Corn Growers Concerned About Removing Ethanol Tariff
Posted: February 1, 2008
Indications are that the Bush administration will be making changes to the ethanol tariff in its budget to Congress scheduled to be released Monday. Earlier this week, Energy Secretary Sam Bodman hinted that the White House’s 2009 budget may propose scaling back or eliminating the 54-cent-a-gallon import tariff.
Bodman was quoted as saying the ethanol industry is “pretty close to being able to stand on its own” and compete with Brazil and other countries without domestic subsidies or protective tariffs.
However, National Corn Growers Association President Ron Litterer says with the volatility of the energy and ethanol markets, removing the tariff may be premature.
“The ethanol industry is going through some growing right now and I would think that we need to keep that in place for a time yet,” Litterer said in an interview with WNAX in Yankton, South Dakota.
He says there are dozens of plants currently coming on line that need the protection the tariff provides to U.S. ethanol. “Everybody understands that the ethanol industry is in a state of pretty rapid growth but yet the market access for ethanol is limited and we have to get through those kinds of issues first.”
Senator Chuck Grassley (R-IA) says removing the tariff would ultimately result in subsidizing Brazilian ethanol. “The United States already provides duty-free treatment for Brazilian ethanol that is merely dehydrated in the Caribbean Basin Initiative countries,” Grassley says. “Brazil has yet to make full use of this program. I don’t see why we should bend over backwards to provide yet more duty-free treatment for Brazil’s ethanol producers.”