Seven commodity and ethanol organizations have written a letter to President Bush in support of the secondary tariff on imported ethanol. The groups called attention to the importance of the tariff for the nation’s growing ethanol industry, as well as to the nation’s energy, economic, and environmental security.
The American Coalition for Ethanol (ACE), Ethanol Producers and Consumers (EPAC), National Association of Wheat Growers, National Corn Growers Association, National Farmers Union, National Sorghum Producers, and the Renewable Fuels Association (RFA) pointed to factors such as oil prices, rising demand, drought, and declining value of the dollar as having more effect on the price of food than biofuels. They urged the President to avoid yielding to the misdirected efforts to blame ethanol for rising prices and to prevent American taxpayers from subsidizing foreign products.
“Removing the tariff would not lower food prices,” said RFA president Bob Dinneen. “Such an action would halt development of new ethanol technologies and take the jobs and economic opportunity being generated by the domestic ethanol industry to foreign countries. I strongly encourage President Bush to recognize that skyrocketing oil prices play a far greater role in the complex issue of food prices than does ethanol and reject the efforts to remove the secondary tariff.”
The 54 cent per gallon secondary tariff was enacted by Congress in 1980 to offset any incentive for imported ethanol to benefit from the 54 cent per gallon tax credit for ethanol blended into motor fuel. The tax credit is taken by refiners who blend ethanol into motor fuel and the purpose of the secondary tariff is to protect American taxpayers from subsidizing imports.