ETHANOL MANDATES ARE CAUSING RISING FOOD PRICES

Date: August 10, 2012

By: Bob Goodlatte

Food or fuel? We should not put our nation in the position of having to choose one over the other. But federal law has done just that.  And with the extreme drought seizing much of the nation and shrinking corn supplies, rising food prices are about to get much worse.  

Unfortunately, government policies are only adding to this dire situation by diverting increased food and feed stocks into fuel, leading to diminished supplies for livestock and food producers.  The Renewable Fuel Standard (RFS) mandates that 36 billion gallons of renewable fuels be part of our nation’s fuel supply by 2022.  Almost all of this is currently being fulfilled by corn ethanol and as the amount goes up each year the problem gets worse.  In 2011, five billion bushels of the corn supply was used for ethanol – equal to nearly 40 percent of the U.S. corn crop. 

As we confront the reality of tightening corn supplies, especially during this extreme drought, there are real concerns about having enough to satisfy the RFS and the needs of our food producers.  Higher corn prices not only affect food producers and the animal agriculture industry, but are also felt in the form of higher grocery bills for American families.  In fact, USDA has already estimated that food prices will rise by 3 to 4 percent in 2013.

Last week, I sent a letter to Environmental Protection Agency (EPA) Administrator Lisa Jackson urging an immediate reduction or waiver of the RFS for this year.  Representing dozens of states from coast to coast, 155 bipartisan Members of the U.S. House of Representatives joined me in signing this letter.

The EPA has the authority, by law, to reduce the required volume of renewable fuels in any year based on severe harm to the economy or environment of a state, a region or the United States.  The current drought and diminishing corn crop will devastate our economy if the RFS mandate is not reduced.   The Members of the House who signed this letter are not the ony ones who agree with the need for a waiver,  a wide range of organizations – including livestock, energy, hunger, environmental, grocery manufacturers, and restaurant groups – have all raised concerns about the federally mandated RFS.

The growing concern over corn supplies and soaring prices are a clear signal that Congress must reopen the RFS debate.  Last year, I introduced the Renewable Fuel Standard Elimination Act (H.R. 3098) and the Renewable Fuel Standard Flexibility Act (H.R. 3097), which would reform the RFS.  I will continue pushing for a long-term legislative fix of this broken RFS policy. 

As this devastating drought persists, I urge the EPA to act now to provide immediate relief from the RFS and help protect consumers, producers, and the American economy.