It is said that those who respect the law and enjoy sausage, should not see how either are made. Too often the farm bill is exhibit A for this adage. Too often such bills include a little something for everyone, or a lot of taxpayer cash for a privileged few. Such legislation picks the pocket of the taxpayer, and distorts the marketplace.
Part of the farm bill is invariably an energy provision which again all too often is simply a grab bag of taxpayer provided cash for energy or chemical projects that managed to lobby hard for the taxpayer-provided benefits. But it is doubtful that such programs actually benefit the nation as a whole. The Senate’s version of the farm bill is sadly yet another Exhibit A in wasteful spending and its energy provisions are simply more of the same.
The bipartisan House farm bill is different from the usual farm bill. It isn’t perfect, but it is a big step in the right direction. The energy title of the House version of the farm bill eliminates mandatory or automatic funding for programs that have been wasting taxpayer money for a long time –– such as ethanol and wind and solar power –– and providing very little in return to the nation’s energy needs.
Wind and solar power projects will be funded in the private sector with private investment dollars when the technologies can produce energy at a competitive and reasonable cost. But it makes little sense to give taxpayer subsidies to energy projects that don’t work efficiently or effectively –– particularly when in some cases those subsidies and credits exceed the entire capitol cost of the project.
Americans want a clean environment and we support reasonable environmental goals. But the primary impact of the U.S. Department of Agriculture’s energy agenda has been bad for the environment, bad for the economy, and bad for the taxpayer. The only beneficiaries have been those receiving large cash subsidies at taxpayer expense.
For example, the USDA has provided heavy funding for corn production for ethanol. The taxpayers have been funding ethanol for decades on the theory that it is an infant industry. I’ve never seen an infant that is four or more decades old -- that’s called middle age!
As we’ve turned more and more acreage into farmland to grow more and more corn for ethanol, we’ve seen food prices rise around the world. For Americans, the higher food prices have been inconvenient and challenging. For those living in the developing world, it has been catastrophic as many are simply forced to go hungry.
Moreover, ethanol increases the cost of gasoline. Ethanol is also a less dense energy source, thus it provides fewer miles per gallon. Studies conclude that ethanol delivers as much as 25% fewer miles per gallon than gasoline. So thanks to the fed’s ordering and paying for more ethanol in our gasoline, a gallon of fuel costs more and runs your engine for shorter distances. This isn’t a good deal. Taxpayers pay twice –– once for the subsidies and a second time for the more expensive gasoline that doesn’t carry them as far. Thus, they have to buy more fuel to travel the same distance -- so actually the taxpayer pays three times for this foolishness. I almost forget to mention that numerous studies conclude that ethanol’s corrosive properties damage engines. That’s four times, taxpayers are forced to pay a big price for ethanol.
The massive production of corn ethanol creates more net harm to the environment than simply using traditional fuels. Ethanol requires fertilizer, pesticides, and large quantities of water. A great deal of energy is expended to grow the corn, and then distill the ethanol for fuel purposes. Numerous independent studies have concluded that it is more harmful to use more land, fertilizers, pesticides, and water to grow more corn and more energy intensive to then turn that corn into ethanol that it would be to simply refine more petroleum. The Organization for Economic Cooperation and Development concluded that “The overall environmental impacts of ethanol and biodiesel can very easily exceed those of petrol and mineral diesel.”
Fortunately, the even EPA has recently admitted that its ethanol mandate is not working and they have reduced it. That is a step in the right direction. But if something is a failure, the better answer is to stop doing it, not simply reduce how much you do of it. But if the EPA can admit that its ethanol mandate is out of control, Congress should do the same in the farm bill.
Unfortunately, the Senate farm bill fails to do this. It makes funding for all these programs mandatory which means that without any oversight or review, even the most wasteful of the wasteful programs will continue to be funded.
In sharp contrast, the House farm bill wisely withholds mandatory funding from the energy title in the farm bill. Without mandatory funding, programs that waste taxpayer money and provide marginal benefit would likely not make the cut. This lone provision would save the taxpayer $160 billion over ten years. This is one big reason to favor the House’s farm bill over the Senate's boondoggle bill.
Landrith is president of Frontiers of Freedom, a conservative-leaning poicy think tank.