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Vilsack says Cutting Ethanol Incentives Would Be Bad Move

March 6, 2011

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." 

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COMMENTS (5 Comments)

How can anyone make a decent argument against ethanol. It only uses 3% of the world's corn supply, and 30 percent of that is reused for cattle feed. Ethanol is not the reason for high food prices. High fuel prices are the reason for high food prices. But nobody blames that, they only fall back on ethanol. The subsidies on ethanol are nothing compared to the subsidies on fuel. Our government does way more to subsidize fuel than it ever has done to subsidize food. What a shame people in this country think it is better to spend billions over seas, and to send young men and women to their deaths to protect our oil supplies abroad, but can't support giving back to our own country by growing our own fuel.
8:19 PM Mar 8th
NW Iowa Farmer - IA
It's sad to see uneducated people who believe that cutting biofuels is the way to go. Energy needs of the world are increasing & more energy needs to be produced. Tom who is the greedy idiots, the livestock guys since they need to plan more & lock things in to make profits instead of buying and selling by the seat of their pants. I don't know why anyone thinks we owe it to third world countries to produce cheap food. If u want America to keep giving everything away so the common person over here can live like a third world individual then you are just an idiot.
12:01 PM Mar 8th
polecat - covington, IN
i would like to know if the exports of ethanal have subsidies in them .if so shame on the system for it was sold as a help for our energy use.
8:36 AM Mar 8th
So all the money that could be going to useful programs like insurance subsidies, disaster relief, tax breaks and so forth,,,, all that money is going to pay for a non solution to a non problem, basically a scam, and we are running the livestock sector dry , they will go into a liquidation phase and instead of prices like 2006 and 2007 we will have a half good year like 2008 and then two or five years like 2009 and 20010. Global warming and ethanol are scams and it shames me that farmers are part of it and are starving the third world for temporary advantage. Shame on you greedy idiots!
9:38 PM Mar 7th
virtualmilkman - WA
He's from the government he must know what he is talking about.
10:09 AM Mar 7th



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