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AMI Statement on Its Opposition to Corn-Based Ethanol Tax Credits and Import Tariffs

Friday, April 9, 2010

Attribute to J. Patrick Boyle, President and CEO, American Meat Institute

AMI remains committed to our opposition to ethanol subsides and tax credits, a position that is supported by a broad cross-section of producers, processors, consumers and, especially, American taxpayers. 

In fact, the federal government has pumped as much as $1.95 per gallon of taxpayer money into subsidies for the production of corn-based ethanol.

 If we are to engage in a responsible public policy discussion, it’s in the public’s best interest to focus on the issues. These issues are: 

1.    Extending tax credits to corn-based ethanol pits our need for food against our need for fuel, ultimately hurting the livestock industry and consumers.  Burning our food/feed sources for fuel is not a viable long-term strategy. Government subsidies for corn ethanol create an inflated market for corn as well other grain commodities, which, in turn, drive up the cost of food production for everyone in the supply chain.  Consumers are ultimately forced to choose between feeding their families and driving their cars.  Estimates are that 44 percent of U.S. corn production would eventually need to be diverted to meet federal ethanol use goals.

2.    The current U.S. policy on corn ethanol, which includes the tax credits, is a direct assault on a vital sector of our economy. The meat and poultry industry directly and indirectly employs 6.2 million people.  The total contribution of the meat and poultry industry in terms of economic output to the U.S. economy is more than $832 billion – nearly 6 percent of total GDP.

3.    Extending tax credits for corn-based ethanol is unfair to taxpayers.  These tax credits continue the unfair support and protection corn-based ethanol has enjoyed for more than 30 years at the expense of the American taxpayer.  The U.S. Government Accountability Office (GAO) estimates that the cost of extending the ethanol tax credits could grow from $4 billion in 2008 to $6.75 billion in 2015 for conventional corn starch ethanol.

4.   Extending tax credits for corn-based ethanol hurts other non food-based emerging biofuels technologies.  Heavily subsidizing corn ethanol places non food-based next generation alternatives at a competitive disadvantage and prolongs their development and realization.  Subsidizing corn-based ethanol will not solve our energy needs nor end our dependence on foreign sources of petroleum. 

5.   Government subsidizes for corn-based ethanol distort market forces.  The corn-based ethanol industry has been subsidized for 30 years, which has afforded the industry ample time to develop and implement its business model.  It is now time for it to either succeed or fail in the free market system.  Enough corporate welfare.

American ranchers and livestock producers are the best in the world at what they do – they can compete with anyone on the planet.  And they’re not opposed to competing for corn, as long as they can compete for it on a level playing field. 

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