Our Views Columns

Our Views Columns

Date: 8/9/2012

Title: Waiving the Ethanol Mandate to Provide Relief to Producers and Consumers

By Rep. Bob Goodlatte (R-Va.)

Food or feed? We should not put our nation’s livestock producers in the position of having to choose one over the other. But federal law has done just that. As a severe drought continues to hold our nation in its grip, concerns over the corn crop and soaring prices are on the minds of nearly every livestock producer. Drought maps show that farmers from Nebraska to Virginia are facing some of the driest conditions seen in the United States in nearly 50 years.

Unfortunately, government policies are only adding to this difficult situation by diverting increased food and feed stocks into fuel, leading to diminished supplies for livestock and food producers. The Renewable Fuel Standard (RFS) mandates that 36 billion gallons of renewable fuels be part of our nation’s fuel supply by 2022. Almost the entire mandate is currently being fulfilled by corn ethanol. As the amount of corn being used for fuel goes up each year, the problem grows worse. In 2011, five billion bushels of the corn supply was used for ethanol – equal to nearly 40 percent of the U.S. corn crop. Last year was the first year ever that ethanol production used more of our corn supplies than feeding livestock and poultry in the U.S.

As we confront the reality of tightening corn supplies, especially during this extreme drought, there are real concerns about having enough to satisfy both the RFS and the needs of our livestock and food producers. There is no doubt that this policy has driven up the price of corn, which has exceeded $8.00 per bushel. An enormous increase in the price of corn has a direct impact on the bottom line of livestock producers. As herd sizes shrink, resulting increases in food prices are ultimately passed down the line in the form of higher grocery bills for families. In fact, the U.S. Department of Agriculture (USDA) has already estimated that food prices will rise by 3 to 4 percent in 2013.

The current drought and diminishing corn crop will devastate our economy if the mandate is not waived. However, the Obama administration has at its disposal a tool that would provide drought relief, if only temporarily – a reduction in the government mandated RFS. That is why I sent a letter to U.S. Environmental Protection Agency (EPA) Administrator Lisa Jackson on August 2, urging an immediate waiver of the RFS for this year.

Representing dozens of states from coast to coast, 155 bipartisan members of the U.S. House of Representatives responded to my

initiative and joined me in signing this letter. Likewise, 26 senators sent a similar letter voicing their support of a waiver to the EPA this week.

EPA has the authority, by law, to reduce the required volume of renewable fuels in any year based on severe harm to the economy or environment of a state, a region or the United States. Today’s conditions make a waiver necessary. The members of the House who signed this letter are not the only ones who agree with the need for a waiver. Recently several livestock groups, using the Administrative Procedures Act, petitioned the Administrator to use her authority to begin the process to waive the mandate. A wide range of organizations – including energy, hunger, environmental, grocery manufacturers and restaurant groups – have also raised concerns about the federally mandated RFS. The time for action is now in order to provide immediate relief from the RFS.

The growing concern over corn supplies and soaring prices are a clear signal that Congress must reopen the RFS debate. Last October, I introduced the Renewable Fuel Standard Elimination Act (H.R. 3098) and the Renewable Fuel Standard Flexibility Act (H.R. 3097), which alters the RFS to give relief to our livestock and food producers and consumers of these products. The legislation will link the amount of corn ethanol required for the RFS to the amount of the U.S. corn supplies. H.R. 3097 provides a mechanism that would reduce the RFS when USDA reports that U.S. corn supplies are tight, based upon the ratio of corn stocks to expected use. For example, if this policy was in place now, the legislation would trigger a 25 percent reduction in the RFS. The RFS mandate has created a domino effect. I am a strong supporter of renewable fuels, when they compete fairly in the marketplace. However, the current ethanol policy is unfair and causing unintended, negative consequences for American consumers, livestock farmers and food manufacturers. I hope that this legislation will serve as a springboard for congressional action on a long-term legislative fix of this broken RFS policy and help ensure sure that we have enough corn supplies to meet all of our demands.

My prayers are with America’s farmers that we will soon see relief from this drought – both in the form of much-needed rain and federal action to waive the ethanol mandate.

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Kris Vincent
Ohio Rancher