special arrangement with Informa Economics, Inc.
Sen. Lugar provides food policy suggestions
for G8 summit
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or retransmission is prohibited under U.S. copyright laws.
Dick Lugar (R-Ind.) called for the elimination of the 54-cent-per-gallon
tax on imported ethanol to ease corn demand. "To demonstrate leadership,"
he said, "the United States should lift its tariff on Brazilian ethanol
that now shelters the U.S. industry."
Lugar said eliminating the tariff would provide more competition
and a better biofuels market in the long term. "Brazil
can provide ethanol to our coasts more efficiently than from our 15-state
heartland," Lugar said. "It is expected that the food crisis
will endure a number of years and could have lasting effects. A situation
of such long duration threatens to reverse any positive trends in the
alleviation of poverty and improvements in health," Lugar noted.
Lugar is getting help for his ethanol
import duty proposal from the Brazilian Sugarcane Industry Association
(UNICA), which is launching an ad campaign this week called
"Are We There Yet?" The ad, which will run this weekend in California,
Florida and Washington, D.C., notes that “With millions of Americans
expected to gas-up and head out for the July 4th weekend, producers of
sugarcane ethanol want drivers to know that there is an alternative to
continued increases in fuel prices.” The “Are We There Yet?”
campaign will introduce Americans to a lower-cost, higher efficiency fuel,
ethanol derived from sugarcane and call on the U.S. Congress to lift the
tariff “that artificially inflates the price of cane ethanol.”
“Americans are being denied an opportunity to save money
at the pump,” said Joel Velasco, Chief Representative for UNICA.
“Eliminating, or even reducing the tariff on cane ethanol could
provide immediate relief, particularly in states like California and
Florida where this form of fuel is already in use.”
The group said that the U.S. tariff on imported ethanol was
put in place in 1980 as a temporary measure designed
to promote the market for domestically-produced ethanol. The tariff
has been repeatedly extended, most recently in the 2008 Farm Bill, signed
into law on June 14, 2008. Rep. Mark Udall (D-Colo.) introduced legislation
on June 19 to facilitate the importation of ethanol by lowering the
ethanol tariff. Sens. Dianne Feinstein (D-Calif.) and Judd Gregg (R-N.H.)
previously introduced legislation on June 4 to reduce the tariff on
Meanwhile, Lugar released a framework
for leaders from the G8 countries, who will meet in Japan July 7-9 that
he believes will promote global food security as prices
for staple food commodities soar. He said the G8 should double agriculture
investments in developing countries to help the poor produce more. “As
we respond to the current food crisis with emergency assistance, we should
recognize that this is more than a short-lived confluence of single events,"
Lugar told a conference held by the American Enterprise Institute. "Developing
more advanced and locally appropriate farming technologies is essential
to increase farm yields," he said.
"We do have the intellectual ability, the scientific ability
to produce a whole lot more," Lugar said. "The question will
be do we have the political skills."
Lugar also called for a phasing out of subsidies and trade
barriers to give developing nations equal footing in global trade
– an issue stalling an agreement in the Doha Round.
Lugar's "Global Food Security: An Agenda for the G8 Summit,"
outlines the necessary steps the international community must take to
respond to the current food crisis. Highlights from his suggestions
Improve the International Response to Crises
-- Reconstitute the Food Aid Convention
-- Create a system of regionally placed supplies of food stocks
Commit to Invest in Rural Development and Agricultural Productivity
--Increase official development assistance for agricultural productivity
and rural development
-- Increase funding for research and technology
-- Establish a global network of land grant colleges
Facilitate a Trade System that is Efficient, Fair, and Transparent
-- Encourage a conclusion of the Doha Development Round
-- Advocate increased research on genetically modified seeds appropriate
to local needs
-- Endorse greater transparency and information sharing in the futures
Endorse Policies that Stabilize Energy Markets and Promote Alternative
-- Encourage the opening of global energy markets
-- Commit to increase assistance for renewable energy
-- Endorse a multilateral Clean Technology Fund
Lugar said, "The cause of the current
spike in food prices is a complex web of factors, some
that have developed recently – a rapid increase in oil prices, droughts
in some key exporting countries, and a weak U.S. dollar. Other factors have
long been present – a significant under-investment in agricultural
productivity and rural economies in the developing world, increased demand
in emerging economies, an irrational avoidance of genetically modified
crops that could markedly help poor small scale farmers to increase their
yields, and a global trading system that too often inhibits the movement
of food and the ability of farmers in poor nations to market their crops
globally," Sen. Lugar said.
Meanwhile, the Environmental Protection
Agency (EPA) continues to review a request from Texas Republican Gov.
Rick Perry to partially waive the Renewable Fuels Standard (RFS) mandate.
The EPA "will review the letter and respond appropriately,"
said agency spokesman Jonathan Shradar in an e-mail to Bloomberg News.
"Keep in mind this is from the same Congress" that just months
ago passed requirements that 9 billion gallons of grain-derived ethanol
be blended into U.S. fuel this year, he added.
The EPA can grant a full or partial waiver if implementation
is found to cause severe harm to the economy or environment of a state,
region or the country. The agency must make a decision by late
July on the request to waive 50 percent of the use requirement for this
year. The 30-day comment period to respond to the wavier request ended
June 23. The EPA will consider the comments and issue a response late
While Sen. Lugar supports changes for the ethanol import tariff,
he still favors the RFS mandate and blender tax credit of 51 cents per
gallon, scheduled to go to 45 cents in Jan. 2009. While some groups
and Texas Gov. Perry have called for a RFS mandate scale back, Lugar
said, "I wish they would get over it, but some people haven't.”
This column is copyrighted material, therefore reproduction or
retransmission is prohibited under U.S. copyright laws.