California group says ethanol subsidies have harmed the state’s dairies
Source: Western United Dairymen news release
California-based Western United Dairymen (WUD) is praising Sen. Dianne Feinstein, D-Calif., for asking her fellow senators to end federal subsidies for ethanol.
In a letter to Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., Feinstein and her colleagues note that they do not support an extension of either the 54-cent-per-gallon tariff on ethanol imports or the 45-cent-per-gallon subsidy for blending ethanol into gasoline. The senators note that these existing "provisions are fiscally irresponsible and environmentally unwise and make our country more dependent on foreign oil."
WUD has a long history of working with the California congressional delegation on responsible federal conservation and renewable energy policy. In this case, WUD worked with Senator Feinstein’s staff to circulate the letter to other dairy groups along with a cover letter for them to use to ask their Senators to sign on.
"We are very appreciative of Senator Feinstein’s leadership in trying to cure this flawed policy and we are thankful that Senator Boxer has joined in calling for this much needed change," WUD CEO Michael Mash said. "Massively subsidizing the conversion of food to fuel with corn-based ethanol subsidies has harmed California dairy families immensely by making us less competitive in an ever more global dairy marketplace. We thank Senator Feinstein for her efforts to effect positive change to an ethanol policy that has eroded the international competitiveness of California's dairy families.
Marsh said the subsidies must stop immediately. "Turning feed grains into fuel will do nothing to reduce hunger in developing nations and only exacerbate the problem here at home," he said. "These subsidies have driven up the cost of all feed grains and, due to inefficiencies in the process, will not move the U.S. along the road to energy independence. It is time to move on before this government policy wreaks additional irreparable damage to the U.S. animal agricultural sector."
In their letter, the senators also cite a 2010 study by the Congressional Budget Office that determined the ethanol tax credits cost $1.78 for each gallon of gasoline consumption reduced. The letter cites an estimate from Iowa State University that states "a one-year extension of the ethanol subsidy and tariff would lead to only 427 additional direct domestic jobs at a cost of almost $6 billion, or roughly $14 million of taxpayer money per job."
In only a few days, 16 senators joined Feinstein in a bi-partisan call for the ethanol provisions to lapse. Joining California’s senior senator are: Barbara Boxer, D-Calif., Jon Kyl, R-Ariz., Richard Burr, R-N.C.), Jack Reed, D-R.I.), Mike Enzi, R-Wy., Bob Bennett, R-Utah, Ben Cardin, D-Md., Jim Webb, D-Va., John McCain, R-Ariz., Sheldon Whitehouse, D-R.I., Tom Coburn, R-Okla., Susan Collins, R-Maine, Bob Corker, R-Tenn., Jeanne Shaheen, D-N.H., Mark Warner, D-Va., and Chris Coons, D-Del.
WUD is a voluntary membership organization representing more than 60% of the milk produced in California.