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An assortment of food groups, from soft drink makers to chicken producers, urged President Bush to suspend an import tariff on Brazilian sugarcane ethanol as a way to reduce demand for the corn-based variety produced domestically.
The competition for corn is increasing due to higher ethanol production requirements mandated by Congress in the 2007 Energy Independence and Security Act, the groups argue. The result is an “unforeseen and severe feed grains inflation,” they said in a letter to Bush.
The energy act calls for the production of 9 billion gallons of ethanol this year. Corn is used as a sweetener and as feed grain for livestock, in addition to its growing role in the nation’s transportation fuel mix.
Thirty-six associations and companies and anti-tax groups signed the letter, including the Grocery Manufacturers Association and Coca-Cola.
Calls to suspend the 54-cent per gallon tariff are not new. But the necessity of action has increased due to the flooding in the Midwest that is projected to reduce the corn crop below expectations, further stressing supplies as demand increases.
“Feed prices and supply are pressing dairy, livestock and poultry producers to endure one of the greatest adverse economic situations in decades, which is ultimately adding unnecessary economic pressure to all Americans,” the letter states.
Tariff opponents sought to capitalize on recent publicity following a speech by Sen. Richard Lugar (R-Ind.) on Wednesday to the American Enterprise Institute. In the speech, Lugar called for the tariff on Brazilian ethanol, which he said has “sheltered” the U.S. ethanol industry, to be lifted. |
