U.S. farm groups warn Congress against striking ethanol import tariff
Several large American agricultural trade groups warned Congress in a letter this week that eliminating the secondary tariff on imported ethanol would send “a devastating and chilling message to investors and the ethanol industry” in the United States.
“Congress should not ask U.S. taxpayers to help strengthen the ethanol industry in foreign countries at the expense of U.S. jobs and investment here at home,” said Bob Stallman, president of the American Farm Bureau Federation, in a May 10 statement.
“The facts clearly show that record crude oil prices, tight refining capacity and lower gasoline production are responsible for nearly the entire price hike Americans are seeing at the pump,” Stallman said.
In addition to the American Farm Bureau Federation, other two groups that signed the letter are the National Corn Growers Association and Renewable Fuels Association.
The groups said sugar cane-based ethanol production in other countries, such as Brazil, is already highly subsidized. The United States imported 135 million gallons of Brazilian ethanol last year and those volumes are increasing.
The groups also said the petroleum industry’s voluntary decision to remove the petroleum-based additive MTBE did not cause the large spikes in gasoline prices.
In recent years, the production of domestic ethanol has increased significantly in recent years. Today, there are 97 ethanol biorefineries nationwide, which have a capacity to produce about 4.5 billion gallons a year, and 35 new ethanol refineries and nine expansions are underway, with a combined production capacity increase of 2.2 billion gallons a year.