It’s Corny, but Don’t Call the Ag Committee

A handful of corn is shown before it is processed at the Tall Corn Ethanol plant, Wednesday, May 24, 2006, in Coon Rapids, Iowa. Ethanol production in the United States is growing so rapidly that for the first time, farmers expect to sell as much corn this year to ethanol plants as they sell overseas. Inside the ethanol plant, corn is ground and mixed with water to make mash. It is heated and mixed with enzymes to convert starch into sugar and fermented with yeast to make alcohol _ just like making moonshine. Hanging in the air around the 500,000-gallon fermenting tanks is the smell of sweet, white wine.
National Journal
Amy Harder
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Amy Harder
Sept. 18, 2013, 4:30 p.m.

One fed­er­al policy that has a pro­found im­pact on the ag­ri­cul­ture in­dustry isn’t con­trolled by the House Ag­ri­cul­ture Com­mit­tee. The re­new­able-fuel stand­ard, which was es­tab­lished in 2005 and strengthened in 2007, re­quires in­creas­ingly large amounts of bio­fuels to be blen­ded with gas­ol­ine. The House En­ergy and Com­merce Com­mit­tee has primary jur­is­dic­tion over the stand­ard, and that pan­el’s lead­ers are craft­ing le­gis­la­tion this fall to re­form — but not re­peal — the policy.

Where farm­ers come in is that oil com­pan­ies meet this stand­ard primar­ily by blend­ing corn-pro­duced eth­an­ol with gas­ol­ine, as op­posed to us­ing more-ad­vanced kinds of bio­fuels that don’t come from food crops.

Corn’s dom­in­ance helps the corn grow­ers by cre­at­ing de­mand, but vir­tu­ally all live­stock pro­du­cers main­tain the policy is caus­ing dis­pro­por­tion­ately high corn prices, which are in turn cre­at­ing high feed­stock prices. Gro­cery stores and fast-food com­pan­ies, in turn, say those high feed­stock prices are caus­ing high­er food prices for con­sumers.

The fuel stand­ard’s ori­gin­al pur­pose was to wean the na­tion off for­eign oil, and Re­pub­lic­an Pres­id­ent George W. Bush signed the le­gis­la­tion in­to law. But the man­date, which is ad­min­istered by the En­vir­on­ment­al Pro­tec­tion Agency, has come un­der in­tense scru­tiny from both Re­pub­lic­ans and Demo­crats in the wake of the re­cord-set­ting drought dur­ing the sum­mer of 2012, which sent corn prices soar­ing.

Al­though the En­ergy Com­mit­tee has made it clear it’s tak­ing the lead on re­form le­gis­la­tion, cer­tain mem­bers on the Ag­ri­cul­ture pan­el, in­clud­ing Vice Chair­man Bob Good­latte, R-Va., will be key in ne­go­ti­ations out­side of the En­ergy Com­mit­tee and gar­ner­ing sup­port for re­form in the House. Good­latte has in­tro­duced two sep­ar­ate pieces of le­gis­la­tion that re­form and re­peal the man­date. His re­form pro­pos­al could likely factor in­to En­ergy Com­mit­tee ne­go­ti­ations.

Like any ma­jor policy re­form, the ef­fort has a long, dif­fi­cult jour­ney ahead of it to pass the House, let alone be­come law. It is not likely to pass this Con­gress, but the ground­work be­ing done now is cru­cial.

House Ag­ri­cul­ture Com­mit­tee Chair­man Frank Lu­cas, R-Okla., noted in an in­ter­view that his dis­trict in­cludes both corn pro­du­cers who want to keep the RFS and live­stock pro­du­cers who want it changed — and that his views on the mat­ter are “aca­dem­ic from a com­mit­tee jur­is­dic­tion­al per­spect­ive.”

Lu­cas main­tains that it’s im­port­ant to make sure there will be enough corn for every­one who wants to buy it. The 2013 corn crop looks like it will be good, and prices have gone down, but Lu­cas said, “You can’t price the con­sumer out. I tell my corn friends you need a good crop. If we have dis­ease or pes­ti­lence “¦ and corn prices ex­plode again, there would be tre­mend­ous pres­sure on En­ergy and Com­merce to change the RFS.”

The Ag­ri­cul­ture Com­mit­tee does have jur­is­dic­tion over policies that are in­dir­ectly af­fected by the man­date. The 2008 farm bill provided money for the Ag­ri­cul­ture De­part­ment to help back the con­struc­tion of re­new­able fuels plants, par­tic­u­larly for those us­ing cel­lu­lose rather than corn. Some of these plants have worked out very well, however, and there has been a de­bate in Con­gress over how much money should go in­to those pro­grams in the fu­ture.

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