to about $6 billion this year.  

Skyrocketing production

Production of ethanol from maize, also called corn in the United States, has skyrocketed in just the last few years to meet the demand, says Purdue University economist Wally Tyner. "It’s gone from 5 percent of our corn crop to almost 40 percent of our corn crop today. So it’s a huge change."

Critics say that huge change is one of the reasons corn prices on global markets have risen 77 percent over a year ago.

Tyner agrees ethanol is a factor, but he also points to a number of other factors driving prices up. Bad weather last season cut supplies in major producing countries, while demand for food and animal feed is rising, especially in Asia.

Rising corn prices

The impacts of rising corn prices are greatest in the developing world, where many people spend most of their income on food.

"Even if they rise a little bit in a local market, poor and vulnerable people are feeling that the most strongly," says Marie Brill, with the advocacy group ActionAid.

ActionAid was one of the 90 organizations that wrote to U.S. congressional leaders urging an end to the ethanol tax credit. The list also included food manufacturers and meat and dairy groups hit by rising prices.

"We don’t need to put good taxpayer money after bad biofuels at a time when the industry can compete on its own," says Brill.

However, Bob Dinneen with the Renewable Fuels Association says the role of ethanol in rising food prices has been greatly overstated.

"I’m not going to say no role, but a very small role," he says. "The fact of the matter is, what is driving food price inflation today is skyrocketing energy costs. Period."

Corn prices on global markets have risen 77 percent over a year ago. Critics blame ethanol production.
Corn prices on global markets have risen 77 percent over a year ago. Critics blame ethanol production.

Food security vs. energy security

With crude oil trading at around $100 a barrel, Dinneen believes subsidies for the petroleum industry should be on the table, too. He says the ethanol industry is open to changes but adds that the industry’s potential to help meet the country’s future energy needs should not be sacrificed.

"Look, we produce from grain today. But there is not an ethanol producer in the country that isn’t looking for new feedstocks, new technologies to continue to grow the industry in a sustainable fashion," says Dinneen.

While the search for new technologies continues, food crops remain the primary source for biofuels - a questionable route to independence from foreign oil, according to ActionAid’s Marie Brill.

"If what we really want in our oil independence is national security," she says, "then we need to make sure we’re not putting at risk our food security."

You May Like

DRC Tries Mega-Farms to Feed Population

Park at Boukanga Lonzo currently has 5,000 hectares under cultivation, crops stretching as far as eye can see, and is start of ambitious large-scale agriculture plan More

Video Survivor Video Testimonies Recount Horrors of Guatemalan Genocide

During a conflict that spanned more than three decades, tens of thousands of indigenous Mayans were killed More

Video War, Drought Threaten Iraq's Marshlands

Areas are spawning ground for Gulf fisheries, a resting place for migrating wildfowl, source of livelihood for fishermen and herders who have called the marshes home for generations More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Nobel Prize Winner Malala Talks to VOAi
X
August 31, 2015 2:17 AM
Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video Nobel Prize Winner Malala Talks to VOA

Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video War, Drought Threaten Iraq's Marshlands

Iraq's southern wetlands are in crisis. These areas are the spawning ground for Gulf fisheries, a resting place for migrating wildfowl, and source of livelihood for fishermen and herders. Faith Lapidus has more.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Rebuilding New Orleans' Music Scene

Ten years after Hurricane Katrina inundated New Orleans, threatening to wash away its vibrant musical heritage along with its neighborhoods, the beat goes on. As Bronwyn Benito and Faith Lapidus report, a Musicians' Village is preserving the city's unique sound.
Video

Video In Russia, Auto Industry in Tailspin

Industry insiders say country relies too heavily on imports as inflation cuts too many consumers out of the market. Daniel Schearf has more from Moscow.
Video

Video Scientist Calls Use of Fetal Tissue in Medical Research Essential

An anti-abortion group responsible for secret recordings of workers at a women's health care organization claims the workers shown are offering baby parts for sale, a charge the organization strongly denies. While the selling of fetal tissue is against the law in the United States, abortion and the use of donated fetal tissue for medical research are both legal. VOA’s Julie Taboh reports.
Video

Video Next to Iran, Climate at Forefront of Obama Agenda

President Barack Obama this week announced new initiatives aimed at making it easier for Americans to access renewable energy sources such as solar and wind. Obama is not slowing down when it comes to pushing through climate change measures, an issue he says is the greatest threat to the country’s national security. VOA correspondent Aru Pande has more from the White House.
Video

Video Arctic Draws International Competition for Oil

A new geopolitical “Great Game” is underway in earth’s northernmost region, the Arctic, where Russia has claimed a large area for resource development and President Barack Obama recently approved Shell Oil Company’s test-drilling project in an area under U.S. control. Greg Flakus reports.
Video

Video Philippine Maritime Police: Chinese Fishermen a Threat to Country’s Security

China and the Philippines both claim maritime rights in the South China Sea.  That includes the right to fish in those waters. Jason Strother reports on how the Philippines is catching Chinese nationals it says are illegal poachers. He has the story from Palawan province.
Video

Video China's Spratly Island Building Said to Light Up the Night 'Like A City'

Southeast Asian countries claim China has illegally seized territory in the Spratly islands. It is especially a concern for a Philippine mayor who says Beijing is occupying parts of his municipality. Jason Strother reports from the capital of Palawan province, Puerto Princesa.
Video

Video Ages-old Ice Reveals Secrets of Climate Change

Ice caps don't just exist at the world's poles. There are also tropical ice caps, and the largest sits atop the Peruvian Andes - but it is melting, quickly, and may be gone within the next 20 years. George Putic reports scientists are now rushing to take samples to get at the valuable information about climate change locked in the ice.

VOA Blogs