The House Energy and Commerce Committee on the Renewable Fuel Standard (RFS) recently released a second white paper, “Agricultural Sector Impacts,” in an effort to make decisions on the future of the RFS. Comments were due today and in response, Brian Jennings, Executive Vice President for the American Coalition for Ethanol (ACE) notes that the RFS is a catalyst for agricultural innovation worldwide.
Regarding the RFS and U.S. agriculture: “The RFS provides an economic incentive for scientists and technology firms to help farmers sustainably produce significantly more bushels of corn on an acre of existing cropland. Since the RFS was enacted in 2005, these advancements, such as new seed varieties and more sustainable tillage practices, have enabled U.S. farmers to produce, on average, nearly 20 additional bushels of corn per acre than before. Still more innovations, like drought-tolerant genes, are being developed to improve corn yield further. The 2012 drought-ravaged corn crop was twice as large as the drought-ravaged crop of 1988 and three-times larger than the U.S. corn crop 50 years ago. None of this progress would have been possible without the RFS.”
Regarding the RFS and global agriculture: “From 2000 to 2011, a timeframe which includes when the idea for the RFS was developed by ACE, when it was enacted by Congress, and implemented by EPA, world corn production rose 12 billion bushels as 43 nations, mostly in Africa and the former Soviet Republic, doubled their production of corn. Repealing the RFS would simply discourage farmers around the world from planting corn, which runs contrary to what the meat and livestock groups supporting repeal want.”
Regarding the RFS and food prices: “Despite the hysteria created by oil companies who oppose the RFS because it enables renewable fuel to compete for market share with petroleum, and food manufacturers who oppose the RFS because they feel entitled to cheap corn forever, the facts indicate virtually no correlation between the RFS or prices farmers receive for corn and retail food prices. When we pay $1 for groceries, about 14 cents goes to the farmer. About 35 cents of that dollar pays for the energy to make, transport, process, and preserve the food we buy. When oil prices rise, so do food prices. If policymakers genuinely want to reduce food prices, they should support the RFS because it replaces petroleum with renewable fuel.”
“Special interests who profited handsomely in the past from corn prices that averaged $2 per bushel and who are today heavily lobbying the Congress to repeal the RFS, profited on the backs of American taxpayers who were paying for multi-billion dollar commodity support programs under previous farm bills,” added Jennings. “With global oil demand on the rise and global oil prices at a new equilibrium, it is highly unlikely those special interests who feel entitled to cheap corn forever will get their wish.”