Taking ethanol incentives away from ethanol production may sound like a good idea with corn futures above $7.00/bu. and growing concerns over food prices. It’s not though, says U.S. Secretary of Agriculture Tom Vilsack.
Speaking to a group of agricultural media at the 2011 Commodity Classic on Friday morning, Vilsack handled a broad range of questions on the federal budget, the next farm bill and how much the administration supports renewable fuels.
"My concern now is, that we have folks who say in this fiscal climate we should lop off incentives for these programs as a way to save money,. Well, first of all it isn’t going to save money. Then secondly, we saw what that did with biodiesel. Fifty percent of production ceased. There were 12,000 jobs lost. This was at a time when we were trying to create jobs and become more energy independent."
Critics of ethanol cite the cost of bioenergy incentives in today’s fiscal time as the reason to eliminate them immediately. Vilsack contends that by keeping these intact, the industry can grow demand and build a reliable supply.
"That’s part of growing ourselves out of this deficit, in addition to cutting ourselves out of a deficit. If we grow a biofuels industry, we will employ a million people in rural Amnerica and we have a $100 billion in capital investments. That is going to grow into a growing stream of revenue for our government and allow us to get our deficit more quickly under control."